Organization: JEA
Comment:
JEA
Additionally, JEA supports approaches that would permit the use of banked CAIR NOx allowances for compliance with the Proposed Transport Rule. Such provisions should allow for unlimited banking along with no 'expiration period' attached to the allowances accrued each year. Because CAIR allowances would not be transferrable into the new program, all CAIR allowances for calendar years 2012 and on would become worthless. [EPA-HQ-OAR-2009-0491-2713.1, p.5]
JEA expended hundreds of millions of dollars installing and operating SCR on two of its coal units with the reasonable expectation that banked CAIR allowances would continue to have value in the future. EPA's proposed action would clearly interfere with these distinct investment backed expectations, yet the proposed rule does not appear to compensate CAIR allowance holders (or otherwise account) for the loss of their assets. [EPA-HQ-OAR-2009-0491-2713.1, p.5]
Response:
See preamble section IX and responses to other comments, primarily in this section.
Organization: Lakeland Electric
Comment:
Lakeland Electric
As EPA is aware, many utilities have invested a substantial amount of monies in Acid Rain Program (ARP) and CAIR I allowances, and Lakeland Electric is no exception. Unfortunately, the Transport Rule as proposed does not incorporate either the ARP or CAIR I banked allowances. Lakeland Electric has depended on these banked allowances for planning purposes and the Transport Rule effectively makes both sets of allowances worthless. In addition, Lakeland Electric, being a municipality, is directly accountable to our customers, unlike some investor owned utilities. EPA's action places Lakeland Electric in a very uncomfortable position. Lakeland Electric began reducing its NOx emissions over the past few years in order to accumulate a surplus of CAIR I allowances in order of avoiding any allowance deficiency costs. However, the Transport Rule does not award Lakeland Electric customers for reducing NOx emissions early. [EPA-HQ-OAR-2009-0491-2630.1, p.5]
Response:
See preamble section IX.
Organization: Manitowoc Public Utilities (MPU)
Comment:
Manitowoc Public Utilities (MPU)
 MPU supports approaches that would permit the use of banked CAIR NOx allowances for compliance with the Proposed Transport Rule.   [EPA-HQ-OAR-2009-0491-2860.1,p.3]
Utilization of Banked Emission Allowances
MPU supports approaches to permit the use of banked CAIR NOx allowances for compliance with the Proposed Transport Rule. In the final rule, EPA should provide that it will transfer all CAIR NOx annual and ozone season allowances held in each source's compliance accounts for the final compliance period of CAIR into that source's compliance accounts for the new program (to the extent the source is subject to the new program's annual or ozone season NOx requirements, or both). [EPA-HQ-OAR-2009-0491-2860.1. p.5]
Response:
See preamble section IX.
Organization: Maryland Department of Environment (MDE)
Comment:
Maryland Department of Environment (MDE)
Maryland agrees with EPA and its interpretation of the Court's decision, that any approach to use the Title IV SO2 allowances is "...not related to, much less necessary for, implementation of the section 110(a)(2)(D)(i)(I) mandate to eliminate significant contribution and interference with maintenance" (75 FR 45338). We also agree with EPA that the existing NOx allowances banked under either the NOx SIP call or CAIR program should not be used as part of the proposed Transport Rule remedy. Similar to the Title IV SO2 allowances, NOx allowances banked under the NOx SIP Call were designed for a different purpose; i.e., to address transport issues associated with the 1-hour ozone NAAQS. And pre-2012 CAIR allowances are associated with a program that was found inadequate by the Court that is to be replaced by the program in the proposed Transport Rule; when CAIR is replaced any allowances banked under that program should therefore not convey. [EPA-HQ-OAR-2009-0491-2639.2, p.14; This comment can also be found at section V.F.4.a of this comment summary]
Response:
EPA is not allowing CAIR NOx allowances to be used in the Transport Rule.  See preamble section IX.
Organization: Massachusetts Department of Environmental Protection
Comment:
Massachusetts Department of Environmental Protection
We strongly urge EPA to prohibit use of the existing NOx allowance bank, which will lead units to install controls rather than allow facilities to purchase these banked allowances to meet their obligations under the proposed Transport Rule programs.  [EPA-HQ-OAR-2009-0491-2787.2 p.2]
Response:
EPA is not allowing CAIR NOx allowances to be used in the Transport Rule.  See preamble section IX.
Organization: Michigan Department of Natural Resources and Environment
Comment:
Michigan Department of Natural Resources and Environment
The EPA requested comments on whether to allow banking of CAIR allowances and insight into the differences on how states allocated allowances. [EPA-HQ-OAR-2009-0491-2774.1 p.9]
The TR proposal notes that banking of allowances for use in future years could have adverse repercussions on the impact determinations of a downwind state's nonattainment and maintenance areas. [EPA-HQ-OAR-2009-0491-2774.1 p.9]
The DNRE believes that minimal banking of allowances from the CAIR program to the proposed TR should be allowed. We recommend that CAIR allowances from the 2009 and 2010 years be allowed under the TR. However, these allowances should only be used when the sources are impacted by increased electricity demands and TR allowances are unavailable for trading. In Michigan, the DNRE utilized 'hardship' allowances to address the needs of the small municipalities included in CAIR. These allowances were 'set-aside' from the main pool of allowances and divided among the municipalities based on need. In some cases the use of hardship allocations was the only way these units could continue to meet their obligations to serve their communities. [EPA-HQ-OAR-2009-0491-2774.1 p.9]
Response:
See preamble Section IX for discussion of why CAIR NOx allowances cannot be used in the Transport Rule programs.  States do have the option of developing state allocations starting in 2013 and could consider the amount of CAIR NOx allowances remaining when deciding how to allocate the state budget, including establishing "hardship" set-asides.
Organization: Oglethorpe Power
Comment:
Oglethorpe Power
X. Transition from CAIR
Oglethorpe Power also supports the use of banked CAIR NOx allowances for compliance with the Transport Rule, and believes that EPA should provide for transfer of all CAIR NOx allowances held in each source's compliance accounts for the final compliance period of CAIR into that source's compliance accounts for the new program. The use of such allowances would provide greater flexibility in complying with the rule. We believe there is no reason not to allow sources to use the CAIR NOx allowances held in their accounts to comply with the Transport Rule, as the Court's opinions in the CAIR litigation do not bar the use of already-allocated allowances, on a banked basis, in a new program that replaces CAIR. 12  At a minimum, EPA should allow CAIR banked NOx allowances to be used in the first year of the Transport Rule program, to ease the transition. This is especially so given the extremely aggressive compliance schedule set forth in the proposed Transport Rule. [EPA-HQ-OAR-2009-0491-2732.1, p.14]

12. As UARG notes in its comments, if EPA is concerned that the amount of banked CAIR NOx allowances is so great that it may reduce the amount of emission reductions that would otherwise be achieved under the proposed rule, there are better ways to avoid that outcome than to completely invalidate the use of such allowances in the Transport Rule. [EPA-HQ-OAR-2009-0491-2732.1, p.14]
Response:
See preamble section IX.
Organization: Ohio Valley Electric Corporation and Indiana-Kentucky Electric Corporation
Comment:
Ohio Valley Electric Corporation and Indiana-Kentucky Electric Corporation
OVEC Should Receive One-to-One Credit for its Participation in Early Reduction Programs During the NOx Budget Program and Clean Air Interstate Rule [EPA-HQ-OAR-2009-0491-2779.1, p.9]
OVEC does not see any provision in the Proposed Transport Rule that would allow early reduction NOx credits to be carried over into the Proposed Transport Rule framework. Any attempt by EPA to disallow a one-to-one credit for ozone season and annual NOx allowances should be reconsidered. [EPA-HQ-OAR-2009-0491-2779.1, p.9]
OVEC banked a number of these allocations in good faith by over-controlling and participating in the early reduction programs during the NOx Budget Program and CAIR. To deny the use of those credits confiscates the economic value of good faith compliance with rules in effect at the time, and creates a disincentive for any utility to take proactive steps to make early or extra emissions reductions in the future. Additionally, the cost of losing those credits has not been fully considered or addressed in EPA's analysis of the cost-effectiveness of the Proposed Transport Rule. [EPA-HQ-OAR-2009-0491-2779.1, p.9]
Response:
See responses to other comments in this section and preamble section IX.
Organization: PowerSouth Energy Cooperative
Comment:
PowerSouth Energy Cooperative
Existing CAIR allowances should be recognized under any new rule.  Existing allowances should be carried over and valued in any compliance schemes promulgated to replace CAIR.  To do otherwise, penalizes utilities for planning prudently and relying on EPA's regulatory authority.  In addition, allowing CAIR allowances to carryover bolsters confidence in the cap and trade regulatory mechanism.  More importantly, utilities may voluntarily run air quality control equipment and continue to reduce NOx emissions between now and the implementation of any new regulatory scheme in order to "earn" CAIR allowances.[EPA-HQ-OAR-2009-0491-2693.1,p.3]
Response:
See preamble section IX.
Organization: PPL Corporation
Comment:
PPL Corporation
9. Use of CAIR Banked NOx Allowances.
The EPA is soliciting comment on four proposed alternatives for treatment of CAIR banked NOx allowances when CAIR is replaced by the Transport Rule. These alternative approaches are:
:: Allow CAIR banked allowances to be used. Along with this option the assurance provisions specifying that annual emissions could not exceed the state budget by more than the variability amounts would begin in 2012 rather than the proposed 2014.
:: Allow only a portion of the banked allowances to be brought into the program but at a discounted value.
:: Allow the banked allowances to be used, but reduce the state budget accordingly.
:: Do not allow the use of the banked allowances. [EPA-HQ-OAR-2009-0491-2739.1, pp.9-10]
PPL believes that the first option, allowing the use of CAIR banked allowances and starting assurance provisions in 2012 is the best alternative. If CAIR banked allowances are not allowed, it is likely that region-wide NOx emissions would increase before the Transport Rule takes effect as sources start using banked allowances that would become worthless in 2012. Additionally, use of banked allowances would help assure that state budgets could be met in the early years of the program while sources are adjusting to the new interstate trading restrictions. [EPA-HQ-OAR-2009-0491-2739.1, p.10]
Response:
See preamble section IX.
Organization: Prairie State Generating Company, LLC
Comment:
Prairie State Generating Company, LLC
7. BANKING FORWARD CAIR ALLOWANCES
The U.S. EPA has proposed not to allow sources to carry the CAIR allowances forward into the Transport Rule Program. p.45336. PSGC suggests that the U.S. EPA reconsider this position and that it provide for the banking forward of the CAIR allowances. [EPA-HQ-OAR-2009-0491-2842.1, p.6]
Like other 'existing' units, at least PSGC Unit I will be subject to the CAIR in 2011 and will be required to surrender the CAIR allowances for its emissions in 2011. PSGC has planned for this requirement and will hold a number of CAIR allowances, likely in excess of the number necessary for compliance in 2011. [EPA-HQ-OAR-2009-0491-2842.1, p.6]
Although the North Carolina court remanded the entirety of the CAIR, the CAIR has, nevertheless, been a viable emissions reduction and trading program and an applicable requirement with which sources have had to comply in the interim between the court's decision and the final promulgation of the Transport Rule. Therefore, the CAIR allowances should have some currency value moving forward under the Transport Rule. [EPA-HQ-OAR-2009-0491-2842.1, p.6]
Moreover, the court did not remand or vacate the NOx Budget Trading Program, 40 CFR 96, Subparts A through I, and NOx Budget Trading Program allowances were banked forward into the CAIR. Complete abandonment of the CAIR allowances also is an inappropriate abandonment of NOx Budget Trading Program allowances. [EPA-HQ-OAR-2009-0491-2842.1, pp.6-7]
Response:
See preamble section IX and responses to other comments.  Additionally, many CAIR allowances are held in accounts not affiliated with a particular unit or state making it impossible to convert allowances from particular state budgets.
Organization: Progress Energy Service Company
Comment:
Progress Energy Service Company
The Proposed Transport Rule properly recognizes the important environmental and economic benefits of allowance banking and that allowance banking as an element of EPA's program was in no way undermined by the court's decision in North Carolina v. EPA. Additionally, Progress Energy supports approaches that would permit the use of banked CAIR NOx allowances for compliance with the Proposed Transport Rule.  [EPA-HQ-OAR-2009-0491-2831.1 p.2]
Response:
See preamble section IX.
Organization: Southern Company
Comment:
Southern Company
IX. EPA Must Consider Market Continuity as it Transitions from CAIR to the Proposed Transport Rule and Any Future Transport Rules
EPA has requested comment on how the transition from CAIR would occur. One of our main concerns with the proposed transition from CAIR, is the proposed elimination of banked allowances and the uncertainty that such elimination creates for compliance. There are no markets yet for Transport Rule allowances, and those markets will not exist until September 2011, just before the January 2012 compliance date. As discussed in more detail in Section X, the data used to develop unit allocations in the proposed rule are so flawed and will require such substantial revision that industry is essentially blind to potential compliance challenges. Given the limited trading and industry-wide allocation uncertainty, it is unclear whether allowances will be available if needed. And the Transport Rule's proposed tight compliance schedule exacerbates the uncertainty. [EPA-HQ-OAR-2009-0491-2864.1, p. 22]
Southern Company supports an approach that would recognize the value of banked NOx and SO2 allowances. EPA should recognize the potential loss to utilities-and the eventual cost to customers-by devaluing or eliminating a company's allowance inventory. At a minimum, EPA should include a mechanism the conversion of CAIR NOx into the Transport Rule program. This would be technically easy to accomplish since EPA proposes to use the same Allowance Management System that it used for CAIR. The conversion of banked CAIR allowances will ensure market continuity through 2011 and will avoid potential price shocks of resetting three new markets simultaneously in the second half of 2011. Subsequently, market continuity will ensure that reductions achieved under CAIR will continue through 2011 and avoid any incentive to 'use up' CAIR allowances and produce a short-term increase in NOx emissions (the same is also true for Acid Rain S02 allowances). The North Carolina decision found flaw with use of fuel adjustment factors in determining original CAIR NOx allowance allocations, however nothing in the decision prohibits the use of existing banked allowances in a new program. In the event that EPA determines the legal concerns are too great to carry the bank forward at full value, Southern Company could support an alternative approach allowing banked allowance conversion at a discounted value. EPA should design a process that effectively eliminates fuel adjustment factor effects by applying a surrender ratio based on the fuel mix of the surrendering entity. To avoid use of conversion proxies (financial institutions on behalf of utilities), allowances could be converted in rounds, with utilities surrendering in the first round followed by a non-utility surrender round. The second round would receive the highest conversion rate applied in the first round, thereby ensuring incentive for utilities to participate in the first round and not utilize conversion proxies. This discounted conversion approach is not preferable, but would achieve some of the objectives of market continuity outlined above. [EPA-HQ-OAR-2009-0491-2864.1, pp. 22-23]
EPA has stated that future transport rules 'may be needed to address transport under future revised ozone or fine particle health standards.,,2o Subsequent phases of the Transport Rule should ensure market continuity by maintaining a common currency, allowing use of existing allowances from one phase to the next. A market based program cannot be expected to work if the currency is continuously changing and price signals are disrupted on a regular basis. Further, EPA should wait to see the effect of the current rule before promulgating future transport rules.  [EPA-HQ-OAR-2009-0491-2864.1, p. 23]
[The above comments can also be found at Section V.F.4.a. of this comment summary.]
Response:
See preamble section IX and responses to other comments.
Organization: Southern IL Power Cooperative
Comment:
Southern IL Power Cooperative
As proposed, unused CAIR allowances would be eliminated as a means of compliance beginning in 2012. For new units, a 3% set aside of CATR state allowance budgets shared pro rata in event of over demand, and no allocation during initial year of start- up provide no assurance that necessary allowances would be available for new units necessarily utilizing best emissions control technologies. EPA has stated that it wholly supports new cleaner fossil fuel generation. Yet this policy would function in opposite of encouraging the newer, cleaner generation. EPA should incorporate unused CAIR allowances into the CATR program and make available to new units to the extent that CATR allowances are not available from the 3% CATR new unit set-side. [EPA-HQ-OAR-2009-0491-2863.1 p.4]
Response:
See preamble section VII regarding allocation to new units and section IX regarding the prohibition on the use of CAIR allowances in the Transport Rule.
Organization: Tennessee Valley Authority (TVA)
Comment:
Tennessee Valley Authority (TVA)
A. Issue: EPA's proposal does not allow banked CAIR NOx emission allowances to carry forward into the new Transport Rule trading program, but the agency has requested comments on whether such pre- 2010 NOx CAIR allowances should be carried forward, and on possible approaches for handling these CAIR allowances. [p. 45339] [EPA-HQ-OAR-2009-0491-2782.1, p. 12]
TVA Comment: EPA should allow CAIR NOx emission allowances to carry over into the Transport Rule trading program. Banking was not addressed by the D.C. Circuit's decision in North Carolina v. EPA. EPA can rely on the assurance provisions to ensure that each state continues to eliminate all significant contributions and interference with maintenance. As EPA indicates, the problem with "state budgets using fuel factors," the use of which was reversed in North Carolina v. EPA, could be mitigated by the fact that states had the flexibility to allocate state allowances however they wished. These carried over allowances should continue for an unlimited period of time as would be the case with any program that creates allowances through actual on-the-ground reductions. If EPA is concerned about the potential impact that use of CAIR allowances may have on preserving the reductions achieved by the Transport Rule, it may choose to mitigate this concern by placing an expiration date of 2016 on these allowances. This would help EGUs make the transition from CAIR to the Transport Rule, mitigating the deleterious impacts of the rigorous timeframes imposed by the Transport Rule.
Elimination of the CAIR NOx allowance banks would be unfair to utilities that installed controls at certain facilities early to bank allowances, and planned, as the CAIR rule allowed, to use these banked allowances to provide for an optimum transition to and time for installation of controls to meet future lower CAIR allocation levels. Eliminating these allowances will also reduce confidence in and hinder implementation of any future cap and trade programs, such as the trading program in the very Transport Rule proposed by EPA as well as those trading programs that have been included in draft legislation for greenhouse gases. Moreover, depressed allowance values prior to 2012 could result in increased emissions. [EPA-HQ-OAR-2009-0491-2782.1, p. 13]
Response:
See preamble Section IX for discussion of why CAIR NOx allowances cannot be used in the Transport Rule programs.  States do have the option of developing state allocations starting in 2013 and could consider the amount of CAIR NOx allowances remaining when deciding how to allocate the state budget.
Organization: Utility Air Regulatory Group (UARG)
Comment:
Utility Air Regulatory Group (UARG)
UARG also emphasizes, however, that it supports approaches that would permit the use of banked CAIR NOx allowances for compliance with the Proposed Transport Rule. In the final rule, EPA should provide that it will transfer all CAIR NOx annual and ozone season allowances held in each source's compliance accounts for the final compliance period of CAIR into that source's compliance accounts for the new program (to the extent the source is subject to the new program's annual or ozone season NOx requirements, or both). This could readily be accomplished because, for purposes of compliance with the new program, EPA proposes to use the same Allowance Management System ("AMS") that it used for compliance with CAIR. 75 Fed. Reg. at 45312/1. There is no reason not to allow sources to use their CAIR allowances (including allowances that they bought or otherwise acquired from others) for compliance with the new program. [EPA-HQ-OAR-2009-0491-2756.1, p.13]
EPA's concern that some may view an approach that authorizes sources to use banked CAIR NOx allowances as unfairly permitting some sources a larger share of allowances due to CAIR's use of fuel adjustment factors, which the North Carolina decision found EPA had not adequately justified, is no basis to bar use of these allowances already allocated. The court's opinion in no way bars use of these already-allocated allowances, on a banked basis, in a new program. Moreover, if EPA disallows use of banked CAIR NOx allowances at this juncture, it will be to the detriment of all sources that hold banked CAIR NOx allowances at the time that CAIR expires. It would be far better to allow all sources the benefit of their banked allowances than to render them worthless at the end of the CAIR program.8 [EPA-HQ-OAR-2009-0491-2756.1, pp.13-14]
Indeed, there are many compelling reasons to allow sources to use their banked CAIR NOx allowances for compliance with the proposed rule. First, as noted above, nothing in the court's North Carolina opinion precludes -- and in fact, no party challenged -- use of banked CAIR NOx allowances. The only flaw identified by the court with respect to CAIR NOx allowances was the way EPA established NOx allowance budgets. Second, as EPA suggests, permitting use of banked CAIR NOx allowances would promote the continuation in 2010 and 2011 of the reductions that occurred under CAIR. Id. at 45339/1. Likewise, it would avoid creating an incentive for sources to "use up" CAIR NOx allowances, thereby potentially increasing their NOx emissions temporarily, because those allowances would -- in the absence of a provision allowing use of banked CAIR NOx allowances in the new program -- have no value after the allowance transfer deadline for the final CAIR annual and ozone season compliance periods. Third, allowing use of banked CAIR NOx allowances would provide a modest degree of increased flexibility for sources during the early years of the new program, an especially important consideration if EPA requires compliance with the Transport Rule according to the unreasonably accelerated schedule set forth in its proposal. [EPA-HQ-OAR-2009-0491-2756.1, pp.14-15]
Indeed, the issue of use of banked CAIR NOx allowances is one example of the reasons why, EPA should design the transition to the Transport Rule as a seamless regulatory process to ensure that the mechanisms remain in place for continuous compliance and assurance of continued emission reductions. The D.C. Circuit, in its December 2008 decision, determined that CAIR could remain in place while EPA developed a replacement rule, specifically because of concerns that the emission reductions attributable to CAIR would not occur during the transition period if CAIR were vacated. Because the court allowed CAIR to remain in place, it is possible for EPA to retain aspects of CAIR that will assure full compliance and that will promote the effective and seamless transition to the new rule, without the possibility of short-term backsliding. This would also leave in place, for example, the CAIR 2015 phase II control requirements until the Transport Rule can be implemented. This approach will provide additional time for EPA to complete the current rulemaking and permit an adequate compliance schedule under the new rule, even while electric generating companies are required to continue to plan for further emission reductions to meet the CAIR 2015 deadline. [EPA-HQ-OAR-2009-0491-2756.1, p.15]

Footnote 8: If EPA is concerned that the amount of banked CAIR NOx allowances is or will be so great that it may reduce the amount of emission reductions that would otherwise be achieved under the proposed rule, see 75 Fed. Reg. at 45339/1, there are better ways to avoid that outcome than to invalidate the allowances in whole or in part. EPA should allow sources the full benefit of their banked CAIR NOx allowances. If EPA determines that some limitations on use of those allowances are necessary, EPA should at least permit use of a substantial amount of the allowances over at least the first few years of the new program.   [EPA-HQ-OAR-2009-0491-2756.1, p.14]
Response:
See preamble sections VI, VII and IX, responses to other comments, and http://epa.gov/airmarkets/business/cairallowancestatus.html (link to a notice from EPA posted since March 2009 regarding the future of CAIR allowances).
The Court ordered EPA to replace CAIR; the Transport Rule is not a successor program.
Organization: Wolverine Power Supply Cooperative
Comment:
Wolverine Power Supply Cooperative
As proposed, CAIR unused allowances would be eliminated as a means of compliance beginning in 2012. Under the proposed rule, for new units, a 3% set aside of state allowance budgets is to be shared pro rata in event of over demand, with no allocation during the initial year of start-up. The proposal does not provide any assurance that necessary allowances will be available for new units utilizing best emissions control technologies. While EPA has stated that it wholly supports new cleaner fossil fuel generation, the proposed rule would function to discourage newer, cleaner generation since these units can have no assurance that sufficient allowances will be available. EPA should incorporate unused CAIR allowances into the CATR program and make available to new units to the extent that CATR allowances are not available from the 3% CATR new unit set-side. [EPA-HQ-OAR-2009-0491-2825.1 p.5]
Response:
See preamble section VII regarding allocation to new units and section IX regarding the prohibition on the use of CAIR allowances in the Transport Rule.

V.G. [Reserved]

V.G.1. Title IV Interactions

Organization: Capital Power Corporation
Comment:
Capital Power Corporation
Further, creating new allowance currencies solves the problem of directly affecting the Title IV program. [EPA-HQ-OAR-2009-0491-2753.1, p.2]
Response:
EPA agrees.
Organization: Pfeiff, Mike
Comment:
Pfeiff, Mike
5. Harm to Cap-and-trade - If finalized, the Proposed Transport Rule will cause permanent and irreversible harm to the use of market oriented mechanisms like cap-and-trade as a policy tool to reduce pollution. While the Proposed Transport Rule does claim offer FIPs with a trading component, for all practical purposes they are so restrictive that they are merely cap-and- trade in name only. I recognize the EPA has statutory obligations under the CAA and is further constrained by the judicial findings in North Carolina v. EPA, (DC Cir. 2008). However, the Proposed Transport Rule is tantamount to 'throwing out the baby with the bathwater'. [EPA-HQ-OAR-2009-0491-2742.1, pp.3-4]
If the Proposed Transport Rule is finalized with any of the three proposed FIPs, and by some miracle is able to withstand the certain judicial challenges, the concept of cap-and-trade as a policy tool will be permanently damaged. Emission allowances are not like other traditional commodities in that they have no intrinsic value and their entire value is predicated on the confidence in the government maintaining its commitments to past programs. [EPA-HQ-OAR-2009-0491-2742.1, p.4]
Remarkably the preferred FIP effectively dismantles the Title IV Acid Rain Program (ARP) which was created by act of Congress in 1990, leaving the Title IV allowances practically worthless. This rule is unfairly punitive to market participants that made economic investments predicated on programs established through statute. The net effect of the Proposed Transport Rule is that it will cast a permanent cloud of doubt on EPA's willingness to maintain all future cap-and-trade programs. The Proposed Transport Rule has challenged the EPA's commitment to market oriented pollution reduction policies. As a result, future market oriented cap-and-trade programs market participants will always remain vigilant to the likelihood of the EPA repeating is backdoor dismantling of the Title IV program. Going forward market participants will reasonably apply an extra large 'risk adjustment' that will disconnect the market price of allowance from the true pollution abatement cost. The disparity between the true abatement cost and the markets risk adjusted price will doom future trading programs. [EPA-HQ-OAR-2009-0491-2742.1, p.4]
If the current structure of the Proposed Transport Rule is not abandoned soon, the EPA will not retain sufficient credibility to establish future market oriented cap-and-trade programs to solve future environmental objectives. This would be a grave tragedy. Instead of the signal sent by the Proposed Transport Rule which highlights the EPA's willingness to step backwards the EPA's should instead be sending the market the signal that it is committed to programs established by Congress. I request that the EPA abandon its efforts to finalize the Propose Transport Rule and initiate a new rulemaking process that does not result in a devaluation of Title IV ARP allowances. [EPA-HQ-OAR-2009-0491-2742.1, p.4]
Response:
See preamble section IX and responses to other comments.

V.G.2. NOx SIP Call Interactions

Organization: Clean Air Task Force
Comment:
Clean Air Task Force
EPA requests comment on the use of banked allowances from other trading schemes for purposes of compliance with TR requirements. 144 Consistent with the Court's opinion in North Carolina v. EPA, the Agency must not allow the use in the TR of any SO2 or NOx allowances banked or otherwise carried over under the CAIR program or the Title IV acid rain program, and we support EPA's proposal to exclude these allowances for TR compliance. 145 [EPA-HQ-OAR-2009-0491-2738.1, p.26; This comment can also be found at section V.F.4 & V.F.4.b of this comment summary]

Footnote:
144 75 Fed. Reg. at 45339.
145 75 Fed. Reg. at 45338-39.
Response:
EPA agrees; see preamble section IX for further discussion.
Organization: North Carolina Department of Environment and Natural Resources
Kentucky Division for Air Quality
Comment:
Kentucky Division for Air Quality
Proposed Transport Rule Should Include NOx SIP Call Non-EGU Units Currently in CAIR
Pursuant to the proposed Transport Rule Preamble Section V.G.2., NOx SIP Call Interactions (75 FR 45340-45341), the Division urges EPA to reconsider its decision not to allow the inclusion of its NOx SIP Call Non-EGUs now in CAIR into the proposed Transport Rule NOx ozone season trading program. Due to the very small emissions budget for the Division's six NOx SIP Call Non-EGUs (64 ozone season (OS) tons) that was added to the CAIR NOx OS budget, Kentucky disagrees with EPA's contention that including these units in the proposed Transport Rule would jeopardize a state's ability to eliminate its part of significant contribution and interference with maintenance that EPA has identified. As EPA has indicated in the preamble, states need a way to continue to meet their NOx SIP Call obligation for Non-EGUs and the Division believes that the transport rule should be that new way. Therefore, given the limited number of subject Non-EGUs and the small amount of their NOx ozone season budget emissions, the Division requests that EPA include the NOx SIP Call Non-EGUs into the proposed Transport Rule. If EPA changes its position to include the NOx SIP Call Non-EGU units, then the Division requests that EPA consult with the Division to ensure that all applicable Kentucky Non-EGUs are properly accounted for in the Transport Rule. [EPA-HQ-OAR-2009-0491-2805.1, p.4]
North Carolina Department of Environment and Natural Resources
On page 45341 EPA explains that because EPA is only covering EGUs under the proposal, any state that brought large non-EGUs into the CAIR NOx ozone season program to meet the NOx SIP Call requirements would need to submit a SIP revision to address their NOx SIP call obligations and that EPA will work with states to ensure those obligations continue to be met. Clarification is needed regarding how EPA envisions states addressing such sources and when related SIP revisions must be submitted to EPA, especially given the amount of time necessary for many states to complete rulemaking processes and the short timeframe between finalizing the TR and sunsetting of CAIR at the end of December 2011. [EPA-HQ-OAR-2009-0491-2767.1 p.7]
Response:
As discussed in preamble section IX, responses to other similar comments primarily in section V.F. of this document, and in a Technical Support Document to the proposed rule, EPA is not expanding the Transport Rule to include non-EGUs from the NOx Budget Program.

VI. Stakeholder Outreach

Organization: Clean Energy Group
Comment:
Clean Energy Group
Public Availability of Data to Promote Effective, Technically-Sound Rules
Finally, for future rulemakings, including any companion rules to the Transport Rule, the Clean Energy Group recommends that EPA publicly distribute any information and data that may be used in the rulemaking through an Advance Notice of Proposed Rulemaking to ensure there is sufficient time to verify the information. This process would allow data verification to occur simultaneously to EPA's development of the proposed rule. Through this process, EPA and owners of potentially-covered sources can ensure that the rulemaking is based on the most up-to-date and accurate information, thereby resulting in a more effective and legally-defensible program. [EPA-HQ-OAR-2009-0491-2702.1, p. 9]
Response:
EPA appreciates this suggestion and agrees that this is an ideal approach.  We will continue to strive to make all data available in the most timely way possible within the constraints of tight schedules as we have done during the Transport Rule process and subsequent Notices of Data Availability.
Organization: Consumers Energy
Comment:
Consumers Energy
The prudent course for EPA is to retract and rethink this proposal, with more upfront transparency and a greater degree of involvement by the States and affected sources. EPA has neither a Court mandated nor a statutory required date for completion of this rule. Furthermore, EPA has already stated that a proposed revision will be coming out in 2012. Consequently, we recommend that EPA take this opportunity to make the necessary changes. The modeling analyses provided in the comments by MOG show that the air quality and public health benefits that the EPA is targeting can be achieved through existing emissions reductions required by CAIR and other emission reduction requirements. The EPA, the state environmental agencies and the regulated power sector can determine an appropriate schedule for additional emissions reductions that are needed that allows for implementation at a more reasonable cost. We recommend that EPA utilize such a collaborative approach to address issues as they currently exist. [EPA-HQ-OAR-2009-0491-2837.1, p.15]
Response:
Thank you for your comment.  EPA has reached out broadly over the past several years since the North Carolina decision through listening sessions, webinars, presentations, meetings, public hearings, and comment periods.
EPA conducted substantial stakeholder outreach in developing the Transport Rule, starting with a series of "listening sessions" in the spring of 2009 with states, nongovernmental organizations, and industry.  EPA docketed stakeholder-related materials in the Transport Rule docket (Docket ID No. EPA-HQ-OAR-2009-0491).  The Agency conducted general teleconferences on the rule with tribal environmental professionals, conducted consultation with tribal governments, and hosted a webinar for communities and tribal governments.  EPA continued to provide updates to regulatory partners and stakeholders through several conference calls with states as well as at conferences where EPA officials often made presentations.  The Agency conducted additional stakeholder outreach during the public comment period, including holding three public hearings.  EPA responded to extensive public comments received during the public comment periods on the proposed rule and associated NODAs.  Additional details of stakeholder involvement in our process may be found in the proposal preamble at 75 FR 45341.
This Transport Rule is one of a series of regulatory actions to reduce the adverse health and environmental impacts of the power sector.  EPA is developing these rules to address judicial review of previous rulemakings and to issue rules required by environmental laws.  Finalizing these rules will effectuate health and environmental protection mandated by Congress while substantially reducing uncertainty over the future regulatory obligations of power plants, which will assist the power sector in planning for compliance more cost effectively.  The Agency is committed to providing full opportunity for notice and comment for each rule and appreciates the collaborative input from states, industry, and the environmental and justice communities.
Organization: National Association of Clean of Air Agencies (NACAA)
Comment:
National Association of Clean of Air Agencies (NACAA)
In the future, we recommend that the agency attempt to include more lead-in time for sources and that the agency work closely with NACAA and its members in fashioning the rule so we can provide detailed feedback prior to the proposed rule. [EPA-HQ-OAR-2009-0491-2771.1, p.6]
Response:
Thank you for your comments.  The Transport Rule results from the North Carolina court decisions.  As described in the proposal preamble (75 FR 45431) EPA reached out and remained open to stakeholder involvement throughout the regulatory process, as permitted.  EPA sought input from NACAA and other state organizations and considered all suggestions and comments duly. We value our relationship with state organizations and will continue to work collaboratively with them in the future.
Organization: Pfeiff, Mike
Comment:
Pfeiff, Mike
2. Listening Sessions - The EPA stated that in early 2009, it participated in 'listening sessions'. 75 Fed. Reg. at 45,341. Invitation to these 'listening sessions' was highly selective an in many cases limited to 'members only' government/trade/environmental justice groups. Only through a Freedom of Information Act request was I able to obtain summary notes of the meetings prepared by EPA staff. To my knowledge, the EPA did not even record or transcribe these listening sessions. Further, it is my understanding that these summary notes were withheld from the general public until August 2, 2010 when the EPA submitted them as 'supporting & related materials' as part of the rulemaking record. The EPA, as the manager the Title IV allowance market, which is directly influenced by the Proposed Transport Rule should have recognized that having these 'listening sessions' without making participation open to all market participants was highly inappropriate as it provided certain market participants with asymmetric information. The EPA's failure to publicize those meetings and extend invitation to all stakeholders questions the EPA's ability to manage future rulemaking efforts. Therefore, I request that as part of the Proposed Transport Rule, the EPA include a 'code of conduct' regarding how agency engages the public when communicating information, or facilitating discussions, that directly impact the value of market oriented programs under its supervision. [EPA-HQ-OAR-2009-0491-2742.1, p.3]
3. Meeting Transparency - The EPA should make public a comprehensive list of entities that they have met with or had discussions as part of their efforts to develop the Proposed Transport Rule. In addition, the EPA should make public transcripts of those meetings and any meeting notes and/or summary documents that the EPA prepared describing the content of the discussions. Since these proposed rules effect the market value of the existing Title IV allowances it is crucial that the EPA not give preferential treatment to any market participant. Full transparency is the only way to prevent actual, or the perception of, preferential treatment. I request that the EPA provide me with a comprehensive list of the entities they have met had discussion with regarding the Proposed Transport Rule. [EPA-HQ-OAR-2009-0491-2742.1, p.3]
4. Meeting Notifications - The EPA should publicize future stakeholder outreach and other meetings to all market participants as defined by the list of contacts of authorized and alternate representatives contained in its Clean Air Markets Division (CAMD) Business System database. The CAMD Business System contains a comprehensive list of allowance holders. The EPA's outreach thus far seems to be limited to industry, trade groups, state organizations, and non-governmental organizations (i.e. environmental groups). However, this method of conducting outreach does not guarantee that all market participants are being reached. I request that at a minimum, invitation to all meetings involving market orientated programs should be made to all existing account owners and their designated representatives. [EPA-HQ-OAR-2009-0491-2742.1, p.3]
Response:
EPA disagrees with the commenter's statements.  The Title IV allowance market was directly influenced by the DC Court decisions vacating and then remanding the Clean Air Interstate Rule in 2008, not the proposed Transport Rule in 2010.  EPA met with whomever requested a meeting, including a teleconference with the commenter.  EPA has also met with commenter in its offices on at least one other occasion.  EPA also held three public hearings for the proposed Transport Rule, notice of which was published in the Federal Register and provided on our website for the rule.  All materials related to meetings held in conjunction with the Transport Rule are in the docket, and other useful information, including all technical and support data, may be found on our website.  As soon as legally feasible, we strive to make all information fully available to the public through release on our website -- even prior to publication in the Federal Register.
Organization: San Miguel Electric Cooperative, Inc.
Tampa Electric Company
Comment:
San Miguel Electric Cooperative, Inc.
San Miguel appreciates the efforts the EPA has provided in answering questions on the proposed CATR through the use of webinars and conference calls sponsored by the NRECA and EEI. [EPA-HQ-OAR-2009-0491-2641.1, p.2]
Tampa Electric Company
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, p.70.]
I would like to take this opportunity to compliment EPA in its effort to post on its website quite a number of the documents used to support the Transport Rule development.
Response:
Thank you.  EPA strives continually to make its rulemaking process as transparent as possible.
Organization: Southern Company
Comment:
Southern Company
In the two and half years since the U. S. Court of Appeals for the D.C. Circuit vacated the Clean Air Interstate Rule, EPA has developed the proposed Transport Rule. During that time, the Agency has made no effort to obtain stakeholder input on the underlying data used to develop the proposed rule or on the approach.1 [EPA-HQ-OAR-2009-0491-2864.1, p. 5]
Footnote 1: EPA did hold one series of 'Listening Sessions' in advance of the proposed rule with stakeholder groups in the Spring of 2009. One such session was held with electric utility industry representatives on April 17, 2009. However, at those sessions, EPA provided no insights into its thoughts or plans for the replacement rule. In response to questions at those Listening Sessions (and in other forums as well), EPA refused to provide any information on its proposed rule. Even now, in the context of the NODA, EPA is refusing to provide requested information. Outside of the one 'Listening Session', EPA has offered no opportunity for input from the electric utility industry. [EPA-HQ-OAR-2009-0491-2864.1, p. 5]
Response:
EPA has purposefully focused on public outreach on the rulemaking to replace the Clean Air Interstate Rule since 2009, and up through proposal.  We held more than a dozen listening sessions prior to promulgation of the proposed Transport Rule, we met with anyone who requested a meeting; we held webinars and conference calls for whomever requested such meetings; we posted all information on our website as soon as legally available; plus made all supporting material available in the docket, including a detailed list of stakeholder meetings.  Regarding the data used to develop the proposed rule or the approach, EPA asked for extensive comments on all data in the proposal as well as publishing 3 NODAs following the proposal, all of which took extensive comment and provided data updates and explanations of our process.

VII. State Implementation Plan Submissions

Organization: Alabama Department of Environmental Management
Comment:
Alabama Department of Environmental Management
EPA is proposing to implement the transport rule through Federal Implementation Plans (FIPs). ADEM objects to this approach. According to the CAA, EPA has up to two years to promulgate a FIP after EPA either disapproves a SIP submission or finds that a state has failed to make a required submission. EPA has yet to take either action with respect to the transport portion of Alabama's 'infrastructure' SIPs for the 1997 ozone and fine particle NAAQS and the 2006 fine particle NAAQS. EPA should allow states an opportunity and sufficient time to revise their SIPs to address the final transport rule prior to promulgating a FIP. Such an approach would be consistent with the intent of the CAA. The court did not impose a schedule when it remanded CAIR back to EPA. Therefore, it is unclear why there is such an urgency to replace CAIR.  [EPA-HQ-OAR-2009-0491-2616, p.2]
Response:
See preamble Sections IV and X for a discussion of FIP authority and SIP deadlines.  Additional information can be found in other responses to comments primarily in Section III of this document and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: Buckeye Power, Inc.
Comment:
Buckeye Power, Inc.
For all of the foregoing reasons, Buckeye Power urges EPA to withdraw its proposed CATR program. If it does proceed, EPA should (4) allow states the opportunity to develop state implementation plans instead of using federal implementation plans. [EPA-HQ-OAR-2009-0491-2710.1, p.13]
Response:
See preamble sections IV and X for explanation of the need for FIPs and information on state SIP options to replace the FIPs.
Organization: Crouch, Diane
Comment:
Crouch, Diane
 It also doesn't allow the states enough time to develop and put in place their own regulatory plans. Given the improvements in air quality that are already occurring, I believe the EPA can delay this rule and achieve the same environmental benefit at a much lower cost for utility ratepayers. [EPA-HQ-OAR-2009-0491-3284, p.1]
Please delay the Transport Rule and modify it with longer deadlines that won't increase costs needlessly and that allow states enough time to put in place common sense regulations. [EPA-HQ-OAR-2009-0491-3284, p.1]
Response:
See preamble sections IV and X for explanation of the need for FIPs and information on state SIP options to replace the FIPs.
Organization: Edison Mission Energy (EME)
Comment:
Edison Mission Energy (EME)
The Practical Effect of EPA's Proposed Approach will be to Undercut the Trading Scheme EME also believes that the practical effect of EPA's approach will undercut the trading scheme. EPA states in the Transport Rule preamble that there are states (EPA does not specify how many) for which a FIP will not be finalized under the Transport Rule until EPA takes action on a pending SIP submission. [EPA-HQ-OAR-2009-0491-2707.1, p.15]
According to the preamble, these may be states that were included in the 2005 findings of failure to submit and not included in CAIR, and that have since submitted SIP revisions to satisfy the requirements of § 110(a)(2)(D)(i) for the 1997 8-hour ozone and PM2.5 NAAQS. EPA states that those SIP revisions have either been approved or are pending approval. EPA does not specify which states fall under this category, but EPA concludes that it will only finalize the FIP for those states if it determines that the SIP is incomplete, it disapproves the SIP submission, or the state withdraws the SIP revision. Furthermore, as described above, EPA makes a similar statement regarding SIP submissions to satisfy the requirements of § 110(a)(2)(D)(i) for the 2006 PM 2.5 NAAQS. [EPA-HQ-OAR-2009-0491-2707.1, p.16]
By proposing to regulate some states immediately under a FIP while allowing others to issue SIPs, the Transport Rule creates a significant practical obstacle to the implementation of its trading provisions. The success of the interstate trading component of the Transport Rule depends upon the participation of all of the states. If some states are undergoing the implementation of a SIP and others are not, this creates an awkward situation because sources in the latter states would not be available to participate in trading until the SIP process is complete. Since implementation of a SIP takes a minimum of three years, sources in those states would not be prepared to participate in the trading scheme by 2012. This is practically important because the trading scheme will be most effective if all of the affected sources are able to participate on the first date the rule goes into effect. [EPA-HQ-OAR-2009-0491-2707.1, p.16]
Moreover, by imposing a FIP immediately on states that submitted their CAIR SIPs in a timely manner but not on those that submitted their CAIR SIPs late (i.e., those whose SIPs are still pending), EPA has penalized the states that took timely action and allowed those who were late to benefit, because the latter are able to take advantage of the SIP process as part of the Transport Rule. If EPA were to proceed with its proposed approach, despite the fact that it is not consistent with CAA requirements, it should attempt to mitigate, at least partially, the problems created by having some states subject to a FIP immediately while others are allowed to benefit from the SIP process by allowing sources to use existing CAIR allowances thru Phase I of the Transport Rule. 44 [EPA-HQ-OAR-2009-0491-2707.1, pp.16-17]

44 We understand that the Environmental Markets Association ("EMA") will be proposing one mechanism to utilize CAIR allowances during Phase I of the Transport Rule. Under EMA's proposal for CAIR NOx allowance conversion, EPA would apply surrender ratios to banked allowances in a way that would reverse the impact of EPA's original fuel factor allocation method that was rejected by the D.C. Circuit. EMA proposes that reversal of the fuel factor should not be tied to the original allowances as allocated to recipients, but to the fuel status of the holder of allowances offering them for conversion. EMA also proposes that conversions be completed in rounds to discourage use of non-emitting conversion proxies.
Response:
See preamble sections IV and IX, and responses to other comments primarily in this section.  See also the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."  EPA has evaluated the status of each state's 110(a)(2)(D)(i)(I) SIPs with regard to the 1997 ozone NAAQS, the 1997 PM2.5 NAAQS and the 2006 PM2.5 NAAQS.  On a pollutant basis, all compliance dates in the final rule are the same for all states.  States subject to PM2.5 requirements have a January 1, 2012 compliance date.  States subject to ozone season requirements have a May 1, 2012 compliance date.
Organization: Georgia Department of Natural Resources, Air Protection Branch
Comment:
Georgia Department of Natural Resources, Air Protection Branch
EPA's approach to establishing FIPs in every state subject to this rule is unjustified and undermines the Federal-State partnership the EPA administrator has said is important to successful implementation of the Clean Air Act.
On October 9, 2007 EPA published in the Federal Register the approval of Georgia's CAIR SIP. This approval preceded the December 2008 remand of the CAIR by the D.C. Circuit Court. CAIR was remanded to ensure the environmental benefits achieved by that rule remain in effect. Therefore, Georgia EPD strongly disagrees with EPA's conclusion that the Court's decision means EPA's approval of our SIP no longer satisfies the section 110(a)(2)(D)(i) obligation and for that reason EPA's 2005 findings that we had failed to submit such a SIP remains in force. In lieu of a FIP, EPA should retain the CAIR SIP requirements, which continue to achieve significant reductions, until such time Georgia submits and EPA approves a revision implementing the requirements of the final Transport Rule. [EPA-HQ-OAR-2009-0491-2647.1, p.1]
Response:
See preamble Sections IV, other responses to comments primarily in Section III of this document and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: Maryland Department of Environment (MDE)
Comment:
Maryland Department of Environment (MDE)
Maryland assumes that EPA views the proposed framework of this rule as an approach that would be used in subsequently issued rules to address transport issues associated with future new NAAQS. Maryland strongly recommends that EPA revise the regulatory framework of the proposed rule to accomplish the following: (1) align the timetable of the transport remedy with the timing of SIPs as required by the CAA; (2) provide a FIPSIP mechanism that allows a state to have discretion in the design of certain aspects of the remedy, e.g., allocation of its own budget of allowances to sources; and (3) mandate upwind states' State Implementation Plans (SIPs) contribute to development of a full remedy if the federal remedy does not achieve elimination of significant contribution and interference with maintenance within the required CAA timeframe. [EPA-HQ-OAR-2009-0491-2639.2, p.2]
2010: Propose NAAQS, Propose SIP Call
2012: EPA designations (2 yr max)
2013: Transport SIP due  -  controls due 2  -  3 yrs later, Final FIP, if no SIP submitted
2015: Attainment SIP due (3 yrs after designation)
2017+: Attainment deadlines [EPA-HQ-OAR-2009-0491-2639.2, pp.2-3]
Maryland believes that these changes will improve the framework of the proposed rule and benefit both the states and EPA in the creation of new transport rules moving forward, as well as achieve notable emissions reductions in a shorter span of time. [EPA-HQ-OAR-2009-0491-2639.2, p.3]
Maryland also advises EPA to consider following the example set in the Clean Air Interstate Rule (CAIR) that allowed a state to submit an abbreviated SIP, in tandem with a FIP that provided for many of the required elements of the remedy. This allows the Federal framework to design the elements of the program that are common to all applicable states, but have the states design certain elements, such as the allocation of the allowance budget, that require the more specific and local knowledge that states have regarding their sources. [EPA-HQ-OAR-2009-0491-2639.2, p.3]
Response:
See preamble section X regarding state allocation options under the Transport Rule.
As noted in the preamble, EPA believes that the broad framework for evaluating significant contribution and interference with maintenance outlined in this rule is applicable to future NAAQS as well.   However, EPA is not taking any final action at this time to apply this framework to any future NAAQS and additional technical analysis would be necessary to do so.
Organization: Mississippi Department of Environmental Quality
Comment:
Mississippi Department of Environmental Quality
The rule is proposed as a Federal Implementation Plan rather than requiring State Implementation Plans (SIPs). It is important that a state has the ability to develop and adopt a SIP to address its particular situation and needs. There needs to be definite provisions and guidance for the states to develop and submit a SIP to address the entire rule or certain portions of it, such as the unit level allocation provisions. [EPA-HQ-OAR-2009-0491-2634.1, p.1]
Response:
See preamble section X.
Organization: National Association of Clean of Air Agencies (NACAA)
Comment:
National Association of Clean of Air Agencies (NACAA)
EPA Should Provide Guidance on Transport Rule SIP Submittals  -  Particularly for States That Wish to Allocate Allowances Using a Different Mechanism Than Proposed by EPA
NACAA appreciates EPA's attempts to expedite implementation of the Transport Rule by proposing a FIP along with the rule instead of issuing a notice requesting the submission of State Implementation Plans (SIP Call). As EPA well knows, preparing another SIP on top of existing SIP obligations would be a severe strain on already stretched state and local resources. However, NACAA does not believe EPA has provided sufficient guidance to states that may choose to submit a SIP. In particular, a number of NACAA members would prefer to allocate emissions allowances to in-state sources using their own procedures, rather than EPA's. For example, some states may wish to distribute their allowances to in-state sources in a manner that encourages renewable energy and energy efficiency. We believe that this should not affect the approvability of the SIP, since the distribution of allowances within the state does not affect the overall emissions in the state or a source's decision to control or not to control emissions. However, the proposal does not provide guidance on what EPA would consider an acceptable allowance distribution mechanism. Furthermore  -  and critically  -  [EPA-HQ-OAR-2009-0491-2771.1, p.5] NACAA seeks guidance on what criteria state SIPs would need to meet in order for that state's sources to be able to still participate in the interstate trading program. We urge EPA to state that it will quickly approve a state SIP that incorporates the Transport Rule FIP elements and only differs significantly from the FIP with respect to the allowance allocation scheme. [EPA-HQ-OAR-2009-0491-2771.1, p.6]
Response:
See preamble section X.
Organization: National Mining Association (NMA)
Comment:
National Mining Association (NMA)
EPA proposes to require compliance with phase one requirements under the proposed rule at the beginning of 2012, just six or so months after EPA anticipates completion of the rule. This is wholly unrealistic. States will not have had an opportunity to examine and understand the final rule and adopt State Implementation Plans (SIPs), and sources will not have had an adequate opportunity to plan for the new requirements. [EPA-HQ-OAR-2009-0491-2868.1, p.15] [[These comments can also be found in Section VII.C.]]
Response:
See preamble Sections VI and VII for discussion of compliance deadlines.  See preamble Section X for information relating to SIP deadlines.
Organization: Oklahoma Department of Environmental Quality
Comment:
Oklahoma Department of Environmental Quality
[[2662.1 p.3]]
   I. Oklahoma's Coverage Under the FIP
Oklahoma submitted its 110(a)(2)(D)(i)(I) SIP in May 2007. EPA has yet to fully approve or disapprove that SIP. On September 17, 2010, EPA published in the Federal Register a proposal to approve the PSD portion of the SIP (75 FR 56923); however, the proposal does not address all the elements in the submittal that pertain to prohibiting air pollutants from within Oklahoma from significantly contributing to nonattainment or interfering with maintenance of the relevant NAAQS in downwind states. Under this new Transport Rule, EPA has stated that states will be covered by the FIP only if it either determines that the state's SIP submission is incomplete or disapproves the state's SIP submission. Because our SIP has not been fully acted upon, Oklahoma appears to be in somewhat of a "lame duck" situation. Oklahoma is concerned as to whether it will in fact be covered by EPA's FIP and what, if anything, it needs to do regarding its SIP submittal to ensure coverage under the FIP.
Response:
EPA plans to address Oklahoma's significant contribution to nonattainment or interference with maintenance in other states with regard to the 1997 ozone NAAQS under a separate action--a Supplemental Notice of Proposed Rulemaking.  The status of the SIP submittal will be addressed in that action.  This rulemaking finds that Oklahoma does not significantly contribute to nonattainment or interfere with maintenance in other states with regard to the 1997 PM2.5 NAAQS or the 2006 PM2.5 NAAQS.
Organization: Ozone Transport Commission (OTC)
Comment:
Ozone Transport Commission (OTC)
Finally, earlier in our comments OTC advises EPA to provide that approval decisions on upwind states' SIPs be made contingent upon their resolution of any remaining emission reductions EPA deems necessary to fulfill their obligations under Section 110(a)(2)(D) of the Clean Air Act, in the event the federal remedy does not eliminate significant contribution and interference with maintenance as anticipated.
Response:
EPA has considered this comment and discusses it in section III. of the preamble to the final rule.
Organization: Pennsylvania Department of Environmental Protection
Comment:
Pennsylvania Department of Environmental Protection
The DEP supports EPA's approach of proposing a FIP in order to expedite implementation of the Transport Rule. EPA indicates in its preamble that a state may submit a SIP revision in order to implement the Transport Rule. 75 Fed. Reg. at p. 45,342. EPA states that: EPA also notes that, by promulgating these Transport Rule FIPs, EPA would in no way affect the right of states to submit, for review and approval, a SIP that replaces the federal requirements of the FIP with state requirements. In order to replace the FIP in a state, the state's SIP must provide adequate provisions to prohibit NOX and SO2 emissions that contribute significantly to nonattainment or interfere with maintenance in another state or states. [EPA-HQ-OAR-2009-0491-2660.1, p.7]
The final TR should be more explicit in delineating what a SIP revision mayor may not include, provide additional guidance on whether there are any unacceptable allocation mechanisms. In addition, the rule should indicate explicitly that EPA will quickly approve a state SIP that incorporates the FIP elements and only differs in the allocation mechanism. [EPA-HQ-OAR-2009-0491-2660.1, p.8]
Response:
See preamble section X.
Organization: South Carolina Department of Health and Environmental Control
Comment:
South Carolina Department of Health and Environmental Control
DHEC notes that the proposed Transport Rule does not adequately address SIPs. There are two parts of the SIP discussion in the proposal, the role of transport in infrastructure SIPs, and Transport Rule SIPs. First, states are required to submit SIPs that address CAA section 110(a)(2) three years after the promulgation of a new NAAQS. If states fail to submit SIPs that address section 110(a)(2), then the EPA can issue a Federal Implementation Plan ("FIP"). DHEC addressed transport in SIP submittals for the 1997 Ozone and PM2.5 standards, and the 2006 PM2.5 standard, by citing the CAIR, meaning that South Carolina relied on the CAIR to meet its obligations to control interstate transport of pollutants. [EPA-HQ-OAR-2009-0491-2677.1 p.15]
The proposed Transport Rule offers the following guidance on SIPs: For the states that have now been identified to be contributing significantly to nonattainment or interfering with maintenance under this proposed rule and whose 110(a)(2)(D)(i)(I) SIPs with respect to the 1997 ozone and PM2.5 NAAQS are pending approval, EPA will finalize the FIP included in this proposed rule only if EPA either determines that the SIP submission is incomplete or disapproves the SIP submission. (Alternatively, if a state withdraws its SIP submission, EPA will finalize the FIP.)33 [EPA-HQ-OAR-2009-0491-2677.1 p.15]
The implication of the EPA's statement is unclear. Does the EPA intend to publish disapprovals for SIPs that relied on the CAIR to satisfy the transport provisions of section 110(a)(2) before it publishes a final Transport Rule? On NACAA-hosted conference calls with states on the Transport Rule, EPA staff has stated that EPA regional offices will work with states on SIP-related questions. DHEC would prefer to have the ability to comment on the EPA's strategy for replacing SIPs before the Transport Rule is final. Once a final rule is in place, that rule will bind regional offices' decisions on SIPs. [EPA-HQ-OAR-2009-0491-2677.1 p.15]
In addition to our comment that the proposal lacks explanation on SIPs, DHEC offers the following preferred strategy if the EPA issues a final Transport Rule that retains the problematic modeling approach from the proposal: The EPA should allow regional offices to interpret the parts of previously submitted infrastructure SIPs (including the four prongs associated with 110(a)(2)(D) 2006 PM2.5 NAAQS) such that where states note that the CAIR will meet the interstate transport obligations, so too will the Transport Rule. This is a reasonable interpretation. First, in the infrastructure SIPs, states are noting that they are relying on the current EPA-led program to address interstate transport. When states submitted the SIP, that program was the CAIR. After January 1, 2012, that program would be the Transport Rule. Second, modeling in the proposed Transport Rule found that South Carolina did not significantly contribute to 24-hour PM2.5 nonattainment or interfere with maintenance downwind for the 2006 PM2.5 NAAQS.34 Third, South Carolina's utilities are complying with the CAIR SO2 limits, which are stricter than the proposed Transport Rule limits. [EPA-HQ-OAR-2009-0491-2677.1 p.15]
It seems that the EPA wants states to formally withdraw their previous SIP submittals, and re-submit the entire revisions for the 1997 ozone and PM2.5 NAAQS, with "CAIR" stricken and replaced by "Transport Rule" once it is final. This would be a time-consuming paperwork exercise with little to no actual air quality benefit, process for the sake of process. Including more explanation on this question in the final rule would provide more clarity and consistency than relying on the 10 EPA regions to develop their own guidance. [EPA-HQ-OAR-2009-0491-2677.1 p.16]
Further, in both parts of the SIP discussion, the final rule could include SIP provisions that would have been impracticable for DHEC to have commented on during the comment period because the EPA simply did not include the provisions in the proposal. The importance of SIPs in implementing the Clean Air Act means that the SIP provisions of the Transport Rule are of central relevance to the outcome of the rule. If the EPA alters the SIP guidance significantly from what could be expected from the nebulous language in the proposal, DHEC requests that the EPA re-notice the proposal. [EPA-HQ-OAR-2009-0491-2677.1 p.16]
Response:
As explained in section X the preamble to the final rule, EPA will work with states that wish to submit SIPs to ensure a smooth integration with the relevant Transport Rule trading programs and intends to provide information and tools to assist states in their rulemaking efforts.  Further, EPA notes that the specific preamble language highlighted by the commenter only applied to states that were not covered by CAIR.  Section IV of the preamble to the final rule, responses to comments in this document (primarily in Section III.A.), and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD" address the CAA 110(a)(2)(D)(i)(I) issues raised in this comment.  The impact of the remand of CAIR is also discussed in the preamble, largely in Section V.B.  EPA also notes that as CAIR addressed the requirements of 110(a)(2)(D)(i)(I) with respect to the 1997 ozone and 1997 PM2.5 NAAQS, EPA could not and has not approved 110(a)(2)(D)(i)(I) SIPs with respect to the 2006 PM2.5 NAAQS which relied on CAIR,  Section X of the preamble to the final rule has information on SIP requirements under the Transport Rule.

VII.A. Section 110 (a)(2)(D)(i) SIPs for the 1997 Ozone and PM2.5 NAAQS

Organization: American Public Power Association (APPA)
Comment:
American Public Power Association (APPA)
Thus, APPA believes that the three-year deadline for CAA section 110(a)(2)(D)(i)(I) interstate transport SIP submissions for the 1997 NAAQS should be restarted due to EPA's unlawful adoption of CAIR, and should begin to run upon EPA's promulgation of a valid final rule replacing CAIR. [EPA-HQ-OAR-2009-0491-2812.1, pp.27-28]
Response:
See Section IV of the preamble, responses to other comments particularly those found in section III.A. of this document, and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: City of Dover, Delaware
Comment:
City of Dover, Delaware
Under the proposed Transport Rule, EPA has indicated that they will utilize Federal Implementation Plans (FIPs) in order to initiate the program by the proposed 2012 start date. The City feels that EPA should allow states to implement the program via State Implementation Plans (SIPs) per the procedures established under the CAA. It appears to the City that EPA is preventing the states from exercising their ability to implement this program as a result of CAIR's deficiencies and not as a result of the States' failure to develop SIPs within the allotted time period or failure by States to implement SIPs consistent with the framework established by EPA - the traditional justifications for utilizing FIPs. For this reason, the City feels that the three-year deadline for SIPs for the 1997 NAAQs should be restarted upon EPA's promulgation of a final rule replace CAIR. [EPA-HQ-OAR-2009-0491-2636.1, p.3]
Response:
See Section IV of the preamble, responses to other comments particularly those found in section III.A. of this document, and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."  See also preamble section X for a discussion of state SIPs.
Organization: Louisiana Chemical Association (LCA)
Comment:
Louisiana Chemical Association (LCA)
LCA also has a number of questions concerning the ability and timing for states to submit SIPs in lieu of the FIPs. For example, if a state wants to use other enforceable measures or propose a NOx allocation scheme that is different than EPA's, the Preamble to the proposed rule gives little guidance as to the requirements. In a June 9, 2009 Federal Register notice, EPA indicated that Louisiana would have until July 9,2012 within which to submit a SIP to address its 'good neighbor' requirements under Section 110 of the Clean Air Act with respect to PM2.5 transport and to obtain approval of that SIP before EPA is required to implement a FIP. Yet, EP A is proposing to make the Transport Rule FIP effective in 2011, with a compliance date beginning January I, 2012. An extension of time is warranted for LCA and its affected members to comment on the relationship between SIPs and FIPs and to suggest alternatives to EPA's approach that better preserves the federalism inherent in the Clean Air Act regulatory scheme. [EPA-HQ-OAR-2009-0491-1925.1, p. 4]
Response:
See Section IV of the preamble, responses to other comments particularly those found in section III.A. of this document, and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."  See also Preamble Section X for information on state SIPs, including state allocation options.

VII.B. Section 110 (a)(2)(D)(i) SIPs for the 2006 PM2.5 NAAQS

Organization: American Public Power Association (APPA)
Comment:
American Public Power Association (APPA)
Likewise, EPA`s explanation that, with respect to the 2006 24-hour PM2.5 NAAQS, it will finalize FIPs for states that have not submitted SIPs and those for which EPA finds the previously-submitted SIPs to be incomplete or inadequate, 75 Fed. Reg. at 45342/2,17 lacks merit and is contradicted by EPA`s own underlying justification for proposing the Transport Rule. In the proposed rule (as in CAIR), EPA plainly takes the position that it has the authority, if not the obligation, to set the overall terms for states` implementation of section 110(a)(2)(D)(i)(I) with respect to any new or revised NAAQS. Given this circumstance, therefore, the affected states` section 110(a)(2)(D)(i)(I) obligation with respect to the 2006 24-hour PM2.5 NAAQS should be deemed to begin to run only upon EPA`s promulgation of a valid final rule setting guidelines (in the form of statewide emission budgets) for the states (e.g., a final CAIR replacement rule that is consistent with the CAA). [EPA-HQ-OAR-2009-0491-2812.1, p.28]
Response:
See Section IV of the preamble, responses to other comments particularly those found in section III.A. of this document, and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: Louisiana Chemical Association (LCA)
Comment:
Louisiana Chemical Association (LCA)
EPA Must Allow Louisiana at Least 18 Months to Adopt and Submit a SIP to Address any Alleged Impact of Louisiana Emissions on Downwind Annual PM2.5 NAAQS in Harris Co., Texas, Before Imposing a FIP.
On June 9, 2010, EPA published a finding that Louisiana failed to make a SIP submission to address the good neighbor provisions of the CAA with respect to the 2006 PM2.5 NAAQS revisions. EPA did not make any finding that Louisiana sources or emission activities were actually contributing significantly to nonattainment in another state or were interfering with maintenance in another state. EPA provided in that rulemaking that Louisiana would have two years within which to submit a SIP addressing this deficiency and obtain approval of it, or EPA would enact a FIP. Under the CAA, through a SIP submittal in response to this finding and notice, Louisiana would have the ability to demonstrate that emissions within its geographic jurisdiction do not significantly contribute to nonattainment and do not interfere with maintenance of the PM2.5 annual standard in any other state, and if they do so, Louisiana would have the authority to choose what sources to control, point sources, a subset of point sources, mobile sources, nonroad sources or other types of emissions. [EPA-HQ-OAR-2009-0491-3527.1, p. 39]
EPA did not wait on Louisiana to submit a SIP for this purpose even though the June Federal Register notice purported to allow Louisiana time to do so. In the instant rulemaking, on August 2, 2010, EPA proposed to find that Louisiana emissions are projected to interfere with maintenance of the annual PM2.5 NAAQS at one monitor in one county in Texas. EPA is now proposing its own FIP, to become effective in 2011 (well before the 2 year period stated in the June 2010 finding of failure to submit), with requirements effective as of January 1, 2012. For the reasons stated above, LCA asserts that EPA cannot enact a FIP and make it effective prior to allowing Louisiana the full time period allotted by the Clean Air Act within which to submit a SIP. [EPA-HQ-OAR-2009-0491-3527.1, p. 39-40]
Response:
See Section IV of the preamble, responses to other comments particularly those found in section III.A. of this document, and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: Nelson Industrial Steam Company (NISCO)
Comment:
Nelson Industrial Steam Company (NISCO)
EPA did not wait on Louisiana to submit a SIP for this purpose even though the June Federal Register notice purported to allow Louisiana time to do so. In the instant rulemaking, on August 2, 2010, EPA proposed to find that Louisiana emissions are projected to interfere with maintenance of the annual PM2.5 NAAQS at one monitor in one county in Texas. EPA is now proposing its own FIP, to become effective in 2011 (well before the 2 year period stated in the June 2010 finding of failure of Louisiana to submit a SIP), with requirements effective as of January 1, 2012. For the reasons stated above, NISCO asserts that EPA cannot enact a FIP and make it effective prior to allowing Louisiana the full time period allotted by the Clean Air Act within which to submit a SIP. [EPA-HQ-OAR-2009-0491-2813.1, p.11]
Response:
See Section IV of the preamble, responses to other comments particularly those found in section III.A. of this document, and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."

VII.C. Transport Rule SIPs

Organization: 8-Hour Ozone State Implementation Plan (SIP) Coalition
Comment:
8-Hour Ozone State Implementation Plan (SIP) Coalition
State Implementation Plan Alternative.  EPA requests comment on how a state could replace the Transport Rule FIP with a SIP and associated approval criteria.  At page 45,342 of the preamble, EPA states that 'The specific quantity of emissions reductions necessary for a state's SIP would be determined based on the state emissions budgets provided in the final transport rule.' [EPA-HQ-OAR-2009-0491-2736.1, p. 5]
The Coalition objects to EPA's quoted plan on two bases:  first, established law prohibits EPA from mandating any particular mix of precursor reductions for attainment or maintenance of a NAAQS; and second, this plan would lock in the results of EPA's current photochemical modeling without providing the opportunity for a SIP to rely on newer, more refined, or otherwise more informative modeling information. [EPA-HQ-OAR-2009-0491-2736.1, p. 6]
Response:
As explained in section X. of the preamble to the final rule, a state always has the option of replacing a FIP with a state SIP.  The SIP must include a technical demonstration by the state that emissions in the state that cause significant contribution to nonattainment and interference with maintenance will be eliminated.  The technical demonstration can include modeling done by the state.  EPA would evaluate the SIP revision to ensure that Section 110(a)(2)(D)(i)(I) requirements are met.  Alternatively, a state could submit a SIP revision that relies on EPA modeling to identify the emissions in the state that are contributing significantly to nonattainment or interfering with maintenance in a downwind state and then require that the amount of emissions be eliminated through state requirements.  The state can decide which emissions to eliminate in the amount considered significant.  EPA would evaluate the SIP revision to ensure that Section 110(a)(2)(D)(i)(I) requirements are met.
Organization: Alabama Department of Environmental Management
Comment:
Alabama Department of Environmental Management
In the preamble for the proposed rule, EPA says that states will be given an opportunity to submit a SIP that replaces the FIP. EPA does not provide sufficient guidance to states regarding the timing or minimum requirements for EPA approval of such SIP submittals. If the transport rule is finalized in the spring of 2011 and implementation begins in 2012, there is little time for states to develop SIPs to replace the FIPs. [EPA-HQ-OAR-2009-0491-2616, p.2]
Response:
See preamble Section X.
Organization: American Electric Power
Comment:
American Electric Power
My company(AEP) favors the continued reduction of air emissions, but believes that the EPA should delay this rule for several reasons:

:: The deadline does not provide enough time for states to develop their own implementation plans to comply with the rule.
The EPA should delay the Transport Rule until it sees the latest modeling based on CAIR compliance. At the least, the EPA should extend the compliance deadline to allow companies time to install the needed retrofits and to allow states to develop their own implementation plans.  [EPA-HQ-OAR-2009-0491-1923, p.1]
Furthermore, the six to eight months is a fraction of the time needed for states to develop their own implementation plans and get them approved. State implementation plans are not only the primary and preferred approach under the Clean Air Act, but also especially vital given the huge financial implications and accompanying decisions that will result from these new regulations. [EPA-HQ-OAR-2009-0491-2665.1, p.5] [[This comment can also be found in Section III.A.]]
Response:
See preamble section IV concerning EPA's FIP authority and obligation.  Additional discussion can be found in responses to comments in Section III.A. of this document.   Preamble sections VI and VII have information on compliance deadlines.
Organization: American Municipal Power, Inc. (AMP)
Comment:
American Municipal Power, Inc. (AMP)
EPA Should Reconsider Its Determination to Issue a FIP
The Transport Rule is currently designed and structured as a Federal Implementation Plan (FIP) to regulate emissions from EGUs in thirty-two states. AMP is puzzled by EPA's decision in this regard and would ask that EPA reconsider this decision. Specifically, since CAIR remains viable as an interim measure, EPA should not rush the Transport Rule via FIP; rather, the states should be given time to modify State Implementation Plans (SIP) as contemplated by both the express language and spirit of Clean Air Act's requirements and federal-state cooperation tenants. Similarly, unit level allowance allocations should be the responsibility of states per the SIP process rather than allocation by EPA using the flawed Integrated Planning Model. [EPA-HQ-OAR-2009-0491-2678.1, p.2]
Response:
See preamble Sections IV and X for a discussion of FIP authority and SIP deadlines.  Additional information can be found in other responses to comments primarily in Section III of this document and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: American Public Power Association (APPA)
Comment:
American Public Power Association (APPA)
5. APPA believes there is no urgency to finalizing the PTR so "getting it right" by taking time to sort out many of the issues brought up in APPA`s comments and those comments submitted separately from UARG is appropriate. In particular, EPA should, consistent with what the Clean Air Act requires, allow time for states to develop SIPs, rather than immediately imposing FIPs. In the  meantime, CAIR would remain in place and would continue to maintain a strong and effective program of emissions reductions pending the initial compliance deadline for the Transport Rule. [EPA-HQ-OAR-2009-0491-2812.1, pp.3-4]
In addition, the proposed rule -- and especially its 2012 first-phase compliance date -- is fundamentally inconsistent with the CAA because it effectively deprives states of the time they need to develop, submit, and receive EPA approval of SIPs before the program begins. See section VII infra. [EPA-HQ-OAR-2009-0491-2812.1, pp.16-17] [[This comment can also be found in Section III.A]]
APPA believes that it would be possible for EPA to encourage early emission reductions beginning in 2012 under the proposed rule even if the initial binding compliance date under the rule was not until some years later. One possible approach would be to set "shadow" allowance allocations, using the best data available, for 2012 and each subsequent year until the new program begins. Then, during the period leading up to the new program`s initial compliance year, EPA (or, more properly, a state) could credit sources with additional allowances corresponding to the number of tons they emitted below their shadow allowance allocation levels in those years, with those allowances eligible to be banked and used beginning in the first compliance year. The ability to earn allowances -- usable once the new program begins -- for early reductions would give sources a meaningful incentive to reduce their emissions prior to the start of the program, while allowing them the time they need to make the adjustments necessary for compliance, and affording states sufficient time to develop and submit SIPs consistent with the Act. [EPA-HQ-OAR-2009-0491-2812.1, p.20]
EPA should take the needed time necessary to correct the many errors in the proposed rule, and allow adequate time for states to develop SIPs and for sources to make the adjustments necessary to comply with the rule, rather than rushing to implementation as it proposes to do. [EPA-HQ-OAR-2009-0491-2812.1, p.20] [[This comment can also be found in Section III.A.]]
Response:
See preamble, particularly sections IV and X regarding state SIP submittals and SIP revision provisions.  See also responses to other comments particularly in section III.A. of this document and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: ARIPPA
Comment:
ARIPPA
F. The initial compliance deadline under the proposed FIP does not allow sufficient time for states to develop and implement state-specific programs, or for affected EGUs to develop compliance plans.
Nevertheless, the initial compliance deadline of January 1, 2012, does not provide states adequate time to develop and implement state-specific strategies for achieving their emissions budgets, as authorized under the Proposed Rule. Indeed, EPA clearly states in the Proposed Rule that it "wants to offer states substantial flexibility for addressing the Section 110(a)(2)(D)(i)(I) transport issues though a SIP should they choose to do so." 75 Fed. Reg. 45342. However, affected states would not have sufficient time to develop state-specific regulations and then satisfy all elements of the SIP-revision approval process, and secure EPA approval of the SIP, all before January 1, 2012. See 75 Fed. Reg. 45342 ("The Transport Rule FIPs would be in place in each covered state until a state's SIP was submitted and approved by EPA to replace a FIP.")? 75 Fed. Reg. 45227 (recognizing that "[b]oth EPA and state resources are limited and EPA recognizes the importance of developing requirements that make efficient use of limited EPA and state resources"). [EPA-HQ-OAR-2009-0491-2794.1, p.18]
EPA must recognize that the inability of states to finalize state-specific SIP-based programs for implementing the Transport Rule would not merely postpone transition from a FIP-based to a SIP-based program. Instead, affected sources must pursue compliance options based upon the regulations that will be effective at the earliest time. Sources may not be able to develop and implement a temporary or transitional compliance approach, especially to the extent that the Proposed Rule is ultimately promulgated. Instead, the very restrictive proposed emission limitations that would be imposed upon the ARIPPA facilities through the Proposed Rule would require dramatic measures, if such reductions could even be achieved. These affected facilities would not likely have the option of implementing a transitional approach during the first phase of regulation that could simply be undone and replaced with a longer term strategy once the state SIP is promulgated and approved. For this reason, it is critical that states be afforded a reasonable opportunity to finalize and establish SIPs before affected sources would be subject to the promulgated standards. [EPA-HQ-OAR-2009-0491-2794.1, p.18] [[These comment can also be found in Section III.A.]]
For these reasons, EPA should extend the initial compliance deadline in the Proposed Rule until January 1, 2015 (with the second phase of emissions reductions beginning in January 2017), to allow affected states and EGUs within those states sufficient time to develop and implement approved SIPs and compliance plans, respectively. Specifically, EPA should allow states until January 1, 2015, to develop SIPs and complete the SIP-approval process, and any FIP should not become effective unless the state has failed to implement an appropriate SIP by that date. [EPA-HQ-OAR-2009-0491-2794.1, p.19]
Finally, ARIPPA objects to the compliance deadline under the proposed FIP, on the basis that such deadline does not afford sufficient time for states to develop and implement state-specific programs, or for affected EGUs to develop compliance strategies. Similarly, the January 2012 compliance deadline does not allow affected EGUs adequate time to develop compliance plans to achieve the emissions reductions necessary to meet the applicable standards in the Proposed Rule. [EPA-HQ-OAR-2009-0491-2794.1, p.21]
For these reasons, EPA should extend the initial compliance deadline in the Proposed Rule until January 1, 2015, to allow affected states and EGUs within those states sufficient time to develop and implement approved SIPs and compliance plans, respectively. [EPA-HQ-OAR-2009-0491-2794.1, pp.21-22] [[These comments can also be found in Section V.C.2.]]
Response:
See preamble Sections IV and X.  See also responses to comments primarily in Section III.A. of this document.
Organization: Associated Electric Cooperative, Inc. (AECI)
Comment:
Associated Electric Cooperative, Inc. (AECI)
:: Allow states time to develop approvable State Implementation Plans (SIPs) that include unit allocations that better fit the regulated community. The states already have mechanisms developed under the CAIR SIP development for distributing their state budgets to facilities within their borders; [EPA-HQ-OAR-2009-0491-2845.1 p.3] [[This comment is also found in Section III.F.]]
Response:
See preamble Section X.
Organization: Clean Air Council
Comment:
Clean Air Council
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-2009-0491-1938, p.44.]
The Council supports EPA's decision to move the process forward under a Federal Implementation Plan, while providing states with the option of replacing the FIP, the state implementation plan, as long as the SIP achieves the required emission reductions.
Since allowing the state to develop a SIP before imposing a FIP is the more traditional approach under the Clean Air Act, EPA must make clear how a state can move forward with the SIP process.
Response:
See Section X of the preamble.
Organization: Cleco Corporation
Comment:
Cleco Corporation
EPA has taken two years to develop this proposed rule and proposes to take another nine months to finalize it. At the same time, it eliminates time for public comment and time on the back end for state SIP development and compliance planning. [EPA-HQ-OAR-2009-0491-2859.1 p.3] [[The comment can also be found in Section V.C.]]
EPA's attempt to impose its one-size-fits-all FIP, without allowing states an opportunity to develop a SIP ignores the fact that state compliance options vary greatly from state to state. By way of example, EPA's multi-sector modeling shows significant differences from state to state with respect to which sectors have the most significant emissions of the precursor pollutants. For example, in Louisiana, EGU emissions represent less than 30% of total anthropogenic SO2 emissions, whereas, in Indiana, EGU emissions represent well over 80% of anthropogenic SO2 emissions.8 Under the proposed rule, states are included in the various programs because of total anthropogenic emissions  -  and not simply EGU emissions. EPA determines that all reductions should come from EGUs based on its macro-level analysis that this sector provides the most cost effective controls. That macro cost-effectiveness analysis does not necessarily hold true at the state level. Thus, under EPA's proposed rule, states are forced  -  via the FIP  -  to obtain all reductions from EGUs regardless of whether other reductions might prove more cost effective. For all of these reasons, each state should be allowed an opportunity to develop a plan for § 110(a)(2)(D)(i) compliance and tailor that plan to the unique challenges and opportunities within that state. [EPA-HQ-OAR-2009-0491-2859.1 p.5]
Response:
See preamble section IV and X regarding state SIP submittals and deadlines, and SIP revision provisions.
Organization: Commerce Lexington Inc.
Comment:
Commerce Lexington Inc.
The deadlines in the Transport Rule provide no practical way for power companies to install any needed pollution control equipment or for the states to develop their own state implementation plans (SIPs). SIPs have always been a cornerstone for compliance and enforcement of the Clean Air Act. [EPA-HQ-OAR-2009-0491-2869.1 p.2]
Response:
See preamble Sections VI and VII for discussion of compliance deadlines.  See preamble Section X for information relating to SIP deadlines.
Organization: Edison Mission Energy (EME)
Comment:
Edison Mission Energy (EME)
EPA's aggressive emission reduction timelines are contrary to law. Title I of the Clean Air Act ("CAA") gives states, not EPA, primary responsibility for attaining air standards within their borders. Under Title I, the proper process for implementing measures to attain air quality standards, like the emission reduction contemplated by the Transport Rule, is for EPA to give the states an opportunity to propose a state implementation plan ("SIP") that achieves those goals. Title I does not permit EPA to skip the SIP development process and impose a federal implementation plan ("FIP") on the states first as it has done here, nor does the D.C. Circuit's opinion in North Carolina v. EPA remanding CAIR. By ignoring the cooperative federalism dictates of Title I, the Transport Rule fails to comply with the CAA. [EPA-HQ-OAR-2009-0491-2707.1, pp.2-3] [[These comments can also be found in Section III.A.]]
Response:
See response in Section III.A. of this document.
Organization: Empire District Electric Company (Empire District)
Comment:
Empire District Electric Company (Empire District)
Empire District believes that the CATR, as proposed, takes the SIP authority from the states and gives that authority to EPA due to the timing requirement that makes it impossible for many states to develop and submit their SIPs.  This is a disturbing new pattern in EPA rulemaking.  We encourage EPA to reconsider the timing of this regulation as it related to the relationship between EPA and the states. [EPA-HQ-OAR-2009-0491-2659.1, p.2]
Response:
See preamble Sections IV and X, and responses to other comments primarily in section III of this document.
Organization: Energy Future Coalition
Comment:
Energy Future Coalition
By promulgating a Federal Implementation Plan, EPA will quickly establish policies to reduce emissions from power plants that significantly contribute to air quality issues in neighboring states. By proceeding in this manner, however, EPA may also reduce the flexibility of states to credit existing efficiency programs or incentivize utilities to make additional investments in efficiency. For that reason, we urge EPA to help states transition from Federal to State air quality plans. EPA will need to provide a model rule and guidance to states to facilitate this process. As written, the CATR does not provide sufficient guidance to states that seek to prepare a SIP that incorporates energy efficiency incentives to reduce regulated emissions from power plants. [EPA-HQ-OAR-2009-0491-2623.1, pp.2-3]
Response:
See preamble Section X.
Organization: Exxon Mobil Corporation
Comment:
Exxon Mobil Corporation
EPA SHOULD ALLOW LOUISIANA SUFFICIENT TIME TO SUBMIT A SIP IN LIEU OF THE PROPOSED FIP
The Clean Air Act was intended by Congress to establish a model of cooperative federalism wherein states have the primary responsibility for air pollution control and EPA is to act only in the clear absence of state action. This is not one of those cases. Louisiana has acted to prevent interstate transport of emissions that could affect attainment of NAAQS in downwind states and should be given a reasonable opportunity to submit any necessary SIP improvements. EPA's preemptive action of proposing this FIP does not provide Louisiana with the deference accorded to states under the Clean Air Act. [EPA-HQ-OAR-2009-0491-2841.1,p.9]
Under CAA § 107(a), 42 USC 7407(a), the Act provides that '[e]ach State shall have the primary responsibility for assuring air quality within the entire geographic area comprising such State by submitting an implementation plan for such State which will specify the manner in which national primary and secondary ambient air quality standards will be achieved and maintained ... ' Under CAA §110(a)(1), 42 USC 7410(a), the Act provides that '[e]ach State shall ... adopt and submit to the Administrator, within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard '' a plan which provides for implementation, maintenance, and enforcement of such primary standard in each air quality control region (or portion thereof) within such State.' [EPA-HQ-OAR-2009-0491-2841.1, p.9]
The jurisprudence supports this primary role for states carved out by the Act. In Train v. Natural Resources Defense Council, Inc., 421 U.S. 60 (1975), the COUl1 had to determine 'whether Congress intended the States to retain any significant degree of control of the manner in which they attain and maintain national [air] standards' Id. at 78. The Court found that the CAA 'plainly' relegates EPA to 'a secondary role in the process of determining and enforcing the specific, source-by-source emission limitations which are necessary if the national standards it has set are to be met.' Id. at 79. 'The Act gives the Agency no authority to question the wisdom of a State's choices of emission limitations.' Id. at 79. As long as the state's plan results in compliance with air quality standards, 'the State is at liberty to adopt whatever mix of emission limitations it deems best suited to its particular situation.' Id. This view was reiterated in Union Elec. Co. v. E.P.A., 427 U.S. 246 (1976) wherein the Court stated: 'Congress plainly left with the States, so long as national standards were met, the power to determine which sources would be burdened by regulation and to what extent.' Id at 269. [EPA-HQ-OAR-2009-0491-2841.1,p.9]
The lower courts have upheld these basic principles enunciated by the Supreme Court. In Bethlehem Steel Corp. v. Gorsuch, 742 F.2d 1028 (7th Cir. 1984), the Court had to reanalyze a prior decision concerning CAA § 110(a) and found that 'The federal government through the EPA determines the ends-the standards of air quality-but Congress has given the states the initiative and a broad responsibility regarding the means to achieve those ends through state implementation plans and timetables for compliance. The Clean Air Act is an experiment in federalism, and the EP A may not run roughshod over the procedural prerogatives that the Act has reserved to the states ... , especially when ... the agency is overriding state policy.' Id. at 1036-37, (citations omitted). The decision in Virginia v. EPA, 108 F.3d 1397 (D.C. Cir. 1997), is particularly relevant here. The court held that EPA can call only for revisions of a SIP 'as necessary' to correct a SIP's inadequacy (i.e., if the state cannot achieve the ambient air quality standard under the terms of its SIP) (1410). It cautioned that EPA cannot condition approval of a SIP on the adoption of source specific regulations that EP A itself mandates. Id. at 1406-15. Specifically, the court stated: 'Congress did not give EPA authority to choose the control measures or mix of measures states would put in their implementation plans.' Instead, as stated in Train, the CAA leaves to the states 'the power to determine which sources would be burdened by regulations and to what extent' and CAA 'did not permit the agency to require the state to pass legislation or issue regulations containing control measures of EPA's choosing.' Id. at 1410. [EPA-HQ-OAR-2009-0491-2841.1,p.10]
Louisiana has adopted SIP provisions to address the good neighbor requirements under the Clean Air Act. On September 27,2006, the Louisiana Department of Environmental Quality (LDEQ) submitted a SIP revision to EPA adopting the CAIR S02 Trading Program to address its 'good neighbor' obligations under CAA Section 1l0(a)(2)(D) with respect to the potential impact of Louisiana emissions on downwind PM2.5 receptors in the State of Alabama. EPA approved this SIP revision on July 20,2007 at 72 Fed. Reg. 39741. On July 12,2007, LDEQ submitted a SIP revision to EPA adopting a SIP for a CAIR NOx Trading Program to address both the 1997 8-hour ozone standard and the 1997 annual PM2.5 standard. EPA approved this SIP revision on September 28, 2007 at 72 Fed. Reg. at 55064. LDEQ submitted amendments to its NOx CAIR SIP on July 1, 2009, which are pending before EPA for decision.  [EPA-HQ-OAR-2009-0491-2841.1,p.10]
EPA has indicated under the proposed CATR and that a CAIR SIP submission is no longer considered all adequate Section 1l0(a)(2)(D)(i)(I) SIP submission. 75 Fed. Reg. 45,341. EPA stated: [EPA-HQ-OAR-2009-0491-2841.1,p.10]
The promulgation of this rule does not affect the right of the states to submit, for review and approval, a SIP that replaces the federal requirements of the FIP with state requirements. To replace the FIP in a state, the state's SIP must provide adequate provisions to prohibit NOx and SO2 emissions that contribute significantly to nonattainment or interfere with maintenance in another state or states. Transport Rule FIP would be in place in each covered state until a state's SIP was submitted and approved by EPA to replace a FIP. Id. EPA taking comment on all aspects of how a state could replace the Transport Rule FIP with a SIP and on what the SIP approval criteria should be. Id. [EPA-HQ-OAR-2009-0491-2841.1, p.11]
Thus, the proposed CATR purports to be a finding of insufficiency of the Louisiana SIP to the extent it is based on CAIR. This finding of insufficiency will not be final until the CATR is final. Despite this, EPA proposes to enact the FIP BEFORE giving Louisiana the full CAA mandated ability to submit its own determination of 'significant contribution' or 'interference with maintenance' and if necessary, any SIP revisions to address the 1997 8-hour ozone NAAQS. EM believes this is contrary to the CAA and asserts that EPA cannot enact a FIP to address any alleged impacts of Louisiana sources on the 8-hour' ozone NAAQS in Texas without first giving Louisiana 18 months from the final date of the CATR finding of insufficiency of its existing CAIR SIP. [EPA-HQ-OAR-2009-0491-2841.1,p.11]
On June 9, 2010, EPA published a finding that Louisiana failed to make a SIP submission to address the good neighbor provisions of the CAA with respect to the 2006 PM2.5 NAAQS revisions. IS EPA did not make any finding that Louisiana sources or emission activities were actually contributing significantly to nonattainment in another state or were interfering with maintenance in another state. EPA provided in that rulemaking that Louisiana would have two years within which to submit a SIP addressing this deficiency and to obtain approval of it, or EPA would enact a FIP. Under the CAA, through a SIP submittal in response to this finding and notice, Louisiana would have the ability to demonstrate that emissions within its geographic jurisdiction do not significantly contribute to nonattainment and do not interfere with maintenance of the PM2.5 annual standard in any other state, and if they do so, Louisiana would have the authority to choose what sources to control, point sources, a subset of point sources, mobile sources, nonroad sources or other types of emissions. [EPA-HQ-OAR-2009-0491-2841.1,p.11]
EPA did not wait on Louisiana to submit a SIP for this purpose even though the June Federal Register notice purported to allow Louisiana time to do so. In the instant rulemaking, on August 2, 2010, EPA proposed to find that Louisiana emissions are projected to interfere with maintenance of the annual PM2.5 NAAQS at one monitor in one county in Texas. EPA is now proposing its own FIP, to become effective in 2011 (well before the 2 year period stated in the June 2010 finding of failure of Louisiana to submit a SIP), with requirements effective as of January 1, 2012. For the reasons stated above, EM asserts that EPA cannot enact a FIP and make it effective prior to allowing Louisiana the full time period allotted by the Clean Air Act within which to submit a SIP. [EPA-HQ-OAR-2009-0491-2841.1,p.11]
Response:
EPA responds to each of the commenters points in responses to other, nearly identical, comments submitted by other comments.  Most of these responses can be found in Section III.A. of this document.  Additional information can be found in section IV of the preamble and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: Florida Department of Environmental Protection
Comment:
Florida Department of Environmental Protection
  The Florida Department of Environmental Protection's (Department) Division of Air Resource Management (Division) appreciates EPA's efforts to address interstate transport issues and provide the flexibility for states to implement this rule through a Federal Implementation Plan (FIP) instead of a State Implementation Plan. With current resource constraints and rulemaking hurdles, it is often more expeditious for the Division to implement a FIP. [EPA-HQ-OAR-2009-0491-2624.1, p.1]
Response:
EPA is finalizing Transport Rule FIPs for all states identified by the rule.
Organization: Florida Electric Power Coordinating Group, Inc. (FCG)
Comment:
Florida Electric Power Coordinating Group, Inc. (FCG)
Finally, EPA's unreasonable 2012 date does not allow states time to develop their own SIPs to address interstate transport issues, despite EPA's pledge that states are free to do so. This issue is discussed more fully below.  [EPA-HQ-OAR-2009-0491-2658.1, p.4] [[This comment can also be found in Section III.A.]]
As stated in the proposed rule, EPA intends to issue a final rule by the end of spring 2011, and that states are free to develop their own State Implementation Plan (SIP) to implement the rule. 75 Fed. Reg. 45228. But EPA's schedule would leave regulated states no more than six months to develop, submit and obtain EPA approval of a SIP for regulation under the Transport Rule. This is unreasonable, unachievable, and contrary to law. EPA must respect the rights of individual states to develop and implement their own SIPs if they so choose. EPA does not have the authority to promulgate a FIP without first giving the states this opportunity. The ability to replace federal requirements at some point in the future does not satisfy the requirement that EPA allow states the opportunity to craft their own plans, at the outset of the program, to address interstate transport. [EPA-HQ-OAR-2009-0491-2658.1,p.10]
In addition, EPA should expressly discuss allowing states to demonstrate that as long as its emissions did not contribute significantly to nonattainment, or interfere with maintenance in another state, it would meet its obligation under Section 11 0(a)(2)(D)(i)(I) of the CAA. [EPA-HQ-OAR-2009-0491-2658.1,p.10]
Response:
See preamble sections IV and X and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: Florida Municipal Electric Association (FMEA)
Comment:
Florida Municipal Electric Association (FMEA)
EPA's proposed Transport Rule usurps the traditional state role in designing state appropriate compliance plans and uses an inappropriate baseline. The Proposed Transport Rule establishes compliance timelines that make a FIP for the state of Florida unavoidable. State officials in Florida indicate that they cannot meet the State Implementation Plan (SIP) deadline required by the rule. This appears to be the case with all states subject to the Transport Rule. EPA has imposed a federal allowance allocation methodology which in the case of CAIR was appropriately and by Congressional design left to the states to accommodate state-specific circumstances. FMEA is concerned that once a state SIP is finally approved, the state will not be able to change the allocations to suit state needs to facilitate the lowest cost methodology for making required reductions. [EPA-HQ-OAR-2009-0491-2731.1, 2]
Finally, EPA's unreasonable 2012 date does not allow states time to develop their own SIPs to address interstate transport issues, despite EPA's pledge that states are free to do so. This issue is discussed more fully below. [EPA-HQ-OAR-2009-0491-2731.1, 2]
Response:
States can submit SIP revisions for state allocation starting with 2013 allocations.  See preamble section X concerning provisions for SIP revisions.
See also Preamble section IV concerning EPA's authority and obligation to promulgate Transport Rule FIPs.
Organization: Gainesville Regional Utilities (GRU)
Comment:
Gainesville Regional Utilities (GRU)
EPA's Proposed CATR Usurps the Traditional State Role in Designing State-Appropriate Compliance Plans and Uses an Inappropriate Baseline.
The proposed CATR establishes compliance timelines that make a FIP for the state of Florida unavoidable. Florida State officials indicate that they cannot meet the SIP deadline required by the rule. This appears to be the case with all states subject to the proposed CATR. EPA has imposed a federal allowance allocation methodology which in the case of CAIR was appropriately, and by Congressional design, left to the states to accommodate state-specific circumstances. GRU is concerned that once a state SIP is finally approved, the state will not be able to change the allocations to suit state needs to facilitate the lowest cost methodology for making the required reductions. [EPA-HQ-OAR-2009-0491-2674.1, p.4]
Response:
States can submit SIP revisions for state allocation starting with 2013 allocations.  See preamble section X concerning provisions for SIP revisions.
Organization: GE Energy Financial Services (GE EFS)
Comment:
GE Energy Financial Services (GE EFS)
As an Alternative to Resolving the Errors in IPM or Basing Unit Allocations on Historical Heat Input Data, EPA Could Instead Provide Adequate Time for States to Develop Adequate SIP Revisions Prior to Imposing the Proposed FIPs
In the Proposed Transport Rule, EPA is taking the unusual step of promulgating Federal Implementation Plans ('FIPs') that would become effective before EPA has made the requisite finding that a state had failed to submit an adequate State Implementation Plan ('SIP') or has otherwise taken any action to rescind its earlier approvals of states' CAIR SIP submittals. This would represent a significant departure from the Clean Air Act's clearly established process for addressing nonattainment of the National Ambient Air Quality Standards ('NAAQS'). If EPA does not correct the serious problems with IPM or establish unit-specific allocations based on historic heat input, it could, as an altogether different approach, refrain from promulgation of the proposed FIPs, and instead support states' efforts to submit adequate SIP revisions within a reasonable amount of time. While this might delay implementation of the CAIR's replacement program until after 2012, it would follow the process that EPA and the states have successfully implemented for four decades to address nonattainment of the NAAQS under the Clean Air Act. Moreover, given that the CAIR would remain in effect in the interim and EPA has recognized that most reductions in the 2012-2014 control periods will be achieved through implementation of emissions reductions that are already being achieved or planned for implementation, such a delay would not postpone or interfere with attainment of the NAAQS. Further, any such delay would provide EPA and the states with the opportunity to establish an adequate replacement program for the CAIR that also addressed anticipated revisions of the NAAQS, avoiding an unnecessary and duplicative series of rulemakings and SIP revisions. [EPA-HQ-OAR-2009-0491-2701.1,p .4]
Response:
See preamble Sections IV for a discussion regarding FIP authority.  See preamble section VII for the final allocation approach.
Organization: Georgia Department of Natural Resources, Air Protection Branch
Comment:
Georgia Department of Natural Resources, Air Protection Branch
[These comments were submitted as testimony at the Atlanta, Georgia public hearing on September 1, 2010.  See Docket Number EPA-HQ-OAR-0491-1939, p.95.]
On October 9th, 2007, EPA published in the Federal Register the approval of Georgia's CAIR SIP. This approval preceded the December 2008 remand of CAIR by the DC Circuit Court. CAIR was remanded to ensure that the environmental benefits achieved by that rule remain in effect. Therefore, Georgia EPD strongly disagrees with EPA's conclusion that the Court's decision means EPA's approval of our SIP no longer satisfies the section 110a2di obligation and for that reason, EPA's 2005 findings that we failed to submit such a SIP remains in force.
In lieu of the FIP, EPA should retain the CAIR SIP requirements which continue to achieve significant reductions until adequate time has been provided for Georgia to submit and for EPA to approve a revision.
Response:
See preamble sections IV and X, responses to comments in section III.A. of this document and the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD."
Organization: Golden Spread Electric Cooperative
Comment:
Golden Spread Electric Cooperative
Most of the major problems with this proposal, or action, begin with EPA eliminating requirements under CAIR and "proposing FIPs to immediately implement the emission reduction requirements identified and quantified by EPA in this action." The unreasonable and unnecessary proposed compliance deadlines in the proposed CATR present further complications for EPA as the agency attempts to circumnavigate its responsibilities under the Clean Air Act (CAA) Section 110 that clearly requires states be given opportunities to implement Section 110 obligations through the SIP process. EPA has not explained why it has chosen to accelerate this proposed CAIR replacement or why it finds it necessary to do so based on the courts' decisions in North Carolina v. EPA, 513 F.3d 896, (DC Cir 2008). GSEC recommends that CAIR remain in effect until each state has been given the opportunity to meet the requirements set forth in the CAA Section 110 (a) based on the timetable(s) set forth in Section 110(a)(1).  [EPA-HQ-OAR-2009-0491-2808.1 p.4] [[This comment can also be found in Section III.A.]]
Response:
See preamble Section IV and responses to comments primarily in section III.A. of this document.
Organization: Griffin Pipe Products, Inc.
Comment:
Griffin Pipe Products, Inc.
The EPA should delay the Transport Rule until it sees the latest modeling based on CAIR compliance. At the least, the EPA should extend the compliance deadline to allow companies time to install the needed retrofits and to allow states to develop their own implementation plans. [EPA-HQ-OAR-2009-0491-2600, p.1] [[These comments can also be found in Section V.C.]]
Response:
See sections IV, V, VI, VII, and X of the preamble.
Organization: Holland Board of Public Works
Comment:
Holland Board of Public Works
This deadline also does not allow our state to develop a State Implementation Plan (SIP) that could be crafted to take in mitigating factors for small municipalities that the EPA's modeling program cannot. [EPA-HQ-OAR-2009-0491-2861.1,p.1] [[This comment is also in Section III.A.]]
Response:
See preamble Section X.
Organization: Hoosier Rural Electric Cooperative
Comment:
Hoosier Rural Electric Cooperative
The timeframe allotted to construct scrubbers and selective catalytic reduction systems is not reasonable since companies will be relying on state specific caps versus regional emissions trading that were included in CAIR. It is unclear how EPA determined that each state will be able to comply with the timeframes included in CATR.  [EPA-HQ-OAR-2009-0491-2724.1 p.1] [EPA-HQ-OAR-2009-0491-3758.1_NODA, p.2]
Response:
See preamble Sections VI and VII.
Organization: Indiana Cast Metals Association (INCMA)
Indiana Builders Association
Comment:
Indiana Builders Association
There is not enough time to develop a state implementation plan, forcing Indiana to rely on the federal implementation plan. This is counter to the spirit of the Clean Air Act and an unneeded and hasty short-circuit of an established regulatory process. [EPA-HQ-OAR-2009-0491-2871.1,p.1] [[These comments are also in Section III.A.]]
Whether intentional or not, you must understand that the proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes an historical state responsibility. This short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans. [EPA-HQ-OAR-2009-0491-2871.1,p.2] [[These comments are also in Section III.A.]]
Indiana Cast Metals Association (INCMA)
Whether intentional or not, you must understand that the proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes an historical state responsibility. This short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans. [EPA-HQ-OAR-2009-0491-2178.1, p.1]
Response:
See preamble sections IV and X.  See also responses to comments in section III.A. of this document.
Organization: Indiana Department of Environmental Management
Comment:
Indiana Department of Environmental Management
The process of imposing a Federal Implementation Plan (FIP) will allow expedient emission reductions to meet the 1997 air quality standards; however, many states, including Indiana, would prefer to develop their own State Implementation Plan (SIP) to better fit the rule into specific state needs. The proposed Clean Air Transport Rule provides for this, but since there is insufficient time for many states to develop a SIP before the proposed 2012 implementation date, the budgets will already be established for the first five years through a FIP: If a state wishes to realign allowances within the budget through a SIP at a later date, how can this be accomplished when allowances under the FIP have already been made? What criteria do states need to meet that will allow sources to participate in the interstate trading program? How is new budget information integrated into U.S. EPA's accounting system? Should initial allocations be for a shorter time period? U.S. EPA needs to provide guidance to states on how these issues can actually be accomplished and on other under defined implementation details. [EPA-HQ-OAR-2009-0491-2645.1, p.2]
Response:
See preamble Section X.
Organization: Indiana Manufacturers Association, Inc. (IMA)
Comment:
Indiana Manufacturers Association, Inc. (IMA)
The proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes an historical state responsibility. This short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans. [EPA-HQ-OAR-2009-0491-1813.1, p. 1]
Response:
See preamble Section X.
Organization: Indiana Municipal Power Agency
Comment:
Indiana Municipal Power Agency
There is not enough time to develop a state implementation plan, possibly forcing Indiana to rely on the federal implementation plan. This is counter to the spirit of the Clean Air Act and an unneeded and hasty short-circuit of an established regulatory process. [EPA-HQ-OAR-2009-0491-3057.1,p.1]
Whether intentional or not, you must understand that the proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes an historical state responsibility. This short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans. [EPA-HQ-OAR-2009-0491-3057.1, p.2]
Response:
See preamble Sections IV and X.
Organization: Indiana Utility Shareholders Association
Comment:
Indiana Utility Shareholders Association
Whether intentional or not, you must understand that the proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes an historical state responsibility. This short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans. [EPA-HQ-OAR-2009-0491-3845 p.2] [[These comments can also be found in Section III.A.]]
Response:
See preamble sections IV and X.  See also responses to comments in section III.A. of this document.
Organization: International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO Boilermakers Union)
Comment:
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO Boilermakers Union)
Second, the proposed 2012 deadline runs contrary to the 'cooperative federalism' policy of the CAA by depriving states of the opportunity to first come into compliance with Section 110 by amending their SIPs. [EPA-HQ-OAR-2009-0491-2672.1, pp.3-4] [[This comment can also be found in Section III.A.]]
As noted above, EPA's 2015 deadline for CAIR was rejected in North Carolina because it was established without any regard for CAA attainment deadlines (or other substantive requirements of Title I of the CAA). If EPA allowed EGUs to prepare for compliance and state permitting authorities the opportunity to revise and submit compliant SIPs (as is Congress' clear preference) the Transport Rule could still achieve 'something measurable" towards assisting downwind states in meeting the earlier attainment deadlines, and would probably have no impact on the achievement of the later attainment deadlines. Our recommended deferral period is therefore consistent with North Carolina while striking an appropriate balance between the attainment deadlines of the CAA, feasibility considerations, and the policy of cooperative federalism. [EPA-HQ-OAR-2009-0491-2672.1, p.10] [[These comments can also be found in Section V.C.]]
Accordingly, the states should not be considered bound by the original three-year deadline provided for meeting the interstate transport requirements of the 1997 PM2.5 and Ozone NAAQS, and the 2006 PM2.5 NAAQS. Instead, EPA should provide a reasonable period from the publication of the final Transport Rule for revision of SIPs to address interstate transport issues. [EPA-HQ-OAR-2009-0491-2672.1, p.10] [[These comments can also be found in Section III.A.]]
Response:
See preamble sections IV, VII, and X.
Organization: Kentucky Chamber of Commerce
Comment:
Kentucky Chamber of Commerce
The deadlines in the Transport Rule provide no practical way for power companies to install any needed pollution control equipment or for the states to develop their own state implementation plans (SIPs). SIPs have always been a cornerstone for compliance and enforcement of the Clean Air Act.  [EPA-HQ-OAR-2009-0491-2760.1 p.2] [[These comments can also be found in Section V.C.2.]]
Response:
See preamble Sections VI, VII, and X.
Organization: Large Public Power Council (LPPC)