83
                                                                             83
                                                                             83
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
Other
                                                                              5
                                                                              5
                                                                              5
                                                                              5
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
Total
                                                                          1,035
                                                                          1,035
                                                                          1,035
                                                                          1,035
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
Note: In this table, "Non-Hydro RE" includes biomass, geothermal, landfill gas, solar, and wind

The EPA estimated the change in the retail price of electricity (2011$) using the Retail Price Model (RPM). The RPM was developed by ICF International for the EPA, and uses the IPM estimates of changes in the cost of generating electricity to estimate the changes in average retail electricity prices. The prices are average prices over consumer classes (i.e., consumer, commercial and industrial) and regions, weighted by the amount of electricity used by each class and in each region. The RPM combines the IPM annual cost estimates in each of the 64 IPM regions with EIA electricity market data for each of the 22 electricity supply regions in the electricity market module of the National Energy Modeling System (NEMS).
      Tables 4-13 and 4-14 present the projected percentage changes in the retail price of electricity for the three regulatory control alternatives in 2017 and 2020, respectively. Consistent with other projected impacts presented above, average retail electricity prices at both the national and regional level are projected to be small.  By 2020, the EPA estimates that this rule will result in a 0.1% increase in national average retail electricity price, or by about 0.1 mills/kWh (about 0.01 cents/kWh).

Table 4-13. Average Retail Electricity Price by Region for the Base Case and the Regulatory Control Alternatives, 2017

            2017 Average Retail Electricity Price
(2011 mills/kWh)
                         Percent Change from Base Case
Region
                                                                      Base Case
                                                                   CSAPR Update
                                                     Less-Stringent Alternative
                                                     More-Stringent Alternative
                                                                   CSAPR Update
                                                     Less-Stringent Alternative
                                                     More-Stringent Alternative
ERCT
                                                                           79.5
                                                                           79.5
                                                                           79.5
                                                                           79.6
                                                                           0.0%
                                                                           0.0%
                                                                           0.1%
FRCC
                                                                          102.3
                                                                          102.2
                                                                          102.2
                                                                          102.2
                                                                          -0.1%
                                                                          -0.1%
                                                                          -0.1%
MROE
                                                                          100.4
                                                                          100.4
                                                                          100.4
                                                                          100.4
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
MROW
                                                                           87.6
                                                                           87.5
                                                                           87.6
                                                                           87.5
                                                                          -0.1%
                                                                          -0.1%
                                                                          -0.1%
NEWE
                                                                          126.8
                                                                          126.8
                                                                          126.8
                                                                          126.8
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
NYCW
                                                                          166.2
                                                                          166.2
                                                                          166.2
                                                                          166.2
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
NYLI
                                                                          136.3
                                                                          136.3
                                                                          136.3
                                                                          136.4
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
NYUP
                                                                          119.2
                                                                          119.3
                                                                          119.2
                                                                          119.3
                                                                           0.1%
                                                                           0.0%
                                                                           0.1%
RFCE
                                                                          103.1
                                                                          103.0
                                                                          103.5
                                                                          103.1
                                                                          -0.1%
                                                                           0.4%
                                                                           0.0%
RFCM
                                                                          103.0
                                                                          103.0
                                                                          102.9
                                                                          103.0
                                                                           0.0%
                                                                          -0.1%
                                                                           0.0%
RFCW
                                                                           88.6
                                                                           88.7
                                                                           88.6
                                                                           88.7
                                                                           0.1%
                                                                           0.0%
                                                                           0.1%
SRDA
                                                                           82.5
                                                                           82.5
                                                                           82.4
                                                                           82.5
                                                                           0.0%
                                                                          -0.1%
                                                                           0.0%
SRGW
                                                                           83.8
                                                                           83.8
                                                                           83.8
                                                                           83.8
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
SRSE
                                                                          101.6
                                                                          101.6
                                                                          101.5
                                                                          101.6
                                                                           0.0%
                                                                          -0.1%
                                                                           0.0%
SRCE
                                                                           79.7
                                                                           79.7
                                                                           79.6
                                                                           79.6
                                                                           0.0%
                                                                          -0.1%
                                                                          -0.1%
SRVC
                                                                           98.3
                                                                           98.3
                                                                           98.3
                                                                           98.3
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
SPNO
                                                                          102.2
                                                                          102.2
                                                                          102.2
                                                                          102.1
                                                                           0.0%
                                                                           0.0%
                                                                          -0.1%
SPSO
                                                                           79.0
                                                                           79.1
                                                                           79.0
                                                                           79.2
                                                                           0.1%
                                                                           0.1%
                                                                           0.2%
AZNM
                                                                          109.6
                                                                          109.6
                                                                          109.6
                                                                          109.6
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
CAMX
                                                                          145.5
                                                                          145.5
                                                                          145.5
                                                                          145.5
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
NWPP
                                                                           72.6
                                                                           72.6
                                                                           72.6
                                                                           72.6
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
RMPA
                                                                           87.1
                                                                           87.1
                                                                           87.1
                                                                           87.1
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
NATIONAL
                                                                           97.3
                                                                           97.3
                                                                           97.3
                                                                           97.3
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%

Table 4-14. Average Retail Electricity Price by Region for the Base Case and the Regulatory Control Alternatives, 2020

            2020 Average Retail Electricity Price
(2011 mills/kWh)
                         Percent Change from Base Case
Region
                                                                      Base Case
                                                                   CSAPR Update
                                                     Less-Stringent Alternative
                                                     More-Stringent Alternative
                                                                   CSAPR Update
                                                     Less-Stringent Alternative
                                                     More-Stringent Alternative
ERCT
                                                                           88.6
                                                                           88.7
                                                                           88.7
                                                                           88.8
                                                                           0.1%
                                                                           0.1%
                                                                           0.2%
FRCC
                                                                          104.3
                                                                          104.4
                                                                          104.4
                                                                          104.4
                                                                           0.1%
                                                                           0.1%
                                                                           0.1%
MROE
                                                                           99.1
                                                                           99.1
                                                                           99.1
                                                                           99.1
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
MROW
                                                                           87.7
                                                                           87.8
                                                                           87.8
                                                                           87.8
                                                                           0.1%
                                                                           0.1%
                                                                           0.1%
NEWE
                                                                          130.6
                                                                          130.7
                                                                          130.7
                                                                          130.7
                                                                           0.1%
                                                                           0.0%
                                                                           0.1%
NYCW
                                                                          171.9
                                                                          172.1
                                                                          172.0
                                                                          172.1
                                                                           0.1%
                                                                           0.1%
                                                                           0.1%
NYLI
                                                                          141.6
                                                                          141.7
                                                                          141.6
                                                                          141.7
                                                                           0.1%
                                                                           0.0%
                                                                           0.1%
NYUP
                                                                          123.1
                                                                          123.3
                                                                          123.2
                                                                          123.3
                                                                           0.2%
                                                                           0.1%
                                                                           0.2%
RFCE
                                                                          108.1
                                                                          108.3
                                                                          108.2
                                                                          108.3
                                                                           0.2%
                                                                           0.1%
                                                                           0.2%
RFCM
                                                                          103.7
                                                                          103.8
                                                                          103.8
                                                                          103.8
                                                                           0.1%
                                                                           0.0%
                                                                           0.1%
RFCW
                                                                           91.4
                                                                           91.6
                                                                           91.7
                                                                           91.7
                                                                           0.2%
                                                                           0.3%
                                                                           0.3%
SRDA
                                                                           85.5
                                                                           85.6
                                                                           85.6
                                                                           85.6
                                                                           0.1%
                                                                           0.1%
                                                                           0.1%
SRGW
                                                                           85.9
                                                                           86.0
                                                                           86.0
                                                                           86.1
                                                                           0.1%
                                                                           0.2%
                                                                           0.3%
SRSE
                                                                          100.4
                                                                          100.4
                                                                          100.4
                                                                          100.4
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
SRCE
                                                                           80.2
                                                                           80.2
                                                                           80.2
                                                                           80.2
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
SRVC
                                                                           97.7
                                                                           97.8
                                                                           97.7
                                                                           97.7
                                                                           0.1%
                                                                           0.0%
                                                                           0.1%
SPNO
                                                                          101.1
                                                                          101.1
                                                                          101.1
                                                                          101.0
                                                                           0.0%
                                                                           0.0%
                                                                          -0.1%
SPSO
                                                                           81.7
                                                                           81.9
                                                                           81.8
                                                                           82.0
                                                                           0.2%
                                                                           0.1%
                                                                           0.3%
AZNM
                                                                          110.6
                                                                          110.6
                                                                          110.6
                                                                          110.6
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
CAMX
                                                                          144.4
                                                                          144.4
                                                                          144.4
                                                                          144.4
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
NWPP
                                                                           69.4
                                                                           69.4
                                                                           69.4
                                                                           69.4
                                                                           0.0%
                                                                           0.0%
                                                                           0.0%
RMPA
                                                                           87.4
                                                                           87.4
                                                                           87.4
                                                                           87.4
                                                                           0.0%
                                                                           0.1%
                                                                           0.0%
NATIONAL
                                                                           99.0
                                                                           99.1
                                                                           99.1
                                                                           99.1
                                                                           0.1%
                                                                           0.1%
                                                                           0.1%

Figure 4-1. Electricity Market Module Regions
Source: EIA (http://www.eia.gov/forecasts/aeo/pdf/nerc_map.pdf)

4.5 Social Costs
As discussed in the EPA Guidelines for Preparing Economic Analyses, social costs are the total economic burden of a regulatory action (USEPA, 2010). This burden is the sum of all opportunity costs incurred due to the regulatory action, where an opportunity cost is the value lost to society of any goods and services that will not be produced and consumed as a result of reallocating some resources towards pollution mitigation. Estimates of social costs may be compared to the social benefits expected as a result of a regulation to assess its net impact on society. The social costs of a regulatory action will not necessarily be equal to the expenditures by the electricity sector to comply with the rule. Nonetheless, here we use compliance costs as a proxy for social costs.
The compliance cost estimates for the final and more or less stringent alternatives presented in this chapter are the change in expenditures by the electricity generating sector required by the power sector for compliance under each alternative. The change in the expenditures required by the power sector to maintain compliance reflect the changes in electricity production costs resulting from application of NOX control strategies, including changes in expenditures resulting from changes in the mix of fuels used for generation, necessary to comply with the emissions budgets. Ultimately, part of the compliance costs may be borne by electricity consumers through higher electricity prices. As discussed above, the electricity and fossil fuel price impacts from this final rule are expected to be small.
4.6	Limitations
     EPA's modeling is based on expert judgment of various input assumptions for variables whose outcomes are in fact uncertain. As a general matter, the Agency reviews the best available information from engineering studies of air pollution controls and new capacity construction costs to support a reasonable modeling framework for analyzing the cost, emission changes, and other impacts of regulatory actions.
     The IPM-projected annualized cost estimates of private compliance costs provided in this analysis are meant to show the increase in production (generating) costs to the power sector in response to the final rule. To estimate these annualized costs, EPA uses a conventional and widely-accepted approach that applies a capital recovery factor (CRF) multiplier to capital investments and adds that to the annual incremental operating expenses. The CRF is derived from estimates of the cost of capital (private discount rate), the amount of insurance coverage required, local property taxes, and the life of capital. The private compliance costs presented earlier are EPA's best estimate of the direct private compliance costs of the final rule.  These cost estimates are based on rigorous power sector modeling using ICF's Integrated Planning Model.  IPM assumes "perfect foresight" of market conditions over the time horizon modeled; to the extent that utilities and/or energy regulators misjudge future conditions affecting the economics of pollution control, costs may be understated.
     As discussed in section 4.3.2, IPM v.5.15 does not have the capacity to endogenously determine whether or not to maximize the use of existing EGU post-combustion NOX controls (i.e., SCR), or install/upgrade combustion controls in response to a regulatory control requirement.  These decisions were imposed exogenously on the model, as documented in section 4.3.2 and Policy Analysis TSD.  While the emission projections reflect operation of these controls, the projected compliance costs were supplemented with exogenously estimated costs of maximizing SCR operation and installing/upgrading combustion controls (see section 4.3.3).  As a result of this modeling approach, the dispatch decisions made within the model do not take into consideration the additional operating costs associated with these two types compliance strategies (the operating costs of the units on which these strategies are imposed do not reflect the additional costs of these strategies).  These additional costs are relatively minor, and do not have a significant impact on the overall finding that the economic impacts of this rule are minimal.
     Additionally, the modeling includes two emission reduction strategies that are exogenously imposed where applicable: turning on idled SCRs (CSAPR Update and more-stringent alternative) and turning on idled SNCRs (mores stringent alternative only).  While these strategies are exogenously imposed, the costs and emissions reductions are accounted for endogenously.  Since the costs of these strategies are accounted for within the model, they are able to influence the projected behavior of the EGUs within the model.
     The annualized cost of the final rule, as quantified here, is EPA's best assessment of the cost of implementing the rule. These costs are generated from rigorous economic modeling of changes in the power sector due to implementation of the CSAPR Update.
4.7	References
U.S. Energy Information Agency (EIA). 2014. The Electricity Market Module of the National Energy Modeling System: Model Documentation 2014. Available at: <http://www.eia.gov/forecasts/aeo/nems/documentation/electricity/pdf/m068(2014).pdf>. Accessed 9/17/2015.
U.S. EPA, 2015. Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (Final Rule), http://www2.epa.gov/cleanpowerplan/clean-power-plan-existing-power-plants.
U.S. EPA, 2015a. Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units (Final Rule), http://www2.epa.gov/cleanpowerplan/carbon-pollution-standards-new-modified-and-reconstructed-power-plants.
U.S. EPA, 2015b. Disposal of Coal Combustion Residuals from Electric Utilities (Final Rule), http://www2.epa.gov/coalash/coal-ash-rule.
U.S. EPA, 2015c. Steam Electric Power Generating Effluent Guidelines (Final Rule), http://www2.epa.gov/eg/steam-electric-power-generating-effluent-guidelines-2015-final-rule.
U.S. EPA, 2014. Final Rule for Existing Power Plants and Factories, http://www2.epa.gov/cooling-water-intakes.
U.S. EPA, 2011. Cross-State Air Pollution Rule, http://www3.epa.gov/airtransport/CSAPR/index.html
U.S. EPA, 2011a. Mercury and Air Toxics Standards (MATS), http://www3.epa.gov/mats/.
U.S. EPA. 2010. EPA Guidelines for Preparing Economic Analyses. Available at: <http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/guidelines.htm>. Accessed 9/21/2015.
U.S. EPA. 2010a. Regulatory Impact Analysis for the Proposed Federal Transport Rule Analyses. Available at: < http://www3.epa.gov/ttnecas1/ria.html>. Accessed 9/21/2015.
U.S. EPA, 2005. Clean Air Interstate Rule, http://archive.epa.gov/airmarkets/programs/cair/web/html/index.html.

APPENDIX 4A:  COST, EMISSIONS, AND ENERGY IMPACTS OF FINAL CSAPR UPDATE BUDGETS
      This appendix reports the compliance costs, emissions, and energy analyses performed for the final CSAPR Update NOX ozone season emission budgets. The tables below summarize the analysis of the final emissions budgets, which differ slightly from the illustrative budgets analyzed outside of this appendix.  The differences between the results below and the results of the illustrative budgets presented in this chapter are minor, consistent with the small differences in NOX ozone season budgets.

Table 4A-1	CSAPR Update NOX Ozone Season Emission Budgets (Tons)
State
                                                     CSAPR Update Final Budgets
Alabama
                                                                         13,211
Arkansas
                                                                          9,210
Iowa
                                                                         11,272
Illinois
                                                                         14,601
Indiana
                                                                         23,303
Kansas
                                                                          8,027
Kentucky
                                                                         21,115
Louisiana
                                                                         18,639
Maryland
                                                                          3,828
Michigan
                                                                         16,545
Missouri
                                                                         15,780
Mississippi
                                                                          6,315
New Jersey
                                                                          2,062
New York
                                                                          5,135
Ohio
                                                                         19,522
Oklahoma
                                                                         11,641
Pennsylvania
                                                                         17,952
Tennessee
                                                                          7,736
Texas
                                                                         52,301
Virginia
                                                                          9,223
Wisconsin
                                                                          7,915
West Virginia
                                                                         17,815
TOTAL
                                                                        313,148
Note: The budget displayed for Arkansas is its 2018 budget. In 2017, for all cases, Arkansas has a budget of 12,048.
 Table 4A-2.	EGU Ozone Season NOX Emissions and Emission Changes (thousand tons) for the Base Case and the CSAPR Update
                       Ozone Season NOX
(thousand tons)
                                                                      Base Case
                                                                   CSAPR Update
                                                                         Change
                                     2017
Region
                                                                          371.7
                                                                          319.8
                                                                          -51.9

Non-Region
                                                                          206.4
                                                                          206.4
                                                                            0.0

Total
                                                                          578.1
                                                                          526.2
                                                                          -51.9
                                     2020
Region
                                                                          380.6
                                                                          314.0
                                                                          -66.6

Non-Region
                                                                          182.6
                                                                          182.6
                                                                            0.0

Total
                                                                          563.2
                                                                          496.6
                                                                          -66.6

Table 4A-3.	EGU Annual Emissions and Emissions Changes for NOX, SO2 and CO2 for the CSAPR Update
                                  Annual NOX
                                                                      Base Case
                                                                   CSAPR Update
                                                                         Change
                                     2017
Region
                                                                          812.4
                                                                          750.3
                                                                          -62.1

Non-Region
                                                                          441.1
                                                                          441.1
                                                                            0.0

Total
                                                                        1,253.5
                                                                        1,191.5
                                                                          -62.1
                                     2020
Region
                                                                          829.6
                                                                          753.8
                                                                          -75.8

Non-Region
                                                                          417.3
                                                                          417.4
                                                                            0.0

Total
                                                                        1,246.9
                                                                        1,171.2
                                                                          -75.7

                          Annual SO2
(thousand tons)
                                                                      Base Case
                                                                   CSAPR Update
                                                                         Change
                                     2017
Region
                                                                          909.4
                                                                          919.4
                                                                           10.0

Non-Region
                                                                          324.7
                                                                          321.8
                                                                           -2.9

Total
                                                                        1,234.1
                                                                        1,241.2
                                                                            7.0
                                     2020
Region
                                                                          909.4
                                                                          919.4
                                                                           10.0

Non-Region
                                                                          324.7
                                                                          321.8
                                                                           -2.9

Total
                                                                        1,234.1
                                                                        1,241.2
                                                                            7.0

                         Annual CO2
(MM Metric Tonnes)
                                                                      Base Case
                                                                   CSAPR Update
                                                                         Change
                                     2017
Region
                                                                        1,235.9
                                                                        1,235.4
                                                                           -0.4

Non-Region
                                                                          653.4
                                                                          653.6
                                                                            0.1

Total
                                                                        1,889.3
                                                                        1,889.0
                                                                           -0.3
                                     2020
Region
                                                                        1,235.9
                                                                        1,235.4
                                                                           -0.4

Non-Region
                                                                          653.4
                                                                          653.6
                                                                            0.1

Total
                                                                        1,889.3
                                                                        1,889.0
                                                                           -0.3

Table 4A-4.	Compliance Cost Estimates (millions of 2011$) for the CSAPR Update

                                                                   CSAPR Update
2017-2020 (Annualized)
                                                                           89.0
2017 (Annual)
                                                                          -18.3
2020 (Annual)
                                                                          198.2
"2017-2020 (Annualized)" reflects total estimated annual compliance costs levelized over the period 2017 through 2020, discounted using a 4.77 discount rate. "2017 (Annual)" and "2020 (Annual)" reflect point estimates in each of those years.  These costs do not include monitoring, reporting, and recordkeeping costs, which are estimated to be a reduction of $1,347,291 per year.

Table 4A-5.	2017 Projected Power Sector Coal Use for the Base Case and the CSAPR Update

                                                                      Base Case
                                                                   CSAPR Update
                                                  Percent Change from Base Case
Appalachia
                                                                            116
                                                                            117
                                                                           1.1%
 Imports
                                                                              0
                                                                              0
                                                                            N/A
Interior
                                                                            227
                                                                            227
                                                                           0.0%
Waste Coal
                                                                              6
                                                                              6
                                                                           0.0%
West
                                                                            353
                                                                            351
                                                                          -0.6%
Total
                                                                            702
                                                                            701
                                                                          -0.1%

Table 4A-6. 2017 Projected Power Sector Natural Gas Use for the Base Case and the CSAPR Update

                                                                      Base Case
                                                                   CSAPR Update
                                                  Percent Change from Base Case
Natural Gas Use
                                                                            8.8
                                                                            8.8
                                                                         -0.01%

Table 4A-7. 2017 Projected Minemouth and Power Sector Delivered Coal Price for the Base Case and the CSAPR Update

                                                                      Base Case
                                                                   CSAPR Update
                                                  Percent Change from Base Case
Minemouth
                                                                           1.51
                                                                           1.51
                                                                           0.2%
Delivered
                                                                           2.31
                                                                           2.31
                                                                           0.0%

Table 4A-8. 2017 Projected Henry Hub and Power Sector Delivered Natural Gas Price for the Base Case and the CSAPR Update

                                                                      Base Case
                                                                   CSAPR Update
                                                  Percent Change from Base Case
Henry Hub
                                                                           4.34
                                                                           4.33
                                                                          -0.1%
Delivered
                                                                           4.53
                                                                           4.52
                                                                          -0.1%

Table 4A-9. 2017 Projected Generation by Fuel Type for the Base Case and the CSAPR Update

                                                                      Base Case
                                                                   CSAPR Update
                                                  Percent Change from Base Case
Coal
                                                                          1,386
                                                                          1,386
                                                                           0.0%
Natural Gas
                                                                          1,198
                                                                          1,198
                                                                           0.0%
Nuclear
                                                                            787
                                                                            787
                                                                           0.0%
Hydro
                                                                            281
                                                                            281
                                                                           0.2%
Non-Hydro RE
                                                                            421
                                                                            421
                                                                           0.0%
Oil\Gas Steam
                                                                             50
                                                                             50
                                                                           0.0%
Other
                                                                              8
                                                                              8
                                                                           0.3%
Total
                                                                          4,130
                                                                          4,131
                                                                           0.0%
Note: In this table, "Non-Hydro RE" includes biomass, geothermal, landfill gas, solar, and wind

Table 4A-10. 2020 Projected Capacity by Fuel Type for the Base Case and the CSAPR Update

                                                                      Base Case
                                                                   CSAPR Update
                                                  Percent Change from Base Case
Coal
                                                                            209
                                                                            209
                                                                          -0.3%
Natural Gas
                                                                            391
                                                                            391
                                                                           0.0%
Nuclear
                                                                            101
                                                                            101
                                                                           0.3%
Hydro
                                                                            107
                                                                            107
                                                                           0.0%
non-Hydro RE
                                                                            138
                                                                            138
                                                                           0.0%
Oil\Gas Steam
                                                                             83
                                                                             83
                                                                           0.0%
Other
                                                                              5
                                                                              5
                                                                           0.0%
Total
                                                                          1,035
                                                                          1,035
                                                                           0.0%
Note: In this table, "Non-Hydro RE" includes biomass, geothermal, landfill gas, solar, and wind

Table 4A-11. Average Retail Electricity Price by Region for the Base Case and the CSAPR Update, 2017
Region
                                                                      Base Case
                                                                   CSAPR Update
                                                  Percent Change from Base Case
ERCT
                                                                           79.6
                                                                           79.5
                                                                           0.0%
FRCC
                                                                          102.3
                                                                          102.2
                                                                          -0.1%
MROE
                                                                          100.4
                                                                          100.4
                                                                           0.0%
MROW
                                                                           87.5
                                                                           87.5
                                                                           0.0%
NEWE
                                                                          126.8
                                                                          126.8
                                                                           0.0%
NYCW
                                                                          166.3
                                                                          166.2
                                                                          -0.1%
NYLI
                                                                          136.4
                                                                          136.4
                                                                           0.0%
NYUP
                                                                          119.3
                                                                          119.3
                                                                           0.0%
RFCE
                                                                          103.2
                                                                          103.1
                                                                          -0.1%
RFCM
                                                                          103.0
                                                                          103.0
                                                                           0.0%
RFCW
                                                                           88.6
                                                                           88.7
                                                                           0.1%
SRDA
                                                                           82.5
                                                                           82.5
                                                                           0.0%
SRGW
                                                                           83.8
                                                                           83.8
                                                                           0.1%
SRSE
                                                                          101.6
                                                                          101.6
                                                                           0.0%
SRCE
                                                                           79.7
                                                                           79.7
                                                                           0.0%
SRVC
                                                                           98.3
                                                                           98.3
                                                                           0.0%
SPNO
                                                                          102.1
                                                                          102.1
                                                                           0.0%
SPSO
                                                                           79.0
                                                                           79.1
                                                                           0.1%
AZNM
                                                                          109.6
                                                                          109.6
                                                                           0.0%
CAMX
                                                                          145.5
                                                                          145.5
                                                                           0.0%
NWPP
                                                                           72.6
                                                                           72.6
                                                                           0.0%
RMPA
                                                                           87.1
                                                                           87.1
                                                                           0.0%
NATIONAL
                                                                           97.3
                                                                           97.3
                                                                           0.0%

Table 4A-12. Average Retail Electricity Price by Region for the Base Case and the CSAPR Update, 2020
Region
                                                                      Base Case
                                                                   CSAPR Update
                                                  Percent Change from Base Case
ERCT
                                                                           88.6
                                                                           88.7
                                                                           0.1%
FRCC
                                                                          104.3
                                                                          104.4
                                                                           0.1%
MROE
                                                                           99.1
                                                                           99.1
                                                                           0.0%
MROW
                                                                           87.7
                                                                           87.8
                                                                           0.1%
NEWE
                                                                          130.6
                                                                          130.7
                                                                           0.1%
NYCW
                                                                          171.9
                                                                          172.1
                                                                           0.1%
NYLI
                                                                          141.5
                                                                          141.7
                                                                           0.1%
NYUP
                                                                          123.2
                                                                          123.3
                                                                           0.1%
RFCE
                                                                          108.2
                                                                          108.3
                                                                           0.1%
RFCM
                                                                          103.7
                                                                          103.8
                                                                           0.1%
RFCW
                                                                           91.4
                                                                           91.6
                                                                           0.2%
SRDA
                                                                           85.5
                                                                           85.6
                                                                           0.1%
SRGW
                                                                           85.9
                                                                           85.9
                                                                           0.1%
SRSE
                                                                          100.4
                                                                          100.4
                                                                           0.1%
SRCE
                                                                           80.1
                                                                           80.2
                                                                           0.1%
SRVC
                                                                           97.7
                                                                           97.8
                                                                           0.0%
SPNO
                                                                          101.1
                                                                          101.1
                                                                           0.0%
SPSO
                                                                           81.7
                                                                           81.9
                                                                           0.2%
AZNM
                                                                          110.6
                                                                          110.6
                                                                           0.0%
CAMX
                                                                          144.3
                                                                          144.4
                                                                           0.0%
NWPP
                                                                           69.4
                                                                           69.4
                                                                           0.0%
RMPA
                                                                           87.4
                                                                           87.4
                                                                           0.0%
NATIONAL
                                                                           99.0
                                                                           99.1
                                                                           0.1%

CHAPTER 5: ESTIMATED HUMAN HEALTH BENEFITS AND CLIMATE CO-BENFITS
5.1	Introduction
As discussed above, this final rule is an update of  the Cross-State Air Pollution Rule (CSAPR) to further reduce interstate transport of Electricity Generating Unit (EGU) ozone season nitrogen oxides (NOX) emissions that contribute significantly to nonattainment or that interfere with maintenance of the 2008 ozone National Ambient Air Quality Standard (NAAQS). The EPA is implementing emission budgets for EGU NOx emissions through the CSAPR NOX ozone season allowance trading program. Updating the CSAPR in this way will reduce emissions of NOX during the summer ozone season and provide ancillary annual NOX and carbon dioxide (CO2) benefits (i.e., co-benefits). This chapter describes the methods used to estimate the monetized ozone-related air quality health benefits, the fine particulate matter (PM2.5)-related air quality health co-benefits from reductions in NOX emissions, and climate co-benefits from reductions of CO2 emissions. These health benefits are associated with reducing exposure to ambient ozone and PM2.5 by reducing emissions of precursor pollutants (i.e., NOX). Data, resource, and methodological limitations prevent the EPA from monetizing several important co-benefits from reducing emissions of pollutants including SO2 and VOC as well as reduced ecosystem effects and visibility impairment associated with reductions in NOx. We discuss these and other unquantified benefits further in this chapter.
This chapter reports estimates of the monetized air quality health benefits and climate co-benefits associated with emission reductions for the CSAPR Update and two regulatory control alternatives across several discount rates. The estimated benefits associated with these emission reductions are beyond those achieved by previous EPA air quality rules, including the original CSAPR that affected cross-state transport of NOX and SO2.
5.2	Estimated Human Health Benefits
 The CSAPR update is expected to reduce emissions of ozone season NOX. In the presence of sunlight, NOX and VOCs can undergo a chemical reaction in the atmosphere to form ozone. Reducing NOX emissions also reduces human exposure to ozone and the incidence of ozone-related health effects, though this depends partly on local levels of volatile organic compounds (VOCs). The CSAPR update will also reduce emissions of NOX throughout the year. Because NOX is also a precursor to formation of ambient PM2.5, reducing these emissions would also reduce human exposure to ambient PM2.5 throughout the year and would reduce the incidence of PM2.5-related health effects.  This RIA does not quantify PM2.5-related benefits associated with SO2 emission changes. (For further explanation of the modeled SO2 emissions changes, see Chapter 4, section 4.4.1).
The benefits estimates reported in this chapter are limited to those that would occur in the 22-state final CSAPR Update region. Reducing NOx may also reduce ozone and PM2.5 concentrations in areas outside the 22 states that are the subject of the CSAPR Update, though the impact of reducing these pollutants in those areas are not assessed in this Chapter. Reducing emissions of NOX would reduce ambient exposure to NO2 (which is a product of combustion) and its associated health effects, though we do not quantify these effects because we lacked sufficient data to quantify these effects. A full description of the epidemiological studies we use, the methods we apply and the tools we employ to quantify the incidence of these effects may be found in the PM NAAQS RIA (U.S. EPA, 2012a) and Ozone NAAQS RIA (U.S. EPA, 2015).
Implementing these updated CSAPR EGU NOX emissions budgets for the ozone season in 22 eastern states may reduce ambient ozone and PM2.5 concentrations below the National Ambient Air Quality Standards (NAAQS) in some areas and assist other areas with attaining the ozone and PM2.5 NAAQS. The NAAQS RIAs (U.S. EPA, 2008, 2012a, 2015) also calculated the benefits of attaining alternate ozone and PM NAAQS, and so differences in the design and analytical objectives of each RIA are worth noting here. The NAAQS RIAs illustrate the potential costs and benefits of attaining a revised air quality standard nationwide based on an array of emission reduction strategies for different sources reflecting the application of identified and unidentified controls, incremental to implementation of existing regulations and controls needed to attain the NAAQS that currently is in effect. In short, NAAQS RIAs hypothesize, but do not predict, the strategies that States may choose to enact when implementing a revised NAAQS. Setting a NAAQS does not directly result in costs or benefits, and as such, the EPA's NAAQS RIAs are illustrative. The estimated costs and benefits from NAAQS RIAs are not intended to be added to the costs and benefits of other regulations that result in specific costs of control and prescribe specific emission reductions. Indeed, some of the emissions reductions estimated to result from implementing the CSAPR update may achieve some of the air quality improvements that resulted from the hypothesized attainment strategies presented in the NAAQS RIAs. The CSAPR Update is intended to achieve the air quality improvements identified in the RIA for the 2008 NAAQS, with appropriate adjustments to baseline conditions between the analysis in that RIA and the analysis presented in this RIA. Implementing this CSAPR Update will assist downwind areas in attaining and maintaining the 2008 ozone NAAQS. The ambient ozone reduced by this rule would also achieve some of the air quality improvements assumed in the baseline for the 2015 ozone NAAQS RIA.
As discussed in Chapter 4, the IPM modeling showing compliance with the CSAPR update and two regulatory control alternatives for which emission reductions are estimated in this RIA is one possible path for compliance with the CSAPR Update emissions budgets. However, the EPA believes the magnitude and location of the air quality changes are well characterized because the rule limits emissions from a specific sector. Emissions reduced by this rule will ultimately be reflected in the baseline of future NAAQS analyses and would lower the additional emissions reductions needed to attain revised future NAAQS. For more information on the relationship between illustrative analyses, such as for the NAAQS and its associated implementation rules, please see the Ozone NAAQS RIA (U.S. EPA, 2015).
5.2.1	Health Impact Assessment for Ozone and PM2.5
The Integrated Science Assessment for Ozone and Related Photochemical Oxidants (Ozone ISA) (U.S. EPA, 2013b) identified the human health effects associated with chronic and acute ambient ozone exposure, which include premature death and a variety of morbidity effects. Similarly, the Integrated Science Assessment for Particulate Matter (PM ISA) (U.S. EPA, 2009b) identified the human health effects associated with ambient PM2.5 exposure, which include premature death and a variety of morbidity effects associated with acute and chronic exposures. Table 5-1 identifies the quantified and monetized benefit and co-benefit categories captured in the EPA's health benefits estimates for reduced exposure to ambient ozone and PM2.5. Although the table below does not list unquantified health effects or welfare effects, such as acidification and nutrient enrichment, these effects are described in detail in Chapters 5 and 6 of the PM NAAQS RIA (U.S. EPA, 2012a) and summarized later in this chapter. The list of unquantified benefits categories is not exhaustive and effects may not have been quantified completely.

Table 5-1.	Human Health Effects of Ambient Ozone and PM2.5
                                   Category
                                Specific Effect
                          Effect Has Been Quantified
                           Effect Has Been Monetized
                               More Information
Improved Human Health

Reduced incidence of mortality from exposure to ozone
Premature mortality based on short-term study estimates (all ages)

Ozone ISA

Premature mortality based on long-term study estimates (age 30 - 99)
                                       --
                                       --
Ozone ISA[1]
Reduced incidence of morbidity from exposure to ozone
Hospital admissions -- respiratory causes (age > 65)

Ozone ISA

Hospital admissions -- respiratory causes (age <2)

Ozone ISA

Emergency department visits for asthma (all ages)

Ozone ISA

Minor restricted-activity days (age 18 - 65)

Ozone ISA

School absence days (age 5 - 17)

Ozone ISA

Decreased outdoor worker productivity (age 18 - 65)
                                       --
                                       --
Ozone ISA[1]

Other respiratory effects (e.g., premature aging of lungs)
                                       --
                                       --
Ozone ISA[2]

Cardiovascular and nervous system effects
                                       --
                                       --
Ozone ISA[2]

Reproductive and developmental effects
                                       --
                                       --
Ozone ISA[2,3]
Reduced incidence of premature mortality from exposure to PM2.5
Adult premature mortality based on cohort study estimates and expert elicitation estimates (age >25 or age >30)

PM ISA

Infant mortality (age <1)

PM ISA
Reduced incidence of morbidity from exposure to PM2.5
Non-fatal heart attacks (age > 18)

PM ISA

Hospital admissions -- respiratory (all ages)

PM ISA

Hospital admissions -- cardiovascular (age >20)

PM ISA

Emergency room visits for asthma (all ages)

PM ISA

Acute bronchitis (age 8-12)

PM ISA

Lower respiratory symptoms (age 7-14)

PM ISA

Upper respiratory symptoms (asthmatics age 9-11)

PM ISA

Asthma exacerbation (asthmatics age 6-18)

PM ISA

Lost work days (age 18-65)

PM ISA

Minor restricted-activity days (age 18-65)

PM ISA

Chronic Bronchitis (age >26)
                                       --
                                       --
PM ISA[1]

Emergency room visits for cardiovascular effects (all ages)
                                       --
                                       --
PM ISA[1]

Strokes and cerebrovascular disease (age 50-79)
                                       --
                                       --
PM ISA[1]

Other cardiovascular effects (e.g., other ages)
                                       --
                                       --
PM ISA[2]

Other respiratory effects (e.g., pulmonary function, non-asthma ER visits, non-bronchitis chronic diseases, other ages and populations)
                                       --
                                       --
PM ISA[2]

Reproductive and developmental effects (e.g., low birth weight, pre-term births, etc.)
                                       --
                                       --
PM ISA[2,3]

Cancer, mutagenicity, and genotoxicity effects
                                       --
                                       --
PM ISA[2,3]
[1] We assess these co-benefits qualitatively due to data and resource limitations for this analysis, but we have quantified them in sensitivity analyses for other analyses.
[2] We assess these co-benefits qualitatively because we do not have sufficient confidence in available data or methods.
3 We assess these co-benefits qualitatively because current evidence is only suggestive of causality or there are other significant concerns over the strength of the association.

We follow a "damage-function" approach in calculating benefits, which estimates changes in individual health endpoints and assigns a dollar value to those changes. Because the EPA rarely has the time or resources to perform new research to measure directly either health outcomes or their values for regulatory analyses, our estimates are based on the best available methods of benefits transfer, which is the science and art of adapting primary research from similar contexts to estimate benefits for the environmental quality change under analysis. We use two benefits transfer techniques to quantify the ozone and PM2.5-attributable benefits. We first perform a health impact assessment (HIA) to estimate the avoided deaths and illnesses resulting from implementing the CSAPR Update. We next use a "benefit-per-ton" approach to estimate the ozone and PM2.5 benefits of the CSAPR Update and the more and less stringent alternatives.
An HIA quantifies the changes in the incidence of adverse health impacts resulting from changes in human exposure to ozone and PM2.5. We use the environmental Benefits Mapping and Analysis Program  -  Community Edition (BenMAP-CE) (version 1.1) to calculate a health impact function that combines information from the modeled air quality predictions for this rule with a database of key input parameters, including population projections, health impact functions, and valuation functions (EPA, 2014). For this assessment, the HIA is limited to those health effects that are directly linked to ambient ozone and PM2.5 concentrations. There may be other indirect health impacts associated with reducing emissions, such as occupational health exposures. Epidemiological studies generally provide estimates of the relative risks of a particular health effect for a given increment of air pollution (often per 10 ppb for ozone or per 10 ug/m[3] for PM2.5). These relative risks can be used to develop risk coefficients that relate a unit reduction in pollution (e.g., ozone) to changes in the incidence of a health effect. We refer the reader to the Ozone NAAQS RIA (U.S. EPA, 2015) and PM NAAQS RIA (U.S. EPA, 2012a) for more information regarding the epidemiology studies and risk coefficients applied in this analysis.
The final air quality modeling simulation predicted changes in ozone and PM2.5 from a baseline scenario that did not fully account for certain emission changes that are reflected in the policy scenario. Chapter 4 describes in greater detail how the emissions baseline was subsequently modified to account for the Pennsylvania RACT as well as other smaller-scale changes to the estimated EGU-level emissions. Because we could not use these air quality predictions directly, we instead employed a benefit-per-ton approach. Using the BenMAP-CE tool noted above, we first quantified the change in the number of ozone and PM2.5-attributable avoided deaths and illnesses, and the dollar value of these outcomes, estimated to result from the modeled air quality scenario relative to the baseline. We divide these values by the change in emissions to calculate an average benefit per ton. Thus, to develop estimates of benefits for this RIA, we are transferring both the underlying health and economic information from a final air quality modeling scenario to the illustrative policy emissions reductions, including more and less stringent policy alternatives. Below, we describe in greater detail the data we used to calculate these benefit per ton values.
Before describing our technique for calculating the benefit per ton estimates, we briefly elaborate on the procedure for estimating the incidence of adult premature deaths in this RIA below. The size of the mortality effect estimates from epidemiological studies, the serious nature of the effect itself, and the high monetary value ascribed to reducing risks of premature death make mortality risk reduction the most significant health endpoint quantified in this analysis.
<IP_ADDRESS>	Mortality Effect Coefficients for Short-term Ozone Exposure
The overall body of evidence indicates that there is likely to be a causal relationship between short-term ozone exposure and premature death. The 2013 ozone Integrated Science Assessment (ISA) concludes that the evidence suggests that ozone effects are independent of the relationship between PM and mortality. (U.S. EPA, 2013a). However, the ISA notes that the interpretation of the potential confounding effects of PM on ozone-mortality risk estimates requires caution due to the PM sampling schedule (in most cities) which limits the overall sample size available for evaluating potential confounding of the ozone effect by PM (U.S. EPA 2013a).
In 2006, the EPA requested a National Academies of Sciences (NAS) study to answer the following four key questions regarding ozone-related mortality: (1) How did the epidemiological literature to that point improve our understanding of the size of the ozone-related mortality effect?; (2) How best can EPA quantify the level of ozone-related mortality impacts from short-term exposure?; (3) How might EPA estimate the change in life expectancy?; and (4) What methods should EPA use to estimate the monetary value of changes in ozone-related mortality risk and life expectancy?
In 2008, the NAS (NRC, 2008) issued a series of recommendations to the EPA regarding the quantification and valuation of ozone-related short-term mortality. Chief among these was that "...short-term exposure to ambient ozone is likely to contribute to premature deaths" and the committee recommended that "ozone-related mortality be included in future estimates of the health benefits of reducing ozone exposures..." The NAS also recommended that "...the greatest emphasis be placed on the multi-city and National Morbidity and Mortality Air Pollution Studies (NMMAPS) studies without exclusion of the meta-analyses" (NRC, 2008). In addition, NAS recommended that EPA "should give little or no weight to the assumption that there is no causal association between estimated reductions in premature mortality and reduced ozone exposure" (NRC, 2008). In 2010, the Health Effects Subcommittee of the Advisory Council on Clean Air Compliance Analysis, while reviewing EPA's The Benefits and Costs of the Clean Air Act 1990 to 2020 (U.S. EPA, 2011a), also confirmed the NAS recommendation to include ozone mortality benefits (U.S. EPA-SAB, 2010a).
In view of the findings of the ozone ISA, the NAS panel, the Science Advisory Board -- Health Effects Subcommittee (SAB-HES) panel, and the Clean Air Scientific Advisory Committee (CASAC) panel, we estimate ozone-related premature mortality for short-term exposure in the core health effects analysis using effect coefficients from the Smith et al. (2009) NMMAPS analysis and the Zanobetti and Schwartz (2008) multi-city study with several additional studies as sensitivity analyses. This emphasis on newer multi-city studies is consistent with recommendations provided by the NAS in their ozone mortality report (NRC, 2008). CASAC supported using the Smith et al. (2009) and Zanobetti and Schwartz (2008) studies for the ozone Health Risk and Exposure Assessment (U.S. EPA-SAB, 2012, 2014), and these are multi-city studies published more recently (as compared with other multi-city studies or meta-analyses included in the sensitivity analyses  -  see discussion below).
Smith et al. (2009) reanalyzed the NMMAPS dataset, evaluating the relationship between short-term ozone exposure and mortality. While this study reproduces the core national-scale estimates presented in Bell et al. (2004), it also explored the sensitivity of the mortality effect to different model specifications including (a) regional versus national Bayes-based adjustment, (b) co-pollutant models considering PM10, (c) all-year versus ozone-season based estimates, and (d) consideration of a range of ozone metrics, including the daily 8-hour max. In addition, the Smith et al. (2009) study did not use the trimmed mean approach employed in the Bell et al. (2004) study in preparing ozone monitor data. In selecting effect estimates from Smith et al. (2009), we use an ozone-only estimate for non-accidental mortality using the 8-hour max metric for the warmer ozone season.  For the sensitivity analysis, we included a co-pollutant model (ozone and PM10) from Smith et al. (2009) for all-cause mortality, using the 8-hour max ozone metric for the ozone season. Using a single pollutant model for the core analysis and the co-pollutant model in the sensitivity analysis reflects our concern that the reduced sampling frequency for days with co-pollutant measurements (1/3 and 1/6) could affect the ability of the study to characterize the ozone effect. This choice is consistent with the ozone ISA, which concludes that ozone effects are likely to be independent of the relationship between PM and mortality (U.S. EPA, 2013a).
The Zanobetti and Smith (2008) study evaluated the relationship between ozone exposure (using an 8-hour mean metric for the warm season June-August) and all-cause mortality in 48 U.S. cities using data collected between 1989 and 2000. The study presented single pollutant C-R functions based on shorter (0-3 day) and longer (0-20 day) lag structures, with the comparison of effects based on these different lag structures being a central focus of the study. We used the shorter day lag based C-R function since this had the strongest effect and tighter confidence interval. We converted the effect estimate from an 8-hour mean metric to an equivalent effect estimate based on an 8-hour max to account for the period of the day in which most individuals are exposed to ozone. To do this, we used the ozone metric approach wherein the original effect estimate (and standard error) is multiplied by the appropriate ozone metric adjustment ratio.
<IP_ADDRESS>	PM2.5 Mortality Effect Coefficients for Adults and Infants
A substantial body of published scientific literature documents the association between elevated PM2.5 concentrations and increased premature mortality (U.S. EPA, 2009b). This body of literature reflects thousands of epidemiology, toxicology, and clinical studies. The PM ISA completed as part of the most recent review of the PM NAAQS, which was twice reviewed by the SAB-CASAC (U.S. EPA-SAB, 2009a, 2009b), concluded that there is a causal relationship between mortality and both long-term and short-term exposure to PM2.5 based on the entire body of scientific evidence (U.S. EPA, 2009b). The size of the mortality effect estimates from epidemiological studies, the serious nature of the effect itself, and the high monetary value ascribed to prolonging life make mortality risk reduction the most significant health endpoint quantified in this analysis.
Researchers have found statistically significant associations between PM2.5 and premature mortality using different types of study designs. Time-series methods have been used to relate short-term (often day-to-day) changes in PM2.5 concentrations and changes in daily mortality rates up to several days after a period of exposure to elevated PM2.5 concentrations. Cohort methods have been used to examine the potential relationship between community-level PM2.5 exposures over multiple years (i.e., long-term exposures) and community-level annual mortality rates that have been adjusted for individual level risk factors. When choosing between using short-term studies or cohort studies for estimating mortality benefits, cohort analyses are thought to capture more of the public health impact of exposure to air pollution over time because they account for the effects of long-term exposures, as well as some fraction of short-term exposures (Kunzli et al., 2001; NRC, 2002). The NRC stated that "it is essential to use the cohort studies in benefits analysis to capture all important effects from air pollution exposure" (NRC, 2002, p. 108). The NRC further noted that "the overall effect estimates may be a combination of effects from long-term exposure plus some fraction from short-term exposure. The amount of overlap is unknown" (NRC, 2002, p. 108-9). To avoid double counting, we focus on applying the risk coefficients from the long-term cohort studies in estimating the mortality impacts of reductions in PM2.5.
Over the last three decades, several studies using "prospective cohort" designs have been published that are consistent with the earlier body of literature. Two prospective cohort studies, often referred to as the Harvard "Six Cities Study" (Dockery et al., 1993; Laden et al., 2006; Lepeule et al., 2012) and the "American Cancer Society" or "ACS study" (Pope et al., 1995; Pope et al., 2002; Pope et al., 2004; Krewski et al., 2009), provide the most extensive analyses of ambient PM2.5 concentrations and mortality. These studies have found consistent relationships between fine particle indicators and premature mortality across multiple locations in the United States. The credibility of these two studies is further enhanced by the fact that the initial published studies (Pope et al., 1995; Dockery et al., 1993) were subject to extensive reexamination and reanalysis by an independent team of scientific experts commissioned by the Health Effects Institute (HEI) and by a Special Panel of the HEI Health Review Committee (Krewski et al., 2000). Publication of studies confirming and extending the findings of the 1993 Six Cities Study and the 1995 ACS study using more recent air quality data and a longer follow-up period for the ACS cohort provides additional validation of the findings of these original studies (Pope et al., 2002, 2004; Laden et al., 2006; Krewski et al., 2009; Lepeule et al., 2012). The SAB-HES also supported using these two cohorts for analyses of the benefits of PM reductions, and concluded, "the selection of these cohort studies as the underlying basis for PM mortality benefit estimates [is] a good choice. These are widely cited, well studied and extensively reviewed data sets" (U.S. EPA-SAB, 2010a). As both the ACS and Six Cities studies have inherent strengths and weaknesses, we present benefits estimates using relative risk estimates from the most recent extended reanalysis of these cohorts (Krewski et al., 2009; Lepeule et al., 2012). Presenting results using both ACS and Six Cities is consistent with other recent RIAs (e.g., U.S. EPA, 2010c, 2011a, 2011c, 2015). The PM ISA concludes that the ACS and Six Cities cohorts provide the strongest evidence of the association between long-term PM2.5 exposure and premature mortality with support from a number of additional cohort studies (described below).
The extended analyses of the ACS cohort data (Krewski et al., 2009) refined the earlier ACS studies by (a) extending the follow-up period by 2 years to the year 2000, for a total of 18 years; (b) incorporating almost double the number of urban areas; (c) addressing confounding by spatial autocorrelation by incorporating ecological, or community-level, co-variates; and (d) performing an extensive spatial analysis using land use regression modeling in two large urban areas. These enhancements make this analysis well-suited for the assessment of mortality risk from long-term PM2.5 exposures for the EPA's benefits analyses.
In 2009, the SAB-HES again reviewed the choice of mortality risk coefficients for benefits analysis, concluding that "[t]he Krewski et al. (2009) findings, while informative, have not yet undergone the same degree of peer review as have the aforementioned studies. Thus, the SAB-HES recommends that EPA not use the Krewski et al. (2009) findings for generating the Primary Estimate" (U.S. EPA-SAB, 2010a). Since this time, the Krewski et al. (2009) has undergone additional peer review, which we believe strengthens the support for including this study in this RIA. For example, the PM ISA (U.S. EPA, 2009b) included this study among the key mortality studies. In addition, the risk assessment supporting the PM NAAQS (U.S. EPA, 2010b) used risk coefficients drawn from the Krewski et al. (2009) study, the most recent reanalysis of the ACS cohort data. The PM risk assessment cited a number of advantages that informed the selection of the Krewski et al. (2009) study as the source of the core effect estimates, including the extended period of observation, the rigorous examination of model forms and effect estimates, the coverage for ecological variables, and the large dataset with over 1.2 million individuals and 156 MSAs (U.S. EPA, 2010b). The CASAC also provided extensive peer review of the PM risk assessment and supported the use of effect estimates from this study (U.S. EPA-SAB, 2009a, b, 2010b).
Consistent with the PM risk assessment (U.S. EPA, 2010b), which was reviewed by the CASAC (U.S. EPA-SAB, 2009a, b), we use the all-cause mortality risk estimate based on the random-effects Cox proportional hazard model that incorporates 44 individual and 7 ecological covariates (RR=1.06, 95% confidence intervals 1.04 - 1.08 per 10 ug/m[3] increase in PM2.5). The relative risk estimate (1.06 per 10 ug/m[3] increase in PM2.5) is identical to the risk estimate drawn from the earlier Pope et al. (2002) study, though the confidence interval around the Krewski et al. (2009) risk estimate is narrower.
In the most recent Six Cities study, which was published after the last SAB-HES review, Lepeule et al. (2012) evaluated the sensitivity of previous Six Cities results to model specifications, lower exposures, and averaging time using eleven additional years of cohort follow-up that incorporated recent lower exposures. The authors found significant associations between PM2.5 exposure and increased risk of all-cause, cardiovascular and lung cancer mortality. The authors also concluded that the C-R relationship was linear down to PM2.5 concentrations of 8 μg/m[3] and that mortality rate ratios for PM2.5 fluctuated over time, but without clear trends, despite a substantial drop in the sulfate fraction. We use the all-cause mortality risk estimate based on a Cox proportional hazard model that incorporates 3 individual covariates. (RR=1.14, 95% confidence intervals 1.07 - 1.22 per 10 ug/m[3] increase in PM2.5). The relative risk estimate is slightly smaller than the risk estimate drawn from Laden et al. (2006), with relatively smaller confidence intervals.
Given that monetized benefits associated with PM2.5 are driven largely by reductions in premature mortality, it is important to characterize the uncertainty in this endpoint. In order to do so, we utilize the results of an expert elicitation sponsored by the EPA and completed in 2006 (Roman et al., 2008; IEc, 2006). The results of that expert elicitation can be used as a characterization of uncertainty in the C-R functions.
In addition to the adult mortality studies described above, several studies show an association between PM exposure and premature mortality in children under 5 years of age. The PM ISA states that less evidence is available regarding the potential impact of PM2.5 exposure on infant mortality than on adult mortality and the results of studies in several countries include a range of findings with some finding significant associations. Specifically, the PM ISA concluded that evidence exists for a stronger effect at the post-neonatal period and for respiratory-related mortality, although this trend is not consistent across all studies. In addition, compared to avoided premature deaths estimated for adult mortality, avoided premature deaths for infants are significantly smaller because the number of infants in the population is much smaller than the number of adults and the epidemiology studies on infant mortality provide smaller risk coefficients associated with exposure to PM2.5.
In 2004, the SAB-HES noted the release of the WHO Global Burden of Disease Study focusing on ambient air, which cites several recently published time-series studies relating daily PM exposure to mortality in children (U.S. EPA-SAB, 2004). With regard to the cohort study conducted by Woodruff et al. (1997), the SAB-HES noted several strengths of the study, including the use of a larger cohort drawn from a large number of metropolitan areas and efforts to control for a variety of individual risk factors in infants (e.g., maternal educational level, maternal ethnicity, parental marital status, and maternal smoking status). Based on these findings, the SAB-HES recommended that the EPA incorporate infant mortality into the primary benefits estimate and that infant mortality be evaluated using an impact function developed from the Woodruff et al. (1997) study (U.S. EPA-SAB, 2004).
In 2010, the SAB-HES again noted the increasing body of literature relating infant mortality and PM exposure and supported the inclusion of infant mortality in the monetized benefits (U.S. EPA-SAB, 2010a). The SAB-HES generally supported the approach of estimating infant mortality based on Woodruff et al. (1997) but also noted that a more recent study by Woodruff et al. (2006) continued to find associations between PM2.5 and infant mortality in California. The SAB-HES also noted, "when PM10 results are scaled to estimate PM2.5 impacts, the results yield similar risk estimates." Consistent with The Benefits and Costs of the Clean Air Act 1990 to 2020 (U.S. EPA, 2011a), we continue to rely on the earlier 1997 study in part due to the national - scale of the earlier study.
5.2.2	Economic Valuation for Health Benefits
After quantifying the change in adverse health impacts, we estimate the economic value of these avoided impacts. Reductions in ambient concentrations of air pollution generally lower the risk of future adverse health effects by a small amount for a large population. Therefore, the appropriate economic measure is willingness to pay (WTP) for changes in risk of a health effect. For some health effects, such as hospital admissions, WTP estimates are generally not available, so we use the cost of treating or mitigating the effect. These cost-of-illness (COI) estimates generally (although not necessarily in every case) understate the true value of reductions in risk of a health effect. They tend to reflect the direct expenditures related to treatment but not the value of avoided pain and suffering from the health effect. The unit values applied in this analysis are provided in Table 5-9 of the PM NAAQS RIA for each health endpoint (U.S. EPA, 2012a).
For this final rule avoided premature deaths account for over 90 percent of monetized ozone-related benefits and 98 percent of monetized PM-related co-benefits. The economics literature concerning the appropriate method for valuing reductions in premature mortality risk is still evolving. The adoption of a value for the projected reduction in the risk of premature mortality is the subject of continuing discussion within the economics and public policy analysis communities. Following the advice of the SAB's Environmental Economics Advisory Committee (SAB-EEAC), the EPA uses the value of statistical life (VSL) approach in calculating estimates of mortality benefits, because we believe this calculation provides the most reasonable estimate of an individual's willingness to trade off wealth for reductions in mortality risk (U.S. EPA-SAB, 2000). The VSL is a summary measure for the value of small changes in mortality risk experienced by a large number of people.
The EPA continues work to update its guidance on valuing mortality risk reductions, and, in the process,  has engaged the SAB-EEAC on different facets of this issue. Until updated mortality risk valuation guidance is available, however, the Agency determined that applying a single, peer-reviewed estimate in a consistent fashion best reflects the SAB-EEAC advice it has received. Therefore, pending future revisions to its mortality risk valuation guidance, the EPA continues to apply the VSL that was vetted and endorsed by the SAB in the Guidelines for Preparing Economic Analyses (U.S. EPA, 2014). This approach calculates a mean value across VSL estimates derived from 26 labor market and contingent valuation studies published between 1974 and 1991. The mean VSL across these studies is $6.3 million (2000$). We then adjust this VSL to account for the currency year and to account for income growth from 1990 to the analysis year. Specifically, the VSL applied in this analysis in 2011$ after adjusting for income growth is $9.9 million for 2017.
The Agency is committed to using scientifically sound, appropriately reviewed evidence in valuing mortality risk reductions and has made significant progress in responding to recent SAB-EEAC recommendations. In March 2016, the EPA presented to the SAB-EEAC a proposed methodology for updating Agency mortality risk valuation estimates based on a previous SAB Advisory (US EPA 2016).  The proposed methodology is currently under review, with formal SAB recommendations anticipated later this year.In valuing PM2.5-related premature mortality, we discount the value of premature mortality occurring in future years using rates of 3 percent and 7 percent (OMB, 2003). We assume that there is a "cessation" lag between changes in PM exposures and the total realization of changes in health effects. Although the structure of the lag is uncertain, the EPA follows the advice of the SAB-HES to assume a segmented lag structure characterized by 30 percent of mortality reductions in the first year, 50 percent over years 2 to 5, and 20 percent over the years 6 to 20 after the reduction in PM2.5 (U.S. EPA-SAB, 2004c). Changes in the cessation lag assumptions do not change the total number of estimated deaths but rather the timing of those deaths. Because short-term ozone-related premature mortality occurs within the analysis year, the estimated ozone-related benefits are identical for all discount rates.
5.2.3	Health Benefit Estimates for Ozone
We performed an HIA in BenMAP-CE and then calculated benefit per ton values to estimate the ozone benefits for the final CSAPR Update alternative and for the more and less stringent alternatives in this RIA. The EPA has applied this approach in several previous RIAs (e.g., U.S. EPA, 2011b, 2011c, 2012b, 2014a, 2015) to quantify the avoided number of deaths and illnesses and the total monetized human health benefits (the sum of premature mortality and premature morbidity) of reducing one ton of summer season NOX (an ozone precursor). We generated benefit-per-ton estimates for ozone based on air quality modeling for the illustrative CSAPR Update alternative described in Chapter 4 of this RIA. As described in Chapter 4 of this RIA and further below, the air quality model runs for the baseline and CSAPR Update alternative reflect different EGU NOX emission levels for reasons other than the abatement necessary to comply with the CSAPR Update. For this reason, it was necessary to estimate a benefit-per-ton value from these two air quality model runs which allows us to then value the benefits solely attributable to NOx reductions associated with the CSAPR Update. We then applied that benefit-per-ton value to the NOx emission reductions attributable to the CSAPR Update for the CSAPR Update alternative, as well as for the more and less stringent alternatives.  The BPT estimates correspond to NOX emissions from U.S. EGUs during the ozone-season (May to September). These estimates assume that EGU-attributable ozone formation at the regional-level is due to NOX alone. Because EGUs emit little VOC relative to NOX emissions, it is unlikely that VOCs emitted by EGUs would contribute substantially to regional ozone formation.
When we characterize analytical uncertainty below we describe how the benefit-per-ton estimates have certain limitations. Specifically, the benefit-per-ton estimates reflect the geographic distribution of the modeled illustrative CSAPR Update. For this rule, the change in EGU NOx emissions between the baseline and CSAPR Update alternative matches well the NOx reductions solely attributable to the CSAPR Update, but not perfectly. For this reason, the resulting ozone benefit per ton estimate may not reflect fully the size or geographic distribution of emission reductions anticipated from the selected policy. In order to address this potential limitation, we limited the benefits estimate for NOX reductions associated with ozone (and PM2.5), to only those benefits that would occur in the 22-state region of the final CSAPR Update. The benefit per ton estimates may also not reflect well the local variability in population density, meteorology, exposure, baseline health incidence rates, or other local factors for any specific location. Notwithstanding these limitations, we believe that this approach is reasonably able to characterize the ozone-related benefits from the rule.
5.2.4	Health Benefit Estimates for PM2.5
We used a combination of an HIA and a "benefit-per-ton" approach to estimate the PM2.5 co-benefits for the final CSAPR Update alternative and for more and less stringent alternatives in this RIA. These values represent the total monetized human health co-benefits (the sum of valued avoided premature mortality and avoided premature morbidity), of reducing one ton of nitrate-apportioned PM2.5 from EGU-attributable NOX. We generated benefit-per-ton estimates for nitrate PM2.5 based on the same air quality modeling simulations used to generate the benefit-per-ton estimate for ozone. To calculate nitrate-apportioned PM2.5 benefits we then multiplied the benefit-per-ton estimates by the change in annual NOX emissions reductions attributable to the CSAPR Update as well as the more and less stringent CSAPR Update alternatives. These estimates correspond to the annual NOX emission reductions from U.S. EGUs.  This nitrate PM2.5 benefit-per-ton estimate shares the limitations of the ozone NOX benefit-per-ton estimate noted above.
5.2.5	Updated Methodology in the Final RIA
    We modified our analytical approach between the proposal and this final RIA. For the final RIA, an updated air quality modeling scenario was completed, which better reflected the selected policy option than did the proposal air quality modeling, and therefore it is appropriate to use updated benefit-per-ton values for the final rule.  However, the final air quality model results preceded final adjustments to the policy options. Furthermore, the Pennsylvania RACT was not included in the base case IPM model scenario, and therefore is not reflected in the air quality baseline. This omission accounts for the larger NOx emission reductions between the air quality model runs than is seen between the IPM base case and the CSAPR Update alternative.  Consequently, the benefit-per-ton value for ozone and nitrate-attributed PM2.5 had to be applied to the CSAPR Update alternative NOx emission reductions in addition to the more and less stringent alternatives NOx emission reductions.
    Unlike the CSAPR Update proposal RIA which provided national estimates of the benefits of the proposed rule, for the final CSAPR Update we calculated benefits only for the 22 CSAPR Update states.  We applied the NOx emission reductions only from the CSAPR Update states in order to provide a benefit-per-ton value for ozone and nitrate-attributed PM2.5 that captures the benefits to the CSAPR states.  We believed this approach was made necessary by the fact that the air quality modeling simulation accounted for NOx emission reductions occurring outside of the 22 CSAPR state region that were not reflected in the final policy scenario. This approach to calculating the benefit per ton values likely underestimates total benefits because it excludes certain downwind states such as those in New England and in the southeast that would likely see benefits from this rule.
	When estimating PM2.5-attributable benefits we use benefit per ton values calculated using a nitrate-attributable PM2.5 benefit per ton estimate; the proposal analysis used a total PM2.5 benefit per ton value.  We determined that the controls in this rule would have a meaningful influence on both NOx and PM2.5 formation from nitrate. The EPA determined that, considering the final CSAPR Update Rule illustrative emissions modeling results, using total PM2.5 benefit per ton would incorrectly additionally account for the benefits of reduced sulfate and directly emitted PM2.5 benefits, which the illustrative emissions modeling does not anticipate.
5.2.6	Estimated Health Benefits Results
Table 5-2 provides the benefit-per-ton estimates for the analysis year 2017. Table 5-3 provides the emission reductions estimated to occur in the analysis year. Table 5-4 summarizes the national monetized ozone-related and PM-related health benefits estimated to occur for the CSAPR Update and two regulatory control alternatives for the 2017 analysis year using discount rates of 3 percent (non-fatal heart attacks quantified using Peters et al. (2001)) and 7 percent (non-fatal heart attacks quantified using a pooled estimate that includes Pope et al. (2006)). Table 5-5 provides national summaries of the reduced counts of premature deaths and illnesses associated with the CSAPR update and two more and less stringent alternatives for the 2017 analysis year. Figure 5-1 provides a visual representation of the range of estimated ozone and PM2.5-related benefits using benefit-per-ton estimates based on concentration-response functions from different studies and expert opinion for the CSAPR update evaluated for 2017.
Table 5-2. 	Summary of Ozone and PM2.5 Benefit-per-Ton Estimates Based on Air Quality Modeling in 2017 (2011$)*
                                   Pollutant
                                 Discount Rate
                                   National
NOX (as Ozone)
                                      N/A
                               $6,000 to $9,900
NOX (as PM2.5)
                                      3%
                               $1,200 to $2,800

                                      7%
                               $1,100 to $2,500

* The range of estimates reflects the range of epidemiology studies for avoided premature mortality for ozone and PM2.5. All estimates are rounded to two significant figures. Benefit-per-ton estimates for ozone are based on the modeled ozone season NOX emissions in the 22-state region (78,000 short tons) used in the air quality runs that were used to estimate the benefit-per-ton value. Ozone co-benefits occur in the analysis year. The monetized co-benefits do not include reduced health effects from direct exposure to NO2, or ecosystem effects or visibility impairment from reduced NOX. All fine particles are assumed to have equivalent health effects, but the benefit-per-ton estimates vary depending on the location and magnitude of their impact on PM2.5 concentrations, which drive population exposure. The PM2.5 attributed to this rule only includes the nitrate fraction of PM2.5.  Benefit-per-ton estimates for PM are based on the annual modeled PM2.5 in the 22-state region (89,000 short tons) used in the air quality runs that were used to estimate the benefit-per-ton value.  The monetized benefits incorporate the conversion from precursor emissions to ambient fine particles and ozone., so they are the same for all discount rates. In general, the 95[th] percentile confidence interval for monetized PM2.5 benefits ranges from approximately -90 percent to +180 percent of the central estimates based on Krewski et al. (2009) and Lepeule et al. (2012). The confidence intervals around the ozone mortality estimates are on the order of +- 60 percent depending on the concentration-response function used.

Table 5-3. 	Emission Reductions of Criteria Pollutants in CSAPR Update States for the CSAPR Update and More and Less Stringent Alternatives in 2017 (thousands of short tons)*

                                 CSAPR Update

                          More Stringent Alternative
                          Less Stringent Alternative
Ozone Season NOX
                                    61,000
                                    66,000
                                    27,000
All Year NOX
                                    75,000
                                    79,000
                                    27,000
*All emissions shown in the table are rounded.

Table 5-4. 	Summary of Estimated Monetized Health Benefits for the CSAPR Update and More and Less Stringent Alternatives Regulatory Control Alternatives for 2017 (millions of 2011$) *
                                   Pollutant

                                 CSAPR Update
                          More Stringent Alternative
                          Less Stringent Alternative
  NOx (as Ozone)

                                 $370 to $610
                                 $400 to $650
                                 $160 to $270
  NOx (as PM2.5)
                               3% Discount Rate
                                  $93 to $210
                                  $98 to $220
                                  $34 to $75

                               7% Discount Rate
                                  $83 to $190
                                  $88 to $200
                                  $30 to $67
                                     Total
                               3% Discount Rate
                                 $460 to $810
                                 $500 to $870
                                 $200 to $340

                               7% Discount Rate
                                 $450 to $790
                                 $490 to $850
                                 $190 to $330
* All estimates are rounded to two significant figures so numbers may not sum down columns. The health benefits range is based on adult mortality functions (e.g., from Krewski et al. (2009) with Smith et al. (2009) to Lepeule et al. (2012) with Zanobetti and Schwartz (2008)). The estimated monetized co-benefits do not include reduced health effects from direct exposure to NO2, ecosystem effects, or visibility impairment. All fine particles are assumed to have equivalent health effects, but the benefit-per-ton estimates vary depending on the location and magnitude of their impact on PM2.5 levels, which drive population exposure. The CSAPR Update values, the more and less stringent alternatives were all calculated using the benefits per ton approach based on the final modeling scenario.  The monetized co-benefits incorporate the conversion from precursor emissions to ambient fine particles and ozone. Benefits for ozone are based on ozone season NOX emissions. Ozone co-benefits occur in analysis year, so they are the same for all discount rates. and are based on annual NOx emissions and the nitrate-only fraction of PM2.5. In general, the 95[th] percentile confidence interval for monetized PM2.5 benefits ranges from approximately -90 percent to +180 percent of the central estimates based on Krewski et al. (2009) and Lepeule et al. (2012). The confidence intervals around the ozone mortality estimates are on the order of +- 60 percent depending on the concentration-response function used.
Table 5-5. 	Summary of Avoided Health Incidences from Ozone-Related and PM2.5-Related Benefits for the CSAPR Update and More and Less Stringent Alternatives for 2017*
Ozone-related Health Effects
                                 CSAPR Update
                          More Stringent Alternative
                          Less Stringent Alternative
Avoided Premature Mortality

 Smith et al. (2009) (all ages)
                                      21
                                      23
                                       9
 Zanobetti and Schwartz (2008) (all ages)
                                      60
                                      65
                                      26
Avoided Morbidity

 Hospital admissions -- respiratory causes (ages > 65)
                                      59
                                      64
                                      26
 Emergency room visits for asthma (all ages)
                                      240
                                      250
                                      100
 Asthma exacerbation (ages 6-18)
                                    67,000
                                    73,000
                                    30,000
 Minor restricted-activity days (ages 18-65)
                                    170,000
                                    180,000
                                    75,000
 School loss days  (ages 5-17)
                                    56,000
                                    60,000
                                    25,000
PM2.5-related Health Effects

Avoided Premature Mortality

 Krewski et al. (2009) (adult)
                                      10
                                      11
                                      3.7
 Lepeule et al. (2012) (adult)
                                      23
                                      25
                                      8.4
 Woodruff et al. (1997) (infant)
                                     <1
                                     <1
                                     <1
Avoided Morbidity

 Emergency department visits for asthma (all ages)
                                      6.1
                                      6.5
                                      2.2
 Acute bronchitis (age 8 - 12)
                                      15
                                      15
                                      5.2
 Lower respiratory symptoms (age 7 - 14)
                                      180
                                      190
                                      67
 Upper respiratory symptoms (asthmatics age 9 - 11)
                                      260
                                      280
                                      95
 Minor restricted-activity days (age 18 - 65)
                                     7,500
                                     7,900
                                     2,700
 Lost work days (age 18 - 65)
                                     1,300
                                     1,300
                                      450
 Asthma exacerbation (age 6 - 18)
                                      270
                                      290
                                      98
 Hospital admissions -- respiratory (all ages)
                                      2.8
                                      2.9
                                      1.0
 Hospital admissions -- cardiovascular (age > 18)
                                      3.8
                                      4.0
                                      1.4
 Non-Fatal Heart Attacks (age >18)

  Peters et al. (2001)
                                      12
                                      13
                                      4.3
  Pooled estimate of 4 studies
                                      1.3
                                      1.4
                                     0.46
* All estimates are rounded to whole numbers with two significant figures. Co-benefits for ozone are based on ozone season NOx emissions. In general, the 95[th] percentile confidence interval for the health impact function alone ranges from approximately +-30 percent for mortality incidence based on Krewski et al. (2009) and +-46 percent based on Lepeule et al. (2012). The confidence intervals around the ozone mortality estimates are on the order of +- 60 percent depending on the concentration-response function used.