\126\ North American Electric Reliability Corporation, Key
Players, available at http://www.nerc.com/AboutNERC/keyplayers/Pages/default.aspx (last visited Mar. 12, 2015). ``The members of
the regional entities come from all segments of the electric
industry: investor-owned utilities; federal power agencies; rural
electric cooperatives; state, municipal and provincial utilities;
independent power producers; power marketers; and end-use
customers.'' Id.
    \127\ North American Electric Reliability Corporation,
Frequently Asked Questions, at 5 (2013), available at http://www.nerc.com/AboutNERC/Documents/NERC%20FAQs%20AUG13.pdf. For
example, a regional entity may propose reliability standards,
including regional variances or regional reliability standards
required to maintain and enhance electric service reliability,
adequacy, and security in the region. See, e.g., Amended and
Restated Delegation Agreement Between North American Reliability
Corporation and Midwest Reliability Organization, Bylaws of the
Midwest Reliability Organization, Inc., Section 2.2 (2012),
available at http://www.nerc.com/FilingsOrders/us/Regional%20Delegation%20Agreements%20DL/MRO_RDA_Effective_20130612.pdf.
    \128\ North American Electric Reliability Corporation,
Frequently Asked Questions, at 5 (2013), available at http://www.nerc.com/AboutNERC/Documents/NERC%20FAQs%20AUG13.pdf.
    \129\ ISOs/RTOs plan for system needs by ``effectively managing
the load forecasting, transmission planning, and system and resource
planning functions.'' For example, the New York Independent System
Operator (NYISO) conducts reliability planning studies, which ``are
used to assess current reliability needs based on user trends and
historical energy use.'' NYISO, Planning Studies, available at
http://www.nyiso.com/public/markets_operations/services/planning/planning_studies/index.jsp. See also PJM, Reliability Assessments,
available at https://www.pjm.com/planning/rtep-development/reliability-assessments.aspx (stating that the PJM ``Regional
Transmission Expansion Planning (RTEP) process includes the
development of periodic reliability assessments to address specific
system reliability issues in addition to the ongoing expansion
planning process for the interconnection process of generation and
merchant transmission.'').
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4. Modern Electric System Trends
    Today, the electricity sector is undergoing a period of intense
change. Fossil fuels--such as coal, natural gas, and oil--have
historically provided a large percentage of electricity in the U.S.,
along with nuclear power, with smaller amounts provided by other types
of generation, including renewables such as wind, solar, and
hydroelectric power. Coal provided the largest percentage of the fossil
fuel generation.\130\ In recent years, the nation has seen a sizeable
increase in renewable generation such as wind and solar, as well as a
shift from coal to natural gas.\131\ In 2013, fossil fuels supplied 67
percent of U.S. electricity,\132\ but the amount of renewable
generation capacity continued to grow.\133\ From 2007 to 2014, use of
lower- and zero-carbon energy sources such as wind and solar grew,
while other major energy sources such as coal and petroleum generally
experienced declines.\134\ Renewable electricity generation, including
from large hydro-electric projects, grew from 8 percent to 13 percent
over that time period.\135\ Between 2000 and 2013, approximately 90
percent of new power generation capacity built in the U.S. came in the
form of natural gas or RE facilities.\136\ In 2015, the U.S. Energy
Information Administration (EIA) projected the need for 28.4 GW of
additional base load or intermediate load generation capacity through
2020.\137\ The vast majority of this new electric capacity (20.4 GW) is
already under development (under construction or in advanced planning),
with approximately 0.7 GW of new coal-fired capacity, 5.5 GW of new
nuclear capacity, and 14.2 GW of new NGCC capacity already in
development.
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    \130\ U.S. Energy Information Administration, ``Table 7.2b
Electricity Net Generation: Electric Power Sector'' data from
Monthly Energy Review May 2015, available at http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_6.pdf (last visited May 26, 2015).
    \131\ U.S. Energy Information Administration, ``Table 7.2b
Electricity Net Generation: Electric Power Sector'' data from
Monthly Energy Review May 2015, release data April 25, 2014,
available at http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_6.pdf (last visited May 26, 2015).
    \132\ U.S. Energy Information Administration, ``Table 7.2b
Electricity Net Generation: Electric Power Sector'' data from
Monthly Energy Review May 2015, release data April 25, 2014,
available at http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_6.pdf (last visited May 26, 2015).
    \133\ Based on Table 6.3 (New Utility Scale Generating Units by
Operating Company, Plant, Month, and Year) of the U.S. Energy
Information Administration (EIA) Electric Power Monthly, data for
December 2013, for the following RE sources: solar, wind, hydro,
geothermal, landfill gas, and biomass. Available at http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_6_03.
    \134\ U.S. Energy Information Administration, ``Table 7.2b
Electricity Net Generation: Electric Power Sector'' data from
Monthly Energy Review May 2015, available at http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_6.pdf (last visited May 26, 2015).
    \135\ Bloomberg New Energy Finance and the Business Council for
Sustainable Energy, 2015 Factbook: Sustainable Energy in America, at
16 (2015), available at http://www.bcse.org/images/2015%20Sustainable%20Energy%20in%20America%20Factbook.pdf. Bloomberg
gave projections for 2014 values, accounting for seasonality, based
on latest monthly values from EIA (data available through October
2014).
    \136\ Energy Information Administration, Electricity: Form EIA-
860 detailed data (Feb. 17, 2015), available at http://www.eia.gov/electricity/data/eia860/.
    \137\ EIA, Annual Energy Outlook for 2015 with Projections to
2040, Final Release, available at http://www.eia.gov/forecasts/AEO/pdf/0383(2015).pdf. The AEO numbers include projects that are under
development and model-projected nuclear, coal, and NGCC projects.
---------------------------------------------------------------------------

    While the change in the resource mix has accelerated in recent
years, wind, solar, other renewables, and EEresources have been
reliably participating in the electric sector for a number of years.
This rapid development of non-fossil fuel resources is occurring as
much of the existing power generation fleet in the U.S. is aging and in
need of modernization and replacement. In 2025, the average age of the
coal-fired generating fleet is projected to be 49 years old, and 20
percent of those units would be more than 60 years old if they remain
in operation at that time. In its 2013 Report Card for America's
Infrastructure, the American Society for Civil Engineers noted that
``America relies on an aging electrical grid and pipeline distribution
systems, some of which originated in the 1880s.'' \138\ While there has
been an

increased investment in electric transmission infrastructure since
2005, the report also found that ``ongoing permitting issues, weather
events, and limited maintenance have contributed to an increasing
number of failures and power interruptions.'' \139\ However, innovative
technologies have increasingly entered the electric energy space,
helping to provide new answers to how to meet the electricity needs of
the nation. These new technologies can enable the nation to answer not
just questions as to how to reliably meet electricity demand, but also
how to meet electricity demand reliably and cost-effectively with the
lowest possible emissions and the greatest efficiency.
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    \138\ American Society for Civil Engineers, 2013 Report Card for
America's Infrastructure (2013), available at http://www.infrastructurereportcard .org/energy/.
    \139\ American Society for Civil Engineers, 2013 Report Card for
America's Infrastructure (2013), available at http://www.infrastructurereportcard .org/energy/.
---------------------------------------------------------------------------

    Natural gas has a long history of meeting electricity demand in the
U.S., with a rapidly growing role as domestic supplies of natural gas
have dramatically increased. Natural gas net generation increased by
approximately 32 percent between 2005 and 2014.\140\ In 2014, natural
gas accounted for approximately 27 percent of net generation.\141\ EIA
projects that this demand growth will continue with its Annual Energy
Outlook 2015 (AEO 2015) Reference case forecasting that natural gas
will produce 31 percent of U.S. electric generation in 2040.\142\
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    \140\ U.S. Energy Information Administration (EIA), Electric
Power Monthly: Table 1.1 Net Generation by Energy Source: Total (All
Sectors), 2005-February 2015 (2015), available athttp://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_1_1 (last visited
May 26, 2015).
    \141\ Id.
    \142\ U.S. Energy Information Administration (EIA), Annual
Energy Outlook 2015 with Projections to 2040, at 24-25 (2015),
available at http://www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf.
According to the EIA, the reference case assumes, ``Real gross
domestic product (GDP) grows at an average annual rate of 2.4% from
2013 to 2040, under the assumption that current laws and regulations
remain generally unchanged throughout the projection period. North
Sea Brent crude oil prices rise to $141/barrel (bbl) (2013 dollars)
in 2040.'' Id. at 1. The EIA provides complete projection tables for
the reference case in Appendix A of its report.
---------------------------------------------------------------------------

    Renewable sources of electric generation also have a history of
meeting electricity demand in the U.S. and are expected to have an
increasing role going forward. A series of energy crises provided the
impetus for RE development in the early 1970s. The OPEC oil embargo in
1973 and oil crisis of 1979 caused oil price spikes, more frequent
energy shortages, and significantly affected the national and global
economy. In 1978, partly in response to fuel security concerns,
Congress passed the Public Utilities Regulatory Policies Act (PURPA)
which required local electric utilities to buy power from qualifying
facilities (QFs).\143\ QFs were either cogeneration facilities \144\ or
small generation resources that use renewables such as wind, solar,
biomass, geothermal, or hydroelectric power as their primary
fuels.\145\ Through PURPA, Congress supported the development of more
RE generation in the U.S. States have also taken a significant lead in
requiring the development of renewable resources. In particular, a
number of states have adopted renewable portfolio standards (RPS). As
of 2013, 29 states and the District of Columbia have enforceable RPS or
similar laws.\146\
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    \143\ Casazza, J. and Delea, F., Understanding Electric Power
Systems, IEEE Press, at 220-221 (2d ed. 2010).
    \144\ Cogeneration facilities utilize a single source of fuel to
produce both electricity and another form of energy such as heat or
steam. Casazza, J. and Delea, F., Understanding Electric Power
Systems, IEEE Press, at 220-221 (2d ed. 2010).
    \145\ Casazza, J. and Delea, F., Understanding Electric Power
Systems, IEEE Press, at 220-221 (2d ed. 2010).
    \146\ U.S. Energy Information Administration (EIA), Annual
Energy Outlook 2014 with Projections to 2040, at LR-5 (2014),
available at http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf
(last visited May 26, 2015).
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    Use of RE continues to grow rapidly in the U.S. In 2013,
electricity generated from renewable technologies, including
conventional hydropower, represented 13 percent of total U.S.
electricity, up from 9 percent in 2005.\147\ In 2013, U.S. non-hydro RE
capacity for the total electric power industry exceeded 80,000 MW,
reflecting a fivefold increase in just 15 years.\148\ In particular,
there has been substantial growth in the wind and photovoltaic (PV)
markets in the past decade. Since 2009, U.S. wind generation has
tripled and solar generation has grown twenty-fold.\149\
---------------------------------------------------------------------------

    \147\ Energy Information Administration, Annual Energy Outlook
2015 with Projections to 2040, at ES-6 (2014) and Energy Information
Administration, Monthly Energy Review, May 2015, Table 7.2b,
available at http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_6.pdf.
    \148\ Non-hydro RE capacity for the total electric power
industry was more than 16,000 megawatts (MW) in 1998. Energy
Information Administration, 1990-2013 Existing Nameplate and Net
Summer Capacity by Energy Source Producer Type and State (EIA-860),
available at http://www.eia.gov/electricity/data/state/.
    \149\ Energy Information Administration, Monthly Energy Review,
May 2015, Table 7.2b, available at http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_6.pdf.
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    The global market for RE is projected to grow to $460 billion per
year by 2030.\150\ RE growth is further encouraged by the significant
amount of existing natural resources that can support RE production in
the U.S.\151\ In the Energy Information Administration's Annual Energy
Outlook 2015, RE generation grows substantially from 2013 to 2040 in
the reference case and all alternative cases.\152\ In the reference
case, RE generation increases by more than 70 percent from 2013 to 2040
and accounts for over one-third of new generation capacity.\153\
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    \150\ ``Global Renewable Energy Market Outlook.'' Bloomberg New
Energy Finance (Nov. 16, 2011), available at http://bnef.com/WhitePapers/download/53.
    \151\ Lopez et al., NREL, ``U.S. Renewable Energy Technical
Potentials: A GIS-Based Analysis,'' (July 2012).
    \152\ Energy Information Administration, Annual Energy Outlook
2015 with Projections to 2040, at 25 (2015), available at http://
www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf.
    \153\ Energy Information Administration, Annual Energy Outlook
2015 with Projections to 2040, at ES-6 (2015), available at http://
www.eia.gov/forecasts/aeo/pdf/0383(2015).pdf (last visited May 27,
2015).
---------------------------------------------------------------------------

    Price pressures caused by oil embargoes in the 1970s also brought
the issues of conservation and EE to the forefront of U.S. energy
policy.\154\ This trend continued in the early 1990s. EE has been
utilized to meet energy demand to varying levels since that time. As of
April 2014, 25 states \155\ have ``enacted long-term (3+ years),
binding energy savings targets, or energy efficiency resource standards
(EERS).'' \156\ Funding for EE programs has grown rapidly in recent
years, with budgets for electric efficiency programs totaling $5.9
billion in 2012.\157\
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    \154\ Edison Electric Institute, Making a Business of Energy
Efficiency: Sustainable Business Models for Utilities, at 1 (2007),
available at http://www.eei.org/whatwedo/PublicPolicyAdvocacy/StateRegulation/Documents/Making_Business_Energy_Efficiency.pdf.
Congress passed legislation in the 1970s that jumpstarted energy
efficiency in the U.S. For example, President Ford signed the Energy
Policy and Conservation Act (EPCA) of 1975--the first law on the
issue. EPCA authorized the Federal Energy Administration (FEA) to
``develop energy conservation contingency plans, established vehicle
fuel economy standards, and authorized the creation of efficiency
standards for major household appliances.'' Alliance to Save Energy,
History of Energy Efficiency, at 6 (2013) (citing Anders, ``The
Federal Energy Administration,'' 5; Energy Policy and Conservation
Act, S. 622, 94th Cong. (1975-1976)), available at https://www.ase.org/sites/ase.org/files/resources/Media%20browser/ee_commission_history_report_2-1-13.pdf.
    \155\ American Council for an Energy-Efficient Economy, State
Energy Efficiency Resource Standards (EERS) (2014), available at
http://aceee.org/files/pdf/policy-brief/eers-04-2014.pdf. ACEEE did
not include Indiana (EERS eliminated), Delaware (EERS pending),
Florida (programs funded at levels far below what is necessary to
meet targets), Utah, or Virginia (voluntary standards) in its
calculation.
    \156\ American Council for an Energy-Efficient Economy, State
Energy Efficiency Resource Standards (EERS) (2014), available at
http://aceee.org/files/pdf/policy-brief/eers-04-2014.pdf.
    \157\ American Council for an Energy-Efficient Economy, The 2013
State Energy Efficiency Scorecard, at 17 (Nov. 2013), available at
http://aceee.org/sites/default/files/publications/researchreports/e13k.pdf.

---------------------------------------------------------------------------

    Advancements and innovation in power sector technologies provide
the opportunity to address CO2 emission levels at affected
power plants while at the same time improving the overall power system
in the U.S. by lowering the carbon intensity of power generation, and
ensuring a reliable supply of power at a reasonable cost.

E. Clean Air Act Regulations for Power Plants

    In this section, we provide a general description of major CAA
regulations for power plants. We refer to these in later sections of
this preamble.
1. Title IV Acid Rain Program
    The EPA's Acid Rain Program, established in 1990 under Title IV of
the CAA, addresses the presence of acidic compounds and their
precursors (i.e., SO2 and NOX), in the atmosphere
by targeting ``the principal sources'' of these pollutants through an
SO2 cap-and-trade program for fossil-fuel fired power plants
and through a technology based NOX emission limit for
certain utility boilers. Altogether, Title IV was designed to achieve
reductions of ten million tons of annual SO2 emissions, and,
in combination with other provisions of the CAA, two million tons of
annual NOX emissions.\158\
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    \158\ 42 U.S.C. 7651(b).
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    The SO2 cap-and-trade program was implemented in two
phases. The first phase, beginning in 1995, targeted one-hundred and
ten named power plants, including specific generator units at each
plant, requiring the plants to reduce their cumulative emissions to a
specific level.\159\ Under certain conditions, the owner or operator of
a named power plant could reassign an affected unit's reduction
requirement to another unit and/or request an extension of two years
for meeting the requirement.\160\ Congress also established an energy
conservation and RE reserve from which up to 300,000 allowances could
be allocated for qualified energy conservation measures or qualified
RE.\161\
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    \159\ 42 U.S.C. 7651c (Table A).
    \160\ 42 U.S.C. 7651c(b) and (d).
    \161\ 42 U.S.C. 7651c(f) and (g).
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    The second phase, beginning in 2000, expanded coverage to more than
2,000 generating units and set a national cap at 8.90 million
tons.\162\ Generally, allowances were allocated at a rate of 1.2 lbs/
mmBtu multiplied by the unit's baseline and divided by 2000.\163\
However, bonus allowances could be awarded to certain units.
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    \162\ U.S. Dept. of Energy, Energy Information Administration,
``The Effects of Title IV of the Clean Air Act Amendments of 1990 on
Electric Utilities: An Update,'' p. vii. (March 1997).
    \163\ See 42 U.S.C. 7651d.
---------------------------------------------------------------------------

    Title IV also required the EPA to hold or sponsor annual auctions
and sales of allowances for a small portion of the total allowances
allocated each year. This ensured that some allowances would be
directly available for new sources, including independent power
production facilities.\164\
---------------------------------------------------------------------------

    \164\ 42 U.S.C. 7651o.
---------------------------------------------------------------------------

    The provisions of the EPA's Acid Rain Program are implemented
through permits issued under the EPA's Title V Operating Permit
Program.\165\ In accordance with Title IV, moreover, each Title V
permit application must include a compliance plan for the affected
source that details how that source expects to meet the requirements of
Title IV.\166\
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    \165\ 42 U.S.C. 7651g.
    \166\ Such plans may simply state that the owner or operator
expects to hold sufficient allowances or, in the case of alternative
compliance methods, must provide a ``comprehensive description of
the schedule and means by which the unit will rely on one or more
alternative methods of compliance in the manner and time authorized
under [Title IV].'' 42 U.S.C. 7651g(b).
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2. Transport Rulemakings
    CAA section 110(a)(2)(D)(i)(I), the ``Good Neighbor Provision,''
requires SIPs to prohibit emissions that ``contribute significantly to
nonattainment . . . or interfere with maintenance'' of the NAAQS in any
other state.\167\ If the EPA finds that a state has failed to submit an
approvable SIP, the EPA must issue a federal implementation plan (FIP)
to prohibit those emissions ``at any time'' within the next two
years.\168\
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    \167\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
    \168\ EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584,
1600-01 (2014) (citing 42 U.S.C. 7410(c)).
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    In three major rulemakings--the NOX SIP Call,\169\ the
Clean Air Interstate Rule (CAIR),\170\ and the Cross State Air
Pollution Rule (CSAPR) \171\--the EPA has attempted to delineate the
scope of the Good Neighbor Provision. These rulemakings have several
features in common. Although the Good Neighbor Provision does not speak
specifically about EGUs, in all three rulemakings, the EPA set state
emission ``budgets'' for upwind states based in part on emissions
reductions achievable by EGUs through application of cost-effective
controls. Each rule also adopted a phased approach to reducing
emissions with both interim and final goals.
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    \169\ 63 FR 57356 (Oct. 27, 1998).
    \170\ 70 FR 25162 (May 12, 2005).
    \171\ 76 FR 48208 (Aug. 8, 2011).
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    a. NOX SIP Call. In 1998, the EPA promulgated the
NOX SIP Call, which required 23 upwind states to reduce
emissions of NOX that would impact downwind areas with ozone
problems. The EPA determined emission reduction requirements based on
reductions achievable through ``highly cost-effective'' controls--i.e.,
controls that would cost on average no more than $2,000 per ton of
emissions reduced.\172\ The EPA determined that a uniform emission rate
on large EGUs coupled with a cap-and-trade program was one such set of
highly cost-effective controls.\173\ Accordingly, the EPA established
an interstate cap-and-trade program--the NOX Budget Trading
Program--as a mechanism for states to reduce emissions from EGUs and
other sources in a highly cost-effective manner. The D.C. Circuit
upheld the NOX SIP Call in most significant respects,
including its use of costs to apportion emission reduction
responsibilities.\174\
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    \172\ 63 FR at 57377-78.
    \173\ 63 FR at 57377-78. In addition to EGUs, the NOX
SIP Call also set budgets based on highly cost-effective emission
reductions from certain other large sources. Id.
    \174\ Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000).
---------------------------------------------------------------------------

    b. Clean Air Interstate Rule (CAIR). In 2005, the EPA promulgated
CAIR, which required 28 upwind states to reduce emissions of
NOX and SO2 that would impact downwind areas with
projected nonattainment and maintenance problems for ozone and
PM2.5. The EPA determined emission reduction requirements
based on ``controls that are known to be highly cost effective for
EGUs.'' \175\ The EPA established cap-and-trade programs for sources of
NOX and SO2 in states that chose to participate
in the trading programs via their SIPs and for states ultimately
subject to a FIP.\176\ As relevant here, the D.C. Circuit remanded CAIR
in North Carolina v. EPA due to in part the structure of its interstate
trading provisions and the way in which EPA applied the cost-effective
standard, but kept the rule in place while the EPA developed an
acceptable substitute.\177\
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    \175\ 70 FR at 25163.
    \176\ 70 FR at 25273-75; 71 FR 25328 (April 28, 2006).
    \177\ 531 F.3d 896, 917-22 (D.C. Cir. 2008), modified on
rehearing 550 F.3d 1176, 1178 (D.C. Cir. 2008).
---------------------------------------------------------------------------

    c. Cross-state Air Pollution Rule (CSAPR). In 2011, the EPA
promulgated CSAPR, which required 27 upwind states to reduce emissions
of NOX and SO2 that would impact downwind areas
with projected nonattainment and

maintenance problems for ozone and PM2.5. The EPA determined
emission reduction requirements based in part on the reductions
achievable at certain cost thresholds by EGUs in each state, with
certain provisions developed to account for the need to ensure
reliability of the electric generating system.\178\ In the same action
establishing these emission reduction requirements, the EPA promulgated
FIPs that subjected states to trading programs developed to achieve the
necessary reductions within each state.\179\ The U.S. Supreme Court
upheld the EPA's use of cost to set emission reduction requirements, as
well as its authority to issue the FIPs.\180\
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    \178\ 76 FR at 48270. The EPA adopted this approach in part to
comport with the D.C. Circuit's opinion in North Carolina v. EPA
remanding CAIR. Id. at 48270-71.
    \179\ 76 FR at 48209-16.
    \180\ EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584
(2014).
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3. Clean Air Mercury Rule
    On March 15, 2005, the EPA issued a rule to control mercury (Hg)
emissions from new and existing fossil fuel-fired power plants under
CAA section 111(b) and (d). The rule, known as the Clean Air Mercury
Rule (CAMR), established, in relevant part, a nationwide cap-and-trade
program under CAA section 111(d), which was designed to complement the
cap-and-trade program for SO2 and NOX emissions
under the Clean Air Interstate Rule (CAIR), discussed above.\181\
Though CAMR was later vacated by the D.C. Circuit on account of the
EPA's flawed CAA section 112 delisting rule, the court declined to
reach the merits of the EPA's interpretation of CAA section
111(d).\182\ Accordingly, CAMR continues to be an informative model for
a cap-and-trade program under CAA section 111(d).
---------------------------------------------------------------------------

    \181\ See 70 FR 28606 (May 18, 2005).
    \182\ New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008).
---------------------------------------------------------------------------

    The cap-and-trade program in CAMR was designed to take effect in
two phases: in 2010, the cap was set at 38 tons of mercury per year,
and in 2018, the cap would be lowered to 15 tons per year. The Phase I
cap was set at a level reflecting the co-benefits of CAIR as determined
through economic and environmental modeling.\183\ For the more
stringent Phase II cap, the EPA projected that sources would ``install
SCR [selective catalytic reduction] to meet their SO2 and
NOX requirements and take additional steps to address the
remaining Hg reduction requirements under CAA section 111, including
adding Hg-specific control technologies (model applies ACI [activated
carbon injection]), additional scrubbers and SCR, dispatch changes, and
coal switching.'' \184\ Based on this analysis, EPA determined that the
BSER ``refers to the combination of the cap-and-trade mechanism and the
technology needed to achieve the chosen cap level.'' \185\
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    \183\ 70 FR 28606, at 28617. The EPA's projections under CAIR
showed a significant number of affected sources would install
scrubbers for SO2 and selective catalytic reduction for
NOX on coal-fired power plants, which had the co-benefit
of capturing mercury emissions. Id. at 28619.
    \184\ 70 FR 28606, at 28619.
    \185\ 70 FR 28606, at 28620.
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    To accompany the nationwide emissions cap, the EPA also assigned a
statewide emissions budget for mercury. Pursuant to CAA section 111(d),
states would be required to submit plans to the EPA ``detailing the
controls that will be implemented to meet its specified budget for
reductions from coal-fired Utility Units.'' \186\ Of course, states
were ``not required to adopt and implement'' the emission trading
program, ``but they [were] required to be in compliance with their
statewide Hg emission budget.'' \187\
---------------------------------------------------------------------------

    \186\ 70 FR 28606, at 28621.
    \187\ 70 FR 28606, at 28621. That said, states could ``require
reductions beyond those required by the [s]tate budget.'' Id. at
28621.
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4. Mercury Air Toxics Rule
    On February 16, 2012, the EPA issued the MATS rule (77 FR 9304) to
reduce emissions of toxic air pollutants from new and existing coal-
and oil-fired EGUs. The MATS rule will reduce emissions of heavy
metals, including mercury, arsenic, chromium, and nickel; and acid
gases, including hydrochloric acid and hydrofluoric acid. These toxic
air pollutants, also known as hazardous air pollutants or air toxics,
are known to cause, or suspected of causing, nervous system damage,
cancer, and other serious health effects. The MATS rule will also
reduce SO2 and fine particle pollution, which will reduce
particle concentrations in the air and prevent thousands of premature
deaths and tens of thousands of heart attacks, bronchitis cases and
asthma episodes.
    New or reconstructed EGUs (i.e., sources that commence construction
or reconstruction after May 3, 2011) subject to the MATS rule are
required to comply by April 16, 2012 or upon startup, whichever is
later.
    Existing sources subject to the MATS rule were required to begin
meeting the rule's requirements on April 16, 2015. Controls that will
achieve the MATS performance standards are being installed on many
units. Certain units, especially those that operate infrequently, may
be considered not worth investing in given today's electricity market,
and are closing. The final MATS rule provided a foundation on which
states and other permitting authorities could rely in granting an
additional, fourth year for compliance provided for by the CAA. States
report that these fourth year extensions are being granted. In
addition, the EPA issued an enforcement policy that provides a clear
pathway for reliability-critical units to receive an administrative
order that includes a compliance schedule of up to an additional year,
if it is needed to ensure electricity reliability.
    Following promulgation of the MATS rule, industry, states and
environmental organizations challenged many aspects of the EPA's
threshold determination that regulation of EGUs is ``appropriate and
necessary'' and the final standards regulating hazardous air pollutants
from EGUs. The U.S. Court of Appeals for the D.C. Circuit upheld all
aspects of the MATS rule. White Stallion Energy Center v. EPA, 748 F.3d
1222 (D.C. Cir. 2014). In Michigan v. EPA, case no. 14-46, the U.S.
Supreme Court reversed the portion of the D.C. Circuit decision finding
the EPA was not required to consider cost when determining whether
regulation of EGUs was ``appropriate'' pursuant to section 112(n)(1).
The Supreme Court considered only the narrow question of whether the
EPA erred in not considering cost when making this threshold
determination. The Court's decision did not disturb any of the other
holdings of the D.C. Circuit. The Court remanded the case to the D.C.
Circuit for further proceedings, and the MATS rule remains in place at
this time.
5. Regional Haze Rule
    Under CAA section 169A, Congress ``declare[d] as a national goal
the prevention of any future, and the remedying of any existing,
impairment of visibility'' in national parks and wilderness areas that
results from anthropogenic emissions.\188\ To achieve this goal,
Congress directed the EPA to promulgate regulations directing states to
submit SIPs that ``contain such emission limits, schedules of
compliance and other measures as may be necessary to make reasonable
progress toward meeting the national goal. . . .'' \189\ One such
measure that Congress deemed necessary to make reasonable progress was
a requirement that certain older stationary sources that cause or
contribute to visibility impairment ``procure, install, and operate, as
expeditiously as practicable

. . . the best available retrofit technology,'' more commonly referred
to as BART.\190\ When determining BART for large fossil-fuel fired
utility power plants, Congress required states to adhere to guidelines
to be promulgated by the EPA.\191\ As with other SIP-based programs,
the EPA is required to issue a FIP within two years if a state fails to
submit a regional haze SIP or if the EPA disapproves such SIP in whole
or in part.\192\
---------------------------------------------------------------------------

    \188\ 42 U.S.C. 7491(a)(1).
    \189\ 42 U.S.C. 7491(b)(2).
    \190\ 42 U.S.C. 7491(b)(2)(A).
    \191\ 42 U.S.C. 7491(b)(2).
    \192\ 42 U.S.C. 7410(c); 7491(b)(2)(A).
---------------------------------------------------------------------------

    In 1999, the EPA promulgated the Regional Haze Rule to satisfy
Congress' mandate that EPA promulgate regulations directing states to
address visibility impairment.\193\ Among other things, the Regional
Haze Rule allows states to satisfy the Act's BART requirement either by
adopting source-specific emission limitations or by adopting
alternatives, such as emissions-trading programs, that achieve greater
reasonable progress than would source-specific BART.\194\ The Ninth
Circuit and D.C. Circuit have both upheld the EPA's interpretation that
CAA section 169A(b)(2) allows for BART alternatives in lieu of source-
specific BART.\195\ In 2005, the EPA promulgated BART Guidelines to
assist states in determining which sources are subject to BART and what
emission limitations to impose at those sources.\196\
---------------------------------------------------------------------------

    \193\ 64 FR 35714 (July 1, 1999) (codified at 40 CFR 51.308-
309).
    \194\ 40 CFR 51.308(e)(1) & (2).
    \195\ See Utility Air Regulatory Grp. v. EPA, 471 F.3d 1333
(D.C. Cir. 2006); Ctr. for Econ. Dev. v. EPA, 398 F.3d 653 (D.C.
Cir. 2005); Cent. Ariz. Water Dist. v. EPA, 990 F.2d 1531 (9th Cir.
1993).
    \196\ 70 FR 39104 (July 6, 2005) (codified at 40 CFR pt. 51,
app. Y).
---------------------------------------------------------------------------

    The Regional Haze Rule set a goal of achieving natural visibility
conditions by 2064 and requires states to revise their regional haze
SIPs every ten years.\197\ The first planning period, which ends in
2018, focused heavily on the BART requirement. States (or the EPA in
the case of FIPs) made numerous source-specific BART determinations,
and developed several BART alternatives, for utility power plants. For
the next planning period, states will need to determine whether
additional controls are necessary at these plants (and others that were
not subject to BART) in order to make reasonable progress towards the
national visibility goal.\198\
---------------------------------------------------------------------------

    \197\ See 40 CFR 51.308(d)(1)(i)(B), (f).
    \198\ See 42 U.S.C. 7491(b)(2); 40 CFR 51.308(d)(3).
---------------------------------------------------------------------------

F. Congressional Awareness of Climate Change in the Context of the
Clean Air Act Amendments \199\
---------------------------------------------------------------------------

    \199\ The following discussion is not meant to be exhaustive.
There are many other instances outside the context of the CAA,
before and after 1970, when Congress discussed or was presented with
evidence on climate change.
---------------------------------------------------------------------------

    During its deliberations on the 1970 Clean Air Act Amendments,
Congress learned that ongoing pollution, including from manmade carbon
dioxide, could ``threaten irreversible atmospheric and climatic
changes.'' \200\ At that time, Congress heard the views of scientists
that carbon dioxide emissions tended to increase global temperatures,
but that there was uncertainty as to the extent to which those
increases would be offset by the decreases in temperatures brought
about by emissions of particulates. President Nixon's Council on
Environmental Quality (CEQ) reported that ``the addition of
particulates and carbon dioxide in the atmosphere could have dramatic
and long-term effects on world climate.'' \201\ The CEQ's First Annual
Report, which was transmitted to Congress, devoted a chapter to ``Man's
Inadvertent Modification of Weather and Climate.'' \202\ Moreover,
Charles Johnson, Jr., Administrator of the Consumer Protection and
Environmental Health Service, testified before the House Subcommittee
on Public Health that ``the carbon dioxide balance might result in the
heating up of the atmosphere whereas the reduction of the radiant
energy through particulate matter released to the atmosphere might
cause reduction in radiation that reaches the earth.'' \203\
Administrator Johnson explained that the Nixon Administration was
``concerned . . . that neither of these things happen'' and that they
were ``watching carefully the kind of prognosis, the kind of
calculations that the scientists make to look at the continuous balance
between heat and cooling of the total earth's atmosphere.'' \204\ He
concluded that ``[w]hat we are trying to do, however, in terms of our
air pollution effort should have a very salutary effect on either of
these.'' \205\
---------------------------------------------------------------------------

    \200\ Sen. Scott, S. Debate on S. 4358 (Sept. 21, 1970), 1970
CAA Legis. Hist. at 349.
    \201\ Council on Environmental Quality, ``The First Annual
Report of the Council on Environmental Quality,'' p. 110 (Aug. 1970)
(recognizing also that ``[man] can increase the carbon dioxide
content of the atmosphere by burning fossil fuels'' and postulating
that an increase in the earth's average temperature by about 2[deg]
to 3[deg] F ``could in a period of decades, lead to the start of
substantial melting of ice caps and flooding of coastal regions.'').
    \202\ Council on Environmental Quality, ``The First Annual
Report of the Council on Environmental Quality,'' p. 93-104 (Aug.
1970)
    \203\ Testimony of Charles Johnson, Jr., Administrator of the
Consumer Protection and Environmental Health Service (Administration
Testimony), Hearing of the House Subcommittee on Public Health and
Welfare (Mar. 16, 1970), 1970 CAA Legis. Hist. at 1381.
    \204\ Testimony of Charles Johnson, Jr., Administrator of the
Consumer Protection and Environmental Health Service (Administration
Testimony), Hearing of the House Subcommittee on Public Health and
Welfare (Mar. 16, 1970), 1970 CAA Legis. Hist. at 1381.
    \205\ Testimony of Charles Johnson, Jr., Administrator of the
Consumer Protection and Environmental Health Service (Administration
Testimony), Hearing of the House Subcommittee on Public Health and
Welfare (Mar. 16, 1970), 1970 CAA Legis. Hist. at 1381.
---------------------------------------------------------------------------

    Scientific reports on climatic change continued to gain traction in
Congress through the mid-1970s, including while Congress was
considering the 1977 CAA Amendments. However, uncertainty continued as
to whether the increased warming brought about by carbon dioxide
emissions would be offset by cooling brought about by particulate
emissions.\206\ Congress ordered, as part of the 1977 CAA Amendments,
the National Oceanic and Atmospheric Administration to research and
monitor the stratosphere ``for the purpose of early detection of
changes in the stratosphere and climatic effects of such changes.''
\207\
---------------------------------------------------------------------------

    \206\ For instance, while scientists, such as Stephen Schneider
of the National Center for Atmospheric Research, testified that
``manmade pollutants will affect the climate,'' they believed that
we would ``see a general cooling of the Earth's atmosphere.'' Rep.
Scheuer, H. Debates on H.R. 10498 (Sept. 15, 1976), 1977 CAA Legis.
Hist. at 6477. Additionally, the Department of Transportation's
climatic impact assessment program and the Climatic Impact Committee
of the National Research Council, National Academies of Science and
Engineering both reported that ``warming or cooling'' could occur.
Id. at 6476. See also Sen. Bumpers, S. Debates on S. 3219 (August 3,
1976), 1977 CAA Legis. Hist. at 5368 (inserting ``Summary of
Statements Received [in the Subcommittee on the Environment and the
Atmosphere] from Professional Societies for the Hearings on Effects
of Chronic Pollution'' into the record, which noted that ``there is
near unamity [sic] that carbon dioxide concentrations in the
atmosphere are increasing rapidly.'').
    \207\ ``Clean Air Act Amendments of 1977,'' Sec.  125, 91 Stat.
at 728.
---------------------------------------------------------------------------

    Between the 1977 and 1990 Clean Air Act Amendments, scientific
uncertainty yielded to the predominant view that global warming ``was
likely to dominate on time scales that would be significant to human
societies.'' \208\ In fact, as part of the 1990 Clean Air Act
Amendments, Congress specifically required the EPA to collect data on
carbon dioxide emissions--the most significant of the GHGs--from all
sources subject to the

newly enacted operating permit program under Title V.\209\ Although
Congress did not require the EPA to take immediate action to address
climate change, Congress did identify certain tools that were
particularly helpful in addressing climate change in the utility power
sector. The Senate report discussing the acid rain provisions of Title
IV noted that some of the measures that would reduce coal-fired power
plant emissions of the precursors to acid rain would also reduce those
facilities' emissions of CO2. The report stated:
---------------------------------------------------------------------------

    \208\ Peterson, Thomas C., William M. Connolley, and John Fleck,
``The Myth of the 1970s Global Cooling Scientific Consensus,''
Bulletin of the American Meteorological Society, p. 1326 (September
2008), available at http://journals.ametsoc.org/doi/pdf/10.1175/2008BAMS2370.1.
    \209\ ``Clean Air Act Amendments of 1990,'' Sec.  820, 104 Stat.
at 2699.

    Energy efficiency is a crucial tool for controlling the
emissions of carbon dioxide, the gas chiefly responsible for the
intensification of the atmospheric `greenhouse effect.' In the last
several years, the Committee has received extensive scientific
testimony that increases in the human-caused emissions of carbon
dioxide and other greenhouse gases will lead to catastrophic shocks
in the global climate system. Accordingly, new title IV shapes an
acid rain reduction policy that encourages energy efficiency and
other policies aimed at controlling greenhouse gases.\210\
---------------------------------------------------------------------------

    \210\ Sen. Chafee, S. Debate on S. 1630 (Jan. 24, 1990), 1990
CAA Legis. Hist. at 8662.

Similarly, Title IV provisions to encourage RE were justified because
``renewables not only significantly curtail sulfur dioxide emissions,
but they emit little or no nitrogen oxides and carbon dioxide''.\211\
---------------------------------------------------------------------------

    \211\ Additional Views of Rep. Markey and Rep. Moorhead, H.R.
Rep. No. 101-490, at 674 (May 17, 1990).
---------------------------------------------------------------------------

G. International Agreements and Actions

    In this final rule, the U.S. is taking action to limit GHGs from
one of its largest emission sources. Climate change is a global
problem, and the U.S. is not alone in taking action to address it. The
UNFCCC \212\ is the international treaty under which countries (called
``Parties'') cooperatively consider what can be done to limit
anthropogenic climate change \213\ and adapt to climate change impacts.
Currently, there are 195 Parties to the UNFCCC, including the U.S. The
Conference of the Parties (COP) meets annually and is currently
considering commitments countries can make to limit emissions after
2020. The 2015 COP will be in Paris and is expected to represent an
historic step for climate change mitigation. The Parties to the UNFCC
will meet to establish a climate agreement that applies to all
countries and focuses on reducing GHG emissions. Such an outcome would
send a beneficial signal to the markets and civil society about global
action to address climate change.
---------------------------------------------------------------------------

    \212\ http://unfccc.int/2860.php.
    \213\ Article 2, Objective, The ultimate objective of this
Convention and any related legal instruments that the Conference of
the Parties may adopt is to achieve, in accordance with the relevant
provisions of the Convention, stabilization of greenhouse gas
concentrations in the atmosphere at a level that would prevent
dangerous anthropogenic interference with the climate system. Such a
level should be achieved within a time frame sufficient to allow
ecosystems to adapt naturally to climate change, to ensure that food
production is not threatened and to enable economic development to
proceed in a sustainable manner. http://unfccc.int/files/essential_background/convention/background/application/pdf/convention_text_with_annexes_english_for_posting.pdf
---------------------------------------------------------------------------

    Many countries have announced their intended post-2020 commitments
already, and other countries are expected to do so before December. In
April 2015, the U.S. announced its commitment to reduce GHG emissions
26-28 percent below 2005 levels by 2025.\214\
---------------------------------------------------------------------------

    \214\ United States Cover Note to Intended Nationally Determined
Contribution (INDC). Available online at: http://www4.unfccc.int/submissions/INDC/Published%20Documents/United%20States%20of%20America/1/U.S.%20Cover%20Note%20INDC%20and%20Accompanying%20Information.pdf.
---------------------------------------------------------------------------

    As Parties to both the UNFCCC and the Kyoto Protocol,\215\ the
European Union (EU) and member countries have taken aggressive action
to reduce GHG emissions.\216\ EU initiatives to reduce GHG emissions
include the EU Emissions Trading System, legislation to increase the
adoption of RE sources, strengthened EE targets, vehicle emission
standards, and support for the development of CCS technology for use by
the power sector and other industrial sources. In 2009, the EU
announced its ``20-20-20 targets,'' including a 20 percent reduction in
GHG emissions from 1990 levels by 2020, an increase of 20 percent in
the share of energy consumption produced by renewable resources, and a
20 percent improvement in EE. In March 2015, the EU announced its
commitment to reduce domestic GHG emissions by at least 40% from 1990
levels by 2030.
---------------------------------------------------------------------------

    \215\ http://unfccc.int/kyoto_protocol/items/2830.php.
    \216\ http://ec.europa.eu/clima/policies/brief/eu/index_en.htm.
---------------------------------------------------------------------------

    Recently, China has also agreed to take action to address climate
change. In November 2014, in a joint announcement by President Obama
and China's President Xi, China pledged to curtail GHG emissions, with
emissions peaking in 2030 and then declining thereafter, and to
increase the share of energy from non-carbon sources (solar, wind,
hydropower, nuclear) to 20 percent by 2030.
    Mexico is committed to reduce unconditionally 25 percent of its
emissions of GHGs and short-lived climate pollutants (below business as
usual) for the year 2030. This commitment implies a 22 percent
reduction of GHG emissions and a 51 percent reduction of black carbon
emissions.
    Brazil has reduced its net CO2 emissions more than any
other country through a historic effort to slow forest loss. The
deforestation rate in Brazil in 2014 was roughly 75 percent below the
average for 1996 to 2005.\217\
---------------------------------------------------------------------------

    \217\ http://www.nature.com/news/stopping-deforestation-battle-for-the-amazon-1.17223.
---------------------------------------------------------------------------

    Together, countries that have already announced their intended
post-2020 commitments, including the U.S., China, European Union,
Mexico, Russian Federation and Brazil, make up a large majority of
global emissions.
    President Obama's Climate Action Plan contains a number of policies
and programs that are intended to cut carbon pollution that causes
climate change and affects public health. The Clean Power Plan is a key
component of the plan, addressing the nation's largest source of
emissions in a comprehensive manner. Collectively, these policies will
help spark business innovation, result in cleaner forms of energy,
create jobs, and cut dependence on foreign oil. They also demonstrate
to the rest of the world that the U.S. is contributing its share of the
global effort that is needed to address climate change.\218\ This
demonstration encourages other major economies to take on similar
contributions, which is critical given the global impact of GHG
emissions. The State Department Special Envoy for Climate Change Todd
Stern, the lead U.S. climate change negotiator, noted the connection
between domestic and international action to address climate change in
his speech at Yale University on October 14, 2014:
---------------------------------------------------------------------------

    \218\ President Obama stated, in announcing the Climate Action
Plan:
    ``The actions I've announced today should send a strong signal
to the world that America intends to take bold action to reduce
carbon pollution. We will continue to lead by the power of our
example, because that's what the United States of America has always
done.'' President Obama, Climate Action Plan speech, Georgetown
University, 2013. Available at https://www.whitehouse.gov/the-press-office/2013/06/25/remarks-president-climate-change.

    This mobilization of American effort matters. Enormously. It
matters because the United States is the biggest economy and largest
historic emitter of greenhouse gases. Because, here, as in so many
areas, we feel a responsibility to lead. And because here, as in so
many areas, we find that American commitment is indispensable to
effective international action.
    And make no mistake--other countries see what we are doing and
are taking note. As I travel the world and meet with my

counterparts, the palpable engagement of President Obama and his
team has put us in a stronger, more credible position than ever
before.

    This final rule demonstrates to other countries that the U.S. is
taking action to limit GHG emissions from its largest emission sources,
in line with our international commitments. The impact of GHGs is
global, and U.S. action to reduce GHG emissions complements and
encourages ongoing programs and efforts in other countries.

H. Legislative and Regulatory Background for CAA Section 111

    In the final days of December 1970, Congress enacted sweeping
changes to the Air Quality Act of 1967 to confront an ``environmental
crisis.'' \219\ The Air Quality Act--which expanded federal air
pollution control efforts after the enactment of the Clean Air Act of
1963--prioritized the adoption of ambient air standards but failed to
target stationary sources of air pollution. As a result, ``[c]ities up
and down the east coast were living under clouds of smoke and daily air
pollution alerts.'' \220\ In fact, ``[o]ver 200 million tons of
contaminants . . . spilled into the air'' each year.\221\ The 1970 CAA
Amendments were designed to face this crisis ``with urgency and in
candor.'' \222\
---------------------------------------------------------------------------

    \219\ Sen. Muskie, S. Debate on S. 4358 (Sept. 21, 1970), 1970
CAA Legis. Hist. at 224.
    \220\ Sen. Muskie, S. Consideration of H.R. Conf. Rep. No. 91-
1783 (Dec. 18, 1970), 1970 CAA Legis. Hist.pa at 123.
    \221\ Sen. Muskie, S. Debate on S. 4358 (Sept. 21, 1970), 1970
CAA Legis. Hist. at 224. These pollutants fell into five main
classes of pollutants: Carbon monoxide, particulates, sulfur oxides,
hydrocarbons, and nitrogen oxides. See Sen. Boggs, id. at 244.
    \222\ Sen. Muskie, S. Consideration of H.R. Conf. Rep. No. 91-
1783 (Dec. 18, 1970), 1970 CAA Legis. Hist. at 123.
---------------------------------------------------------------------------

    For the most part, Congress gave EPA and the states flexible tools
to implement the CAA. This is best exhibited by the newly enacted
programs regulating stationary sources. For these sources, Congress
crafted a three-legged regime upon which the regulation of stationary
sources was intended to sit.
    The first prong--CAA sections 107-110--addressed what are commonly
referred to as criteria pollutants, ``the presence of which in the
ambient air results from numerous or diverse mobile or stationary
sources'' and are determined to have ``an adverse effect on public
health or welfare''.\223\ Under these provisions, states would have the
primary responsibility for assuring air quality within their entire
geographic area but would submit plans to the Administrator for
``implementation, maintenance, and enforcement'' of national ambient
air quality standards. These plans would include ``emission
limitations, schedules, and timetables for compliance . . . and such
other measures as may be necessary to insure attainment and
maintenance'' of the national ambient air quality standards.\224\
---------------------------------------------------------------------------

    \223\ ``Clean Air Act Amendments of 1970,'' Pub. L. 91-604,
Sec.  4, 84 Stat. 1676, 1678 (Dec. 31, 1970). The ``adverse effect''
criterion was later amended to refer to pollutants ``which may
reasonably be anticipated to endanger public health or welfare''.
See 42 U.S.C. 7408(a)(1)(A). Similar language is also used under the
current CAA section 111. See 42 U.S.C. 7411(b)(1)(A).
    \224\ ``Clean Air Act Amendments of 1970,'' Sec.  4, 84 Stat. at
1680.
---------------------------------------------------------------------------

    The second prong--CAA section 111--addressed pollutants on a source
category-wide basis. Under CAA section 111(b), the EPA lists source
categories which ``contribute significantly to air pollution which
causes or contributes to the endangerment of public health or
welfare,'' And then establishes ``standards of performance'' for the
new sources in the listed category.\225\ For existing sources in a
listed source category, CAA section 111(d) set out procedures for the
establishment of federally enforceable ``emission standards'' of any
pollutant not otherwise controlled under the CAA's SIP provisions or
CAA section 112.
---------------------------------------------------------------------------

    \225\ ``Clean Air Act Amendments of 1970,'' Sec.  4, 84 Stat. at
1684.
---------------------------------------------------------------------------

    Lastly, the third prong--CAA section 112--addressed hazardous air
pollutants through the establishment of national ``emission standards''
at a level which ``provides an ample margin of safety to protect the
public health''.\226\ All new or modified sources of any hazardous air
pollutant would be required to meet these emission standards. Existing
sources were required to meet the same standards or would be shut down
unless they obtained a temporary EPA waiver or Presidential
exemption.\227\
---------------------------------------------------------------------------

    \226\ ``Clean Air Act Amendments of 1970,'' Sec.  4, 84 Stat. at
1685.
    \227\ ``Clean Air Act Amendments of 1970,'' Sec.  4, 84 Stat. at
1685.
---------------------------------------------------------------------------

    At its inception, CAA section 111 was intended to bear a
significant weight under this three-legged regime. Indeed, by 1977, the
EPA had promulgated six times as many performance standards under CAA
section 111 than emission standards under CAA section 112.\228\ That
said, states, including Texas and New Jersey, levied ``substantial
criticisms'' against the EPA for not moving rapidly enough.\229\
Accordingly, the 1977 CAA Amendments were designed to ``provide a
greater role for the [s]tates in standards setting under the [CAA],''
``protect [s]tates from `environmental blackmail' as they attempt to
regulate mobile and competitive industries,'' and lastly ``provide a
check on the Administrator's inaction or failure to control emissions
adequately.'' \230\
---------------------------------------------------------------------------

    \228\ H.R. Rep. No. 95-294, at 194 (May 12, 1977).
    \229\ H.R. Rep. No. 95-294, at 194 (May 12, 1977).
    \230\ H.R. Rep. No. 95-294, at 195 (May 12, 1977).
---------------------------------------------------------------------------

    At bottom, CAA section 111 rests on the definition of a standard of
performance under CAA section 111(a)(1), which reads nearly the same
now as it did when it was first adopted in the 1970 CAA Amendments. In
1970, Congress defined standard of performance--a term which had not
previously appeared in the CAA--as

a standard for emissions of air pollutants which reflects the degree
of emission limitation achievable through the application of the
best system of emission reduction which (taking into account the
cost of achieving such reduction) the Administrator determines has
been adequately demonstrated.\231\
---------------------------------------------------------------------------

    \231\ ``Clean Air Act Amendments of 1970,'' Sec.  4, 84 Stat. at
1683.

    Despite significant changes to this definition in 1977, Congress
reversed course in 1990 and largely reinstated the original
definition.\232\ As presently defined, the term applies to the
regulation of new and existing sources under CAA sections 111(b) and
(d).\233\
---------------------------------------------------------------------------

    \232\ ``Clean Air Act Amendments of 1990,'' Pub. L. 101-549,
Sec.  403, 104 Stat. 2399, 2631 (Nov. 15, 1990) (retaining only the
obligation to account for ``any nonair quality health and
environmental impact and energy requirements'' that was added in
1977).
    \233\ As CAA section 111(d) was originally adopted, state plans
would have established ``emission standards'' instead of ``standards
of performance.'' This distinction was later abandoned in 1977 and
the same term is used in both CAA sections 111(b) and (d).
---------------------------------------------------------------------------

    The level of control reflected in the definition is generally
referred to as the ``best system of emission reduction,'' or the BSER.
The BSER, however, is not further defined, and only appeared after
conference between the House and Senate in late 1970, and was neither
discussed in the conference report nor openly debated in either
chamber. Nevertheless, the originating bills from both houses shed
light on its construction.
    The BSER grew out of proposed language in two bills, which, for the
first time, targeted air pollution from stationary sources. The House
bill sought to establish national emission standards to ``prevent and
control . . . emissions [of non-hazardous pollutants] to the fullest
extent compatible with the available technology and economic
feasibility.'' \234\ The House also

proposed to prohibit the construction or operation of new sources of
``extremely hazardous'' pollutants.\235\ The Senate bill, on the other
hand, authorized ``Federal standards of performance,'' which would
``reflect the greatest degree of emission control which the Secretary
[later, the Administrator] determines to be achievable through
application of the latest available control technology, processes,
operating methods, or other alternatives.'' \236\ The Senate also would
have authorized ``national emission standards'' for hazardous air
pollution and other ``selected air pollution agents.'' \237\
---------------------------------------------------------------------------

    \234\ H.R. 17255, 91st Cong. Sec.  5 (1970).
    \235\ H.R. 17255, 91st Cong. Sec.  5 (1970).
    \236\ S. 4358, 91st Cong. Sec.  6 (1970) (emphasis added). The
breadth of the Senate bill is further emphasized in the conference
report, which explains that a standard of performance ``refers to
the degree of emission control which can be achieved through process
changes, operation changes, direct emission control, or other
methods'' and also includes ``other means of preventing or
controlling air pollution.'' S. Rep. No. 91-1196, at 15-16 (Sept.
17, 1970).
    \237\ S. 4358, 91st Cong. Sec.  6 (1970).
---------------------------------------------------------------------------

    After conference, CAA section 111 emerged as one of the CAA's three
programs for regulating stationary sources. In defining the newly
formed ``standards of performance,'' Congress appeared to merge the
various ``means of preventing and controlling air pollution'' under the
Senate bill with the consideration of costs that was central to the
House bill into the BSER. At the time, however, this definition only
applied to new sources under CAA section 111(b).
    To regulate existing sources, Congress collapsed section 114 of the
Senate bill into CAA section 111(d).\238\ Section 114 of the Senate
bill established emission standards for ``selected air pollution
agents,'' and was intended to bridge the gap between criteria
pollutants and hazardous air pollutants. As proposed, the Senate
identified fourteen substances for regulation under section 114 and
only four substances for regulation under Senate bill 4358, section
115, the predecessor of CAA section 112.\239\
---------------------------------------------------------------------------

    \238\ The House bill did not provide for the direct regulation
of existing sources.
    \239\ See S. Rep. No. 91-1196, at 18 and 20 (Sept. 17, 1970).
---------------------------------------------------------------------------

    As adopted, CAA section 111(d) requires states to submit plans to
the Administrator establishing ``emission standards'' for certain
existing sources of air pollutants that were not otherwise regulated as
criteria pollutants or hazardous air pollutants. This ensured that
there would be ``no gaps in control activities pertaining to stationary
source emissions that pose any significant danger to public health or
welfare.'' \240\
---------------------------------------------------------------------------

    \240\ S. Rep. No. 91-1196, at 20 (Sept. 17, 1970) (discussing
the relationship between sections 114 (addressing emission standards
for ``selected air pollution agents'') and 115 (addressing hazardous
air pollutants) of the Senate bill).
---------------------------------------------------------------------------

    The term ``emission standards,'' however, was not expressly defined
in the 1970 CAA Amendments (save for purposes of citizen suit
enforcement) even though the term was also used under the CAA's SIP
provisions and CAA section 112.\241\ That said, under the newly enacted
``ambient air quality and emission standards'' sections, Congress
directed the EPA to provide states with information ``on air pollution
control techniques,'' including data on ``available technology and
alternative methods of prevention and control of air pollution'' and on
``alternative fuels, processes, and operating methods which will result
in elimination or significant reduction of emissions.'' \242\
Similarly, the Administrator would ``issue information on pollution
control techniques for air pollutants'' in conjunction with
establishing emission standards under CAA section 112. However,
analogous text is absent from CAA section 111(d).
---------------------------------------------------------------------------

    \241\ See ``Clean Air Act Amendments of 1970,'' Sec.  12, 84
Stat. at 1706.
    \242\ ``Clean Air Act Amendments of 1970,'' Sec.  4, 84 Stat. at
1679.
---------------------------------------------------------------------------

    After the enactment of the 1970 CAA Amendments, the EPA proposed
standards of performance for an ``initial list of five stationary
source categories which contribute significantly to air pollution'' in
August 1971.\243\ The first category listed was for fossil-fuel fired
steam generators, for which EPA proposed and promulgated standards for
particulate matter, SO2, and NOX.\244\
---------------------------------------------------------------------------

    \243\ ``Standards of Performance for New Stationary Sources:
Proposed Standards for Five Categories,'' 36 FR 15704 (Aug. 17,
1971). See ``Clean Air Act Amendments of 1970,'' Sec.  4, 84 Stat.
at 1684 (requiring the Administrator to publish a list of categories
of stationary sources within 90 days of the enactment of the 1970
CAA Amendments).
    \244\ 36 FR at 15704-706; and ``Standards of Performance for New
Stationary Sources,'' 36 FR 24876, 24879 (Dec. 23, 1971).
---------------------------------------------------------------------------

    Several years later, the EPA proposed its implementing regulations
for CAA section 111(d).\245\ These regulations were finalized in
November 1975, and provided for the publication of emission
guidelines.\246\ The first emission guidelines were proposed in May
1976 and finalized in March 1977.\247\
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    \245\ See ``State Plans for the Control of Existing
Facilities,'' 39 FR 36102 (Oct. 7, 1974).
    \246\ See ``State Plans for the Control of Certain Pollutants
from Existing Facilities,'' 40 FR 53340 (Nov. 17, 1975).
    \247\ See ``Phosphate Fertilizer Plants; Draft Guideline
Document; Availability,'' 41 FR 19585 (May 12, 1976); and
``Phosphate Fertilizer Plants; Final Guideline Document
Availability,'' 42 FR 12022 (Mar. 1, 1977).
---------------------------------------------------------------------------

    Despite these first steps taken under CAA sections 111(b) and (d),
Congress revisited the CAA in 1977 to address growing concerns with the
nation's response to the 1973 oil embargo (noted above), to respond to
new environmental problems such as stratospheric ozone depletion, and
to resolve other issues associated with implementing the 1970 CAA
Amendments.\248\ Most notably, an increase in coal use as a result of
the oil crisis meant that ``vigorous and effective control'' of air
emissions was ``even more urgent.'' \249\ Thus, to curb the projected
surge in air emissions, Congress enacted several new provisions to the
CAA. These new provisions include the prevention of significant
deterioration (PSD) program, visibility protections, and requirements
for nonattainment areas.\250\
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    \248\ For example, Congress recognized that many air pollutants
had not been regulated despite ``mounting evidence'' that these
pollutants ``are associated with serious health hazards''. H.R. Rep.
No. 94-1175, 22 (May, 15, 1976). Because EPA ``failed to promulgate
regulations to institute adequate control measures,'' Congress
ordered EPA to regulate four specific pollutants that had ``been
found to be cancer-causing or cancer-promoting''. Id. at 23. This
directive, reflected in CAA section 122, specifically added
radioactive pollutants, cadmium, arsenic, and polycyclic organic
matter ``under the various provisions of the Clean Air Act and
allows their regulation as criteria pollutants under ambient air
quality standards, as hazardous air pollutants, or under new source
performance standards, as appropriate.'' H.R. Conf. Rep. No. 95-564,
142 (Aug. 3, 1977), 1977 CAA Legis. Hist. at 522. At the same time,
Congress made sure that these commands would have no effect on the
Administrator's discretion to address ``any substance (whether or
not enumerated [under CAA section 122(a))'' under CAA sections 108,
112, or 111. 42 U.S.C. 7422(b).
    \249\ See Statement of EPA Administrator Costle, S. Hearings on
S. 272, S. 273, S. 977, and S. 1469 (Apr. 5, 7, May 25, June 24 and
30, 1977), 1977 CAA Legis. Hist. at 3532.
    \250\ See ``Clean Air Act Amendments of 1977,'' Pub. L. 95-95,
Sec. Sec.  127-129, 91 Stat. 685 (Aug. 7, 1977).
---------------------------------------------------------------------------

    Congress also made significant changes to CAA section 111. For
example, Congress amended the definition of a standard of performance
(including by requiring the consideration of ``nonair quality health
and environmental impact and energy requirements''), authorized
alternative (e.g., work practice or design) standards in limited
circumstances, provided states with authority to petition the
Administrator for new or revised (and more stringent) standards, and
imposed a strict regulatory schedule for establishing standards of
performance for categories of major stationary sources that had not yet
been listed.\251\
---------------------------------------------------------------------------

    \251\ ``Clean Air Act Amendments of 1977,'' Sec.  109, 91 Stat.
at 697.

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    The 1977 definition for a standard of performance required ``all
new sources to meet emission standards based on the reductions
achievable through the use of the `best technological system of
continuous emission reduction.' '' \252\ For fossil-fuel fired
stationary sources, Congress further required a percentage reduction in
emissions from the use of fuels.\253\ Together, this was designed to
``force new sources to burn high-sulfur fuel thus freeing low-sulfur
fuel for use in existing sources where it is harder to control
emissions and where low-sulfur fuel is needed for compliance.'' \254\
---------------------------------------------------------------------------

    \252\ H.R. Rep. No. 95-294, at 192 (May 12, 1977). Congress
separately defined ``technological system of continuous emission
reduction'' as ``(A) a technological process for production or
operation by any source which is inherently low-polluting or
nonpolluting, or (B) technological system for continuous reduction
of the pollution generated by a source before such pollution is
emitted into the ambient air, including precombustion cleaning or
treatment of fuels.'' ``Clean Air Act Amendments of 1977,'' Sec.
109, 91 Stat. at 700; see also 42 U.S.C. 7411(a)(7).
    \253\ ``Clean Air Act Amendments of 1977,'' Sec.  109, 91 Stat.
at 700.
    \254\ ``New Stationary Sources Performance Standards; Electric
Utility Steam Generating Units,'' 44 FR 33580, 33581-82 (June 11,
1979).
---------------------------------------------------------------------------

    Congress also clarified that with respect to CAA section 111(d),
standards of performance (now applicable in lieu of emission standards)
``would be based on the best available means (not necessarily
technological)''.\255\ This was intended to distinguish existing source
standards from new source standards, for which ``the requirement for
[the BSER] has been more narrowly redefined as best technological
system of continuous emission reduction.'' \256\ Additionally, Congress
clarified that states could consider ``the remaining useful life'' of a
source when applying a standard of performance to a particular existing
source.\257\
---------------------------------------------------------------------------

    \255\ H.R. Rep. No. 95-294, at 195 (May 12, 1977).
    \256\ Sen. Muskie, S. Consideration of the H.R. Conf. Rep. No.
95-564 (Aug. 4, 1977), 1977 CAA Legis. Hist. at 353.
    \257\ This concept was already reflected in the EPA's CAA
section 111(d) implementing regulations under 40 CFR 60.24(f). See
40 FR 53340, 53347 (Nov. 17, 1975).
---------------------------------------------------------------------------

    In the twenty years since the 1970 CAA Amendments and in spite of
the refinements of the 1977 CAA Amendments, ``many of the Nation's most
important air pollution problems [had] failed to improve or [had] grown
more serious.'' \258\ Indeed, in 1989, President George Bush said that
`` `progress has not come quickly enough and much remains to be done.'
'' \259\ This time, with the 1990 CAA Amendments, Congress
substantially overhauled the CAA. In particular, Congress again added
to the NAAQS program, completely revised CAA section 112, added a new
title to target existing fossil fuel-fired stationary sources and
address growing concerns with acid rain, imported an operating permit
modeled off the Clean Water Act, and established a phase out of certain
ozone depleting substances.
---------------------------------------------------------------------------

    \258\ H.R. Rep. No. 101-490, at 144 (May 17, 1990).
    \259\ H.R. Rep. No. 101-490, at 144 (May 17, 1990).
---------------------------------------------------------------------------

    All told, however, there was minimal debate on changes to CAA
section 111. In fact, the only discussion centered on the repeal of the
percentage reduction requirement, which became seen as unduly
restrictive. Accordingly, Congress reverted the definition of
``standard of performance'' to the definition agreed to in the 1970 CAA
Amendments, but retained the requirement to consider nonair quality
environmental impacts and energy requirements added in 1977.\260\
However, the repeal would only apply so long as the SO2 cap
under CAA section 403(e) of the newly established acid rain program
remained in effect.\261\ Lastly, Congress instructed the EPA to revise
its new source performance standards for SO2 emissions from
fossil fuel-fired power plants but required that the revised emission
rate be no less stringent than before.\262\
---------------------------------------------------------------------------

    \260\ Congress also updated the regulatory schedule that was
added in the 1977 CAA Amendments to reflect the newly enacted 1990
CAA Amendments. See ``Clean Air Act Amendments of 1990,'' Sec.  108,
104 Stat. 2467.
    \261\ ``Clean Air Act Amendments of 1990,'' Sec.  403, 104 Stat.
at 2631.
    \262\ ``Clean Air Act Amendments of 1990,'' Sec.  301, 104 Stat.
at 2631.
---------------------------------------------------------------------------

I. Statutory and Regulatory Requirements

    Clean Air Act section 111, which Congress enacted as part of the
1970 Clean Air Act Amendments, establishes mechanisms for controlling
emissions of air pollutants from stationary sources. This provision
requires the EPA to promulgate a list of categories of stationary
sources that the Administrator, in his or her judgment, finds ``causes,
or contributes significantly to, air pollution which may reasonably be
anticipated to endanger public health or welfare.'' \263\ The EPA has
listed more than 60 stationary source categories under this
provision.\264\ Once the EPA lists a source category, the EPA must,
under CAA section 111(b)(1)(B), establish ``standards of performance''
for emissions of air pollutants from new sources in the source
categories.\265\ These standards are known as new source performance
standards (NSPS), and they are national requirements that apply
directly to the sources subject to them.
---------------------------------------------------------------------------

    \263\ CAA section 111(b)(1)(A).
    \264\ See 40 CFR 60 subparts Cb--OOOO.
    \265\ CAA section 111(b)(1)(B), 111(a)(1).
---------------------------------------------------------------------------

    When the EPA establishes NSPS for new sources in a particular
source category, the EPA is also required, under CAA section 111(d)(1),
to prescribe regulations for states to submit plans regulating existing
sources in that source category for any air pollutant that, in general,
is not regulated under the CAA section 109 requirements for the NAAQS
or regulated under the CAA section 112 requirements for HAP. CAA
section 111(d)'s mechanism for regulating existing sources differs from
the one that CAA section 111(b) provides for new sources because CAA
section 111(d) contemplates states submitting plans that establish
``standards of performance'' for the affected sources and that contain
other measures to implement and enforce those standards.
    ``Standards of performance'' are defined under CAA section
111(a)(1) as standards for emissions that reflect the emission
limitation achievable from the ``best system of emission reduction,''
considering costs and other factors, that ``the Administrator
determines has been adequately demonstrated.'' CAA section 111(d)(1)
grants states the authority, in applying a standard of performance to a
particular source, to take into account the source's remaining useful
life or other factors.
    Under CAA section 111(d), a state must submit its plan to the EPA
for approval, and the EPA must approve the state plan if it is
``satisfactory.'' \266\ If a state does not submit a plan, or if the
EPA does not approve a state's plan, then the EPA must establish a plan
for that state.\267\ Once a state receives the EPA's approval of its
plan, the provisions in the plan become federally enforceable against
the entity responsible for noncompliance, in the same manner as the
provisions of an approved SIP under the Act.
---------------------------------------------------------------------------

    \266\ CAA section 111(d)(2)(A).
    \267\ CAA section 111(d)(2)(A).
---------------------------------------------------------------------------

    Section 302(d) of the CAA defines the term ``state'' to include the
Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa
and the Commonwealth of the Northern Mariana Islands. While 40 CFR part
60 contains a separate definition of ``state'' at section 60.2, this
definition expands on, rather than narrows, the definition in section
302(d) of the CAA. The introductory language to 40 CFR 60.2 provides:
``The terms in this part are defined in the Act or in this section as
follows.'' Section 60.2 defines ``State'' as

``all non-Federal authorities, including local agencies, interstate
associations, and State-wide programs that have been delegated
authority to implement: (1) The provisions of this part and/or (2) the
permit program established under part 70 of this chapter. The term
State shall have its conventional meaning where clear from the
context.'' The EPA believes that the last sentence refers to the
conventional meaning of ``state'' under the CAA. Thus, the EPA believes
the term ``state'' as used in the emission guidelines is most
reasonably interpreted as including the meaning ascribed to that term
in section 302(d) of the CAA, which expressly includes U.S.
territories.
    Section 301(d)(A) of the CAA recognizes that the American Indian
tribes are sovereign Nations and authorizes the EPA to ``treat tribes
as States under this Act''. The Tribal Authority Rule (63 FR 7254,
February 12, 1998) identifies that EPA will treat tribes in a manner
similar to states for all of the CAA provisions with the exception of,
among other things, specific plan submittal and implementation
deadlines under the CAA. As a result, though they operate as part of
the interconnected system of electricity production and distribution,
affected EGUs located in Indian country would not be encompassed within
a state's CAA section 111(d) plan. Instead, an Indian tribe with one or
more affected EGUs located in its area of Indian country \268\ will
have the opportunity, but not the obligation, to apply for eligibility
to develop and implement a CAA section 111(d) plan. The Indian tribe
would need to be approved by the EPA as eligible to develop and
implement a CAA section 111(d) plan following the procedure set forth
in 40 CFR part 49. Once a tribe is approved as eligible for that
purpose, it would be treated in the same manner as a state, and
references in the emission guidelines to states would refer equally to
the tribe. The EPA notes that, while tribes have the opportunity to
apply for eligibility to administer CAA programs, they are not required
to do so. Further, the EPA has established procedures in 40 CFR part 49
(see particularly 40 CFR 49.7(c)) that permit eligible tribes to
request approval of reasonably severable partial program elements.
Those procedures are applicable here.
---------------------------------------------------------------------------

    \268\ The EPA is aware of at least four affected sources located
in Indian Country: Two on Navajo lands--the Navajo Generating
Station and the Four Corners Generating Station; one on Ute lands--
the Bonanza Generating Station; and one on Fort Mojave lands, the
South Point Energy Center. The affected EGUs at the first three
plants are coal-fired EGUs. The fourth affected EGU is an NGCC
facility.
---------------------------------------------------------------------------

    In these final emission guidelines, the term ``state'' encompasses
the 50 states and the District of Columbia, U.S. territories, and any
Indian tribe that has been approved by the EPA pursuant to 40 CFR 49.9
as to develop and implement a CAA section 111(d) plan.
    The EPA issued regulations implementing CAA section 111(d) in
1975,\269\ and has revised them in the years since.\270\ (We refer to
the regulations generally as the implementing regulations.) These
regulations provide that, in promulgating requirements for sources
under CAA section 111(d), the EPA first develops regulations known as
``emission guidelines,'' which establish binding requirements that
states must address when they develop their plans.\271\ The
implementing regulations also establish timetables for state and EPA
action: States must submit state plans within 9 months of the EPA's
issuance of the guidelines,\272\ and the EPA must take final action on
the state plans within 4 months of the due date for those plans,\273\
although the EPA has authority to extend those deadlines.\274\ In this
rulemaking, the EPA is following the requirements of the implementing
regulations, and is not re-opening them, except that the EPA is
extending the timetables, as described below.
---------------------------------------------------------------------------

    \269\ ``State Plans for the Control of Certain Pollutants from
Existing Facilities,'' 40 FR 53340 (Nov. 17, 1975).
    \270\ The most recent amendment was in 77 FR 9304 (Feb. 16,
2012).
    \271\ 40 CFR 60.22. In the 1975 rulemaking, the EPA explained
that it used the term ``emission guidelines''--instead of emissions
limitations--to make clear that guidelines would not be binding
requirements applicable to the sources, but instead are ``criteria
for judging the adequacy of State plans.'' 40 FR at 53343.
    \272\ 40 CFR 60.23(a)(1).
    \273\ 40 CFR 60.27(b).
    \274\ See 40 CFR 60.27(a).
---------------------------------------------------------------------------

    Over the last forty years, under CAA section 111(d), the agency has
regulated four pollutants from five source categories (i.e., sulfuric
acid plants (acid mist), phosphate fertilizer plants (fluorides),
primary aluminum plants (fluorides), Kraft pulp plants (total reduced
sulfur), and municipal solid waste landfills (landfill gases)).\275\ In
addition, the agency has regulated additional pollutants under CAA
section 111(d) in conjunction with CAA section 129.\276\ The agency has
not previously regulated CO2 or any other GHGs under CAA
section 111(d).
---------------------------------------------------------------------------

    \275\ See ``Phosphate Fertilizer Plants; Final Guideline
Document Availability,'' 42 FR 12022 (Mar. 1, 1977); ``Standards of
Performance for New Stationary Sources; Emission Guideline for
Sulfuric Acid Mist,'' 42 FR 55796 (Oct. 18, 1977); ``Kraft Pulp
Mills, Notice of Availability of Final Guideline Document,'' 44 FR
29828 (May 22, 1979); ``Primary Aluminum Plants; Availability of
Final Guideline Document,'' 45 FR 26294 (Apr. 17, 1980); ``Standards
of Performance for New Stationary Sources and Guidelines for Control
of Existing Sources: Municipal Solid Waste Landfills, Final Rule,''
61 FR 9905 (Mar. 12, 1996).
    \276\ See, e.g., ``Standards of Performance for New Stationary
Sources and Emission Guidelines for Existing Sources: Sewage Sludge
Incineration Units, Final Rule,'' 76 FR 15372 (Mar. 21, 2011).
---------------------------------------------------------------------------

    The EPA's previous CAA section 111(d) actions were necessarily
geared toward the pollutants and industries regulated. Similarly, in
this rulemaking, in defining CAA section 111(d) emission guidelines for
the states and determining the BSER, the EPA believes that taking into
account the particular characteristics of carbon pollution, the
interconnected nature of the power sector and the manner in which EGUs
are currently operated is warranted. Specifically, the operators
themselves treat increments of generation as interchangeable between
and among sources in a way that creates options for relying on varying
utilization levels, lowering carbon generation, and reducing demand as
components of the overall method for reducing CO2 emissions.
Doing so results in a broader, forward-thinking approach to the design
of programs to yield critical CO2 reductions that improve
the overall power system by lowering the carbon intensity of power
generation, while offering continued reliability and cost-
effectiveness. These opportunities exist in the utility power sector in
ways that were not relevant or available for other industries for which
the EPA has established CAA section 111(d) emission guidelines.\277\
---------------------------------------------------------------------------

    \277\ See ``Phosphate Fertilizer Plants; Final Guideline
Document Availability,'' 42 FR 12022 (Mar. 1, 1977); ``Standards of
Performance for New Stationary Sources; Emission Guideline for
Sulfuric Acid Mist,'' 42 FR 55796 (Oct. 18, 1977); ``Kraft Pulp
Mills, Notice of Availability of Final Guideline Document,'' 44 FR
29828 (May 22, 1979); ``Primary Aluminum Plants; Availability of
Final Guideline Document,'' 45 FR 26294 (Apr. 17, 1980); ``Standards
of Performance for New Stationary Sources and Guidelines for Control
of Existing Sources: Municipal Solid Waste Landfills, Final Rule,''
61 FR 9905 (Mar. 12, 1996).
---------------------------------------------------------------------------

    In this action, the EPA is promulgating emission guidelines for
states to follow in developing their CAA section 111(d) plans to reduce
emissions of CO2 from the utility power sector.

J. Clean Power Plan Proposal and Supplemental Proposal

    On June 18, 2014, the EPA proposed emission guidelines for states
to follow in developing plans to address GHG emissions from existing
fossil fuel-fired electric generating units (EGUs). Specifically, the
EPA proposed rate-based goals for CO2 emissions for each

state with existing fossil fuel-fired EGUs, as well as guidelines for
plans to achieve those goals. On November 4, 2014, the EPA published a
supplemental proposal that proposed emission rate-based goals for
CO2 emissions for U.S. territories and areas of Indian
country with existing fossil fuel-fired EGUs. In the supplemental
proposal, the EPA also solicited comment on authorizing jurisdictions
(including any states, territories and areas of Indian country) without
existing fossil fuel-fired EGUs subject to the proposed emission
guidelines to partner with jurisdictions (including any states) that do
have existing fossil fuel-fired EGUs subject to the proposed emission
guidelines in developing multi-jurisdictional plans. The EPA also
solicited comment on the treatment of RE, demand-side EE and other new
low- or zero-emitting electricity generation across international
boundaries in a state plan.
    The EPA also issued two documents after the June 18, 2014 proposal.
On October 30, 2014, the EPA published a NODA in which the agency
provided additional information on several topics raised by
stakeholders and solicited comment on the information presented. This
action covered three topic areas: 1) the emission reduction compliance
trajectories created by the interim goal for 2020 to 2029, 2) certain
aspects of the building block methodology, and 3) the way state-
specific CO2 goals are calculated.
    In a separate action, the EPA published a document regarding
potential methods for determining the mass that is equivalent to an
emission rate-based CO2 goal (79 FR 67406; November 13,
2014). With the action, the EPA also made available, in the docket for
this rulemaking, a TSD that provided two examples of how a state, U.S.
territory or tribe could translate a rate-based CO2 goal to
total metric tons of CO2 (a mass-based equivalent).

K. Stakeholder Outreach and Consultations

    Following the direction in the Presidential Memorandum to the
Administrator (June 25, 2013),\278\ the EPA engaged in extensive and
vigorous outreach to stakeholders and the general public at every stage
of development of this rule. Our outreach has included direct
engagement with the energy and environment officials in states, tribes,
and a full range of stakeholders including leaders in the utility power
sector, labor leaders, non-governmental organizations, other federal
agencies, other experts, community groups and members of the public.
The EPA participated in more than 300 meetings before the rule was
proposed and more than 300 after the proposal.
---------------------------------------------------------------------------

    \278\ Presidential Memorandum--Power Sector Carbon Pollution
Standards, June 25, 2013. http://www.whitehouse.gov/the-press-office/2013/06/25/presidential-memorandum-power-sector-carbon-pollution-standards.
---------------------------------------------------------------------------

    Throughout the rulemaking process, the agency has encouraged,
organized, and participated in hundreds of meetings about CAA section
111(d) and reducing carbon pollution from existing power plants. The
agency's outreach prior to proposal, as well as during the public
comment period, was designed to solicit policy ideas,\279\ concerns,
and technical information. The agency received 4.3 million comments
about all aspects of the proposed rule and thousands of people
participated in the agency's public hearings, webinars, listening
sessions,\280\ teleconferences and meetings held all across the
country.
---------------------------------------------------------------------------

    \279\ The EPA received more than 2,000 emails offering input
into the development of these guidelines through email and a Web-
based form. These emails and other materials provided to the EPA are
posted on line as part of a non-regulatory docket, EPA Docket ID No.
EPA-HQ-OAR-2014-0020, at www.regulations.gov.
    \280\ Summaries of the 11 public listening sessions in 2013 are
available at www.regulations.gov at EPA Docket ID No. EPA-HQ-OAR-
2014-0020.
---------------------------------------------------------------------------

    Our engagement has brought together a variety of states and
stakeholders to discuss a wide range of issues related to the utility
power sector and the development of emission guidelines under CAA
section 111(d). The meetings were attended by the EPA Regional
Administrators, other senior managers and staff who have been
instrumental in the development of the rule and will play key roles in
developing and implementing it.
    This outreach process has produced a wealth of information which
has informed this rule significantly. The pre-proposal outreach efforts
far exceeded what is required of the agency in the normal course of a
rulemaking process, and the EPA expects that the dialogue with states
and stakeholders will continue after the rule is finalized. The EPA
recognizes the importance of working with all stakeholders, and in
particular with the states, to ensure a clear and common understanding
of the role the states will play in addressing carbon pollution from
power plants. We firmly believe that our outreach has resulted in a
more workable rule that will achieve the statutory goals and has
enhanced the likelihood of timely and successful achievement of the
carbon reduction goals, given the critical importance and urgency of
the concrete action.
    The EPA has given stakeholder comments careful consideration and,
as a result, this final rule includes features that are responsive to
many stakeholder concerns.
1. Public Hearings
    More than 2,700 people attended the public hearings sessions held
in Atlanta, Denver, Pittsburgh, and Washington, DC. More than 1,300
people spoke at the public hearings. Additionally, about 100 people
attended the public hearing held in Phoenix, Arizona, on the November
4, 2014 supplemental proposal. Speakers at the public hearings included
Members of Congress, other public officials, industry representatives,
faith-based organizations, unions, environmental groups, community
groups, students, public health groups, energy groups, academia and
concerned citizens.
    Participants shared a range of perspectives. Many were concerned
with the impacts of climate change on their health and on future
generations, others were worried about the impact of regulations on the
economy. Their support for the agency's efforts varied.
2. State Officials
    Since fall 2013, the agency has provided multiple opportunities for
the states to inform this rulemaking. Administrator McCarthy has
engaged with governors from states with a variety of interests in the
rulemaking. Other senior agency officials have engaged with every
branch and major agency of state government--including state
legislators, attorneys general, state energy, environment, and utility
officials, and governors' staff.
    On several occasions, state environmental commissioners met with
senior agency officials to provide comments on the Clean Power Plan.
The EPA organized, encouraged and attended meetings with states to
discuss multi-state planning efforts. States have come together with
several collaborative groups to discuss ways to work together to make
the Clean Power Plan more affordable. The EPA has participated in and
supported the states in these discussions. Because of the
interconnectedness of the power sector, and the fact that electricity
generated at power plants crosses state lines; states, utilities and
ratepayers may benefit from states working together to implement the
requirements of this rulemaking. The meetings provided state leaders,
including governors, environmental commissioners, energy officers,
public utility commissioners, and air directors, opportunities to
engage with the EPA officials. In addition, the states

submitted public comments from several agencies within each state. The
wealth of comments and input from states was important in developing
the final rulemaking.
    Agency officials listened to ideas, concerns and details from
states, including from states with a wide range of experience in
reducing carbon pollution from power plants. The EPA reached out to all
50 states to engage with both environmental and energy departments at
all levels of government. As an example, a three-part webinar series in
June/July 2014 for the states and tribes offered an interactive format
for technical staff at the EPA and in the states/tribes to exchange
ideas and ask clarifying question. The webinars were then posted online
so other stakeholders could view them. A few weeks after the postings,
the EPA organized follow-up conference calls with stakeholder groups.
Also, the EPA hosted scores of technical meetings between states and
the EPA in the weeks and months after the rule was proposed.
    Additionally, the EPA organized ``hub'' calls; these
teleconferences brought all of the states in a given EPA region
together to discuss technical and interstate aspects of the proposal.
These exchanges helped provide the stakeholders with the information
they needed to comment on the proposal effectively. The EPA also held a
series of webinars with state environmental associations and their
members on a series of technical issues.
    The agency has collected policy papers and comment letters from
states with overarching energy goals and technical details on the
states' utility power sector. EPA leadership and staff also
participated in webinars and meetings with state and tribal officials
hosted by collaborative groups and trade associations. After the
comment period closed, and based on our meetings over the last year, as
well as written comments on the proposal and NODA, the EPA analyzed
information about data errors that needed to be addressed for the final
rule. In February and March 2015, we reached out to particular states
to clarify ambiguous or unclear information that was submitted to the
EPA related to NEEDS and eGRID data. The EPA contacted particular
states to clarify the technical comments or concerns to ensure that any
changes we make are accurate and appropriate.
    To help prepare for implementation of this rule, the agency
initiated several outreach activities to assist with state planning
efforts. The agency participated in meetings organized by the National
Association of State Energy Officials (NASEO), the National Association
of Regulatory Utility Commissioners (NARUC), and the National
Association of Clean Air Agencies (NACAA) (the ``3N'' groups). Meeting
participants discussed issues related to EE and RE.
    To help state officials prepare for the planning process that will
take place in the states, the EPA presented a webinar on February 24,
2015. This webinar provided an update on training plans and further
connection with states in the implementation process. Forty-nine
states, the District of Columbia, and 14 tribes were represented at
this webinar. The EPA is developing a state plan electronic collection
system to receive, track, and store state submittals of plans and
reports. The EPA plans to use an integrated project team to solicit
stakeholder input on the system during development. The team
membership, including state representatives, will bring together the
business and technology skills required to construct a successful
product and promote transparency in the EPA's implementation of the
rule.
    To help identify training needs for the final Clean Power Plan, the
agency reached out to a number of state and local organizations such as
the Central State Air Resources Agencies and other such regional air
agencies. The EPA's outreach on training has included sharing the plans
with the states and incorporating changes to the training topics based
on the states' needs. The EPA training plan includes a wide variety of
topics such as basic training on the electric power sector as well as
specific pollution control strategies to reduce carbon emissions from
power plants. In particular, the states requested training on how to
use programs such as combined heat and power, EE and RE to reduce
carbon emissions. The EPA will continue to work with states to tailor
training activities to their needs.
    The agency has engaged, and will continue to engage with states,
territories, Washington, DC, and tribes after the rulemaking process
and throughout implementation.
3. Tribal Officials
    The EPA conducted significant outreach to and consultation with
tribes. Tribes are not required to, but may, develop or adopt Clean Air
Act programs. The EPA is aware of four facilities with affected EGUs
located in Indian country: the South Point Energy Center, in Fort
Mojave Indian country, geographically located within Arizona; the
Navajo Generating Station, in Navajo Indian country, geographically
located within Arizona; the Four Corners Power Plant, in Navajo Indian
country, geographically located within New Mexico; and the Bonanza
Power Plant, in Ute Indian country, geographically located within Utah.
The EPA offered consultation to the leaders of the tribes on whose
lands these facilities are located as well as all of the federally
recognized tribes to ensure that they had the opportunity to have
meaningful and timely input into this rule. Section III (``Stakeholder
Outreach and Conclusions'') of the June 18, 2014 proposal documents the
EPA's extensive outreach efforts to tribal officials prior to that
proposal, including an informational webinar, outreach meeting,
teleconferences with tribal officials and the National Tribal Air
Association (NTAA), and letters offering consultation. Additional
outreach to tribal officials conducted by the EPA prior to the November
4, 2014 supplemental proposal is discussed in Section II.D
(``Additional Outreach and Consultation'') of the supplemental
proposal. The additional outreach for the supplemental proposal
included consultations with all three tribes that have affected EGUs on
their lands, as well as several other tribes that requested
consultation, and also additional teleconferences with the NTAA.
    After issuing the supplemental proposal, the EPA offered an
additional consultation to the leaders of all federally recognized
tribes. The EPA held an informational meeting open to all tribes and
also held consultations with the Navajo Nation, Fort McDowell Yavapai
Nation, Fort Mojave Tribe, Ak-Chin Indian Community, and Hope Tribe on
November 18, 2014. The EPA held a consultation with the Ute Tribe of
the Uintah and Ouray Reservation on December 16, 2014, and a
consultation with the Gila River Indian Community on January 15, 2015.
The EPA held a public hearing on the supplemental proposal on November
19, 2014, in Phoenix, Arizona. On April 28, 2015, the EPA held an
additional consultation with the Navajo Nation.
    Tribes were interested in the impact of this rule on other ongoing
regulatory actions at the affected EGUs, such as permitting or
requirements for the best available retrofit technology (BART). Tribes
also noted that it was important to allow RE projects on tribal lands
to contribute toward meeting state goals. Some tribes indicated an
interest in being involved in the development of implementation plans
for areas of Indian country. Additional detail regarding the EPA's
outreach to tribes and comments and recommendations from tribes can be
found in Section X.F of this preamble.

4. U.S. Territories
    The EPA has met with individual U.S. territories and affected EGUs
in U.S. territories during the rulemaking process. On July 22, 2014,
the EPA met with representatives from the Puerto Rico Environmental
Quality Board, the Puerto Rico Electric Power Authority, the Governor's
Office, and the Office of Energy, Puerto Rico. On September 8, 2014,
the EPA held a meeting with representatives from the Guam Environmental
Protection Agency (GEPA) and the Guam Power Authority and, on February
18, 2015, the EPA met again with representatives from GEPA.
5. Industry Representatives
    Agency officials have engaged with industry leaders and
representatives from trade associations in many one-on-one and national
meetings. Many meetings occurred at the EPA headquarters and in the
EPA's Regional Offices and some were sponsored by stakeholder groups.
Because the focus of the rule is on the utility power sector, many of
the meetings with industry have been with utilities and industry
representatives directly related to the utility power sector. The
agency has also met with energy industries such as coal and natural gas
interests, as well as companies that offer new technology to prevent or
reduce carbon pollution, including companies that have expertise in RE
and EE. Other meetings have been held with representatives of energy
intensive industries, such as the iron and steel and aluminum
industries, to help understand the issues related to large industrial
users of electricity.
6. Electric Utility Representatives
    Agency officials participated in many meetings with utilities and
their associations to discuss all aspects of the proposed guidelines.
We have met with all types of companies that produce electricity,
including private utilities or investor owned utilities. Public
utilities and cooperative utilities were also part of in-depth
conversations about CAA section 111(d) with EPA officials.
    The conversations included meetings with the EPA headquarters and
regional offices. State officials were included in many of the
meetings. Meetings with utility associations and groups of utilities
were held with key EPA officials. The meetings covered technical,
policy and legal topics of interest and utilities expressed a wide
variety of support and concerns about CAA section 111(d).
7. Electricity Grid Operators
    The EPA had a number of conversations with the ISOs and RTOs to
discuss the rule and issues related to grid operations and reliability.
EPA staff met with the ISO/RTO Council on several occasions to collect
their ideas. The EPA regional offices also met with the ISOs and RTOs
in their regions. System operators have offered suggestions in using
regional approaches to implement CAA section 111(d) while maintaining
reliable, affordable electricity.
8. Representatives from Community and Non-governmental Organizations
    Agency officials engaged with community groups representing
vulnerable communities, and faith-based groups, among others, during
the outreach effort. In response to a request from communities, the EPA
held a day-long training on the Clean Power Plan on October 30, 2014,
in Washington DC At this meeting, the EPA met with a number of
environmental groups to provide information on how the agency plans on
reducing carbon pollution from existing power plants using CAA section
111(d).
    Many environmental organizations discussed the need for reducing
carbon pollution. Meetings were technical, policy and legal in nature
and many groups discussed specific state policies that are already in
place to reduce carbon pollution in the states.
    A number of organizations representing religious groups have
reached out to the EPA on several occasions to discuss their concerns
and ideas regarding this rule. Many members of faith communities
attended the four public hearings.
    Public health groups discussed the need for protection of
children's health from harmful air pollution. Doctors and health care
providers discussed the link between reducing carbon pollution and air
pollution and public health. Consumer groups representing advocates for
low income electricity customers discussed the need for affordable
electricity. They talked about reducing electricity prices for
consumers through EE and low-cost carbon reductions.
    In winter/spring 2015, EPA continued to offer webinars and
teleconferences for community groups on the rulemaking.
9. Environmental Justice Organizations
    Agency officials engaged with environmental justice groups
representing communities of color, low-income communities and others
during the outreach effort. Agency officials also engaged with the
EPA's National Environmental Justice Advisory Council (NEJAC) members
in September 2013. The NEJAC is composed of stakeholders, including
environmental justice leaders and other leaders from state and local
government and the private sector. Additionally, the agency conducted a
community call on February 26, 2015, and on February 27, 2015, the EPA
conducted a follow up webinar for participants in an October 30, 2014
training session. The EPA also held a webinar for communities on the
Clean Air Act (CAA) and section 111(d) of the CAA on April 2, 2015. The
agency, in partnership with FERC and DOE, held two additional webinars
for communities on the electricity grid and on energy markets on June
11, 2015, and July 9, 2015.
    During the EPA's extensive outreach conducted before and after
proposal, the EPA has heard a variety of issues raised by environmental
justice communities. Communities expressed the desire for the agency to
conduct an environmental justice (EJ) analysis and to require that
states in the development of their state plans conduct one as well.
Additionally, they asked that the agency require that states engage
with communities in the development of their state plans and that the
agency conduct meaningful involvement with communities, throughout the
whole rulemaking process, including the implementation phase.
Furthermore, communities stressed the importance of low-income and
communities of color receiving the benefits of this rulemaking and
being protected from being adversely impacted by this rulemaking.
    The purpose of this rule is to substantially reduce emissions of
CO2, a key contributor to climate change, which adversely
and disproportionately affects vulnerable and disadvantaged communities
in the U.S. and around the world. In addition, the rule will result in
substantial reductions of conventional air pollutants, providing
immediate public health benefits to the communities where the
facilities are located and for many miles around. The EPA is committed
to ensuring that all Americans benefit from the public health and other
benefits that this rule will bring. Further discussion of the impacts
of this rule on vulnerable communities and actions that the EPA is
taking to address concerns cited by communities is available in
Sections IX and XII.J of this preamble.
10. Labor
    Senior agency officials met with a number of labor union
representatives about reducing carbon pollution using CAA section
111(d). Those unions included: The United Mine Workers of America; the
Sheet Metal, Air, Rail and Transportation Union (SMART); the

International Brotherhood of Boilermakers, Iron Ship Builders,
Blacksmiths, Forgers and Helpers (IBB); United Association of
Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of
the United States and Canada; the International Brotherhood of
Electrical Workers (IBEW); and the Utility Workers Union of America. In
addition, agency leaders met with the Presidents of several unions and
the President of the American Federation of Labor-Congress of
Industrial Organizations (AFL-CIO) at the AFL-CIO headquarters.
    EPA officials attended meetings sponsored by labor unions to give
presentations and engage in discussions about reducing carbon pollution
using CAA section 111(d). These included meetings sponsored by the IBB
and the IBEW.
11. Other Federal Agencies and Independent Agencies
    Throughout the development of the rulemaking, the EPA consulted
with other federal agencies with relevant expertise. For example, the
EPA met with managers from the U.S. Department of Agriculture's
(USDA's) Rural Utility Service to discuss the rule and potential
effects on affected EGUs in rural areas and how USDA programs could
interact with affected EGUs during rule implementation.
    The U.S. Department of Energy (DOE) was a frequent source of
expertise on the proposed and final rule. EPA management and staff had
numerous meetings with management and staff at DOE on a range of
topics, including the effectiveness and costs of energy generation
technologies, and EE.
    DOE provided technical assistance relating to RE and demand-side
EE, including RE and demand-side EE cost and performance data and, for
RE, information on the feasibility of deploying and reliably
integrating increased RE generation. Further, EPA and DOE staff
discussed emission measurement and verification (EM&V) strategies.
    The EPA also consulted with DOE on electric reliability issues. EPA
staff and managers met and spoke with DOE staff and managers throughout
the development of the proposed and final rules on topic related to
electric system reliability.
    EPA officials worked closely with DOE and Federal Energy Regulatory
Commission (FERC) officials to ensure, to the greatest extent possible,
that actions taken by states and affected EGUs to comply with the final
rule mitigate potential electric system reliability issues. Senior EPA
officials met with each of the FERC Commissioners and EPA staff had
frequent contact with FERC staff throughout the development the rule.
FERC held four technical conferences to discuss implications of
compliance approaches to the rule for electric reliability. EPA staff
attended the four conferences and EPA leadership spoke at all of them.
The EPA, DOE, and FERC will continue to work together to ensure
electric grid reliability in the development and implementation of
state plans.

L. Comments on the Proposal

    The Administrator signed the proposed emission guidelines on June
2, 2014, and, on the same day, the EPA made this version available to
the public at http://www.epa.gov/cleanpowerplan/. The 120-day public
comment period on the proposal began on June 18, 2014, the day of
publication of the proposal in the Federal Register. On September 18,
2014, in response to requests from stakeholders, the EPA extended the
comment period by 45 days, to December 1, 2014, giving stakeholders
over 165 days to review and comment upon the proposal. Stakeholders
also had the opportunity to comment on the NODA, as well as the Federal
Register document and TSD regarding potential methods for determining
the mass that is equivalent to an emission rate-based CO2
goal, through December 1, 2014. The EPA offered a separate 45-day
comment period for the November 4, 2014 supplemental proposal, and that
comment period closed on December 19, 2014.
    The EPA received more than 4.2 million comments on the proposed
carbon pollution emission guidelines from a range of stakeholders that
included, including state environmental and energy officials, local
government officials, tribal officials, public utility commissioners,
system operators, utilities, public interest advocates, and members of
the public. The agency received comments on many aspects of the
proposal and many suggestions for changes that would address issues of
concern.

III. Rule Requirements and Legal Basis

A. Summary of Rule Requirements

    The EPA is establishing emission guidelines for states to use in
developing plans to address GHG emissions from existing fossil fuel-
fired electric generating units. The emission guidelines are based on
the EPA's determination of the ``best system of emission reduction . .
. adequately demonstrated'' (BSER) and include source category-specific
CO2 emission performance rates, state-specific goals,
requirements for state plan components, and requirements for the
process and timing for state plan submittal and compliance.
    Under CAA section 111(d), the states must establish standards of
performance that reflect the degree of emission limitation achievable
through the application of the ``best system of emission reduction''
that, taking into account the cost of achieving such reduction and any
non-air quality health and environmental impact and energy
requirements, the Administrator determines has been adequately
demonstrated.
    The EPA has determined that the BSER is the combination of emission
rate improvements and limitations on overall emissions at affected EGUs
that can be accomplished through the following three sets of measures
or building blocks:

    1. Improving heat rate at affected coal-fired steam EGUs.
    2. Substituting increased generation from lower-emitting
existing natural gas combined cycle units for generation from
higher-emitting affected steam generating units.
    3. Substituting increased generation from new zero-emitting RE
generating capacity for generation from affected fossil fuel-fired
generating units.

    Consistent with CAA section 111(d) and other rules promulgated
under this section, the EPA is taking a traditional, performance-based
approach to establishing emission guidelines for affected sources and
applying the BSER to two source subcategories of existing fossil fuel-
fired EGUs--fossil fuel-fired electric utility steam generating units
and stationary combustion turbines. The EPA is finalizing source
subcategory-specific emission performance rates that reflect the EPA's
application of the BSER. For fossil fuel-fired steam generating units,
we are finalizing a performance rate of 1,305 lb CO2/MWh.
For stationary combustion turbines, we are finalizing a performance
rate of 771 lb CO2/MWh. The EPA has also translated the
source subcategory-specific CO2 emission performance rates
into equivalent statewide rate-based and mass-based CO2
goals and is providing those as an option for states to use.
    Under CAA section 111(d), each state must develop, adopt, and then
submit its plan to the EPA. For its CAA section 111(d) plan, a state
will determine whether to apply these emission performance rates to
each affected EGU, individually or together, or to take an alternative
approach and meet either an equivalent statewide rate-based goal or an
equivalent statewide mass-based

goal, as provided by the EPA in this rulemaking.
    States with one or more affected EGUs will be required to develop
and implement plans that set emission standards for affected EGUs. The
CAA section 111(d) emission guidelines that the EPA is promulgating in
this action apply to only the 48 contiguous states and any Indian tribe
that has been approved by the EPA pursuant to 40 CFR 49.9 as eligible
to develop and implement a CAA section 111(d) plan.\281\ Because
Vermont and the District of Columbia do not have affected EGUs, they
will not be required to submit a state plan. Because the EPA does not
possess all of the information or analytical tools needed to quantify
the BSER for the two non-contiguous states with otherwise affected EGUs
(Alaska and Hawaii) and the two U.S. territories with otherwise
affected EGUs (Guam and Puerto Rico), these emission guidelines do not
apply to those areas, and those areas will not be required to submit
state plans on the schedule required by this final action.
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    \281\ In the case of a tribe that has one or more affected EGUs
in its area of Indian country, the tribe has the opportunity, but
not the obligation, to establish a CO2 emission standard
for each affected EGU located in its area of Indian country and a
CAA section 111(d) plan for its area of Indian country. If the tribe
chooses to establish its own plan, it must seek and obtain authority
from the EPA to do so pursuant to 40 CFR 49.9. If it chooses not to
seek this authority, the EPA has the responsibility to determine
whether it is necessary or appropriate, in order to protect air
quality, to establish a CAA section 111(d) plan for an area of
Indian country where affected EGUs are located.
---------------------------------------------------------------------------

    In developing its CAA section 111(d) plan, a state will have the
option of choosing from two different approaches: (1) An ``emission
standards'' approach, or (2) a ``state measures'' approach. With an
emission standards approach, a state will apply all requirements for
achieving the subcategory-specific CO2 emission performance
rates or the state-specific CO2 emission goal to affected
EGUs in the form of federally enforceable emission standards. With a
state measures approach, a state plan would be comprised, at least in
part, of measures implemented by the state that are not included as
federally enforceable components of the plan, along with a backstop of
federally enforceable emission standards for affected EGUs that would
apply in the event the plan does not achieve its anticipated level of
CO2 emission performance.
    The EPA is requiring states to make their final plan submittals by
September 6, 2016, or to make an initial submittal by this date in
order to obtain an extension for making their final plan submittals no
later than September 6, 2018, which is 3 years from the signature date
of the rule. In order to receive an extension, states, in the initial
submittal, must address three required components sufficiently to
demonstrate that a state is able to undertake steps and processes
necessary to timely submit a final plan by the extended date of
September 6, 2018. The first required component is identification of
final plan approach or approaches under consideration, including a
description of progress made to date. The second required component is
an appropriate explanation for why the state requires additional time
to submit a final plan beyond September 6, 2016. The third required
component for states to address in the initial submittal is a
demonstration of how they have been engaging with the public, including
vulnerable communities, and a description of how they intend to
meaningfully engage with community stakeholders during the additional
time (if an extension is granted) for development of the final plan.
    Affected EGUs must achieve the final emission performance rates or
equivalent state goals by 2030 and maintain that level thereafter. The
EPA is establishing an 8-year interim period over which states must
achieve the full required reductions to meet the CO2
performance rates, and this begins in 2022. This 8-year interim period
from 2022 through 2029, is separated into three steps, 2022-2024, 2025-
2027, and 2028-2029, each associated with its own interim
CO2 emission performance rates that states must meet, as
explained in Section VI of this preamble.
    For the final emission guidelines, the EPA is revising the list of
components required in a final state plan submittal to reflect: (1)
Components required for all state plan submittals; (2) components
required for the emission standards approach; and (3) components
required for the state measures approach. The revised list of
components also reflects the approvability criteria, which are no
longer separate from the state plan submittal components.
    All state plans must include the following components:

 Description of the plan approach and geographic scope
 Identification of the state's CO2 interim period
goal (for 2022-2029), interim steps (interim step goal 1 for 2022-
2024; interim step goal 2 for 2025-2027; interim step goal 3 for
2028-2029) and final CO2 emission goal of 2030 and beyond
 Demonstration that the plan submittal is projected to
achieve the state's CO2 emission goal \282\
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    \282\ A state that chooses to set emission standards that are
identical to the emission performance rates for both the interim
period and in 2030 and beyond need not identify interim state goals
nor include a separate demonstration that its plan will achieve the
state goals.
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 State recordkeeping and reporting requirements
 Certification of hearing on state plan
 Supporting documentation

    Also, in all state plans, as part of the supporting documentation,
a state must include a description of how they considered reliability
in developing its state plan.
    State plan submittals using the emission standards approach must
also include:

     Identification of each affected EGU; identification of
federally enforceable emission standards for the affected EGUs; and
monitoring, recordkeeping and reporting requirements.
     Demonstrations that each emission standard will result
in reductions that are quantifiable, non-duplicative, permanent,
verifiable, and enforceable.

    State plan submittals using the state measures approach must also
include:

     Identification of each affected EGU; identification of