[Federal Register Volume 83, Number 137 (Tuesday, July 17, 2018)]
[Rules and Regulations]
[Pages 33730-33760]
[FR Doc No: 2018-15143]

Vol. 83

Tuesday,

No. 137

July 17, 2018

Part V

Environmental Protection Agency

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40 CFR Part 52

Air Plan Approval; Kentucky; 2008 Ozone NAAQS Interstate Transport SIP
Requirements; Final Rule

Federal Register / Vol. 83 , No. 137 / Tuesday, July 17, 2018 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2018-0142; FRL-9980-57--Region 4]

Air Plan Approval; Kentucky; 2008 Ozone NAAQS Interstate
Transport SIP Requirements

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving a
revision to Kentucky's State Implementation Plan (SIP) pertaining to
the ``good neighbor'' provision of the Clean Air Act (CAA or Act) for
the 2008 8-hour ozone National Ambient Air Quality Standard (NAAQS).
Kentucky submitted a draft version of this SIP revision for parallel
processing by EPA on February 28, 2018, and submitted a final version
that contained no substantive changes on May 10, 2018. The good
neighbor provision requires each state's implementation plan to address
the interstate transport of air pollution in amounts that contribute
significantly to nonattainment, or interfere with maintenance, of a
NAAQS in any other state. In this action, EPA is approving Kentucky's
submission demonstrating that no additional emission reductions are
necessary to address the good neighbor provision for the 2008 ozone
NAAQS beyond those required by the Cross-State Air Pollution Rule
Update (CSAPR Update) federal implementation plan (FIP). Accordingly,
EPA is approving Kentucky's submission because it partially addresses
the requirements of the good neighbor provision for the 2008 ozone
NAAQS, and it resolves any obligation remaining under the good neighbor
provision after promulgation of the CSAPR Update FIP. The approval of
Kentucky's SIP submission and the CSAPR Update FIP, together, fully
address the requirements of the good neighbor provision for the 2008
ozone NAAQS for Kentucky. EPA is approving this action because it is
consistent with the CAA.

DATES: This rule is effective August 16, 2018.

ADDRESSES: EPA has established a docket for this action under Docket
Identification No. EPA-R04-OAR-2018-0142. All documents in the docket
are listed on the www.regulations.gov website. Although listed in the
index, some information may not be publicly available, i.e.,
Confidential Business Information or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, is not placed on the internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either electronically through www.regulations.gov or in hard
copy at the Air Regulatory Management Section, Air Planning and
Implementation Branch, Air, Pesticides and Toxics Management Division,
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW,
Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you
contact the person listed in the FOR FURTHER INFORMATION CONTACT
section to schedule your inspection. The Regional Office's official
hours of business are Monday through Friday 8:30 a.m. to 4:30 p.m.,
excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT: Ashten Bailey, Air Regulatory
Management Section, Air Planning and Implementation Branch, Air,
Pesticides and Toxics Management Division, Region 4, U.S. Environmental
Protection Agency, 61 Forsyth Street SW, Atlanta, Georgia 30303-8960.
Ms. Bailey can be reached by telephone at<PHONE_NUMBER> or via
electronic mail at [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    On March 27, 2008 (73 FR 16436), EPA promulgated an ozone NAAQS
that revised the levels of the primary and secondary 8-hour ozone
standards from 0.08 parts per million (ppm) to 0.075 ppm or 75 parts
per billion (ppb). Pursuant to CAA section 110(a)(1), within three
years after promulgation of a new or revised NAAQS (or shorter, if EPA
prescribes), states must submit SIPs that meet the applicable
requirements of section 110(a)(2). EPA has historically referred to
these SIP submissions made for the purpose of satisfying the
requirements of sections 110(a)(1) and 110(a)(2) as ``infrastructure
SIP'' submissions. One of the structural requirements of section
110(a)(2) is section 110(a)(2)(D)(i), also known as the ``good
neighbor'' provision, which generally requires SIPs to contain adequate
provisions to prohibit in-state emissions activities from having
certain adverse air quality effects on downwind states due to
interstate transport of air pollution. There are four sub-elements, or
``prongs,'' within section 110(a)(2)(D)(i) of the CAA. CAA section
110(a)(2)(D)(i)(I), addressing two of these four prongs, requires SIPs
to include provisions prohibiting any source or other type of emissions
activity in one state from emitting any air pollutant in amounts that
will contribute significantly to nonattainment, or interfere with
maintenance, of the NAAQS in another state. The two provisions of this
section are referred to as prong 1 (significant contribution to
nonattainment) and prong 2 (interference with maintenance). This action
addresses only prongs 1 and 2 of section 110(a)(2)(D)(i).\1\
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    \1\ All other infrastructure SIP elements for Kentucky for the
2008 8-hour ozone NAAQS were addressed in separate rulemakings. See
78 FR 14681 (March 7, 2013) and 79 FR 65143 (November 3, 2014).
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    On July 17, 2012, Kentucky submitted a SIP submission to EPA,
addressing a number of the CAA requirements for the 2008 8-hour ozone
NAAQS infrastructure SIPs. With respect to the interstate transport
requirements of 110(a)(2)(D)(i)(I), EPA disapproved the submission (78
FR 14681 (March 7, 2013), effective April 8, 2013) because the SIP had
relied on Kentucky's participation in the Clean Air Interstate Rule
(CAIR), which did not address the 2008 ozone NAAQS and had been
remanded by the D.C. Circuit. In October 2016, EPA promulgated the
CSAPR Update to address the requirements of CAA section
110(a)(2)(D)(i)(I) concerning interstate transport of air pollution for
the 2008 ozone NAAQS. See 81 FR 74504 (October 26, 2016). In the CSAPR
Update rulemaking, EPA determined that air pollution transported from
Kentucky would unlawfully affect other states' ability to attain or
maintain the 2008 8-hour ozone NAAQS. EPA's analysis projected that in
2017, Kentucky would be linked to downwind nonattainment or maintenance
problems at four monitors, or receptors. Accordingly, EPA established
an ozone season nitrogen oxides (NOX) budget for Kentucky's
electricity generating units (EGUs) and promulgated a FIP requiring
affected EGUs to participate in an allowance trading program to
implement the budget.\2\ At the time it finalized the CSAPR Update, EPA
determined that, after implementation of the rule, many downwind air
quality problems would persist in 2017, including at two of the four
receptors to which Kentucky was linked. EPA therefore found that the
CSAPR Update FIPs for Kentucky and 20 other states may not fully
address the good neighbor requirements as to the 2008 8-hour ozone
NAAQS. EPA explained that further analysis of air quality in a
potential future compliance year and potential control strategies would
be needed to determine whether any

further emission reductions from these states would be necessary to
fully address the good neighbor obligations.
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    \2\ CSAPR Update, 81 FR at 74507-08.
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    On October 27, 2017, EPA issued a memorandum (October 2017
Transport Memo) \3\ that provided technical information and related
analyses to assist states with developing SIPs to address any remaining
section 110(a)(2)(D)(i)(I) requirements for the 2008 8-hour ozone
NAAQS. EPA's updated modeling data, released with the October 2017
Transport Memo, indicate that for the 2023 future base case emissions
scenario there are no monitoring sites, outside of California, that are
projected to have nonattainment or maintenance problems with respect to
the 2008 ozone NAAQS in 2023.
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    \3\ Memorandum, Stephen D. Page, Supplemental Information on the
Interstate Transport State Implementation Plan Submissions for the
2008 Ozone National Ambient Air Quality Standards under Clean Air
Action Section 110(a)(2)(D)(i)(I).
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II. This Action

    On February 28, 2018, Kentucky submitted a draft SIP revision to
EPA for parallel processing that reviewed air quality modeling and data
files that EPA disseminated in the October 2017 Transport Memo. The
draft SIP revision indicated that the air quality problems at monitors
to which Kentucky remained linked after implementation of the CSAPR
Update would be resolved by 2023. Kentucky's draft SIP submission
agreed with the October 2017 Transport Memo's preliminary projections
and provided information intended to demonstrate that reliance on the
modeling to evaluate its remaining good neighbor obligation is
appropriate. The draft submission also contained air quality modeling
conducted by Alpine Geophysics, LLC (Alpine) that concluded that none
of the nonattainment and maintenance receptors identified in the CSAPR
Update are predicted to be in nonattainment or have issues with
maintenance of the 2008 ozone NAAQS in 2023. Additionally, Kentucky
cited information related to emissions trends--such as reductions in
ozone precursor emissions and controls on Kentucky sources--as further
evidence that, after implementation of all on-the-books measures,
including those promulgated in the CSAPR Update FIPs, emissions from
the Commonwealth will no longer contribute significantly to
nonattainment or interfere with maintenance of the 2008 8-hour ozone
NAAQS in any other state.
    In a notice of proposed rulemaking (NPRM) published on April 18,
2018 (83 FR 17123), EPA proposed to approve Kentucky's February 28,
2018 draft SIP submission. In the NPRM, EPA explained that it was
basing its proposal to approve Kentucky's February 28, 2018 draft SIP
submission on a finding that 2023 is a reasonable analytic year for
evaluating ozone transport problems with respect to the 2008 ozone
NAAQS and that interstate ozone transport air quality modeling
projections for 2023 indicate that Kentucky is not expected to
significantly contribute to nonattainment or interfere with maintenance
of the 2008 ozone NAAQS in downwind states. As described in more detail
in the NPRM, EPA based its evaluation on a four-step analytic framework
by:
    (1) Identifying downwind air quality problems relative to the 2008
ozone NAAQS considering air quality modeling projections to a future
compliance year;
    (2) Determining which upwind states are ``linked'' to these
identified downwind air quality problems and thereby warrant further
analysis to determine whether their emissions violate the good neighbor
provision;
    (3) For states linked to downwind air quality problems, identifying
upwind emissions on a statewide basis that significantly contribute to
nonattainment or interfere with maintenance of a standard; and
    (4) For states that are found to have emissions that significantly
contribute to nonattainment or interfere with maintenance of the NAAQS
downwind, implementing the necessary emission reductions within the
state.
    EPA explained that its selection of 2023 was a reasonable analytic
year for evaluating downwind air quality at step one of the framework,
supported by an assessment of attainment dates for the 2008 ozone NAAQS
and feasibility of implementing potential control strategies at both
EGUs and non-EGUs to reduce NOX in CSAPR Update states,
including Kentucky. First, EPA considered the upcoming 2021 and 2027
attainment dates for the 2008 ozone NAAQS, consistent with the holding
of the U.S. Court of Appeals for the District of Columbia Circuit (D.C.
Circuit) in North Carolina v. EPA, 531 F.3d 896, 911-12 (2008). Next,
EPA assessed the amount of time necessary to implement new
NOX controls at EGUs and non-EGUs across the CSAPR Update
region, finding that, fleetwide, sources would require four years to
implement additional, substantial NOX emission reductions.
EPA therefore proposed to find that 2023 is an appropriate future
analytic year because it is the first ozone season for which
significant new post-combustion controls to reduce NOX could
be feasibly installed across the CSAPR Update region, and thus
represents the timeframe that is as expeditious as practicable for
upwind states to implement additional emission reductions. EPA then
described its modeling analysis at step one of the four-step framework
for the 2023 analytic year, which indicates that there are no expected
nonattainment or maintenance receptors for the 2008 ozone NAAQS in the
eastern U.S. in this future year. Please refer to the April 18, 2018
NPRM for additional information on the basis for the proposed approval.
    Based on these proposed findings and the information provided in
Kentucky's February 28, 2018 SIP submittal, EPA proposed to determine
that Kentucky's draft SIP submission demonstrates that emission
activities from the Commonwealth will not contribute significantly to
nonattainment or interfere with maintenance of the 2008 8-hour ozone
NAAQS in any other state after implementation of all on-the-books
measures, including the CSAPR Update. Comments on the NPRM were due on
or before May 18, 2018. EPA received adverse comments on the proposed
rulemaking, which are discussed below. Because Kentucky submitted the
draft SIP revision for parallel processing, EPA's April 18, 2018
proposed rulemaking was contingent upon Kentucky providing a final SIP
revision that was substantively the same as the draft SIP revision. See
83 FR 17123. Kentucky submitted the final version of its SIP revision
on May 10, 2018.\4\ The May 10, 2018 SIP submission had no substantive
changes from the February 28, 2018 draft SIP submission.
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    \4\ Both the draft and final SIP revisions are provided in the
docket for this action.
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    After considering the comments received on the NPRM, for the
reasons described in the NPRM and in this action,\5\ EPA is now taking
final action to approve Kentucky's May 10, 2018, final SIP submission
and find that Kentucky is not required to make any further reductions,
beyond those required by the CSAPR Update, to address its statutory
obligation under CAA section 110(a)(2)(D)(i)(I) for the 2008 ozone
NAAQS. EPA's final approval of Kentucky's submission means that
Kentucky's obligations under 110(a)(2)(D)(i)(I) are fully addressed
through the combination of the 2016 CSAPR Update FIP and the 2018 SIP
demonstration showing that no

further reductions are necessary. As a result, EPA is also amending the
regulatory text at 40 CFR 52.940(b)(2) to reflect that the CSAPR Update
represents a full remedy with respect to Kentucky's transport
obligation for the 2008 ozone NAAQS.
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    \5\ EPA notes that to the extent there are any conflicts between
the rationale provided in the NPRM for the proposed approval and the
rationale provided in this action, statements made in this document
should be treated as the controlling basis for EPA's final action
approving Kentucky's SIP submission.
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III. Response to Comments

    The Regional Administrator signed the proposed rule on April 9,
2018, and on April 12, 2018, EPA made a prepublication version of the
proposal available on its website. The 30-day public comment period on
the proposed rulemaking began on April 18, 2018, the day of publication
of the proposal in the Federal Register, and closed on May 18, 2018.
EPA received 15 comments on the proposed action, 10 of which are
relevant to the proposal. The relevant comments were submitted by the
Connecticut Department of Energy and Environmental Protection, Delaware
Department of Natural Resources & Environmental Control, Maryland
Department of the Environment, Midwest Ozone Group, New Jersey
Department of Environmental Protection, New York State Department of
Environmental Conservation (NYDEC), New York State Office of the
Attorney General, Sierra Club and Chesapeake Bay Foundation, and
Utility Air Regulatory Group. The remaining comments were outside the
scope of the proposed action. This section contains summaries of the
relevant comments and EPA's responses to those comments.
    Comment: One commenter states that existing measures, including
volatile organic compounds (VOC) and NOX requirements for
EGUs, industrial sources, and mobile sources within Kentucky, have
brought Kentucky into attainment of both the 2008 and 2015 ozone NAAQS.
The commenter states that the issue being addressed in the proposed SIP
is whether these existing measures also satisfy Kentucky's ``good
neighbor'' requirements for the 2008 ozone NAAQS. The commenter states
that 2023 is the appropriate analytic year for evaluation of ozone
transport issues related to the 2008 ozone NAAQS. The commenter points
to the October 2017 Transport Memo and its modeling results as
demonstrating that there is no need to conduct any further analysis of
EPA's four-step transport framework. The commenter states its support
of both EPA and Alpine modeling showing no downwind air quality
problems related to the 2008 ozone NAAQS and cites a report prepared
for the commenter by Alpine indicating that all sites identified in the
final CSAPR Update will have design values below the 2008 ozone NAAQS
by 2023 and that therefore no states are required to estimate their
contributions to these monitors. The commenter states in conclusion
that recent modeling performed by EPA as well as by Alpine indicate
that implementation of the CSAPR Update, in addition to other on-the-
books controls, are all that are needed to satisfy requirements related
to the 2008 ozone NAAQS, and indicates commenter's support for
Kentucky's request that EPA approve its ``good neighbor'' SIP.
    An additional commenter expresses support for EPA to finalize
approval of Kentucky's section 110(a)(2)(D)(i)(I) SIP submission and
further states its support for Kentucky's reliance on EPA's modeling
analysis. The commenter states that the EPA analysis released in the
October 2017 Transport Memo was consistent with the four-step
framework, and that it was not necessary to complete all four steps
because no receptor in the eastern United States is expected to have
problems attaining or maintaining the 2008 ozone NAAQS in 2023. The
commenter states that 2023 is the modeling year used in EPA's modeling
because that is the earliest year by which it is feasible to install
controls across the CSAPR Update region and states its support of EPA's
decision to evaluate the feasibility of installing controls on a
regional basis rather than on a state-by-state or unit-by-unit basis.
The commenter further states that EPA properly considered upcoming
attainment dates and the need to consider future effects of local,
state, and federal emission reduction requirements in order to avoid
unlawfully mandating over-control. The commenter concludes that EPA's
modeling analysis is reasonable and that EPA's approval is proper even
without additional information from Kentucky. In support of its
assertion that EPA should finalize its approval, the commenter notes
that Kentucky also provides state-specific information to further
demonstrate that reliance on EPA's modeling is appropriate in the
context of this SIP and modeling performed by Alpine that is consistent
with EPA's results.
    Response: EPA agrees with the commenters' assertions as to the
appropriateness of 2023 as an analytic year and other specifics of
EPA's analysis as documented in the October 2017 Transport Memo. EPA
acknowledges receipt of the Alpine report and recognizes that it
demonstrates similar 2023 design values to those projected by EPA's
modeling.
    Comment: One commenter states that, although it appreciates the
emissions reductions made thus far by Kentucky, EPA must disapprove
Kentucky's proposed SIP as it does not fulfill the CAA's good neighbor
obligations. Another commenter states that, while New York will
continue to control air pollution, it does not have the authority to
control sources in upwind states and that EPA must disapprove the
Kentucky submission. Additional commenters state opposition to EPA's
proposed approval, and assert that EPA should disapprove Kentucky's SIP
submission.
    Response: EPA disagrees with the commenters' contentions that EPA
should disapprove Kentucky's submittal because it does not fulfill the
CAA's good neighbor obligations. As explained in the proposed
rulemaking and further in this action, based on EPA's modeling and with
implementation of the CSAPR Update and other measures, Kentucky is not
expected to significantly contribute to nonattainment or interfere with
maintenance of the 2008 ozone NAAQS in downwind states in 2023.
Kentucky provided information showing that the use of the modeling is
appropriate in this context, and also included additional modeling that
showed results consistent with EPA's modeling. Thus, Kentucky's draft
submission is approvable because it demonstrated that emission activity
from the State will not contribute significantly to nonattainment or
interfere with maintenance of the 2008 8-hour ozone NAAQS in any other
state after implementation of all on-the-books measures, including the
CSAPR Update.
    To the extent that these comments are general statements stating
opposition to EPA's action and are intended to incorporate other,
specific comments made by commenters, EPA has addressed the specific
concerns later in this preamble.
    Comment: One commenter states that EPA's determination of
significant contribution should be based upon current data, and to base
the determination on 2023 modeling ignores New York's 2021 attainment
deadline and adds too much uncertainty and speculation to the
determination of whether Kentucky significantly contributes to
nonattainment or interferes with maintenance in New York and other
states.
    Response: EPA does not agree that it is inappropriate to rely on
modeled projections for a future year, rather than current data, to
analyze ozone concentrations in downwind states. Consistent with
historical practice, Kentucky and EPA have focused their analysis in
this action on a future year in light of the forward-looking nature of
the good neighbor obligation in section

110(a)(2)(D)(i)(I). Specifically, the statute requires that states
prohibit emissions that ``will'' significantly contribute to
nonattainment or interfere with maintenance of the NAAQS in any other
state. EPA reasonably interprets this language as permitting states and
EPA in implementing the good neighbor provision to evaluate downwind
air quality problems, and the need for further upwind emission
reductions, prospectively. In EPA's prior regional transport
rulemakings, the Agency generally evaluated whether upwind states
``will'' significantly contribute to nonattainment or interfere with
maintenance based on projections of air quality in the future year in
which any emission reductions would be expected to go into effect. See,
e.g., NOX SIP Call, 63 FR 57377 (using the anticipated 2007
compliance year for its analysis); CAIR, 70 FR 25241 (using the years
2009 and 2010, the anticipated compliance years for the ozone and fine
particulate matter (PM2.5) NAAQS, respectively); CSAPR, 76
FR 48211 (using the 2012 compliance year); CSAPR Update, 81 FR 74537
(using the 2017 compliance year). The D.C. Circuit affirmed EPA's
interpretation of ``will,'' finding EPA's consideration of future
projected air quality (in addition to current measured data) to be a
reasonable interpretation of an ambiguous term. North Carolina, 531
F.3d at 913-14. Thus, consistent with this precedent, it is reasonable
for EPA to analyze air quality in an appropriate future compliance year
to evaluate any remaining obligation for the 2008 ozone NAAQS.
    EPA also does not agree that the 2023 modeling is too uncertain or
speculative as compared to current data. As discussed in more detail
later, courts' rulings have deferred to EPA's reasonable reliance on
modeling to inform its policy choices, notwithstanding that no model is
perfect and there may be some level of discrepancy between modeled
predictions what eventually occurs. Comments regarding the relationship
between the future analytic year and the attainment date are also
addressed later in this preamble.
    Comment: One commenter states that the plain meaning of section
110(a)(2)(D) requires Kentucky to prohibit contributing emissions prior
to the 2008 ozone attainment dates set for downwind states, i.e., by
2018 for moderate nonattainment areas. The commenter contends that the
D.C. Circuit adopted this plain reading, finding the statute
unambiguously requires compliance with NAAQS attainment deadlines in
North Carolina, 531 F.3d at 911-12. The court based its conclusion on
the requirement that implementing provisions be consistent with Title I
of the CAA, finding the plan must be consistent with both the
substantive and procedural requirements of NAAQS compliance. Id. at
911. The commenter states that the court also held that compliance must
be achieved in time for attainment determinations for downwind states
expected to be close to the NAAQS so as not to ``interfere with
maintenance.'' Id. at 908-09.
    The commenter further states that the CAA establishes attainment
dates for the 2008 ozone NAAQS ``as expeditiously as practicable'' but
no later than 3, 6, 9, 15, or 20 years--depending on area
classification--after the designation. The commenter contends that, in
NRDC v. EPA, 777 F.3d 456 (D.C. Cir. 2014), the court rejected EPA's
attempt to extend the 2008 ozone NAAQS compliance deadlines by several
months, holding that the CAA requires attainment dates be set at the
statutorily fixed term of time from the date of designations.
    The commenter therefore asserts that section 110(a)(2)(D)(i)(I)
does not allow Kentucky to wait until 2023 nor does it grant EPA
discretion to extend compliance deadlines. The commenter contends that,
by 2023, the harms the good neighbor provisions were intended to avoid
will have already befallen downwind states. Accordingly, the commenter
states that Kentucky must take immediate steps to offset past over-
pollution. In a footnote, the commenter notes that prior legal
precedent indicates that attainment dates are ``central to the
regulatory scheme,'' Sierra Club v. EPA, 294 F.3d 155, 161 (D.C. Cir.
2002), and ``leave no room for claims of technological or economic
feasibility,'' NRDC, 777 F.3d at 468.
    Another commenter points to 2015-2017 design values at monitors in
the NJ-NY-CT nonattainment area that are above the standard at 83 ppb
(the Stratford monitor) and 82 ppb (the Westport monitor). The
commenter states that design values indicate that the area can expect
to be reclassified as ``serious'' with an attainment deadline of July
2021, based on a 2020 design value. The commenter contends that the
Kentucky SIP is deficient because it relies on a future year that does
not adequately reflect the appropriate attainment year of the impacted
nonattainment area. Because the moderate attainment deadline has
passed, the commenter states that modeling for the next attainment date
of July 2021 (based on 2020 design values) should be conducted.
    The commenter asserts that downwind states significantly impacted
by ozone pollution will be unable to meet attainment deadlines if good
neighbor SIPs are not done prior to the attainment deadline of the
downwind nonattainment areas. The commenter asserts the CAA recognizes
this since the good neighbor provision is required to be addressed
ahead of the attainment demonstration requirements for nonattainment
areas. The commenter notes that Kentucky's significant contributions
for the 2008 ozone NAAQS therefore should have been addressed by March
2011. The commenter states that 2023 is an inappropriate future year
for modeling because it falls after both the July 2018 moderate
classification deadline and the July 2021 serious classification
deadline.
    One commenter states that the tri-state New York City metropolitan
area struggles to attain the 2008 ozone NAAQS, with 2017 design values
up to 83 ppb, due in significant part to interstate transport of ozone
precursors from upwind states like Kentucky. The commenter notes that
NYDEC requested a reclassification of the area to ``serious''
nonattainment due to the inevitability of missing the moderate area
attainment deadline. The commenter therefore asserts that the 2023
modeling year relied upon by EPA and Kentucky is well beyond--and fails
to take into account--the attainment deadline for ``serious''
nonattainment areas.
    The commenter further states that had EPA met its 2015 FIP deadline
for Kentucky, it could have mandated controls that would be installed
and operating in time to benefit New York's ``serious'' nonattainment
deadline.
    One commenter contends that EPA's proposed approval fails to
account for New York's upcoming attainment deadlines for the 2008 ozone
NAAQS. The commenter asserts that the New York metropolitan area has
struggled to attain the 2008 ozone NAAQS, with 2017 design values of up
to 83 ppb. The commenter asserts that EPA admitted the CSAPR Update was
only a partial remedy for downwind states such as New York, and that
additional reductions may be required from upwind states, including
Kentucky. CSAPR Update modeling projected that New York would remain in
nonattainment past its July 20, 2018 statutory attainment deadline. On
November 10, 2017, NYDEC requested a reclassification to ``serious''
nonattainment, due to the inevitability of missing the July 20, 2018
moderate area attainment deadline, which the state attributed in large
part to

transported emissions from upwind states such as Kentucky. The
reclassification carries an attainment deadline of July 20, 2021, based
on 2018-2020 monitoring data.
    The commenter asserts that 2023 modeling analysis takes no account
of New York's current and likely new attainment deadlines, in direct
conflict with settled law under the Act. To be fully compliant, the
commenter believes a good neighbor SIP must eliminate significant
contribution to downwind nonattainment or interference with maintenance
by the deadlines for downwind areas to attain the NAAQS. EPA's proposed
approval only discusses this deadline in its conclusion that emission
reductions will not be achieved in time to meet it. The commenter
asserts that EPA cannot approve a SIP that delays eliminating emissions
that presently contribute to downwind nonattainment past New York's
attainment deadlines.
    One commenter challenges the future year selection of 2023 and
states that it perpetuates Connecticut citizens' health and economic
burdens. The commenter states that Connecticut faces a reclassification
to serious nonattainment, has previously been reclassified to moderate,
and has not met attainment due to ``overwhelming'' transport from
upwind areas, including Kentucky.
    Response: EPA disagrees that it has failed to consider the
appropriate attainment dates in relying on the 2023 modeling results to
approve Kentucky's SIP submission.
    First, to the extent the commenters suggest that the current
measured design values may preclude EPA's reliance on modeled
projections, EPA does not agree. As explained earlier in this action,
EPA has reasonably interpreted the term ``will'' in the good neighbor
provision as permitting states and EPA in implementing the good
neighbor provision to evaluate downwind air quality problems, and the
need for further upwind emission reductions, prospectively and
coordinated with anticipated compliance timeframes. See North Carolina,
531 F.3d at 913-14.
    EPA further disagrees that the D.C. Circuit's North Carolina
decision constrains EPA to choosing the next relevant attainment date
as its future analytic year. The North Carolina decision faulted EPA
for not giving any consideration to upcoming attainment dates in
downwind states when setting compliance deadlines for upwind emissions;
there, EPA had evaluated only the feasibility of implementing upwind
controls. Id. at 911-12. But the court did not hold that the CAA
imposes strict deadlines for the implementation of good neighbor
emission reductions. Nor did the court opine that EPA would never be
justified in setting compliance dates that post-date downwind
attainment dates or consider the feasibility of implementing upwind
emission reductions. Indeed, in remanding the rule, the D.C. Circuit
acknowledged that upwind compliance dates may, in some circumstances,
follow attainment dates. Id. at 930 (instructing EPA to ``decide what
date, whether 2015 or earlier, is as expeditious as practicable for
states to eliminate their significant contributions to downwind
nonattainment'').\6\
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    \6\ EPA also disagrees with the commenters' contention that the
North Carolina decision explicitly requires emission reductions, 531
F.3d at 911-912, necessary to address the ``interfere with
maintenance clause'' of the good neighbor provision to be aligned
with downwind attainment dates. The commenters are conflating the
court's holding that EPA should consider downwind attainment dates
when setting compliance schedules for upwind state emission
reductions with the court's separate holding that EPA must give
independent significance to the ``interfere with maintenance''
clause when identifying downwind air quality problems. id. at 910-
911. The court did not explicitly indicate whether EPA was required
to align emission reductions associated with maintenance receptors
with downwind attainment dates, indicating only that EPA must
``provide a sufficient level of protection to downwind states
projected to be in nonattainment as of'' the future analytic year.
Id. at 912 (emphasis added).
---------------------------------------------------------------------------

    While the commenters suggest that the court's reference to the
phrase ``consistent with the provisions of this subchapter''--i.e., CAA
Title I--imports downwind attainment dates from section 181 into the
good neighbor provision, CAA section 181 itself does not impose
inflexible deadlines for attainment. The general timeframes provided in
the section 181(a)(1) table may be (and often are) modified pursuant to
other provisions in section 181, considering factors such as measured
ozone concentrations and the feasibility of implementing additional
emission reductions. For example, the six-year timeframe for attainment
of the 2008 ozone NAAQS in moderate areas could be extended by up to
two years (to 2020), pursuant to section 181(a)(5). And pursuant to
section 181(b)(2), when downwind areas are unable to implement
sufficient reductions via feasible control technologies by one
attainment date, those areas will be ``bumped up'' in classification
and given a new attainment date with additional time to attain. With
``bump-ups'' like this, the date for an area to attain the 2008 ozone
NAAQS could be extended to 2021, 2027, and 2032, and each of these
deadlines could be subject to further extensions of up to two years
pursuant to section 181(a)(5). See also Whitman v. Am. Trucking Ass'ns,
Inc., 531 U.S. 457, 493-94 (2001) (Breyer concurring) (considerations
of costs and technological feasibility may affect deadlines selected by
EPA). Thus, the commenters' premise that all upwind emission reductions
must occur before the earliest downwind attainment date, feasible or
not, is inconsistent with the framework of section 181 as it applies to
downwind states.
    Similarly, the D.C. Circuit's decision in NRDC, 777 F.3d at 468,
does not stand for the proposition that EPA should ignore the
feasibility of implementing emission reductions when addressing the
good neighbor provision, or that such emission reductions are strictly
required to be in place by a date certain. There, EPA had set 2008
ozone standard attainment dates in December 2015 so that downwind
states could use data from the 2015 ozone season to demonstrate
attainment. Id. at 465. The NRDC court simply held that section
181(a)(1) did not allow EPA this type of flexibility. The court's
holding in NRDC did not speak to state planning or implementation
requirements that apply for areas subject to those dates, or the
various ways in which the date may be legally extended under the CAA.
NRDC is therefore inapposite as to how the good neighbor provision
should be harmonized with CAA statutory or regulatory dates for
downwind states.
    Here, EPA has considered the downwind attainment dates for the 2008
ozone NAAQS, consistent with the court's holding in North Carolina. As
the commenters note, areas classified as moderate nonattainment areas
currently have attainment dates of July 20, 2018, but the 2017 ozone
season was the last full season from which data could be used to
determine attainment of the NAAQS by that date. Given that the 2017
ozone season has now passed, it is not possible to achieve additional
emission reductions by the moderate area attainment date. It is
therefore necessary to consider what subsequent attainment dates should
inform EPA's analysis. The next attainment dates for the 2008 ozone
NAAQS will be July 20, 2021, for nonattainment areas classified as
serious, and July 20, 2027, for nonattainment areas classified as
severe.\7\ Because the various attainment

deadlines are in July, which is in the middle of the ozone monitoring
season for all states, data from the calendar year immediately prior to
the attainment date (e.g., data from 2020 for the 2021 attainment date
and from 2026 for the 2027 attainment date) are the last data that can
be used to demonstrate attainment with the NAAQS by the relevant
attainment date.
---------------------------------------------------------------------------

    \7\ While there are no areas (outside of California) that are
currently designated as serious or severe for the 2008 ozone NAAQS,
the CAA requires that EPA reclassify to serious any moderate
nonattainment areas that fail to attain by their attainment date of
July 20, 2018. Similarly, if any area fails to attain by the serious
area attainment date, the CAA requires that EPA reclassify the area
to severe.
---------------------------------------------------------------------------

    As discussed in the NPRM and later in this action, EPA has also
considered the timeframes that would likely be required for
implementing further emissions reductions as expeditiously as
practicable and concluded that additional control strategies at EGUs
and non-EGUs could not be implemented by the July 2021 serious area
attainment date, and certainly not by the 2020 ozone season immediately
preceding that attainment date. This consideration of feasibility is
consistent with the considerations affecting the statutory timeframes
imposed on downwind nonattainment areas under section 181. Therefore,
because new emissions controls for sources in upwind states cannot be
implemented feasibly for several years, and at that later point in time
air quality will likely be cleaner due to continued phase-in of
existing regulatory programs, changing market conditions, and fleet
turnover, it is reasonable for EPA to evaluate air quality (at step one
of the four-step framework) in a future year that is aligned with
feasible control installation timing in order to ensure that the upwind
states continue to be linked to downwind air quality problems when any
potential emissions reductions would be implemented and to ensure that
such reductions do not over-control relative to the identified ozone
problem.
    Comment: One commenter notes that Delaware's Sussex County is a
standalone nonattainment area and New Castle County is part of the
Philadelphia-Wilmington-Atlantic City, PA-NJ-MD-DE nonattainment area
(Philadelphia NAA), with an attainment date of July 20, 2015. The CAA
requires states to attain the ozone standards as expeditiously as
practicable, but states significantly impacted by ozone pollution from
upwind states will be unable to do so if good neighbor SIPs are not
submitted with adequate remedies implemented prior to downwind
attainment dates. Such SIPs are required to be addressed prior to the
submission of attainment demonstrations by nonattainment areas, such
that Kentucky should have addressed its significant contribution for
the 2008 ozone NAAQS by March 2011. The commenter notes that states,
including Kentucky, failed to submit SIPs and EPA failed to issue FIPs
until the CSAPR Update was issued on October 26, 2016, well after the
attainment dates for many areas, including Delaware.
    The commenter contends that EPA should have acted in a timely
manner when states failed to adopt good neighbor provisions, and
contends that Kentucky should have tied its analysis of significant
contribution to the air quality at the time designations were made. The
commenter asserts that EPA should have coupled its analysis and remedy
with marginal attainment dates, as the first deadline for which
nonattainment areas had to attain the standard. The commenter notes
that EPA aligned its modeling analysis and implementation of the CSAPR
Update with the moderate area attainment dates in 2018. While the
commenter acknowledges that EPA could not have tied implementation of
the CSAPR Update to the 2015 marginal area attainment date which had
already passed, the commenter contends EPA should have addressed the
need for good neighbor reductions relative to marginal nonattainment by
aligning contribution modeling analysis for those states to some
timeframe prior to the marginal attainment deadline. Instead, EPA's
process takes place after the attainment dates, at which point EPA
concludes that Delaware and all other areas outside of California do
not need reductions to attain and maintain the NAAQS.
    Response: As explained earlier in this action, EPA has reasonably
interpreted the term ``will'' in the good neighbor provision as
permitting states and EPA in implementing the good neighbor provision
to evaluate downwind air quality problems, and the need for further
upwind emission reductions, prospectively and coordinated with
anticipated compliance timeframes. See North Carolina, 531 F.3d at 913-
14. Accordingly, EPA does not agree that Kentucky should tie its
analysis to either the date when designations were made or the marginal
area attainment date, both of which have now passed. Were EPA to have
evaluated good neighbor obligations based on a retrospective analysis
of downwind air quality, the Agency could not have ensured that any
emission reductions that may have been required would actually be
necessary to address downwind air quality problems at the time they
were implemented, which could result in impermissible over-control
under the Supreme Court's holding in EPA v. EME Homer City Generation,
L.P., 134 S. Ct. 1584, 1608 (2014) (EME Homer City). Whether Kentucky
or EPA acted in a timely manner to develop a SIP or promulgate a FIP,
respectively, does not lessen the obligation to comply the Supreme
Court's holding in the present action.
    Comment: One commenter alleges that EPA's decision to untether its
action from statutory nonattainment dates and instead focus on 2023 is
arbitrary and capricious, as the ``agency has relied on factors which
Congress has not intended it to consider'' and ``entirely failed to
consider an important aspect of the problem.'' Motor Vehicle Mfrs.
Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). The
commenter suggests that EPA takes a novel approach of selecting an
analytic year five years in the future based on concerns that by the
time any controls can be implemented, they may no longer be needed. The
commenter cites both CSAPR and the CSAPR Update as examples of how EPA
analyzed projected emissions in the upcoming year. The commenter states
that EPA's logic is almost tantamount to urging upwind states to wait
because downwind states will take care of the problem themselves.
    The commenter states that technical feasibility has been
specifically rejected as a basis for ignoring attainment deadlines in
North Carolina, and over-control is at best a secondary factor which
does not justify complete departure from the plain text and controlling
precedent. The commenter states that EPA's emphasis on over-control is
contrary to EME Homer City, stating that when the Supreme Court upheld
the consideration of cost-effectiveness in CSAPR and upheld EPA's
immediate issuance of a FIP after disapproving a SIP, the Court clearly
indicated that the key statutory mandate of the good neighbor provision
is to expeditiously ``maximize achievement of attainment downwind.''
134 S. Ct. at 1590. The Court made concern about over-control secondary
to that goal. Id. at 1609.
    The commenter further asserts that reliance on feasibility of
implementing controls to justify delaying action or analysis until 2023
is foreclosed by North Carolina, which specifically rejected the
compliance deadlines in CAIR that were based on feasibility restraints
but were not consistent with compliance deadlines for downwind states.
When EPA has considered feasibility in analyzing ozone related good
neighbor obligations since North Carolina, it has not been in the
context of selecting an analytic year, but in allocating emission
budgets. The commenter states that EPA's argument regarding feasibility
also includes the

need for additional time for planning and coordination between EPA and
states, but asserts that the courts have rejected claims that
additional time is necessary to improve the quality or soundness of
regulations. Sierra Club v. Johnson, 444 F. Supp. 2d 46, 53 (D.D.C.
2006).
    One commenter states that EPA should focus on achieving available
emission reductions on or before the 2020 ozone season (the next
applicable attainment date), rather than looking ahead to 2023. The
commenter states that by focusing on the timeframes to install new
controls, EPA has not conducted an analysis of reductions available in
the near term to see if there are additional NOX reduction
strategies that are available prior to 2023. The commenter identified
optimization of previously installed post-combustion controls as a
potential NOX reduction strategy with reductions available
immediately and at low cost. The commenter stated that EPA's concern
with over-control must be evaluated relative to the attainment
deadlines for the standard. Therefore, relying on EPA's 2023 modeling
is inconsistent with the intent of the CAA to achieve standards as
expeditiously as practicable.
    Another commenter states that EPA's rationale for use of a 2023
modeling year rests on a speculative guess of the time required for two
categories of cost-effective controls to be installed, starting from
the date of its approval. The commenter contends that EPA cannot rely
on the cost-effectiveness of EGU controls as the exclusive
consideration in justifying a further five-year delay when a full
remedy for Kentucky has already been unlawfully delayed for years. Even
if EPA has a general duty to avoid over-control of upwind emissions, it
cannot point to this duty to justify a strategy that postpones
necessary controls. Rather, EPA should require these controls now, and
then reevaluate them in a few years at the point when the purported
over-control may actually occur.
    Response: EPA disagrees with the commenters' assertion that EPA has
inappropriately weighted concerns about over-control of upwind state
emissions. The Supreme Court and the D.C. Circuit have both held that
EPA may not require emissions reductions (at step three of the
framework) that are greater than necessary to achieve attainment and
maintenance of the NAAQS in downwind areas. EME Homer City, 134 S. Ct.
at 1608; EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 127
(D.C. Cir. 2012) (EME Homer City II). While the Supreme Court indicated
that ``EPA must have leeway'' to balance the possibilities of under-
control and over-control and that ``some amount of over-control . . .
would not be surprising,'' the Court did not indicate that such over-
control was required. 134 S. Ct. at 1609. Rather, the Court held, ``If
EPA requires an upwind State to reduce emissions by more than the
amount necessary to achieve attainment in every downwind State to which
it is linked, the Agency will have overstepped its authority, under the
Good Neighbor Provision.'' Id. at 1608. On remand in EME Homer City II,
the D.C. Circuit gave that holding further meaning when it determined
that the CSAPR phase 2 ozone season NOX budgets for 10
states were invalid because EPA's modeling showed that the downwind air
quality problems to which these states were linked when EPA evaluated
air quality projections in 2012 would be entirely resolved by 2014,
when the phase 2 budgets were scheduled to be implemented. 795 F.3d at
129-30. Thus, the Court did not find that over-control was a secondary
consideration, but rather that it was a constraint on EPA's authority.
    To the extent that the commenters note that EPA chose an earlier
analytic year in prior rulemakings, EPA notes that it has not done so
in all rulemakings. In the NOX SIP Call, EPA evaluated air
quality in 2007, nine years after the rule was promulgated. 63 FR 57377
(October 27, 1998). In CAIR, which was promulgated in 2005, EPA
evaluated air quality in 2009 and 2010, for the ozone and
PM2.5 NAAQS, respectively. 70 FR 25241 (May 12, 2005). Thus,
EPA's approach in this action is not inconsistent with these prior
actions. Although EPA evaluated relatively more near-term air quality
in CSAPR and CSAPR Update, EPA expected that certain cost-effective
emission reductions could be implemented in the near-term in those
actions. Here, EPA has already analyzed and implemented those cost-
effective control strategies that could be implemented quickly
(including the optimization of existing post-combustion controls) to
address the 2008 ozone NAAQS through the CSAPR Update FIPs.
Accordingly, any further emission reductions that may be required to
address the 2008 ozone NAAQS would necessarily be implemented through
control strategies that cannot be implemented in the near term and
require a longer period for implementation. In addition, NOX
emissions levels are expected to decline in the future through the
combination of the implementation of existing local, state, and federal
emissions reduction programs and changing market conditions for
generation technologies and fuels.\8\ Therefore, were EPA to evaluate
downwind ozone concentrations and upwind state linkages in a future
year that precedes the date when actual compliance is anticipated
(i.e., the timeframe within which additional control strategies can
feasibly be implemented), EPA could not ensure that the emission
reductions will be ``necessary to achieve attainment'' in any downwind
area by the time they were implemented. Such an approach would only
replicate the circumstances the D.C. Circuit found impermissible in
CSAPR.
---------------------------------------------------------------------------

    \8\ Annual Energy Outlook 2018. Electricity Supply, Disposition,
Prices, and Emissions. Reference Case. Department of Energy, Energy
Information Administration.
---------------------------------------------------------------------------

    The commenter's citation to Sierra Club v. Johnson is inapposite.
In that case, EPA sought more time to promulgate regulations under the
CAA after failing to perform the mandatory duties within the
statutorily prescribed timeframe. 444 F. Supp. 2d at 52. Therefore, the
court's reference to the Agency's need for ``additional time'' is in
reference to the time required to conduct the rulemaking process. Id.
at 53. The court was not interpreting the requirements of the good
neighbor provision or any other provision regarding the time required
for states or sources to implement controls under the CAA.
    Finally, the commenters misunderstand EPA's evaluation to the
extent they suggest that EPA relied on the cost-effectiveness of
controls for this action. EPA evaluated the feasibility of implementing
various control options, without regard to cost, that had not
previously been included in EPA's analysis of cost-effective controls
in the CSAPR Update. EPA concluded that additional controls on either
EGUs or non-EGUs--when considering multiple projects across multiple
states and allowing for planning and permitting--would generally
require four years or more to implement, which would lead to an
implementation timeframe associated with the 2023 ozone season. Because
the air quality modeling results for 2023 showed that air quality
problems in the eastern U.S. would be resolved by 2023, EPA did not
further evaluate the cost-effectiveness of the control options
considered for the feasibility analysis.
    Comment: One commenter contends that EPA's insistence on fleetwide
compliance is based on a circular argument wherein such a scheme would

cause labor and material shortages that would, in turn, require four
years to implement, at which point they will be unnecessary. The
commenter points out that this means there will be no labor shortage.
The commenter notes that this is contrary to EPA's prior approaches in
CSAPR where the agency segregated controls based on feasibility,
including multiple phases, and conducted emissions analyses for both
phases.
    One commenter states that EPA cannot rely on its analysis of
alleged labor and materials shortages relating to installation of new
controls at a ``fleet'' level. While EPA may prefer a regional
approach, Congress did not establish a regional implementation plan
requirement or mechanism, and EPA is not considering whether to approve
a regional transport rule, nor a group of SIPs or FIPs. EPA is
proposing to approve a single SIP from a single state and has not
undertaken a study of the labor or materials market in Kentucky.
Therefore, EPA's justification for allowing the delay of EGU controls
for up to 48 months based on its speculative estimate of the time
needed to install these controls on all sources within some
unidentified region is arbitrary and capricious.
    One commenter states EPA's approach to evaluating potential
NOX controls on a regional, rather than state-specific,
basis ``undermines the intent of the CAA'' and causes Connecticut to be
required to spend more to attempt to comply with the CAA than states
that emit and contribute more to Connecticut's ozone problem.'' The
commenter states as an example that it recently promulgated a
reasonably available control technology (RACT) rule with a minimum
control cost of $13,000 per ton. The commenter states that EPA's under
controlling of emissions has led to delays in attainment and added cost
for Connecticut despite ozone exceedances being overwhelmingly due to
transported emissions.
    One commenter states that guidance provided in an informational
memorandum issued by EPA in January 2015 \9\ specifically references
upwind state responsibilities in determining the states' good neighbor
SIP transport obligations. EPA further states in its proposal that it
believes the most appropriate approach to evaluating potential upwind
obligations for Kentucky (where several other states are also linked to
the Harford County receptor) is to evaluate potential NOX
control strategies on a regional, rather than state-specific basis. The
commenter asserts that this is inconsistent with the scope of EPA's SIP
approval authority under CAA section 110, which involves intra-state,
rather than regional, plans to attain the NAAQS. The commenter also
contends that EPA's position is contrary to its previous positions in
denying Maryland's request for a super-regional nonattainment area
under CAA section 107, and in denying Maryland's section 176A petition
requesting expansion of the Ozone Transport Region (OTR). To the
contrary, EPA stated in those actions that CAA sections 110 and 126
were more appropriate mechanisms for controlling interstate pollution
transport.
---------------------------------------------------------------------------

    \9\ Memorandum from Stephen D. Page to Regional Air Division
Directors, ``Information on the Interstate Transport `Good Neighbor'
Provision for the 2008 Ozone National Ambient Air Quality Standards
(NAAQS) under Clean Air Act (CAA) Section 110(a)(2)(D)(i)(I)''
(January 22, 2015) (January 2015 Transport Memo), available at
https://www.epa.gov/sites/production/files/2015-11/documents/goodneighborprovision2008naaqs.pdf.
---------------------------------------------------------------------------

    Response: EPA disagrees with the commenters that it is
inappropriate to evaluate the feasibility of implementing
NOX controls on a regional or fleetwide basis. EPA's
analysis of the feasibility of NOX control strategies
reflects the time needed to plan for, install, test, and place into
operation new EGU and non-EGU NOX reduction strategies
regionally--i.e., across multiple states. This regional analytic
approach is consistent with the regional nature of interstate ozone
pollution transport. The Agency adopted this approach based on previous
interstate ozone transport analyses showing that where eastern downwind
ozone problems are identified, multiple upwind states typically are
linked to these problems. See 81 FR at 74538 (October 26, 2016).
Specifically of relevance to this action, EPA's assessment in the CSAPR
Update found that 21 states would continue to contribute greater than
or equal to 1 percent of the 2008 ozone NAAQS to identified downwind
nonattainment or maintenance receptors in multiple downwind states in
2017, even after implementation of the CSAPR Update FIPs. Thus, to
reasonably address these ozone transport problems, EPA must identify
and apportion emission reduction responsibility across multiple upwind
states. In other words, EPA's analysis should necessarily be regional,
rather than focused on individual linkages. Where such an analysis is
needed for multiple states, the inquiry into the availability and
feasibility of control options is necessarily considerably more
complicated than for a single state or sector.
    EPA further disagrees that this approach is inconsistent with EPA's
prior rulemakings, like CSAPR, where the Agency implemented controls in
multiple phases. In CSAPR, EPA evaluated downwind air quality and
upwind state linkages based on 2012 air quality and contribution
modeling. The commenter is correct that EPA then implemented two phases
of emission budgets, with a first phase of reductions implemented
beginning in 2012 and a second phase of reductions implemented
beginning in 2014. However, in subsequent litigation, a number of the
phase 2 ozone season NOX emission budgets were remanded
because EPA's modeling showed that there would no longer be downwind
air quality problems in many areas in 2014. See EME Homer City II, 795
F.3d at 129-30. Thus, EPA cannot require additional emission reductions
in a future year if EPA's data show that there will no longer be
downwind air quality problems in that year. Here, EPA implemented a
first phase of post-CSAPR emission reductions in 2017 via the CSAPR
Update. In this action, Kentucky and EPA have evaluated whether a
second phase of post-CSAPR emission reductions is necessary and
authorized by the good neighbor provision and determined that it is not
because downwind air quality problems identified in 2017 with respect
to the 2008 ozone NAAQS will be resolved by 2023.
    EPA does not agree that this approach is inconsistent with the
scope of EPA's authority under section 110. The fact that EPA is, in
this action, acting on a single SIP does not alter the regional nature
of ozone pollution transport. As the Supreme Court noted, the good
neighbor provision presents a ``thorny causation problem'' with respect
to ozone pollution transport in light of the ``collective and
interwoven contributions of multiple upwind States,'' EME Homer City,
134 S. Ct. at 1604. The Court affirmed EPA's consideration of the
problem on a regional rather than localized scale. Id. at 1606-07
(affirming EPA's use of cost to apportion upwind state emission
reduction responsibility). The Court did not indicate that this
endorsement of a regional assessment was appropriate only when EPA is
taking a regional action. Rather, it is reasonable for EPA to interpret
the implementation of the good neighbor provision for a particular
NAAQS consistently regardless of the scope of the action. Consistent
with this opinion, it is therefore also reasonable for EPA to view an
individual state's implementation plan through a regional lens.
    EPA also does not agree that the Agency's approach to evaluating
interstate ozone transport under section

110 is inconsistent with its recent action on a section 176A petition
to expand the OTR or EPA's designations under section 107. EPA denied
the section 176A petition because it concluded that any remaining
interstate transport problems could be better addressed via the good
neighbor provision, which EPA and the states can use to make decisions
regarding which precursor pollutants to address, which sources to
regulate, and what amount of emission reductions to require,
flexibilities that are not available with respect to control
requirements applicable to sources in the OTR. See 82 FR 51244-46
(November 3, 2017). EPA did not deny the petition because it concluded
that ozone transport was not regional; on the contrary, EPA explicitly
acknowledged the regional nature of ozone transport in its action. See
82 FR 6511 (January 19, 2017).
    With respect to the request for a super-regional nonattainment area
under section 107, EPA has consistently explained that such an approach
is not consistent with the statutory language.\10\ CAA section
107(d)(1) provides that areas designated nonattainment should include
any ``nearby'' area contributing to a violation of the NAAQS. EPA has
repeatedly explained that the proposal for broad super-regional
nonattainment areas go beyond this statutory definition by including
areas that are not necessarily ``nearby'' but contribute to
nonattainment through long-range transport, an issue that other
sections of the CAA, like the good neighbor provision, are designed to
address. Thus, rather than contradict EPA's analysis of ozone transport
regionwide, EPA's prior actions regarding requests for a super-regional
nonattainment area support EPA's view that such an approach is
appropriately applied under the good neighbor provision.
---------------------------------------------------------------------------

    \10\ See, e.g., Responses to Significant Comments on the State
and Tribal Designation Recommendations for the 2008 Ozone National
Ambient Air Quality Standards (NAAQS), EPA-HQ-OAR-2008-0476-0675,
Section 3.1.2 (April 2012); New York-Northern New Jersey, Long-
Island, NY-NJ-CT Nonattainment Area, Final Area Designations for the
2015 Ozone National Ambient Air Quality Standards Technical Support
Document, at 28-29.
---------------------------------------------------------------------------

    Finally, EPA does not agree that its conclusion that no additional
emission reductions would be required of upwind states undermines its
fleetwide analysis of labor and material shortages. EPA's analysis was
based on the assumption that if additional controls would be required
of upwind states, they would be required on a region-wide basis. This
was a reasonable assumption in light of the complex, regional nature of
ozone pollution transport. Had EPA identified remaining downwind air
quality problems in the future analytic year, it would have been
reasonable to assume that multiple upwind states would contribute to
any remaining air quality problem consistent with EPA's previous ozone
transport analyses and thus multiple upwind states could be required to
concurrently implement emission reductions. As explained earlier, while
EPA has phased-in application of controls in some circumstances, those
phases were implemented based on consistent, region-wide compliance
deadlines. The commenters do not explain how EPA could set different
compliance dates for different states in the CSAPR Update region to
require additional emission reductions while also insuring that states'
obligations were addressed in a consistent, non-arbitrary manner that
did not lead to over- or under-control.
    Comment: One commenter states that EPA's argument that extensive
planning is required to install controls is uncompelling because EPA
has had ample time to plan. The CSAPR Update repeatedly emphasizes that
states, including Kentucky, were expected to have remaining obligations
after the implementation of the CSAPR Update. Moreover, EPA has been on
notice that it would be required to take action on Kentucky by June
2018 as required by court order.
    Response: The commenter misunderstands EPA's reference to the
planning required to implement additional controls. The individual
sources, not EPA, must engage in appropriate planning anytime they
install new control devices. As discussed in more detail later,
installing new selective catalytic reduction (SCR) or selective non-
catalytic reduction (SNCR) controls for EGUs or non-EGUs generally
involves the following steps: Conducting an engineering review of the
facility; advertising and awarding a procurement contract; obtaining a
construction permit; installing the control technology; testing the
control technology; and obtaining or modifying an operating permit.\11\
Scheduled curtailment, or planned outage, for pollution control
installation would be necessary to complete either SCR or SNCR
projects. Given that peak demand for EGUs and rule compliance would
both fall in the ozone season, such sources would likely try to
schedule installation projects for the ``shoulder'' seasons (i.e., the
spring and/or fall seasons), when electricity demand is lower than in
the summer, reserves are higher, and ozone season compliance
requirements are not in effect. In addition to the coordination of
scheduled curtailment, an appropriate compliance timeframe would need
to accommodate the additional coordination of labor and material supply
necessary for any fleet-wide mitigation efforts. More details regarding
these considerations are outlined later in this preamble.
---------------------------------------------------------------------------

    \11\ Final Report: Engineering and Economic Factors Affecting
the Installation of Control Technologies for Multipollutant
Strategies, EPA-600/R-02/073 (October 2002), available at https://nepis.epa.gov/Adobe/PDF/P1001G0O.pdf.
---------------------------------------------------------------------------

    Many of these materials, installation, and labor concerns are also
relevant for non-EGU control technologies. Thus, the implementation of
new EGU and non-EGU NOX reduction strategies, especially
when implemented across a broad region of states, requires extensive
time and planning by the affected sources.
    Moreover, while EPA indicated that the CSAPR Update may not fully
address states' good neighbor obligations, the Agency did not
definitively conclude that more emission reductions would necessarily
be required. Nor did the Agency indicate what sources would likely be
controlled, in which states, or via what control strategies if
additional emission reductions were in fact required. Thus, EPA does
not agree with the commenter's suggestion that it was reasonable for
any particular sources to begin planning for the implementation of new
controls before EPA or the states completed further analysis and
promulgated requirements actually requiring additional emission
reductions.
    Comment: One commenter states that EPA's finding that
implementation of control strategies is not feasible until during or
after the 2022 ozone season is false and contradicted by the evidence
EPA presents. The commenter contends that EPA's conclusion that 48
months may be necessary to implement emission reductions is contrary to
EPA's own experience of pollution control and belied by EPA's own
finding that Kentucky will likely outperform its CSAPR Update
obligations. Both CSAPR and CSAPR Update were implemented on much
shorter timescales, with immediate reductions available in both cases
in under one year, and post-combustion controls being required within
three years under CSAPR.
    Response: EPA has evaluated the feasibility of implementing
controls on a region-wide basis, considering markets for labor and
materials necessary for implementing controls across multiple sources
in multiple states. Thus, examples where individual sources might have
installed controls more

quickly do not speak to what is reasonable to require across a state or
a region, and therefore do not contradict EPA's analysis.
    Moreover, EPA's projections of EGU emission levels in Kentucky in
2023 also do not contradict EPA's conclusion that 48 months should be
provided for the region-wide implementation of new NOX post-
combustion controls. Kentucky's CSAPR Update budget is not an emissions
floor. It represents emission reductions reflecting control strategies
determined to be cost-effective and feasible to implement by the first
compliance year in 2017 (e.g., SCR optimization). However, market
conditions that did not influence quantification of the budgets can
also drive further emission reductions in future years, including
variables such as low natural gas prices and new, lower-cost competitor
generation in downwind states, and can lead to utility decisions to
retire aging assets. In addition, sources may install new controls
after the 2017 ozone season that would not have been considered when
EPA calculated the budgets.\12\ These factors can and do lead to state-
emission levels often being significantly lower than its emission
budget in future compliance years. EPA's projected emissions level in
2023 captures these types of recently announced and known
infrastructure changes and fleet turnover and it is therefore
reasonable that the 2023 projected EGU emissions would be below
Kentucky's CSAPR Update budget established for a first compliance year
of 2017.
---------------------------------------------------------------------------

    \12\ EPA notes that the only new post-combustion controls
assumed in EPA's projection of 2023 EGU emissions in Kentucky were
at Shawnee units 1 and 4. Both of these units were required to
implement SCR as of December 31, 2017 pursuant to a compliance
agreement with EPA finalized in 2011. See 76 FR 22095 (April 20,
2011) and https://www.epa.gov/enforcement/tennessee-valley-authority-clean-air-act-settlement.
---------------------------------------------------------------------------

    While CSAPR and CSAPR Update were implemented more quickly than the
four years considered in this action, neither CSAPR nor CSAPR Update
anticipated that sources would implement new post-combustion
NOX controls. See 76 FR 48302 (August 8, 2011); 81 FR 74541
(October 26, 2016). Rather, the ozone season emission budgets for both
rules only considered the near-term emission reductions that could be
achieved from implementation of control strategies other than new post-
combustion controls, including the optimization of existing post-
combustion controls and implementation of new combustion controls. See
76 FR 48256 (August 8, 2011); 81 FR 74541 (October 26, 2016). With
respect to the 2008 ozone NAAQS, EPA already implemented the near-term
emission reductions that were cost-effective in the CSAPR Update.
Accordingly, EPA disagrees with the commenter's suggestion that there
may be substantial immediate NOX reductions available that
could be implemented on a more immediate timeframe at this time.
    EPA notes that it did evaluate post-combustion controls in CSAPR
with respect to sulfur dioxide (SO2) emission reductions
necessary to address PM2.5 and established emission budgets
reflecting the possible implementation of scrubbers three years
following rule promulgation. However, to the extent labor and supply
markets were a consideration for installation timing requirements for
scrubbers in CSAPR in 2011, those variables may have changed over the
last seven years. Moreover, EPA established budgets for NOX
in CSAPR based on a cost threshold of $500 per ton, which was not
anticipated to drive significant, labor- and resource-intensive SCR
installation within that timeframe. See 76 FR 48302 (August 8, 2011).
    Comment: One commenter asserts that EPA has not explained why it
still lacks information on the potential for cost-effective emission
reductions from non-EGUs, two years after the CSAPR Update was
promulgated. EPA's analysis is lacking any analysis of actual cost-
effectiveness numbers for non-EGU controls, relying instead on an
``implication'' from two-year old public comments that non-EGU controls
would be relatively less cost-effective than EGU controls. EPA ignores
its own framework, which calls for determining the availability and
cost-effectiveness of non-EGU controls, despite identifying the need to
do so in the CSAPR Update. In a footnote, the commenter notes that EPA
represented to the court in a mandatory duty suit that it was taking
steps to improve its data to evaluate NOX reduction
potential from non-EGUs, which it expected to complete by November
2017. EPA has not accounted for any of the stakeholder reviewed
information on non-EGU emissions reductions and costs that it should
have amassed in the last year and a half.
    The commenter further contends that EPA has changed its regulatory
position without reasonable explanation. In the CSAPR Update, EPA
indicated that evaluating full interstate transport obligations is
subject to an evaluation of the contribution to interstate transport
from non-EGUs, but EPA has unexpectedly changed course and stated that
no such evaluation is necessary. This is an unexplained, arbitrary and
capricious change in policy.
    One commenter states that with respect to non-EGU sources, EPA
``has documented multiple cost-effective controls that can be
implemented within one year'' in the ``Assessment of Non-EGU
NOX Emissions Controls, Costs of Controls and Time for
Compliance Final TSD'' dated August 2016 available in the docket for
the final CSAPR Update Rule. The commenter notes that EPA has dismissed
these potential benefits as ``uncertain'' and states that EPA ``cannot
continue to invoke the prospect of an uncertain future to limit its
responsibility to satisfy its statutory mandate.''
    Response: EPA first notes that it is not relying on its lack of
information with respect to the cost-effectiveness of non-EGUs to
support this final action. EPA evaluated the feasibility of
implementing various control options, without regard to cost, that had
not previously been included in EPA's analysis of cost-effective
controls in the CSAPR Update. EPA concluded that additional controls--
on either EGUs or non-EGUs--would generally require four years to
implement, which would lead to an implementation timeframe associated
with the 2023 ozone season. Because the air quality modeling results
for 2023 showed that air quality problems in the eastern U.S. would be
resolved by 2023, EPA did not further evaluate the cost-effectiveness
of the control options considered for the feasibility analysis. This
approach is consistent with EPA's four-step framework, and does not
rely on the relative cost-effectiveness of controls for non-EGUs.
    Because EPA did not need to evaluate either the cost-effectiveness
or NOX reduction potential of either EGU or non-EGU sources,
the commenter's concern with whether EPA has completed steps to improve
its data on these issues is irrelevant. Nonetheless, EPA notes that the
particular efforts outlined in the court filing referred to by the
commenter were in support of EPA's request in a mandatory duty suit
that the court permit the Agency several years to develop a rulemaking
to address the good neighbor obligations with respect to the 2008 ozone
NAAQS for Kentucky and 20 other states. In that filing, EPA outlined
steps that the Agency believed would be necessary to promulgate a
rulemaking if EPA's analysis demonstrated that additional emission
reductions would be required from sources in upwind states, including
what EPA viewed as necessary analysis regarding non-EGUs. EPA
acknowledged in that same

declaration that one possible result of the litigation could be a
determination that downwind air quality problems would be resolved, in
which case a cost-effectiveness analysis would be unnecessary. See
Decl. of Janet G. McCabe para. 98, Sierra Club v. Pruitt, No. 3:15-cv-
04328-JD (N.D. Cal. Dec. 15, 2016). As EPA could not know the results
of any future air quality modeling before it was performed, EPA's
proposed timeline assumed that such an analysis could be required. Id.
para. 170. Ultimately, the court disagreed with EPA's proposed timeline
and provided only one year--until June 30, 2018--for promulgation of a
rulemaking addressing Kentucky's good neighbor obligation, which was
insufficient time to complete all of the steps outlined in EPA's
declaration, thereby requiring EPA to prioritize certain steps and
eliminate others, including the additional efforts intended to improve
data regarding the cost-effectiveness of controls. Nonetheless, because
the first step of EPA's analysis demonstrated that there would be no
remaining air quality problems in 2023 in the eastern U.S., it was
unnecessary for EPA to finalize the efforts to improve its data
regarding the cost-effectiveness of controls before finalizing this
action. Thus, the representations that EPA made to the court regarding
the steps necessary to take this action no longer apply under the
present circumstances.
    Thus, EPA's analysis is not a change in policy. In the CSAPR
Update, EPA only stated it could not conclude, at that time, that
additional reductions from NOX sources (including non-EGUs)
would not be necessary to fully resolve these obligations. While EPA
did indicate that it anticipated the need to evaluate non-EGUs to fully
evaluate the full scope of upwind states' good neighbor obligations,
the Agency has done so here. In selecting the appropriate future
analytic year in which to evaluate air quality, contributions, and
NOX reduction potential, EPA considered the implementation
timeframes for controls at EGUs as well as non-EGUs. As noted in the
NPRM and explained further in this action, EPA's analysis showed that
there would be no remaining air quality problems in 2023 in the eastern
U.S., and thus EPA has concluded that no such additional reductions
beyond those on-the-books or on-the-way are necessary, whether from
non-EGUs or otherwise, to bring downwind areas into attainment of the
2008 ozone NAAQS.
    Finally, the commenter is correct that EPA included preliminary
estimates of installation times for some non-EGU NOX control
technologies in a technical support document for the CSAPR Update
entitled Assessment of Non-EGU NOX Emission Controls, Cost
of Controls, and Time for Compliance Final Technical Support Document
(Final Non-EGU TSD). These preliminary estimates were based on research
from a variety of information sources, including:
     Typical Installation Timelines for NOX Emissions Control
Technologies on Industrial Sources, Institute of Clean Air Companies,
December 2006 (all sources except cement kilns and reciprocating
internal combustion engines (RICE)); \13\
---------------------------------------------------------------------------

    \13\ Institute of Clean Air Companies, Typical Installation
Timelines for NOX Emissions Control Technologies on Industrial
Sources, December 2006, available at https://c.ymcdn.com/sites/icac.site-ym.com/resource/resmgr/ICAC_NOX_Control_Installatio.pdf.
---------------------------------------------------------------------------

     Cement Kilns Technical Support Document for the NOX FIP,
US EPA, January 2001; \14\ and
---------------------------------------------------------------------------

    \14\ US EPA, Cement Kilns Technical Support Document for the
NOX FIP, January 2001, available at https://www.regulations.gov/document?D=EPA-HQ-OAR-2015-0500-0094.
---------------------------------------------------------------------------

     Availability and Limitations of NOX Emission Control
Resources for Natural Gas-Fired Reciprocating Engine Prime Movers Used
in the Interstate Natural Gas Transmission Industry, Innovative
Environmental Solutions Inc., July 2014 (prepared for the INGAA
Foundation).\15\
---------------------------------------------------------------------------

    \15\ INGAA Foundation, Availability and Limitations of
NOX Emission Control Resources for Natural Gas-Fired
Reciprocating Engine Prime Movers Used in the Interstate Natural Gas
Transmission Industry, Innovative Environmental Solutions Inc., July
2014, available at http://www.ingaa.org/Foundation/Foundation-Reports/NOX.aspx.
---------------------------------------------------------------------------

    EPA's analysis in the Final Non-EGU TSD focused on potential
control technologies within the range of costs considered in the final
CSAPR Update for EGUs, i.e., those controls available at a marginal
cost of $3,400 per ton (2011 dollars) of NOX reduced or
less. EPA's analysis did not evaluate implementation timeframes or
potential emissions reductions available from controls at higher cost
thresholds. See Final Non-EGU TSD at 18. This focus excluded some
emissions source groups with emissions reduction potential at a
marginal cost greater than $3,400 per ton, including: Industrial/
commercial/institutional boilers using SCR and low-NOX
burners (LNB); and catalytic cracking units, process heaters, and coke
ovens using LNB and flue gas recirculation. However, while the
emissions reduction potential from these source groups is uncertain,
the timeframe for these control technologies would be subject to
similar considerations and limitations discussed in the following
paragraphs.
    Among the control technologies that were evaluated in the Final
Non-EGU TSD, EPA identified six categories of common control
technologies available for different non-EGU emissions source
categories. Id. at 19. For four of the technology categories (SNCR,
SCR, LNB, and mid-kiln firing), EPA preliminarily estimated that such
controls could be installed in approximately one year or less in some
unit-specific cases. Installation time estimates presented in the Final
Non-EGU TSD begin with control technology bid evaluation (bids from
vendors) and end with the startup of the control technology.\16\ See
Final Non-EGU TSD at 20. For the other two technology categories
(biosolid injection technology (BSI) and OXY-firing) as well as one
emissions source category (RICE), EPA had no installation time
estimates or uncertain installation time estimates. For example, EPA
found that the use of BSI is not widespread, and therefore EPA does not
have reliable information regarding the time required to install the
technology on cement kilns. The installation timing for OXY-firing is
similarly uncertain because the control technology is installed only at
the time of a furnace rebuild, and such rebuilds occur at infrequent
intervals of a decade or more.
---------------------------------------------------------------------------

    \16\ In the Final Non-EGU TSD, we present different installation
time estimates for SCRs and non-EGUs than described in the NPRM and
in this action for EGUs. These installation times are not
inconsistent because: (i) The EGU time estimate of 39 months
mentioned in the NPRM is based on multi-boiler installation and
factors in a pre-vendor bid engineering study consideration, and
(ii) the non-EGU SCR installation time estimates are based on
single-unit installation and do not factor in pre-vendor bid
evaluation.
---------------------------------------------------------------------------

    Moreover, for those categories for which preliminary estimates were
available, as noted in the Final Non-EGU TSD, the single unit
installation time estimates provided do not account for additional
important considerations in assessing the full amount of time needed
for installation of NOX control measures at non-EGUs; those
considerations include time, labor, and materials needed for
programmatic adoption of measures and time required for installing
controls on multiple sources in a few to several non-EGU sectors across
the region. The preliminary estimates of installation time shown in the
Final Non-EGU TSD are for installation at a single source and do not
account for the time required for installing controls to achieve
sector-wide compliance. When considering installation of control
measures on sources regionally and across non-EGU sectors, the time for
full sector-wide compliance is uncertain, but it is likely longer than
the installation times shown

for control measures as mentioned above for individual sources in the
Final Non-EGU TSD. Regional, sector-wide compliance could be slowed
down by limited vendor capacity, limited available skilled labor for
manufacturers such as boilermakers (who produce steel fabrications,
including those for pollution control equipment), availability of raw
materials and equipment (e.g., cranes) for control technology
construction, and bottlenecks in delivery and installation of control
technologies. Some of the difficulties with control technology
installation as part of regional, sector-wide compliance at non-EGUs,
such as availability of skilled labor and materials, could also have an
impact on monitor installation at such sources. EPA currently has
insufficient information on vendor capacity and limited experience with
suppliers of control technologies and major engineering firms, which
results in uncertainty in the installation time estimates for non-EGU
sectors.
    In summary, there is significant uncertainty regarding the
implementation timeframes for various NOX control
technologies for non-EGUs. While EPA has developed preliminary
estimates for some potential control technologies, these estimates do
not account for additional considerations such as the impacts of
sector- and region-wide compliance. For purposes of this analysis, EPA
believes that it is reasonable to assume that it is likely that an
expeditious timeframe for installing sector- or region-wide controls on
non-EGU sources may collectively require four years or more.
    Comment: One commenter adds that the CSAPR Update considered SCR to
be optimized if the unit achieves a rate of 0.10 lbs/mmBtu, but EPA did
not examine the particular rates that can be achieved by Kentucky's
EGUs. The commenter states that EPA should require Kentucky's EGUs to
achieve an optimized emissions rate at each EGU based on the past best
demonstrated ozone season average rates at the unit. The commenter
states that such optimized rates would be reflective of a unit's actual
reported data and would be considered well controlled while still
allowing for fluctuation in operating conditions, as it would encompass
a whole ozone season's worth of reported emission data. The commenter
states that its own analysis indicates that, even after CSAPR Update
implementation, Kentucky's coal-fired EGUs could have reduced
NOX emissions by an additional 4,100 tons during the 2017
ozone season and could have reduced daily NOX emissions by
up to an additional 35 tons per day by optimizing existing controls at
levels the EGUs had previously achieved. The commenter contends that
optimization of existing controls is cost-effective and has already
been shown to be achievable from past performance. The commenter
further asserts that not requiring Kentucky's EGUs to optimize controls
by this ozone season, at levels consistent with past best-demonstrated
ozone season average rates at each EGU, goes against the intent of the
CAA to reduce transported air pollution as expeditiously as
practicable. The commenter provides suggested language that could be
used to require specific coal-fired EGUs in Kentucky to optimize use of
existing control technologies.
    Another commenter states that EPA's argument regarding installation
of control devices on uncontrolled EGUs being unworkable (based on
potential for delays due to shortages in qualified labor and material)
ignores the potential for immediate reductions that can be had by
optimizing existing EGU controls.
    Response: To the extent the commenters take issue with EPA's
determination in the CSAPR Update that 0.10 lb/mmBtu was reasonable
rate to reflect optimized existing SCR controls regionwide, EPA did not
reopen that issue for comment in this rulemaking. EPA has already
evaluated and implemented cost-effective NOX emission
reductions associated with the optimization of existing SCRs. In
establishing the CSAPR Update EGU ozone season NOX emissions
budgets, the Agency quantified the emissions reductions achievable from
all NOX control strategies that were feasible to implement
in less than one year and cost-effective at a marginal cost of $1,400
per ton of NOX removed.\17\ These EGU NOX control
strategies were: Optimizing NOX removal by existing,
operational SCR controls; turning on and optimizing existing idled SCR
controls; installing state-of-the-art NOX combustion
controls; and shifting generation to existing units with lower-
NOX emissions rates within the same state. See 81 FR 74541
(October 26, 2016). Thus, for the purposes of this action, EPA
considers the turning on and optimizing of existing SCR controls to be
a NOX control strategy that has already been evaluated and
implemented in the final CSAPR Update. Any concerns regarding whether
EPA appropriately considered these controls in the CSAPR Update are not
within the scope of this action.
---------------------------------------------------------------------------

    \17\ The CSAPR Update was signed on September 7, 2016--
approximately eight months before the beginning of the 2017 ozone
season on May 1.
---------------------------------------------------------------------------

    Moreover, the Agency believes that the resulting CSAPR Update
emissions budgets are being appropriately implemented under the CSAPR
NOX Ozone Season Group 2 allowance trading program.
Preliminary data for the 2017 ozone season, which is the first CSAPR
Update compliance period, indicate that power plant ozone season
NOX emissions across the 22-state CSAPR Update region were
reduced by 77,420 tons (or 21 percent) from 2016 to 2017.\18\ As a
result, total 2017 ozone season NOX emissions from covered
EGUs across the 22 CSAPR Update states were approximately 294,478
tons,\19\ well below the sum of states' emissions budgets established
in the CSAPR Update of 316,464 tons. At the state-level, preliminary
2017 ozone season data indicate power plant emissions within Kentucky
were reduced 5,424 tons (also 21 percent) from 2016 to 2017. As a
result, emissions were 19,978 tons, well below Kentucky's CSAPR Update
budget of 21,115 tons. More specifically, emissions from non-optimized
SCR-controlled units (i.e., units with an emission rate greater than
0.10 lb/mmBtu) in the CSAPR Update region were 82,321 tons in 2016.
EPA's 2023 emission estimate for these same units post-optimization was
40,590. Actual emissions in 2017 from these units was 41,706 tons,
demonstrating that the CSAPR Update has successfully incentivized
optimization of controls in Kentucky and across the CSAPR Update
region.
---------------------------------------------------------------------------

    \18\ https://ampd.epa.gov/ampd/ (Data current as of March 1,
2018).
    \19\ Id.
---------------------------------------------------------------------------

    To the extent that EPA's NPRM could be interpreted as having
invited comment on this issue, EPA further notes that, in the CSAPR
Update the Agency reviewed fleet-wide, SCR-controlled coal units from
2009 to 2015 and calculated an average ozone season NOX
emission rate across the fleet of coal-fired EGUs with SCR for each of
these seven years, and used the third lowest average ozone season
NOX rate. As described in that rule, EPA determined that it
was not prudent to use either the lowest or second-lowest ozone season
NOX rates to represent the optimization of controls because
such a rate may reflect new SCR systems that have all new components
(e.g., new layers of catalyst). See 81 FR 74543 (October 26, 2016). EPA
determined that data from these new systems are not representative of
ongoing achievable NOX rates considering broken-in

components and routine maintenance schedules. Moreover, there are
market conditions, maintenance, and outages (scheduled and unscheduled)
that can impact the utilization rates. These factors can fluctuate
yearly and provide another set of reasons to not universally assume
that the lowest rate for a unit can repeat itself on a yearly basis
going forward. EPA determined instead that the third lowest fleet-wide
average coal-fired EGU NOX rate for EGUs with SCR, or 0.10
lbs/mmBtu, would be representative of ongoing achievable emission
rates. The commenter has not provided any information to contradict
this conclusion.
    EPA further notes that this rate was implemented as an upper limit,
meaning that EPA did reflect units that had recently operated an a more
efficient rate in the budget calculations. EPA considered the latest
available data at the time of that rulemaking (i.e., 2015) that
captured each unit's operation and performance under the latest fleet
and market conditions. EPA used 0.10 lb/mmBtu as a ceiling in its
budget calculation to reflect optimization of existing controls that
were not achieving that level in 2015. However, the Agency used a rate
of less than 0.10 lb/mmBtu if the unit was operating at that level in
2015 and a rate of 0.075 lb/mmBtu for new SCRs. Thus, EPA's budget
calculation and consequent emission reduction requirements did reflect
the fact that some units can and do operate below 0.10 lb/mmBtu.
    Comment: One commenter states that EPA's speculative examination of
the timeline required to install and run new EGU controls based on a
cost-effectiveness threshold of $1,400 is unreasonable where there are
existing EGU controls that EPA admits could be run, only at a higher
cost. EPA's focus on its estimated timeline for design and installation
of new, cost-effective EGU controls such as SCRs and SNCRs puts cost-
effectiveness above all else, and that EPA must take into account other
statutory concerns and considerations (such as attainment deadlines for
downwind states). The commenter contends that, while cost-effectiveness
thresholds have been upheld as a reasonable consideration in
prioritizing control of sources, these thresholds cannot conversely be
used to justify unreasonable, protracted delay in requiring upwind
emission reductions. If there are no EGU controls at a given cost
threshold that can be installed in time to permit downwind states to
meet their attainment deadlines, then EPA has set the cost-
effectiveness threshold too low or has defined the type of controls too
narrowly.
    The commenter concludes that EPA's refusal to reconsider its cost-
effectiveness threshold of $1,400 per ton of NOX is
arbitrary where EPA has concluded that idled SNCR controls are
available for immediate emission reductions at a cost of $3,400 per
ton. Moreover, EPA dismissed this control strategy without any analysis
of whether SNCRs can be run at less than $3,400 per ton, which is
arbitrary and capricious when downwind states such as New York are
forced to reduce NOX by implementing RACT controls at costs
of more than $5,000 per ton.
    One commenter states that the CSAPR Update failed to look at any
short-term fixes, such as the operation of idled SNCR, that could now
be benefiting downwind areas. The commenter notes that the CSAPR Update
also ruled out restarting idled SNCR based on the conclusion that
$3,400 per ton was not cost effective, despite the fact that New York
and other downwind states commonly apply RACT at a cost threshold of
$5,000 per ton and greater.
    Another commenter states that the control costs of $1,400 per ton
considered in the Kentucky SIP are too low and that EPA should require
Kentucky to analyze all options available. The commenter states that
Kentucky should not limit its control costs to those in the CSAPR
Update since ``EPA considered this rule a partial remedy.'' The
commenter provides as an example that ``EPA identified an additional
measure that could be undertaken immediately'' in turning on existing
idled SNCRs. The commenter states that EPA should also consider
evaluating cost effectiveness of controls on an ozone season day rather
than an annual basis, in order to address the need to lower emissions
on high ozone days.
    Response: EPA first notes that the commenters misunderstand EPA's
evaluation in this action to the extent they suggest that Kentucky or
EPA relied on the cost-effectiveness of controls in order to select an
appropriate future analytic year. As explained earlier, EPA evaluated
the feasibility of implementing, without regard to cost, various
control options that had not previously been included in EPA's analysis
of cost-effective controls in the CSAPR Update. EPA concluded that
additional controls on either EGUs or non-EGUs would generally require
four years to implement, which would lead to an implementation
timeframe associated with the 2023 ozone season. Had EPA identified
downwind air quality problems to which upwind states continued to be
linked in 2023, EPA would have proceeded to the next steps in its four-
step analytic framework and evaluated the cost-effectiveness of all
available controls, considering the achievable emission reductions and
anticipated improvements in downwind air quality at all cost
thresholds. However, EPA did not further evaluate the cost-
effectiveness of the control options considered for the feasibility
analysis because EPA lacks authority to require additional emission
reductions in 2023 in light of the modeling results showing that air
quality problems in the eastern U.S. would be resolved by that time.
See EME Homer City II, 795 F.3d at 129-30 (finding emissions budgets
for 10 states were invalid because EPA's modeling showed that the
downwind air quality problems to which these states were linked when
EPA evaluated projected air quality in 2012 would be entirely resolved
by 2014).
    Similarly, to the extent the commenter suggests cost-effectiveness
should be evaluated on particular days, rather than over the ozone
season, this comment is not material to this action because EPA's
analysis has concluded at step one of the four-step framework.
    EPA did not reevaluate the feasibility of near-term control
strategies in order to inform the selection of a future analytic year
for this action because both the feasibility and cost-effectiveness of
those control strategies were already fully evaluated in the CSAPR
Update. Thus, EPA acknowledges that the operation of idled SNCR
controls could physically be implemented more quickly than four years,
but EPA already evaluated whether this control was cost-effective to
implement relative to other near-term control strategies in the CSAPR
Update and concluded that it was not.\20\ In the CSAPR Update, EPA
identified a marginal cost of $3,400 per ton as the level of uniform
control stringency that represents turning on and fully

operating idled SNCR controls.\21\ Ultimately, the CSAPR Update
finalized emissions budgets using $1,400 per ton control stringency,
finding that this level of stringency represented the control level at
which incremental EGU NOX reductions and corresponding
downwind ozone air quality improvements were maximized with respect to
marginal cost. In finding that use of the $1,400 control cost level was
appropriate, EPA established that the more stringent emissions budget
level reflecting $3,400 per ton (representing turning on idled SNCR
controls) yielded fewer additional emissions reductions and fewer air
quality improvements relative to the increase in control costs.
Specifically, EPA's analysis showed that the additional reductions from
the operation of idling SNCRs in Kentucky would only result in a 0.5
percent decrease in the Commonwealth's emission budget (from 21,115 to
21,007 tons). See 81 FR 74548 (October 26, 2016). In other words, based
on the CSAPR Update analysis, establishing emissions budgets at $3,400
per ton, and therefore developing budgets based on operation of idled
SNCR controls, was determined not to be cost-effective for addressing
downwind air quality problems under the good neighbor provision
obligations for the 2008 ozone NAAQS. See 81 FR 74550 (October 26,
2016). EPA believes that the strategy of turning on and fully operating
idled SNCR controls was appropriately evaluated in the CSAPR Update
with respect to addressing interstate ozone pollution transport for the
2008 ozone NAAQS. Accordingly, EPA is not further assessing this
control strategy for purposes of identifying an appropriate future
analytic year. EPA did not reopen that issue for comment in this
rulemaking, and the comments are therefore not within the scope of this
action. To the extent that the commenter believes that EPA's analysis
of SNCR controls in the CSAPR Update was flawed, the time to contest
that analysis was during that rulemaking.
---------------------------------------------------------------------------

    \20\ EPA notes that this conclusion that the feasibility of
implementing SNCR should not inform the potential compliance
timeframe and analytic year would not have precluded EPA from
considering whether the operation of SNCR would be cost-effective
relative to the installation of post-combustion controls. Had EPA,
at step one of the four-step framework, identified continued
downwind air quality problems in 2023, EPA could have considered in
subsequent steps whether to require emission reductions consistent
with operation of existing SNCR in addition to considering whether
to require emission reductions consistent with implementation of new
post-combustion controls. However, because EPA has already concluded
that operation of existing SNCR is not cost-effective in the near-
term, it would not be reasonable for EPA to select an earlier
analytic year that would only be consistent with the timeframe for
implementing that non-cost-effective near-term compliance strategy.
    \21\ See EGU NOX Mitigation Strategies Final Rule TSD
(docket ID EPA-HQ-OAR-2015-0500-0554, available at
www.regulations.gov and https://www.epa.gov/sites/production/files/2017-05/documents/egu_nox_mitigation_strategies_final_rule_tsd.pdf)
(NOX Mitigation Strategies TSD).
---------------------------------------------------------------------------

    To the extent the commenters suggest that EPA must select a higher
cost threshold in order to ``permit downwind states to meet their
attainment deadlines,'' the commenters misconstrue the requirements of
the good neighbor provision and the applicable legal precedent. The
good neighbor provision does not require upwind states to bring that
downwind areas into attainment with the NAAQS. Rather, states are
required to reduce emissions that ``contribute significantly'' to
nonattainment in downwind areas. Once a state has eliminated its
significant contribution to downwind nonattainment, it has met the
requirements of the good neighbor provision, regardless of whether the
downwind area has actually attained. See, e.g., 76 FR 48258-59 (August
8, 2011) (determining in CSAPR that SO2 emission reductions
available at $2,300 per ton represented good neighbor obligation even
though some downwind air quality problems would persist). This is
distinct from the obligations imposed on downwind states containing
designated nonattainment areas, which are directly obligated to
demonstrate attainment of the NAAQS. See, e.g., CAA section
182(c)(2)(A) (requiring the state submit a demonstration that the plan
will provided for attainment of the ozone NAAQS by the applicable
attainment date). Because the statutory obligations imposed on upwind
and downwind states with respect to attainment differs, it is also
reasonable that the costs of controls implemented in upwind states may
also differ from those implemented in downwind states. The Supreme
Court has already affirmed EPA's approach to quantifying and
apportioning upwind states' significant contribution on the basis of
cost. See EME Homer City, 134 S. Ct. at 1607. While the Court stated
that EPA was prohibited from requiring more emission reductions than
necessary to bring downwind areas into attainment of the NAAQS, id. at
1608, the Court did not indicate that upwind states were specifically
responsible for ensuring the downwind states achieve attainment in all
instances. Thus, EPA does not agree that it must require additional
emission reductions from upwind states, even if they are not cost-
effective, simply because a downwind area has not yet attained the
NAAQS.
    Comment: One commenter states that EPA's contention that
implementation of controls is not feasible until during or after the
2022 ozone season is unfounded for the following reasons:
     SCR installations are typically less time-consuming than
39 months, noting that one of the resources EPA cites indicates 21
months is reasonable.
     SNCR takes less time, 10-13 months, to implement.
     EPA tacitly admits some projects could be completed prior
to 2022 when it claims that SCR and SNCR should be ``linked'' at the
fleet-level.
     The original CSAPR allowed less than three years for
compliance with SO2 limits that were expected to require
installation of flue gas desulfurization controls, which generally are
expected to take longer than SCR to install.
     EPA's integrated planning model assumes SO2
scrubbers can be installed in three years and SCR units in two years.
     Non-EGU controls are widely available on timeframes
shorter than 48 months according to EPA's Final Non-EGU TSD. Although
EPA insinuates this document questions the availability of non-EGU
controls within 48 months, it lists many categories of non-EGU
NOX controls available in about 60 weeks that were also
cost-effective.
     EPA did not exhaust readily available EGU control options.
Kentucky could require 100 percent operation of already-installed
control equipment or insist on optimized performance. Kentucky could
discontinue use of ``banked allowances'' in the CSAPR Update. And CSAPR
did not require any re-dispatch or shifting power generation from
higher-emitting to lower-emitting plants, which is also feasible in the
short term.
     EPA's arguments regarding the availability of steel and
cranes are tenuous. EPA cites only two documents to support its
assertion about crane shortages, only one of which even mentions a
shortage. That article only indicates that developers need to book the
cranes and operators several months in advance, which is not much of an
obstacle.
    Another commenter states that--based on its experience--EPA's
estimated installation time frames for SCRs are too conservative
(short), and provides a range of 28 to 60 months for installation of
SCRs at one site.
    Response: EPA first notes that responses to comments regarding the
following issues are addressed earlier in this document: (1) Timeframes
assumed for installation of post-combustion controls in CSAPR; (2)
timeframes for installation of controls on non-EGUs; and (3) the
optimization of existing post-combustion controls. EPA will address the
remaining comments in the following paragraphs.
    EPA disagrees that the timeframe for implementation of SNCR and SCR
at an individual unit necessarily indicates that the feasibility
analysis is flawed. As an initial matter, there are differences between
these control technologies with respect to the potential viability of
achieving cost-effective regional NOX reductions from EGUs.
SCR controls generally achieve greater EGU NOX reduction
efficiency (up to 90 percent) than SNCR controls (up to 25 percent).
Resulting in part from this disparity in NOX reduction
efficiency, when

considering both control costs and NOX reduction potential
in developing cost per ton analysis for the CSAPR Update, EPA found new
SCR controls to be more cost-effective than SNCR at removing
NOX. Specifically, EPA found that new SCR controls could
generally reduce EGU emissions for $5,000 per ton of NOX
removed whereas new SNCR controls could generally reduce EGU emissions
at a higher cost of $6,400 per ton of NOX removed.\22\ In
other words, the greater NOX reduction efficiency for SCR
controls translates into greater cost-effectiveness relative to SNCR
controls. The general cost-effectiveness advantage is consistent with
observed installation patterns where SCR controls (62 percent of coal-
fired capacity) are more prevalent across the east relative to SNCR (12
percent of coal-fired capacity).\23\ In light of the increased
NOX removal efficiency and the relative cost-effectiveness
of SCR as compared to SNCR, EPA does not believe that is reasonable to
focus its analysis on the implementation of the less-efficient control
strategy (SNCR) at the expense of the greater emission reduction
potential of SCR controls. Accordingly, EPA believes it is reasonable
to select a potential compliance timeframe and therefore a future
analytic year that would permit the region-wide installation of both
new SCR and new SNCR.
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    \22\ NOX Mitigation Strategies TSD.
    \23\ National Electric Energy Data System (NEEDS) v6. EPA,
available at https://www.epa.gov/airmarkets/national-electric-energy-data-system-needs-v6.
---------------------------------------------------------------------------

    Moreover, the estimated 39 months and 10 to 13 months for
implementation of SCR and SNCR, respectively, at an individual unit do
not account for factors that would influence this timeframe across the
fleet. Installing new SCR or SNCR controls for EGUs generally involves
the same steps: Conducting an engineering review of the facility;
advertising and awarding a procurement contract; obtaining a
construction permit; installing the control technology; testing the
control technology; and obtaining or modifying an operating permit.\24\
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    \24\ Final Report: Engineering and Economic Factors Affecting
the Installation of Control Technologies for Multipollutant
Strategies, EPA-600/R-02/073 (October 2002), available at https://nepis.epa.gov/Adobe/PDF/P1001G0O.pdf.
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    Scheduled curtailment, or planned outage, for pollution control
installation would be necessary to complete either SCR or SNCR
projects. Given that peak demand and rule compliance would both fall in
the ozone season, sources would likely try to schedule installation
projects for the ``shoulder'' seasons (i.e., the spring and/or fall
seasons), when electricity demand is lower than in the summer, reserves
are higher, and ozone-season compliance requirements are not in effect.
If multiple units were under the same timeline to complete the retrofit
projects as soon as feasible from an engineering perspective, this
could lead to bottlenecks of scheduled outages as each unit attempts to
start and finish its installation in roughly the same compressed time
period. Thus, any compliance timeframe that would assume installation
of new SCR or SNCR controls should encompass multiple shoulder seasons
to accommodate scheduling of curtailment for control installation
purposes and better accommodate the regional nature of the program.
    In addition to the coordination of scheduled curtailment, an
appropriate compliance timeframe should accommodate the additional
coordination of labor and material supply necessary for any fleet-wide
control installation efforts.\25\ The total construction labor for an
SCR system associated with a 500-megawatt (MW) EGU is in the range of
310,000 to 365,000 man-hours, with boilermakers accounting for
approximately half of this time.\26\ SNCR installations, while
generally having shorter individual project timeframes of 10 to 13
months from bid solicitation to startup, share similar labor and
material resources and the timing of SNCR installation planning is
therefore linked to the timing of SCR installation planning. In recent
industry surveys, one of the largest shortages of union craft workers
was for boilermakers. This shortage of skilled boilermakers is expected
to rise due to an anticipated nine percent increase in boilermaker
labor demand growth by 2026, coupled with expected retirements and
comparatively low numbers of apprentices joining the workforce.\27\ The
shortage of and demand for skilled labor, including other craft workers
critical to pollution control installation, is pronounced in the
manufacturing industry. The Association of Union Constructors conducted
a survey of identified labor shortages and found that boilermakers were
the second-most frequently reported skilled labor market with a labor
shortage.\28\ Moreover, recovery efforts from the natural disasters of
Hurricanes Harvey and Irma and wildfires in 2017 are expected to
further tighten the labor supply market in manufacturing in the near
term.\29\ EPA determined that these tight labor market conditions
within the relevant manufacturing sectors, combined with fleet-level
mitigation initiatives, would likely lead to some sequencing and
staging of labor pool usage, rather than simultaneous construction
across all efforts. This sector-wide trend supports SCR and SNCR
installation timeframes for a fleet-wide program that exceed the
demonstrated single-unit installation timeframe.
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    \25\ EPA considers these additional labor and supply
requirements in the context of the already committed labor and
supply requirements associated with projects already underway.
    \26\ Id.
    \27\ Occupational Outlook Handbook, Bureau of Labor Statistics,
available at https://www.bls.gov/ooh/construction-and-extraction/boilermakers.htm.
    \28\ Union Craft Labor Supply Survey, The Association of Union
Constructors, Exhibit 4-2 at page 29, available at https://www.tauc.org/files/2017_TAUC_UNION_CRAFT_LABOR_SUPPLY_REVISEDBC_FINAL.pdf.
    \29\ Skilled Wage Growth Less Robust, Worker Shortage Still an
Issue, Industry Week, October 23, 2017, available at http://www.industryweek.com/talent/skilled-wage-growth-less-robust-worker-shortage-still-issue.
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    Moreover, NOX post-combustion control projects also
require materials and equipment such as steel and cranes. Sheet metal
workers, necessary for steel production, are also reported as having
well above an average supply-side shortage of labor.\30\ This, coupled
with growth in steel demand estimated at three percent in 2018, and
simultaneous global economic growth, suggests that there may be a
constricted supply of steel needed for installation of new post-
combustion controls.\31\ Similarly, cranes are critical for
installation of SCRs, components of which must be lifted hundreds of
feet in the air during construction. Cranes are also facing higher
demand during this period of economic growth, with companies reporting
a shortage in both equipment and manpower.32 33 The
tightening markets in relevant skilled labor, materials, and equipment,
combined with the large number of installations that could be required
fleet-wide under a regional air pollution transport program,
necessitate longer installation

time-tables relative to what has been historically demonstrated at the
unit-level.
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    \30\ Union Craft Labor Supply Survey, The Association of Union
Constructors, Exhibit 4-2 at page 29, available at https://www.tauc.org/files/2017_TAUC_UNION_CRAFT_LABOR_SUPPLY_REVISEDBC_FINAL.pdf.
    \31\ Worldsteel Short Range Outlook, October 16, 2017, available
at https://www.worldsteel.org/media-centre/press-releases/2017/worldsteel-Short-Range-Outlook-2017-2018.html.
    \32\ See, e.g., Seattle Has Most Cranes in the Country for 2nd
Year in a Row--and Lead is Growing, Seattle Times, July 11, 2017,
available at https://www.seattletimes.com/business/real-estate/seattle-has-most-cranes-in-the-country-for-2nd-year-in-a-row-and-lead-is-growing/.
    \33\ See RLB Crane Index, January 2018, in the docket for this
action.
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    EPA disagrees with the commenter's assertion that these
observations regarding crane and steel markets are tenuous and thus
should not influence EPA's analysis. While this is not the sole reason
for EPA's conclusion that 48 months would be necessary for region-wide
control installation, EPA believes the market for labor and materials
is a relevant factor to consider in light of reports from companies
that supply the tower cranes that there is a shortage of both equipment
and manpower. The crane index, along with quarterly construction costs
reports, are metrics regularly used to evaluate construction activity
by construction consultancies and can provide information useful to
demonstrate the level of equipment demand.\34\ Moreover, the commenter
provides no evidence to contradict the EPA's finding that these
equipment markets are facing periods of higher demand.
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    \34\ Kalinoski, Gail, North American Construction Trends: RLB
Reports, available at https://www.cpexecutive.com/post/north-america-construction-trends-rlb-reports/.
---------------------------------------------------------------------------

    The time lag observed between the planning phase and in-service
date of SCR and SNCR operations in certain cases also illustrates that
site-specific conditions sometimes lead to installation times of four
years or longer. For instance, SCR projects for units at Ottumwa
Generating Station (Iowa), Columbia Energy Center (Wisconsin), and
Oakley Generating Station (California) were all in the planning phase
in 2014. However, these projects have estimated in-service dates
ranging between 2018 and 2021.\35\ Similarly, individual SNCR projects
can exceed their estimated 10-13-month time frame. For example,
projects such as SNCR installation at Jeffrey Energy Center (Kansas)
were in the planning phase in 2013, but not in service until 2015.\36\
Completed projects, when large in scale, also illustrate how timelines
can extend beyond the bare minimum necessary for a single unit when the
project is part of a larger air quality initiative involving more than
one unit at a plant. For instance, the Big Bend Power Station in
Florida completed a multi-faceted project that involved adding SCRs to
all four units as well as converting furnaces, over-fire air changes,
and making windbox modifications. The time from the initial planning
stages to completion was a decade.\37\
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    \35\ 2014 EIA Form 860, Schedule 6, Environmental Control
Equipment.
    \36\ 2013 EIA Form 860, Schedule 6, Environmental Control
Equipment.
    \37\ Big Bend's Multi-Unit SCR Retrofit, Power Magazine, March
1, 2010, available at http://www.powermag.com/big-bends-multi-unit-scr-retrofit/.
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    While individual unit-level SCR and SNCR projects can average 39
and 10 months, respectively, from bid to startup, a comprehensive and
regional emissions reduction effort also requires more time to
accommodate the labor, materials, and outage coordination for these two
types of control strategies. Because these post-combustion control
strategies share similar resource inputs and are part of regional
emissions reduction programs rather than unit-specific technology
mandates, the timeframes for one type are inherently linked to the
other type. This means that SNCR projects cannot be put on an early
schedule in light of their reduced construction timing without
impacting the availability of resources for the manufacture and
installation of SCRs and thus the potential start dates of those
projects.
    In short, given the market and regulatory circumstances in which
EPA evaluated this effort, we determined that four years would be an
expeditious timeframe to coordinate the planning and completion of any
mitigation efforts that might be necessary in this instance. In regard
to the commenter who noted a range of 28 to 60 months for SCR
installation, EPA notes that a period of 48 months falls reasonably
within that range, and is consistent with the region-wide evaluation of
control feasibility that EPA has conducted in this action.
    EPA notes that the commenters' assertions about assumptions in IPM
regarding control installation timeframes are unfounded. Post-
combustion control installation times are an exogenous assumption in
EPA's power sector modeling--i.e., EPA determines the number of years
for installation and provides that figure as an input to the model; the
figure is not the product of a function that the model performs
internally. EPA makes this installation determination independently for
each model run. For instance, if EPA is using IPM to model a run year
that is three years from a present date, it may choose to allow
scrubber installation to occur in that first model run year if the
volume of installations is expected to be small (consistent with the
notion that some units may be able to install controls more quickly).
However, if the volume of scrubber installations is expected to be
larger, reflecting more region-wide resource coordination requirements
and resource requirements, EPA may not allow the retrofit option in the
model until after three years. Thus, the assumption can vary according
to the policy context being considered.
    Finally, EPA notes that the commenter is incorrect in asserting
that the CSAPR Update failed to account for generation shifting. The
CSAPR Update budgets accounted for generation shifting that was
considered to be available at the $1,400 cost threshold and feasible to
implement by the 2017 compliance timeframe. See 81 FR 74544-45 (October
26, 2016). The commenter does not otherwise explain whether or how any
potential for additional generation shifting should influence EPA's
analysis in this action.\38\
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    \38\ Because EPA did not evaluate additional generation shifting
possibilities in this action, it does not at this time need to
revisit the question whether it is within the EPA's authority or
otherwise proper to consider generation shifting in implementing the
good neighbor provision. The EPA is aware that this has been an
issue of contention in the past. See, e.g., 81 FR at 74545 (October
26, 2016) (responding to comments); CSAPR Update Rule--Response to
Comment, at 534-50 (EPA-HQ-OAR-2015-0500-0572) (summarizing and
responding to comments). The EPA may revisit this question in
addressing good neighbor requirements for other NAAQS but is not
revisiting this issue with regard to the 2008 ozone NAAQS.
---------------------------------------------------------------------------

    Comment: Several commenters advocate for the adoption of short-term
NOX emission rate limits for EGUs. The ozone NAAQS is based
on an 8-hour standard and the allowance trading under the CSAPR Update
is done over a multi-month ozone season. The commenters believe that
the lack of federally enforceable short-term NOX emission
rates in Kentucky will facilitate the continued operation of EGUs with
inadequate NOX emission controls, to include units that have
NOX controls that are not always operated during the ozone
season. While the CSAPR Update has encouraged improved utilization of
SCR and SNCR controls during the 2017 ozone season, the commenter
contends that there are additional cost-effective NOX
reductions that can be achieved by requiring optimization of these
existing controls, every day of the ozone season, at coal-fired EGUs.
The commenter therefore states that Kentucky should establish emission
limits for its EGUs with appropriate magnitudes and averaging periods.