[Federal Register Volume 85, Number 100 (Friday, May 22, 2020)]
[Rules and Regulations]
[Pages 31286-31320]
[FR Doc No: 2020-08607]

Vol. 85

Friday,

No. 100

May 22, 2020

Part II

Environmental Protection Agency

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 National Emission Standards for Hazardous Air Pollutants: Coal- and
Oil-Fired Electric Utility Steam Generating Units--Reconsideration of
Supplemental Finding and Residual Risk and Technology Review; Final
Rule

Federal Register / Vol. 85, No. 100 / Friday, May 22, 2020 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2018-0794; FRL-10008-60-OAR]
RIN 2060-AT99

National Emission Standards for Hazardous Air Pollutants: Coal-
and Oil-Fired Electric Utility Steam Generating Units--Reconsideration
of Supplemental Finding and Residual Risk and Technology Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The U.S. Environmental Protection Agency (EPA) is revising its
response to the U.S. Supreme Court decision in Michigan v. EPA, which
held that the EPA erred by not considering cost in its determination
that regulation under section 112 of the Clean Air Act (CAA) of
hazardous air pollutant (HAP) emissions from coal- and oil-fired
electric utility steam generating units (EGUs) is appropriate and
necessary. After primarily comparing the cost of compliance relative to
the benefits of HAP emission reduction from regulation, the EPA finds
that it is not ``appropriate and necessary'' to regulate HAP emissions
from coal- and oil-fired EGUs, thereby reversing the Agency's previous
conclusion under CAA section 112(n)(1)(A) and correcting flaws in the
Agency's prior response to Michigan v. EPA. We further find that
finalizing this new response to Michigan v. EPA will not remove the
Coal- and Oil-Fired EGU source category from the CAA section 112(c)
list of sources that must be regulated under CAA section 112(d) and
will not affect the existing CAA section 112(d) emissions standards
that regulate HAP emissions from coal- and oil-fired EGUs. The EPA is
also finalizing the residual risk and technology review (RTR) conducted
for the Coal- and Oil-Fired EGU source category regulated under
national emission standards for hazardous air pollutants (NESHAP),
commonly referred to as the Mercury and Air Toxics Standards (MATS).
Based on the results of the RTR analyses, the Agency is not
promulgating any revisions to the MATS rule.

DATES: Effective May 22, 2020.

ADDRESSES: The EPA has established a docket for these actions under
Docket ID No. EPA-HQ-OAR-2018-0794.\1\ All documents in the docket are
listed on the https://www.regulations.gov/ website. Although listed,
some information is not publicly available, e.g., confidential business
information or other information whose disclosure is restricted by
statute. Certain other material, such as copyrighted material, is not
placed on the internet and will be publicly available only in hard copy
form. Publicly available docket materials are available either
electronically through https://www.regulations.gov/, or in hard copy at
the EPA Docket Center, WJC West Building, Room Number 3334, 1301
Constitution Ave. NW, Washington, DC. The Public Reading Room hours of
operation are 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST),
Monday through Friday. The telephone number for the Public Reading Room
is<PHONE_NUMBER>, and the telephone number for the Docket Center is
(202) 566-1742.
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    \1\ As explained in a memorandum to the docket, the docket for
these actions include the documents and information, in whatever
form, in Docket ID Nos. EPA-HQ-OAR-2009-0234 (National Emission
Standards for Hazardous Air Pollutants for Coal- and Oil-fired
Electric Utility Steam Generating Units), EPA-HQ-OAR-2002-0056
(National Emission Standards for Hazardous Air Pollutants for
Utility Air Toxics; Clean Air Mercury Rule (CAMR)), and Legacy
Docket ID No. A-92-55 (Electric Utility Hazardous Air Pollutant
Emission Study). See memorandum titled Incorporation by reference of
Docket Number EPA-HQ-OAR-2009-0234, Docket Number EPA-HQ-OAR-2002-
0056, and Docket Number A-92-55 into Docket Number EPA-HQ-OAR-2018-
0794 (Docket ID Item No. EPA-HQ-OAR-2018-0794-0005).

FOR FURTHER INFORMATION CONTACT: For questions about these final
actions, contact Mary Johnson, Sector Policies and Programs Division
(D243-01), Office of Air Quality Planning and Standards, U.S.
Environmental Protection Agency, Research Triangle Park, North Carolina
27711; telephone number:<PHONE_NUMBER>; and email address:
<EMAIL_ADDRESS>For specific information regarding the risk
modeling methodology, contact Mark Morris, Health and Environmental
Impacts Division (C539-02), Office of Air Quality Planning and
Standards, U.S. Environmental Protection Agency, Research Triangle
Park, North Carolina 27711; telephone number:<PHONE_NUMBER>; and email
address<EMAIL_ADDRESS>For information about the applicability
of the NESHAP to a particular entity, contact your EPA Regional
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representative as listed in 40 CFR 63.13 (General Provisions).

SUPPLEMENTARY INFORMATION:
    Preamble acronyms and abbreviations. We use multiple acronyms and
terms in this preamble. While this list may not be exhaustive, to ease
the reading of this preamble and for reference purposes, the EPA
defines the following terms and acronyms here:

CAA Clean Air Act
CAMR Clean Air Mercury Rule
CEMS continuous emissions monitoring systems
CFR Code of Federal Regulations
CRA Congressional Review Act
EGU electric utility steam generating unit
EPA Environmental Protection Agency
EPRI Electric Power Research Institute
HAP hazardous air pollutant(s)
HCl hydrochloric acid
HF hydrogen fluoride
HQ hazard quotient
ICR information collection request
km kilometer
MACT maximum achievable control technology
MATS Mercury and Air Toxics Standards
MIR maximum individual risk
MW megawatt
NAAQS National Ambient Air Quality Standards
NAICS North American Industry Classification System
NEI National Emissions Inventory
NESHAP national emission standards for hazardous air pollutants
NOAEL no-observed-adverse-effect-level
NOX nitrogen oxides
NTTAA National Technology Transfer and Advancement Act
OAQPS Office of Air Quality Planning and Standards
OMB Office of Management and Budget
PB-HAP hazardous air pollutants known to be persistent and bio-
accumulative in the environment
PDF Portable Document Format
PM particulate matter
PM2.5 fine particulate matter
POM polycyclic organic matter
PRA Paperwork Reduction Act
RDL representative detection level
REL reference exposure level
RFA Regulatory Flexibility Act
RIA regulatory impact analysis
RTR residual risk and technology review
SO2 sulfur dioxide
TOSHI target organ-specific hazard index
tpy tons per year
UMRA Unfunded Mandates Reform Act

    Background information. With this action, the EPA is, after review
and consideration of public comments, finalizing two aspects of the
2019 Proposal. On February 7, 2019, the EPA proposed to find that it is
not ``appropriate and necessary'' to regulate HAP emissions from coal-
and oil-fired EGUs, thereby reversing the Agency's prior conclusion
under CAA section 112(n)(1)(A) and correcting flaws in the Agency's
prior response to Michigan v. EPA, 135 S. Ct. 2699 (2015). 84 FR 2670
(2019 Proposal). We further proposed that finalizing this new response
to Michigan v. EPA would not remove the Coal- and Oil-Fired EGU source
category from the CAA section 112(c) list of sources that must be
regulated under CAA section 112(d) and would not

affect the existing CAA section 112(d) emissions standards that
regulate HAP emissions from coal- and oil-fired EGUs. In the same
action, the EPA also proposed the results of the RTR of the NESHAP for
Coal- and Oil-Fired EGUs. In this action, we are taking final action
with regard to these aspects of the 2019 Proposal.\2\ We summarize some
of the more significant comments regarding the proposed rule and
provide our responses in this preamble. A summary of all other
significant comments on the 2019 Proposal and the EPA's responses to
those comments is available in the document titled Final Supplemental
Finding and Risk and Technology Review for the NESHAP for Coal- and
Oil-Fired EGUs Response to Public Comments on February 7, 2019 Proposal
(Response-to-Comment (RTC) document), in Docket ID No. EPA-HQ-OAR-2018-
0794.
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    \2\ The EPA took final action on the other aspect of the 2019
Proposal (i.e., solicitation of comment on establishing a
subcategory of certain existing EGUs firing eastern bituminous coal
refuse for emissions of acid gas HAP) on April 15, 2020, in a
separate action (85 FR 20838).
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    Organization of this document. The information in this preamble is
organized as follows:

I. General Information
    A. Do these actions apply to me?
    B. Where can I get a copy of this document and other related
information?
    C. Judicial Review and Administrative Reconsideration
II. Appropriate and Necessary Finding
    A. Overview
    B. Background
    C. EPA's Finding Under CAA Section 112(n)(1)(A)
    D. Effects of This Reversal of the Supplemental Finding
III. Background on the RTR Action
    A. What is the statutory authority for this action?
    B. What is the Coal- and Oil-Fired EGU source category and how
does the NESHAP regulate HAP emissions from the source category?
    C. What changes did we propose for the Coal- and Oil-Fired EGU
source category in our February 7, 2019, proposed rule?
IV. What is included in this final rule based on results of the RTR?
    A. What are the final rule amendments based on the residual risk
review for the Coal- and Oil-Fired EGU source category?
    B. What are the final rule amendments based on the technology
review for the Coal- and Oil-Fired EGU source category?
    C. What are the effective and compliance dates of the standards?
V. What is the rationale for our final decisions regarding the RTR
action for the Coal- and Oil-Fired EGU source category?
    A. Residual Risk Review for the Coal- and Oil-Fired EGU Source
Category
    B. Technology Review for the Coal- and Oil-Fired EGU Source
Category
VI. Summary of Cost, Environmental, and Economic Impacts and
Additional Analyses Conducted
    A. What are the affected facilities?
    B. What are the air quality impacts?
    C. What are the cost impacts?
    D. What are the economic impacts?
    E. What are the benefits?
    F. What analysis of environmental justice did we conduct?
    G. What analysis of children's environmental health did we
conduct?
VII. Statutory and Executive Order Reviews
    A. Executive Orders 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act (NTTAA)
    K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    L. Congressional Review Act (CRA)

I. General Information

A. Do these actions apply to me?

    Regulated entities. Categories and entities potentially regulated
by these final actions are shown in Table 1 of this preamble.

Table 1--NESHAP and Industrial Source Categories Affected by These Final
                                 Actions
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    NESHAP and source category                 NAICS \1\ code
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Coal- and Oil-Fired EGUs.........  221112, 221122, 921150.
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North American Industry Classification System.

    Table 1 of this preamble is not intended to be exhaustive, but
rather to provide a guide for readers regarding entities likely to be
affected by these final actions for the source category listed. To
determine whether your facility is affected, you should examine the
applicability criteria in the appropriate NESHAP. If you have any
questions regarding the applicability of any aspect of this NESHAP,
please contact the appropriate person listed in the preceding FOR
FURTHER INFORMATION CONTACT section of this preamble.

B. Where can I get a copy of this document and other related
information?

    In addition to being available in the docket, an electronic copy of
this document will also be available on the internet. Following
signature by the EPA Administrator, the EPA will post a copy of this
document at: https://www.epa.gov/mats/regulatory-actions-final-mercury-and-air-toxics-standards-mats-power-plants. Following publication in
the Federal Register, the EPA will post the Federal Register version
and key technical documents at this same website.
    Additional information regarding the RTR action is available on the
RTR website at https://www3.epa.gov/ttn/atw/rrisk/rtrpg.html. This
information includes an overview of the RTR program, links to project
websites for the RTR source categories, and detailed emissions and
other data we used as inputs to the risk assessments.

C. Judicial Review and Administrative Reconsideration

    Under CAA section 307(b)(1), judicial review of these final actions
is available only by filing a petition for review in the United States
Court of Appeals for the District of Columbia Circuit (D.C. Circuit) by
July 21, 2020. Under CAA section 307(b)(2), the requirements
established by this final rule may not be challenged separately in any
civil or criminal proceedings brought by the EPA to enforce the
requirements.
    Section 307(d)(7)(B) of the CAA further provides that only an
objection to a rule or procedure which was raised with reasonable
specificity during the period for public comment (including any public
hearing) may be raised

during judicial review. That section of the CAA also provides a
mechanism for the EPA to reconsider the rule if the person raising an
objection can demonstrate to the Administrator that it was
impracticable to raise such objection within the period for public
comment or if the grounds for such objection arose after the period for
public comment (but within the time specified for judicial review) and
if such objection is of central relevance to the outcome of the rule.
Any person seeking to make such a demonstration should submit a
Petition for Reconsideration to the Office of the Administrator, U.S.
EPA, Room 3000, WJC South Building, 1200 Pennsylvania Ave. NW,
Washington, DC 20460, with a copy to both the person(s) listed in the
preceding FOR FURTHER INFORMATION CONTACT section, and the Associate
General Counsel for the Air and Radiation Law Office, Office of General
Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave. NW,
Washington, DC 20460.

II. Appropriate and Necessary Finding

A. Overview

    On June 29, 2015, the U.S. Supreme Court ruled in Michigan v. EPA
that the Agency had erred when it failed to take cost into account in
its previous CAA section 112(n)(1)(A) determination that it is
appropriate and necessary to regulate HAP emissions from coal- and oil-
fired EGUs. In response to that decision, the EPA finalized a
supplemental finding on April 25, 2016, that evaluated cost
considerations and concluded that the appropriate and necessary finding
was still valid. 81 FR 24420 (2016 Supplemental Finding). On February
7, 2019, the EPA proposed a revised response to the U.S. Supreme Court
decision. 84 FR 2670 (2019 Proposal). In the 2019 Proposal, after
primarily comparing the cost of compliance relative to the benefits of
HAP emission reduction from regulation, the EPA proposed to find that
it is not appropriate and necessary to regulate HAP emissions from
coal- and oil-fired EGUs, thereby reversing the Agency's conclusion
under CAA section 112(n)(1)(A), first made in 2000 and later affirmed
in 2012 and 2016. Specifically, the Agency proposed that the 2016
Supplemental Finding considering the cost of MATS was flawed as it did
not satisfy the EPA's obligation under CAA section 112(n)(1)(A), as
interpreted by the U.S. Supreme Court in Michigan. Additionally, the
EPA proposed that while finalizing the action would reverse the 2016
Supplemental Finding, it would not remove the Coal- and Oil-Fired EGU
source category from the CAA section 112(c)(1) list, nor would it
affect the existing CAA section 112(d) emissions standards regulating
HAP emissions from coal- and oil-fired EGUs that were promulgated on
February 16, 2012. 77 FR 9304 (2012 MATS Final Rule).
    In section II.B of this preamble, which finalizes the reversal of
the 2016 Supplemental Finding, the EPA provides background information
regarding the previous appropriate and necessary findings, including
the affirmations in the preamble of the 2012 MATS Final Rule and in the
2016 Supplemental Finding. Section II.C of this preamble describes why
the 2016 Supplemental Finding was flawed, why the EPA has authority to
revisit that finding now, and what the EPA is finalizing as the
appropriate approach to satisfy the EPA's obligation under CAA section
112(n)(1)(A) as interpreted by the U.S. Supreme Court in Michigan.
Finally, section II.D of this preamble explains that the EPA's revised
determination that regulation of HAP emissions from EGUs under CAA
section 112 is not appropriate and necessary will not remove coal- and
oil-fired EGUs from the CAA section 112(c) list of source categories,
and that the previously established CAA section 112(d) standards for
HAP emissions from coal- and oil-fired EGUs will remain in place. In
this preamble, the EPA provides a summary of certain significant
comments received on the 2019 Proposal and the Agency's response to
those comments. The RTC document for this action summarizes and
responds to all other significant comments that the EPA received.

B. Background

    The CAA establishes a multi-step process for the EPA to regulate
HAP emissions from EGUs. First, section 112(n)(1)(A) of the CAA
requires the EPA to perform a study of the hazards to public health
reasonably anticipated to occur as a result of HAP emissions from EGUs
``after imposition of the requirements of this chapter.'' \3\ If, after
considering the results of this study, the EPA determines that it is
``appropriate and necessary'' to regulate EGUs under CAA section 112,
the EPA shall then do so.
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    \3\ See CAA section 112(n)(1)(A); see also Michigan v. EPA, 135
S. Ct. at 2705 (``Quite apart from the hazardous-air-pollutants
program, the Clean Air Act Amendments of 1990 subjected power plants
to various regulatory requirements. The parties agree that these
requirements were expected to have the collateral effect of reducing
power plants' emissions of hazardous air pollutants, although the
extent of the reduction was unclear.'').
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    The required study, which the EPA completed in 1998, contained an
analysis of HAP emissions from EGUs, an assessment of the hazards and
risks due to inhalation exposures to these emitted pollutants, and a
multipathway (inhalation plus non-inhalation exposures) risk assessment
for mercury and a subset of other relevant HAP.\4\ The study indicated
that mercury was the HAP of greatest concern to public health from
coal- and oil-fired EGUs. Mercury is highly toxic, persistent, and
bioaccumulates in food chains. The study also concluded that numerous
control strategies, of varying cost and efficiency, were available to
reduce HAP emissions from this source category. Based on this study and
other available information, the EPA determined in December 2000,
pursuant to CAA section 112(n)(1)(A), that it was appropriate and
necessary to regulate coal- and oil-fired EGUs under CAA section 112
and added such units to the CAA section 112(c) list of sources that
must be regulated under CAA section 112(d). 65 FR 79825 (December 20,
2000) (2000 Finding).\5\ The 2000 Finding did not consider the cost of
regulating EGUs in its finding that it was appropriate and necessary to
do so. Id. at 79830.
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    \4\ U.S. EPA. 1998. Study of Hazardous Air Pollutant Emissions
from Electric Utility Steam Generating Units--Final Report to
Congress, Volume 1. EPA-453/R-98-004a.
    \5\ In the same 2000 action, the EPA Administrator found that
regulation of HAP emissions from natural gas-fired EGUs is not
appropriate or necessary. 65 FR 79826.
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    In 2005, the EPA revised the original 2000 Finding and concluded
that it was neither appropriate nor necessary to regulate EGUs under
CAA section 112. 70 FR 15994 (March 29, 2005) (2005 Revision). This
action was taken because, at that time, the EPA concluded that the
original 2000 Finding lacked foundation in that it failed to consider:
(1) The HAP reductions that could be obtained through implementation of
CAA sections 110 and 111; and (2) whether hazards to public health
would still exist after imposition of emission reduction rules under
those sections. The 2005 Revision also removed coal- and oil-fired EGUs
from the CAA section 112(c) list of source categories to be regulated
under CAA section 112. In a separate but related 2005 action, the EPA
also promulgated the Clean Air Mercury Rule (CAMR) which established
CAA section 111 standards of performance for mercury emissions from
EGUs. 70 FR 28605 (May 18, 2005).

Both the 2005 Revision and the CAMR were vacated by the D.C. Circuit in
2008. The Court held that the EPA had failed to comply with the
requirements of CAA section 112(c)(9) for delisting source categories,
and consequently also vacated the CAA section 111 performance standards
promulgated in CAMR, without addressing the merits of those standards.
New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008).
    In response to the New Jersey decision, the EPA conducted
additional technical analyses, including peer-reviewed risk assessments
on human health effects associated with mercury and non-mercury HAP
emissions from EGUs, focusing on risks to the most exposed and
sensitive individuals in the population. Those analyses found that
mercury and non-mercury HAP emissions from EGUs remain a significant
public health hazard and that EGUs were the largest U.S. anthropogenic
source of mercury emissions to the atmosphere.\6\ Based on these
findings, in 2012, the EPA affirmed the original 2000 Finding that it
is appropriate and necessary to regulate EGUs under CAA section 112. 77
FR 9304 (February 16, 2012).
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    \6\ U.S. EPA. 2011. Revised Technical Support Document:
National-Scale Assessment of Mercury Risk to Populations with High
Consumption of Self-caught Freshwater Fish in Support of the
Appropriate and Necessary Finding for Coal- and Oil-Fired Electric
Generating Units. Office of Air Quality Planning and Standards.
December. EPA-452/R-11-009. Docket ID Item No. EPA-HQ-OAR-2009-0234-
19913.
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    In the same 2012 action, the EPA established a NESHAP, commonly
called MATS, that required coal- and oil-fired EGUs to meet HAP
emission standards reflecting the application of the maximum achievable
control technology (MACT) for mercury and other air toxics. After MATS
was promulgated, both the rule itself and many aspects of the EPA's
appropriate and necessary finding were challenged in the D.C. Circuit.
In White Stallion Energy Center v. EPA, the Court denied all
challenges. 748 F.3d 1322 (D.C. Cir. 2014). One judge dissented,
expressing the view that the EPA erred by refusing to consider cost in
its ``appropriate and necessary'' determination. Id. at 1258-59
(Kavanaugh, J., dissenting).
    The U.S. Supreme Court subsequently granted certiorari, directing
the parties to address a single question posed by the Court itself:
``Whether the Environmental Protection Agency unreasonably refused to
consider cost in determining whether it is appropriate to regulate
hazardous air pollutants emitted by electric utilities.'' Michigan v.
EPA, 135 S. Ct. 702 (Mem.) (2014). In 2015, the U.S. Supreme Court held
that ``EPA interpreted [CAA section 112(n)(1)(A)] unreasonably when it
deemed cost irrelevant to the decision to regulate power plants.''
Michigan v. EPA, 135 S. Ct. 2699, 2712 (2015). In so holding, the U.S.
Supreme Court found that the EPA ``must consider cost--including, most
importantly, cost of compliance--before deciding whether regulation is
appropriate and necessary.'' Id. at 2711. It is ``up the Agency,'' the
Court added, ``to decide (as always, within the limits of reasonable
interpretation) how to account for cost.'' Id. The rule was ultimately
remanded back to the EPA (without vacatur) to complete the required
cost analysis. White Stallion Energy Ctr. v. EPA, No. 12-1100, ECF No.
1588459 (D.C. Cir. December 15, 2015).
    In response to the U.S. Supreme Court's direction, the EPA in the
2016 Supplemental Finding promulgated two different approaches to
incorporate cost into the appropriate and necessary finding. 81 FR
24420. The EPA's preferred approach (referred to as the ``cost
reasonableness'' approach) compared the estimated cost of compliance in
the regulatory impact analysis (RIA) for the 2012 MATS Final Rule
(referred to here as 2011 RIA \7\) against several cost metrics
relevant to the EGU sector (e.g., historical annual revenues, annual
capital expenditures, and impacts on retail electricity prices). The
``cost reasonableness'' approach did not compare costs to benefits.
Under this approach, the EPA concluded that the power sector would be
able to comply with the MATS requirements while maintaining its ability
to generate, transmit, and distribute reliable electricity at
reasonable cost to consumers. Using a totality-of-the-circumstances
approach, the EPA weighed this analysis that the costs of the rule were
reasonable along with its prior findings about the amount of HAP
pollution coming from the Coal- and Oil-Fired EGU source category, the
scientific studies and modeling assessing the risks to public health
and the environment from domestic EGU HAP pollution, and information
about the toxicity and persistence of HAP in the environment.
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    \7\ U.S. EPA. 2011. Regulatory Impact Analysis for the Final
Mercury and Air Toxics Standards. EPA-452/R-11-011. Available at:
https://www3.epa.gov/ttn/ecas/docs/ria/utilities_ria_final-mats_2011-12.pdf.
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    In a second, alternative, and independent approach (referred to as
the ``cost benefit'' approach), the EPA considered the benefit-cost
analysis in the RIA for the 2012 MATS Final Rule. In that analysis, the
EPA estimated that the final MATS rule would yield total annual
monetized benefits (in 2007 dollars) of between $37 billion to $90
billion using a 3-percent discount rate and $33 billion to $81 billion
using a 7-percent discount rate, plus additional benefits that cannot
be quantified, in comparison to the projected $9.6 billion in annual
compliance costs. That analysis reflects that 99.9 percent of the total
annual monetized benefits were attributable not to benefits from HAP
reduction, but rather from benefits from co-reduction of non-HAP
pollutants. In the 2016 Supplemental Finding, the EPA determined that
both the preferred ``cost reasonableness'' approach and the alternative
``cost benefit'' approach supported the conclusion that regulation of
HAP emissions from EGUs is appropriate and necessary.
    Several state and industry groups petitioned for review of the 2016
Supplemental Finding in the D.C. Circuit. Murray Energy Corp. v. EPA,
No. 16-1127 (D.C. Cir. filed April 25, 2016). In April 2017, the EPA
moved the D.C. Circuit to continue oral argument and hold the case in
abeyance in order to give the new Administration an opportunity to
review the 2016 action. (As further explained below, as of the date of
signature, the case remains pending in the D.C. Circuit.) Accordingly,
the EPA reviewed the 2016 action and proposed on February 7, 2019, to
correct flaws in the prior response to Michigan v. EPA (84 FR 2670).
Specifically, the 2019 Proposal proposed to reverse the 2016 action and
to conclude that it is not ``appropriate and necessary'' to regulate
HAP emissions from coal- and oil-fired EGUs. The public comment period
for the 2019 Proposal ended on April 17, 2019. The remainder of this
section of this preamble responds to significant comments received on
the appropriate and necessary finding and describes the EPA's
justification for finalizing this reversal of the 2016 Supplemental
Finding.

C. EPA's Finding Under CAA Section 112(n)(1)(A)

1. EPA Has the Statutory Authority To Revisit the Appropriate and
Necessary Finding
a. Summary of 2019 Proposal
    Section 112(n)(1)(A) of the CAA directs the Administrator of the
EPA to determine whether it is ``appropriate and necessary'' to
regulate HAP emissions from fossil fuel-fired EGUs after conducting a
study of the hazards to public health reasonably anticipated to occur
as a result of emissions of HAP

from EGUs after imposition of emission controls imposed under other
provisions of the CAA. In Michigan v. EPA, the U.S. Supreme Court
instructed the Agency that it was required to consider cost as part of
its appropriate and necessary determination. The Agency completed a
consideration of the cost to regulate HAP emissions from coal- and oil-
fired EGUs in the 2016 Supplemental Finding. The EPA's 2019 action
proposed to revisit the 2016 Supplemental Finding's consideration of
cost, on the basis that the 2016 action is flawed. The 2019 Proposal
stated that such reexamination was permissible as a basic principle of
administrative law and under the CAA. 84 FR 2674 n.3.
b. Final Rule
    The EPA is finalizing this action as proposed in February 2019 on
the basis that the CAA and CAA section 112(n)(1)(A) do not prohibit the
Administrator from revisiting a prior finding made under that section.
c. Comments and Responses
    Comment: Some commenters asserted that it is unlawful for the EPA
to revisit its 2016 Supplemental Finding at all, because the EPA has
completed the analytic process Congress set in motion in 1990, and the
statute unambiguously prohibits the EPA from revisiting or revising the
CAA section 112(n)(1)(A) finding. Commenters asserted that the
legislative history, statutory context, and statutory structure support
their position that Congress intended the CAA section 112(n)(1)(A)
appropriate and necessary finding to be a one-time decision, and that
the provision gives the EPA ``limited discretion to activate a one-way
switch to `turn on' regulation of power plants.'' The commenters argued
that ``[o]nce EPA turns on that switch, as it did in its 2000 finding .
. . it must regulate power plants under section 112.''
    Moreover, those commenters argued that even if CAA section 112 were
ambiguous as to the EPA's authority to revisit the appropriate and
necessary finding, the EPA was still bound to follow CAA section
112(c)(9)'s delisting procedure before it could reverse its finding
under CAA section 112(n)(1)(A). The commenters claimed that New Jersey
confirms that the EPA lacks inherent authority to reconsider the
appropriate and necessary finding.
    Finally, the commenters claimed that it would be ``illogical'' for
the EPA to have authority to revise the appropriate and necessary
finding independent of removing power plants from the list of regulated
sources under CAA section 112. Commenters argued that a revised finding
that has no regulatory effect would be ``inherently irrational,'' and
that the EPA has failed to articulate a reasoned basis for undertaking
this action (citing Air Alliance Houston v. EPA, 906 F.3d 1049 (D.C.
Cir. 2018), and asserting that in that decision the D.C. Circuit found
an EPA rule irrational where the EPA tried to ``have it both ways'' by
claiming that a rule was necessary to prevent harms to regulated
industry but also ``does nothing more than maintain the status quo,''
Id. at 1068).
    Other commenters said that the EPA has authority to reconsider
prior Agency decisions and the 2016 Supplemental Finding in particular.
These commenters noted that if the 2016 Supplemental Finding were left
unamended, it would establish policy precedents at odds with well-
established precepts about how benefits and costs should be considered
in regulatory decisions.
    Response: The EPA disagrees with commenters that CAA section
112(n)(1)(A) speaks to the EPA's authority to revisit its appropriate
and necessary finding, and we, therefore, disagree with commenters'
contention that the statute on its face prohibits the EPA from
revisiting a determination made under that provision. The provision
reads: ``The Administrator shall regulate electric utility steam
generating units under this section, if the Administrator finds such
regulation is appropriate and necessary after considering the results
of the study required by this subparagraph [the ``Utility Study''
\8\].'' The only clear requirement with regard to timing or sequence
found in the text of the provision is that the Administrator may not
make the finding prior to considering the results of the Utility Study,
which the EPA completed in 1998. The statute does not restrict the
Administrator's ability to revise or reconsider a prior finding made
under CAA section 112(n)(1)(A).
---------------------------------------------------------------------------

    \8\ CAA section 112(n)(1)(A) directs the EPA to conduct a study
to evaluate the hazards to public health reasonably anticipated to
occur as the result of HAP emissions from EGUs after the imposition
of the requirements of the CAA, and to report the results of such
study to Congress by November 15, 1993. See U.S. EPA, Study of
Hazardous Air Pollutant Emissions from Electric Utility Steam
Generating Units--Final Report to Congress. EPA-453/R-98-004a,
February 1998.
---------------------------------------------------------------------------

    We also disagree with commenters' argument that because other
statutory provisions in the CAA mandate that the EPA review and revise
regulations on a set schedule or continuing basis, it must follow that
every other statutory provision lacking such a review-and-revise clause
prohibits an agency from rethinking its interpretation of such
provision. The EPA's CAA rulemaking history contains many examples of
the Agency's changing position on a previous interpretation of a
provision, even where there is no explicit directive within the
provision to review or revise.
    Absent a specific statutory prohibition, the EPA's ability to
revisit existing decisions is well established. The EPA has inherent
authority to reconsider and/or revise past decisions to the extent
permitted by law so long as the Agency provides a reasoned explanation.
The authority to reconsider exists in part because the EPA's
interpretations of statutes it administers ``[are not] instantly carved
in stone,'' but must be evaluated ``on a continuing basis.'' Chevron
U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 863-64. This
is true when, as is the case here, review is undertaken partly ``in
response to . . . a change in administrations.'' National Cable &
Telecommunications Ass'n v. Brand X internet Services, 545 U.S. 967,
981 (2005). Indeed, ``[a]gencies obviously have broad discretion to
reconsider a regulation at any time.'' Clean Air Council v. Pruitt, 862
F.3d 1, 8-9 (D.C. Cir. 2017).
    Commenters' assertions that the statutory context and structure of
CAA section 112 and the legislative history of that provision support
their view that the EPA lacks authority to revisit its CAA section
112(n)(1)(A) determination are marred by the commenters' assumed
premise that the EPA necessarily would find that it is appropriate and
necessary to regulate EGUs. The commenters argue that their
interpretation of the statute must be correct because it creates a tidy
framework: The EPA makes an affirmative appropriate and necessary
finding, regulations under CAA section 112 are promulgated, and the
only statutory means by which the appropriate and necessary finding
could be revisited is to satisfy the delisting criteria under CAA
section 112(c)(9). According to commenters, such a framework fits with
Congress' concerns about dangers to public health and welfare due to
air pollution and what they broadly characterize as congressional
desire to regulate HAP from power plants ``promptly.'' The problem with
the commenters' statutory interpretation is that it makes sense only if
an affirmative appropriate and necessary finding occurs in the first
instance. If, as commenters assert, CAA section 112(c)(9) is the only
statutory means by which a finding under CAA section 112(n)(1)(A) may
be revisited, commenters' framework provides no pathway by which the
EPA could revisit

a finding that it is not appropriate and necessary to regulate HAP from
power plants. Commenters' ``unambiguous'' reading of CAA section
112(n)(1)(A) and its assumption that Congress drafted the provision in
order to ensure ``prompt'' reductions of HAP from EGUs treats an
affirmative finding under that section as a foregone conclusion rather
than a decision left up to the expertise of the Agency and its
Administrator.
    The commenters' reading of the statute also cannot be squared with
the Michigan v. EPA decision. They assert that CAA section 112(n)(1)(A)
only allows the EPA ``to activate a one-way switch to `turn on'
regulation,'' and notes that the Agency did so ``in its 2000 finding.''
Commenters are essentially arguing that the U.S. Supreme Court's
instruction to the EPA that it was required to consider cost as part of
a CAA section 112(n)(1)(A) finding could never have had any practical
effect, because according to commenters, the ``only . . . statutorily
mandated avenue to turn the switch off and reverse course . . . [is]
the section 112(c)(9) procedures.'' Therefore, in petitioners' view,
regardless of what the EPA determined on remand from Michigan, only the
satisfaction of the CAA section 112(c)(9) criteria, which contain no
consideration of cost, could have altered the EPA's finding under CAA
section 112(n)(1)(A). We do not agree that this is a reasonable reading
of the statute or the Michigan decision.
    Additionally, the EPA notes that the D.C. Circuit in New Jersey
held that the EPA's reversal of a prior determination that it was
appropriate and necessary to regulate EGUs under CAA section 112 did
not by itself effect a delisting of EGUs from the CAA section 112(c)
list of source categories. This holding recognizes that the CAA section
112 appropriate and necessary determination is structurally and
functionally separate from the EPA's ability, conditioned on certain
predicate findings, to remove source categories from the CAA section
112(c) list. Commenters are, therefore, wrong to assert that the EPA
can reverse an appropriate and necessary determination under CAA
section 112(n)(1)(A) only if it has first undertaken CAA section
112(c)(9)'s delisting procedure, and wrong to assert that New Jersey
supports their position that the EPA lacks inherent authority to
reconsider the appropriate and necessary finding; in fact, that case
supports the opposite position.
    For similar reasons, we also reject the commenters' contention that
CAA section 112(c)(9)'s health protective criteria are substantively
incorporated into CAA section 112(n)(1)(A)'s appropriate and necessary
determination, such that a failure to consider those criteria in the
context of reversing a determination under CAA section 112(n)(1)(A) is
arbitrary and renders CAA section 112(c)(9) a nullity. As explained in
section II.D of this preamble, we agree that the EPA may not delist
EGUs from the CAA section 112(c) list and revoke MACT standards for
power plants without meeting the delisting criteria of CAA section
112(c)(9). We do not agree, however, that the delisting provision has
any effect on the Agency's ability to make an affirmative or negative
determination under CAA section 112(n)(1)(A) where we are not
purporting to alter the CAA section 112(c) list. In particular, we do
not agree with the commenters' reading of New Jersey that the D.C.
Circuit's holding means that the EPA could reverse an affirmative
appropriate and necessary finding only if it found that the CAA section
112(c)(9) delisting criteria were met. The Court's holding in New
Jersey plainly states that CAA section 112(c)(9) ``unambiguously
limit[s] EPA's discretion to remove sources, including EGUs, from the
section 112(c)(1) list once they have been added to it.'' 517 F.3d 574,
583 (D.C. Cir. 2008). Commenters' presumed incorporation of the
statutory delisting criteria into the CAA section 112(n)(1)(A)
determination also finds no support in the Michigan decision, which
said nothing about the EPA's obligation to consider those criteria in
determining whether regulation of power plants is appropriate and
necessary.
    Finally, we disagree with commenters who assert that this final
action is ``inherently irrational'' because the MATS standards would
not be reversed as a result of the negative appropriate and necessary
finding, due to controlling legal precedent from the D.C. Circuit (New
Jersey). In this action the EPA is setting out the Agency's revised
reasoning to respond to a U.S. Supreme Court decision and remand
(Michigan), because the EPA concludes that the 2016 Supplemental
Finding is not appropriate as a matter of interpretation of the statute
or as a matter of policy. As noted by some of the commenters, leaving
in place the incorrect interpretation of ``appropriate'' in CAA section
112(n)(1)(A) could establish policy precedent that could have ``long-
term and harmful consequences.''
    Moreover, the EPA disagrees that Air Alliance Houston v. EPA has
any bearing on this action. There, in admonishing the Agency that it
could not ``have it both ways,'' the Court was criticizing the EPA for
attempting to characterize its rule as relieving ``substantial
compliance and implementation burden'' while also ``maintaining the
status quo'' (such that the rule would have little effect on compliance
requirements). See Air Alliance Houston, 906 F.3d at 1068. Here, the
Agency believes a different finding and better response to the U.S.
Supreme Court's decision in Michigan v. EPA is warranted given the
proper application of that decision and the facts in the EPA's record.
We acknowledge that this change in policy will not affect the CAA
section 112 MACT standards for EGUs because the D.C. Circuit's decision
in New Jersey v. EPA prohibits the Agency from removing listed sources
from the CAA section 112(c) list without satisfying the CAA section
112(c)(9) delisting criteria (see section II.D of this preamble). But
we do not agree that simply because D.C. Circuit precedent establishes
that the Agency's reversing its prior determination will have a
particular regulatory consequence, the Agency is, therefore, prohibited
from revisiting that prior determination in the first instance.
    Comment: Some commenters stated that the EPA has no authority to
``revise'' its response to the U.S. Supreme Court's decision in
Michigan, and its attempt to do so would impermissibly subvert the
judicial review process. These commenters argued that the EPA's
response to Michigan is the 2016 Supplemental Finding, and that at this
stage, that response cannot be altered or reversed. The commenters
contended that the 2016 Supplemental Finding constitutes final Agency
action and noted that the Finding is currently subject to petitions for
review in the D.C. Circuit. The commenters suggested that seeking to
undo the 2016 Supplemental Finding by administrative action would
unlawfully circumvent that review. Other commenters asserted that the
EPA has an obligation to explain how final action on the 2019 Proposal
could impact the government's position in ongoing litigation of the
2016 Supplemental Finding. Commenters also said the EPA must address
the implications of a reversal of that finding, considering the
petitioner's positions in the ongoing litigation where the petitioner
has argued that reversal of the appropriate and necessary finding must
be followed by vacatur of MATS.
    Response: The EPA disagrees with the commenters that finalizing
this action ``subverts the judicial review process'' with respect to
the 2016 Supplemental Finding. To the extent that commenters are
arguing that the EPA lacks statutory

authority to review the 2016 Supplemental Finding, the EPA has
addressed that contention in the response to the comment above. We
agree that the 2016 Supplemental Finding constituted final Agency
action, and we acknowledge that petitions for review of that action
were filed in the D.C. Circuit in Murray Energy Corp. v. EPA, No. 16-
1127 (and consolidated cases) (D.C. Cir. filed April 25, 2016).
However, we disagree that our final action unlawfully circumvents the
judicial process. The EPA filed a motion in the Murray Energy
litigation requesting the Court to continue oral argument, which had
been scheduled for May 18, 2017, to allow the new Administration
adequate time to review the 2016 Supplemental Finding to determine
whether it needed to be reconsidered.\9\ On April 27, 2017, in
consideration of the EPA's motion, the D.C. Circuit ordered that the
consolidated challenges to the 2016 Supplemental Finding be held in
abeyance.\10\ That case continues to be held in abeyance, pending
further order of the Court. In its order, the Court directed the
parties to file motions to govern future proceedings within 30 days of
the Agency's concluding its review of the 2016 Supplemental
Finding.\11\
---------------------------------------------------------------------------

    \9\ Respondent EPA's Motion to Continue Oral Argument at 6,
Murray Energy Corp. v. EPA, No. 16-1127 (D.C. Cir. April 18, 2017),
ECF No. 1671687.
    \10\ Order, Murray Energy Corp. v. EPA, No. 16-1127 (D.C. Cir.
April 27, 2017), ECF No. 1672987.
    \11\ Id.
---------------------------------------------------------------------------

    The EPA disagrees with the commenters that the Agency has an
obligation to address in the context of this regulatory action the
government's position in that ongoing litigation. We address in section
II.D of this preamble the implications of the reversal of the 2016
Supplemental Finding, including addressing those comments received that
argue that a vacatur of MATS is required upon finalization of this
action. To the extent that the commenter is suggesting that it would be
appropriate or required for the EPA at this point to address potential
future arguments petitioners might make in the Murray Energy litigation
following this final action, the Agency disagrees. The appropriate
venue for addressing such arguments is the judicial review process for
that action. Commenters provide no authority to support their assertion
that an agency is obliged to discuss in a rulemaking the implications
of that rulemaking for pending litigation challenging a previous,
related agency action; the EPA is aware of no such authority; and the
EPA declines to take such litigation positions in this final action.
2. The Preferred Cost Reasonableness Approach of the 2016 Supplemental
Finding Was Deficient
a. Summary of 2019 Proposal
    The EPA proposed to determine that the Agency's 2016 Supplemental
Finding erred in its consideration of cost. Specifically, we proposed
to find that what was described in the 2016 Supplemental Finding as the
preferred approach, or the ``cost reasonableness test,'' does not meet
the statute's requirements to fully consider costs and was an
unreasonable interpretation of CAA section 112(n)(1)(A)'s mandate, as
informed by the U.S. Supreme Court's opinion in Michigan. A summary of
that approach can be found in the 2019 Proposal. 84 FR 2674-75.
b. Final Rule
    After considering comments submitted in response to the EPA's 2019
Proposal, the EPA is finalizing the proposed approach. The EPA
concludes that the ``preferred approach'' in the 2016 Supplemental
Finding did not meaningfully consider cost, which the Michigan Court
observed to be a ``centrally relevant factor'' in making the CAA
section 112(n)(1)(A) appropriate and necessary finding. The 2016
Supplemental Finding's de-emphasis of the importance of the cost
consideration in the appropriate and necessary determination was based
on an impermissible attempt to ``harmonize'' CAA section 112(n)(1)(A)
with the remainder of CAA section 112,\12\ and was not consistent with
Congress' intent and the U.S. Supreme Court's decision in Michigan v.
EPA, given that statutory provision's directive to treat EGUs
differently from other sources. See 135 S. Ct. at 2710 (``The Agency
claims that it is reasonable to interpret [CAA section 112(n)(1)(A)] in
a way that `harmonizes' the program's treatment of power plants with
its treatment of other sources. This line of reasoning overlooks the
whole point of having a separate provision about power plants: Treating
power plants differently from other sources.'') (emphasis in original).
---------------------------------------------------------------------------

    \12\ See Legal Memorandum Accompanying the Proposed Supplemental
Finding that it is Appropriate and Necessary to Regulate Hazardous
Air Pollutants from Coal- and Oil-Fired Electric Utility Steam
Generating Units (EGUs) (2015 Legal Memorandum) (Docket ID Item No.
EPA-HQ-OAR-2009-0234-20519), at 6-15 (describing statutory purpose
of 1990 CAA Amendments and CAA section 112, and concluding that
``while cost is certainly an important factor, it is one of several
factors that must be considered and section 112(n)(1) does not
support a conclusion that cost should be the predominant or
overriding factor.'').
---------------------------------------------------------------------------

c. Comments and Responses
    Comment: Some commenters asserted that the cost analysis in the
2016 Supplemental Finding was consistent with longstanding cost-
effectiveness methodologies used in other CAA programs, such as the CAA
section 111 New Source Performance Standards and CAA section 169
Prevention of Significant Deterioration (PSD). These commenters
disagreed with what they characterized as the 2019 Proposal's position
that CAA section 111 case law was irrelevant to the CAA section
112(n)(1)(A) appropriate and necessary determination, noting that cost
effectiveness is used in CAA section 111 to determine standards for
existing sources, much as the EPA is determining whether to regulate
existing sources in CAA section 112(n)(1)(A). These commenters further
said that the proposed monetized cost-benefit approach is inferior to
the longstanding cost-effectiveness test for addressing concerns about
standards that impose costs too high for the industry to bear. However,
other commenters agreed with the EPA that cases interpreting section
111 of the CAA were not an appropriate guide to considering costs under
CAA section 112(n)(1)(A).
    Response: The broad language of CAA section 112(n)(1)(A) and the
holding of the Michigan Court suggest that there is more than one
permissible way to interpret the Agency's obligation to consider cost
in the appropriate and necessary finding. The text of that section does
not require the Agency to consider cost in a particular fashion. The
U.S. Supreme Court, in identifying that the Agency's obligation to
consider cost in some fashion in light of the broad term
``appropriate,'' recognized the discretion afforded the Administrator,
noting, ``[i]t will be up the Agency to decide (as always, within the
limits of reasonable interpretation) how to account for cost.'' 135 S.
Ct. at 2711. Even in the final 2016 Supplemental Finding, the EPA
acknowledged that the cost reasonableness test was but one way to
interpret its CAA section 112(n)(1)(A) obligation to consider cost, and
``that the agency need not demonstrate that [its] decision is the same
decision that would be made by another Administrator or a reviewing
court.'' 81 FR 24431. The commenters provide many reasons for why they
preferred the EPA's ``cost reasonableness'' test, but even they do not
attempt to argue that the EPA's 2016 ``preferred approach'' is

the only permissible interpretation of the statute.
    Comparisons of a regulation's costs and the relationship of those
costs to the benefits the regulation is expected to accrue are a
traditional and commonplace way to assess the costs of a regulation and
are a permissible way to comply with Congress' broad directive to the
Administrator to determine whether regulation is ``appropriate'' in CAA
section 112(n)(1)(A). The EPA has never taken the position, nor do
commenters argue now, that any comparison of costs to benefits would be
an impermissible reading of the Agency's obligation to consider cost in
CAA section 112(n)(1)(A); indeed, the Agency's alternative approach to
considering cost in the 2016 Supplemental Finding was a formal cost-
benefit analysis based on its 2011 RIA, and many of the commenters who
now evince a preference for the 2016 ``cost reasonableness test'' at
the time agreed that the 2011 RIA cost-benefit analysis could
independently satisfy the Agency's obligation to consider cost under
CAA section 112(n)(1)(A). U.S. Supreme Court precedent also supports
the Agency's position that, absent an unambiguous prohibition to use
cost-benefit analysis, the Agency generally may do so as a reasonable
way to consider cost.\13\ In Entergy Corp. v. Riverkeeper, Inc., 556
U.S. 208 (2009), the U.S. Supreme Court struck down a Second Circuit
decision prohibiting the EPA from employing benefit-cost analysis where
the statute was silent as to how the Agency was to consider cost in
adopting standards for cooling water intake standards for power plants.
The Second Circuit found that because analogous provisions in the Clean
Water Act explicitly instructed the EPA to consider ``the total cost of
application of technology in relation to the effluent reduction
benefits to be achieved,'' (33 U.S.C. 1314(b)(4)(B)), Congress' failure
to include such an instruction to the EPA in the provision at issue in
the case meant that the EPA was not permitted to compare compliance
costs to expected environmental benefits. The U.S. Supreme Court
reversed, holding that the EPA's use of cost-benefit analysis ``governs
if it is a reasonable interpretation of the statute--not necessarily
the only possible interpretation, nor even the interpretation deemed
most reasonable by the courts.'' Id. at 218 (emphasis in original).
---------------------------------------------------------------------------

    \13\ See S. Masur & Eric A. Posner, Cost-Benefit Analysis and
the Judicial Role, 85 U. Chi. L. Rev. 935, 981 (2018).
---------------------------------------------------------------------------

    The EPA's choice to employ cost-effectiveness analyses, rather than
cost-benefit comparisons, in the context of other statutory provisions
such as CAA section 111 or the PSD program in no way binds the Agency
to using that method to consider cost in CAA section 112(n)(1)(A). The
EPA's citation in the 2015 Legal Memorandum of our consideration of
cost under CAA section 111 and the case law evaluating those instances
was only to provide context to explain the genesis of the EPA's newly
minted ``cost reasonableness'' test in the 2016 Supplemental Finding.
Even then the EPA did not take the position that the D.C. Circuit cases
reviewing the Agency's cost considerations under CAA section 111 were
binding precedent upon which the Court should review our action under
CAA section 112(n)(1)(A). In short, the commenters' preference that the
EPA consider cost in a different way does not preclude the Agency from
instead considering cost using an approach that compares costs and
benefits, where the statute's broad directive suggests that it may. See
Entergy, 556 U.S. at 226.
    Comment: Some commenters asserted that the EPA's proposed approach
to considering costs and benefits is inconsistent with what they
broadly characterize as congressional intent to err on the side of
protecting public health. These commenters argued that Congress
recognized the insufficiency of available methods for quantifying costs
and benefits when revising CAA section 112 in 1990 and that Congress
concluded that the nature and latency of harms posed by HAP are not
given sufficient weight in a regulatory process that must balance long-
term benefits against present-day costs. Commenters said that the
Agency should not construe the Michigan Court's instruction to
``meaningfully consider cost'' as a requirement to consider benefits in
a way that is inconsistent with Congress' determination that reductions
in HAP emissions have great value to the public. These commenters added
that the EPA's proposed approach is based on an incorrect
interpretation of Michigan, which stated only that consideration of
cost should play some role in the appropriate and necessary finding,
not that cost considerations should dominate that finding. According to
these commenters, the studies required in CAA section 112(n) indicate
that Congress put public health and environmental concerns at the
forefront of CAA section 112, which was enacted explicitly in response
to the EPA's lack of action in addressing the harmful effects of HAP,
and, therefore, shares the section's overall focus on harm prevention.
These commenters asserted that the ``preferred approach'' in the 2016
Supplemental Finding met the requirements of Michigan and were
consistent with congressional intent and the CAA's statutory goals.
    Other commenters, however, agreed with the 2019 Proposal that the
``cost reasonableness'' test in the 2016 Supplemental Finding's
``preferred approach'' was invalid, harmful, and failed to meet the
Michigan Court's expectation that the Agency should weigh benefits
against costs. These commenters characterized the cost-reasonableness
test, which compared costs of MATS compliance with various other costs
incurred by the power sector, as an ``affordability test,'' or an
inquiry into whether the power sector could absorb the costs of
compliance. These commenters noted that such a test ignores benefits by
failing to provide important information on whether society's
investment in additional costs is worth the expected benefits and fails
to consider whether costs would be ``prudently incurred'' as a means to
reduce hazards to public health. As one commenter put it, ``Simply
because the power sector could absorb costs without affecting current
operational performance does not mean that it should absorb those
costs.'' Some commenters objecting to the ``preferred approach'' in the
2016 Supplemental Finding emphasized that looking at cost in this
manner would invite the promulgation of regulations that are poorly
designed, with few potential benefits. They voiced concern that using
affordability tests could result in agencies focusing public and
private sector resources on extinguishing relatively small risks while
leaving larger risks unattended. Other commenters noted that such tests
also penalize successful industries due to their success, and risk
failing to appropriately regulate industries that are less profitable.
    Response: The EPA agrees with commenters who stated that Congress'
intent with respect to CAA section 112, as a whole, evinces an
acknowledgment of the seriousness of toxic air pollutants. We do not
agree, however, that general congressional concern about the toxicity
of HAP overrides the specific instruction given to the Administrator in
CAA section 112(n)(1)(A) to make a determination about whether
regulation of EGUs in particular is ``appropriate and necessary.'' As
the U.S. Supreme Court admonished the EPA in Michigan, the text and
structure of CAA section

112, and 112(n)(1)(A) in particular, evince Congressional design to
approach the question whether to regulate EGUs differently than other
source categories:

    Congress crafted narrow standards for EPA to apply when deciding
whether to regulate other sources; in general, these standards
concern the volume of pollution emitted by the source, [CAA section
112(c)(1)], and the threat posed by the source ``to human health or
the environment,'' [citing CAA section 112(c)(3)]. But Congress
wrote the provision before us [CAA section 112(n)(1)(A)] more
expansively . . . That congressional election settles this case.
[The Agency's] preference for symmetry cannot trump an asymmetrical
statute.

135 S. Ct. at 2710 (internal citations omitted).
    Moreover, we do not agree with commenters' suggestion that in the
Agency's comparison of costs and benefits, the EPA is considering
benefits in a way that is inconsistent with a congressional
determination that reductions in HAP emissions have great value to the
public and Congress' public health and environmental concerns. We
disagree that CAA section 112's general concerns about public health
and environmental risks from HAP emissions mandated a particular manner
of valuing or weighing the benefits of reducing those risks.
    As noted in the 2019 Proposal, we do not think the 2016
Supplemental Finding's analysis of cost satisfied the Agency's mandate
under CAA section 112(n)(1)(A) and Michigan. The ``preferred approach''
in the 2016 Supplemental Finding considered cost insofar as the Agency
at the time analyzed whether the utility industry as a whole could
continue to operate, and found that it could (i.e., that costs were
``reasonable''). 81 FR 24420, 24422, 24424, 24427, 24428, 24429, 24430,
24431. But we do not think the ``preferred approach'' in the 2016
Finding gave sufficient weight to cost as a ``centrally relevant
factor,'' Michigan, 135 S. Ct. at 2707--that is, we do not think that a
cost standard that is satisfied by establishing that regulation will
not fundamentally impair the functioning of a major sector of the
economy places cost at the center of a regulatory decision--and we are
in this action heeding the Michigan Court's reading of the
Administrator's role under CAA section 112(n)(1)(A), which directed the
Agency to meaningfully consider cost within the context of a
regulation's benefits. We agree that Michigan did not hold that the
Agency is required to base its decision whether it is appropriate and
necessary to regulate EGUs under CAA section 112 on a formal benefit-
cost analysis, but neither did it hold that a comparison of costs and
benefits is an impermissible approach to considering cost.
    The U.S. Supreme Court contemplated that a proper consideration of
cost would be relative to benefits, and the Court's decision contains
many references comparing the two considerations. In establishing the
facts of the case, the Court pointed out that ``EPA refused to consider
whether the costs of its decision outweighed the benefits.'' 135 S. Ct.
at 2706. The Court questioned whether a regulation could be considered
``rational'' where there was a gross imbalance between costs and
benefits and stated that ``[n]o regulation is `appropriate' if it does
more harm than good.'' Id. at 2707. The Court also made numerous
references to a direct comparison of the costs of MATS with benefits
from reducing emissions of HAP. For instance, the Court pointed out
that ``[t]he costs [of MATS] to power plants were thus between 1,600
and 2,400 times as great as the quantifiable benefits from reduced
emissions of hazardous air pollutants.'' Id. at 2706. Although the
Court's holding established no bright-line rules, the opinion as a
whole, thus, repeatedly suggests that CAA section 112(n)(1)(A)'s
requisite consideration of cost would not be met if the cost analysis
did not ``prevent the imposition of costs far in excess of benefits.''
Id. at 2710.
    The 2016 Supplemental Finding's ``test'' of whether an industry can
bear the cost of regulation, and its subsequent conclusion that such
costs are ``reasonable,'' does not satisfy the statute's mandate to
determine whether such regulation is appropriate and necessary. We
agree with commenters who stated that the metrics ``tested'' by the
Agency in the 2016 Supplemental Finding are not an appropriate basis
for the determination whether it is ``appropriate and necessary'' to
impose that regulation. Each cost metric the Agency examined compared
the cost of MATS to other costs borne by the industry, but never in its
``preferred approach'' did the Agency make the assessment of whether
the benefits garnered by the rule were worth it--i.e., a comparison of
costs and benefits. Even if the EPA determined that cost of regulation
was, viewed on its own terms, unreasonable after comparing the cost of
regulation to other costs borne by the industry, the ``preferred
approach'' could have still resulted in a finding that regulation was
``appropriate'' because the EPA placed so much weight on hazards to
public health and the environment that needed to be prevented. See 81
FR at 24432. In other words, much as it did in 2012 when it read cost
consideration entirely out of the CAA section 112(n)(1)(A)
determination, the Agency in 2016 was fixated on the term
``necessary,'' without considering whether any countervailing factors,
i.e., cost, might call into question whether regulation was
``appropriate.'' As many commenters pointed out, the ``cost
reasonableness test'' failed to consider cost relative to benefits, and
really focused only on whether costs could be absorbed, rather than on
whether they should be absorbed--the inquiry that is specifically
required by the word ``appropriate.'' We, therefore, conclude that the
``cost reasonableness'' approach did not adequately address the U.S.
Supreme Court's instruction that a reasonable regulation requires an
agency to fully consider ``the advantages and the disadvantages'' of a
decision. See Michigan, 135 S. Ct. at 2707 (emphasis in original).
    Moreover, we take seriously commenters' concerns that leaving the
``preferred approach'' in place, with its ``cost reasonableness'' or
affordability test, could have a harmful influence on other agencies
interpreting similarly broad congressional directives to consider cost.
Statutes that direct agencies to make determinations about whether
regulation is ``appropriate'' are precisely the contexts in which those
agencies should retain discretion to select and prioritize public
policies which provide the most value for the public good in relation
to the cost.
    Comment: Commenters said that the EPA's proposed new approach to
considering cost in the CAA section 112(n)(1)(A) finding is an
impermissible interpretation of that provision because it fails to
meaningfully address factors that are ``centrally relevant'' to the
inquiry of whether it is appropriate and necessary to regulate HAP from
EGUs. Some commenters noted that the Agency's alleged failure in the
2019 Proposal to adequately address these factors, upon which the 2016
Supplemental Finding was predicated, runs afoul of the Agency's
obligation to provide a reasoned explanation for abandoning these
considerations, citing Motor Vehicle Mfrs. Ass'n of United States, Inc.
v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29 (1983) and FCC v.
Fox Television Stations, Inc., 556 U.S. 502 (2009). The commenters
noted that these cases state the principle that agencies cannot simply
ignore prior factual determinations but must provide a ``reasoned
explanation'' for a proposed departure from ``facts and circumstances
that underlay or were engendered by the

prior policy.'' These commenters specifically faulted the EPA for not
giving appropriate weight to the following factors:
i. Unquantified Benefits
    Commenters stated that the 2019 Proposal does not acknowledge that
some ``hazards to public health'' are unquantified and asserted that
the 2019 Proposal presents a significant change in position with
insufficient justification for revising the EPA's longstanding
interpretation that the phrase ``hazards to public health'' encompasses
risks that have not been monetized because of the limitations of
current methods, data, and uncertainty. Commenters said the 2019
Proposal gave no discernable weight to these risks as required by the
statutory phrase ``hazards to public health reasonably anticipated to
occur.''
    Moreover, the commenters asserted that the monetized, HAP-specific
benefits at issue, which quantify avoided IQ loss in children
associated with prenatal methylmercury exposure from self-caught fish
consumption among recreational anglers, are but a small fraction of the
public health benefits attributable to reductions in mercury emissions
alone. The commenters cited the statement from the EPA's Science
Advisory Board (SAB), which stated that IQ loss ``is not the most
potentially significant health effect associated with mercury exposure
as other neurobehavioral effects, such as language, memory, attention,
and other developmental indices, are more responsive to mercury
exposure.'' 80 FR 75040. The commenters noted that none of the
environmental benefits from reductions in mercury emissions could be
quantified, nor any of the health or environmental benefits
attributable to reductions in other HAP.
ii. Qualitative Benefits Such as Impacts on Tribal Culture and
Practices
    Some commenters stated that the EPA's proposed approach ignores
non-monetizable benefits. These commenters asserted that methylmercury
contamination threatens traditional American Indian lifeways, including
longstanding traditions of fishing and fish consumption that are
central to many tribes' cultural identity and that make individual
tribes as distinct as different individual people. These commenters
stated that for many tribes, fishing and fish consumption are critical
social practices, handed down from generation to generation. Where
tribal members no longer fish due to health concerns, these fishing
traditions are not passed down to new generations of tribal members,
leading to permanent cultural loss. Furthermore, these commenters
stated that many tribes are connected to particular waters for
cultural, spiritual, or other reasons (and others' fishing rights are
limited to certain grounds by treaty), so tribal members cannot simply
move their fishing to another location to avoid mercury contamination.
The commenters asserted that the preferred approach of the 2016
Supplemental Finding recognized that regulation of HAP from EGUs would
benefit American Indians by allowing them to safely engage in, and
thereby perpetuate, their culture. These commenters argued that the
Agency's preferred approach in the 2016 Supplemental Finding properly
deemed these qualitative benefits to be cognizable and highly
significant. In addition, the commenters stated that mercury emissions
likewise cause significant harm to Indian subsistence and fishing
economies, contaminating food sources that many tribal members depend
on for survival. According to these commenters, the EPA's 2016
preferred approach methodology allowed for a full range of qualitative
benefits to be accounted for, whereas the 2019 proposed reversal does
not.
iii. Latency, Persistence in the Environment, and Toxicity of Regulated
Pollutants
    Some commenters asserted that the EPA's proposed approach
disregarded the physiochemical nature and toxicity of the toxic air
pollutants regulated by CAA section 112 and the concern Congress had
expressed about these qualities in enacting that section. These
commenters pointed out that, in enacting the list of regulated air
toxics, Congress deliberately withdrew the EPA's authority to judge the
importance of the harms threatened by the listed pollutants. The
commenters noted that Congress itself listed the pollutants, rather
than waiting for the EPA to do so, because of a difficulty which
commenters argue is particular to air toxics: ``[t]he public health
consequences of substances which express their toxic potential only
after long periods of chronic exposure will not be given sufficient
weight in the regulatory process when they must be balanced against the
present-day costs of pollution control and its other economic
consequences.'' Leg. Hist. at 8522 (S. Rep. No. 101-228 at 182). The
commenters argued that these identified harms from air toxics occur
regardless of the source of the pollutants, and, therefore, there is no
reason to believe that Congress might have, by inserting CAA section
112(n)(1)(A), authorized the EPA to reassess the benefits of reducing
those harms in the context of EGUs. The commenters stated that no
study, including the EPA's Utility Study, suggests that HAP from EGUs
are of any different character or pose less harm by their nature than
HAP emitted by any other industrial source category.
iv. Distributional Impacts of the Pollutants on the Population
    Commenters pointed to Congress' intent to address harms that are
concentrated within particular communities or populations, citing CAA
section 112(f)(2)(A)'s requirement that the EPA address lifetime excess
cancer risks borne by the ``individual most exposed to emissions,'' CAA
section 112(n)(1)(C)'s directive that the EPA consider power plant
mercury harms to sensitive fish-consuming populations, and legislative
history (``EPA is to consider individuals who are sensitive to a
particular chemical'' in assessing whether a pollutant's harm warrants
regulation) (Leg. Hist. at 8501). The commenters noted that the 2016
Supplemental Finding's preferred approach identified several
populations that were disproportionately at risk of mercury exposure
from EGUs, including African-Americans living below the poverty line in
the Southeast who rely on the fish they catch for food, and the
children and fetuses in those communities in particular whose risk of
exposure is amplified; and individuals and communities who live near
coal- and oil-fired power plants, who are disproportionately members of
racial and ethnic minorities. The commenters cited a study that found
that of the 8.1 million people living within 3 miles of a coal-fired
plant in the year 2000, 39 percent were people of color, a percentage
significantly higher than the proportion of people of color in the U.S.
population as a whole. The same study found that people living within 3
miles of such power plants had an average annual per capita income of
$18,596, significantly lower than the national average.
    Some commenters pointed to various executive orders that
independently direct the EPA to consider some of these factors,
including Executive Order 12898 (February 11, 1994), which establishes
that ``disproportionately high and adverse human health or
environmental effects'' of EPA decisions ``on minority populations and
low-income populations in the U.S. and its territories and
possessions'' are of central concern to the EPA's decision-making, with
specific emphasis upon ``subsistence consumption of fish and

wildlife.'' The commenters also pointed to Executive Order 13045 (April
21, 1997),\14\ which is particularly concerned about ``environmental
health risks'' that may ``disproportionately affect children.''
---------------------------------------------------------------------------

    \14\ Commenters cite Executive Order 13035 in their comments,
but we believe this was a typographical error.
---------------------------------------------------------------------------

    Response: Agency decisions, once made, are not forever ``carved in
stone.'' Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545
U.S. 967, 981 (2005) (internal quotation marks and citations omitted).
We disagree with the commenters' view that the EPA is not permitted to
determine that the ``cost reasonableness'' approach is not the correct
way to consider cost in the CAA section 112(n)(1)(A) appropriate and
necessary finding, and their view that the EPA is not permitted to re-
evaluate the significance of the factual findings underpinning its 2016
Supplemental Finding and come to a different conclusion. D.C. Circuit
and U.S. Supreme Court precedent, including those cases cited by the
commenters, support the Agency's position that it is within its
authority to do so, provided that the Agency's new action is based on a
permissible interpretation of the statute and is supported by a
reasoned explanation.
    In FCC v. Fox, the U.S. Supreme Court stated an agency's obligation
with respect to changing a prior policy quite plainly:

    We find no basis . . . for a requirement that all agency change
be subjected to more searching review. The [Administrative
Procedure] Act mentions no such heightened standard. And our opinion
in State Farm neither held nor implied that every agency action
representing a policy change must be justified by reasons more
substantial than those required to adopt a policy in the first
instance.\15\
---------------------------------------------------------------------------

    \15\ FCC v. Fox, 556 U.S. at 514.

    In cases where an agency is changing its position, the Court stated
that a reasoned explanation for the new policy would ordinarily
``display awareness that it is changing position'' and ``show that
there are good reasons for the new policy.'' Id. at 515. However, the
Court held that the agency ``need not demonstrate . . . that the
reasons for the new policy are better than the reasons for the old one;
it suffices that the new policy is permissible under the statute, that
there are good reasons for it, and that the agency believes it to be
better.'' Id. In cases where a new policy ``rests upon factual findings
that contradict those which underlay its prior policy; or when its
prior policy has engendered serious reliance interests that must be
taken into account,'' the Court found that a more detailed
justification might be warranted than what would suffice for a new
policy.
    Although commenters assert that the EPA has failed to provide a
reasoned basis for its action here, their real complaint with the
Agency's abandonment of the 2016 Supplemental Finding's ``cost
reasonableness test'' and ``preferred approach'' is that they favored
the way the Agency under that approach weighed certain factors,
including unquantified benefits, impacts on tribes and tribal culture,
the latency and persistence of air toxics in the environment, and
distributional concerns and impacts. That the EPA now weighs these
concerns differently--a weighing that is further explained below--does
not mean the Agency is ``disregarding'' or ``dismissing'' these
concerns.
    In the 2019 Proposal, the EPA clearly stated that the unquantified
HAP benefits associated with regulating power plants were
``significant,'' and enumerated the impacts on human health that have
been linked to mercury (including neurologic, cardiovascular,
genotoxic, and immunotoxic effects), the adverse health effects
associated with non-mercury HAP (including cancer and chronic and acute
health disorders that implicate organ systems such as the lungs and
kidneys), and other effects on wildlife and ecosystems. 84 FR 2677.
Contrary to commenters' assertions, the EPA did not ignore these
concerns but said, ``The EPA acknowledges the importance of these
benefits and the limitations on the Agency's ability to monetize HAP-
specific benefits. The EPA agrees that such benefits are relevant to
any comparison of the benefits and costs of a regulation.'' Id. at
2677-78. Moreover, as the Agency pointed out in its proposal, the 2011
RIA, which summarizes the factual findings and scientific studies which
form the basis of this action as well as the EPA's 2016 action,
discussed all of the monetized and unquantified benefits of regulating
HAP from power plants, including the qualitative impacts on American
Indian tribes,\16\ distributional impacts,\17\ and latency and
persistence of the pollutant.\18\ Id. at 2678.
---------------------------------------------------------------------------

    \16\ 2011 RIA at 7-40 to -49.
    \17\ 2011 RIA at 7-49 to -54.
    \18\ 2011 RIA at Chapter 4.
---------------------------------------------------------------------------

    In the context of this action, in which the lens we use to consider
cost is based on a comparison of benefits to cost, we are choosing to
weigh these concerns (and particulate matter (PM) co-benefits discussed
in more detail in section II.C.3 of this preamble) differently than the
manner in which the EPA evaluated them in the 2016 Supplemental
Finding. While it is true that many of the benefits associated with
reducing emissions of HAP from power plants have not been quantified,
the EPA provided in the 2019 Proposal its reasons for concluding that
those unquantified benefits were not likely to overcome the imbalance
between the monetized HAP benefits and compliance costs in the record.
First, as the EPA pointed out and as discussed below, most of the
unquantified benefits of MATS are morbidity effects associated with
exposure to mercury and other HAP. Second, to the extent commenters
have identified potential mortality outcomes such as potential
cardiovascular impacts from mercury exposure and potential cancer risks
from exposure to other HAP, the EPA disagrees, for the reasons provided
below, with the proposition that significant monetized benefits would
be expected from either outcome.
    As the commenters acknowledged, the SAB noted that IQ loss ``is not
the most potentially significant health effect associated with mercury
exposure, as other neurobehavioral effects, such as language, memory,
attention, and other developmental indices, are more responsive to
mercury exposure.'' 80 FR 75040. The Agency explained in its 2019
Proposal that the neurobehavioral effects of mercury exposure
identified by the SAB as more ``potentially significant'' are
morbidity, not mortality, outcomes. In the EPA's experience, the
economic value of avoided morbidity effects (e.g., impaired cognitive
development, problems with language, abnormal social development, etc.)
per incident is a small fraction of the monetizable value of avoided
premature deaths. Further, when estimating the economic value of
avoided cases of air pollution-related effects, the Agency has
generally found that the aggregate value of the avoided illnesses
(e.g., hospital admissions, emergency department visits, cases of
aggravated asthma, etc.) is small as compared to the total value of
avoided deaths.\19\
---------------------------------------------------------------------------

    \19\ See U.S. EPA 2010a: Regulatory Impact Analysis for the
Nitrogen Oxide National Ambient Air Quality Standards Page 4-8
through 4-10; U.S. EPA. 2010b: Regulatory Impact Analysis for the
Sulfur Dioxide National Ambient Air Quality Standards Page 5-26
through 5-28; U.S. EPA. 2012: Regulatory Impact Analysis for the
Particulate Matter National Ambient Air Quality Standards pages 5-
69; U.S. EPA. 2015: Regulatory Impact Analysis for the Ozone
National Ambient Air Quality Standards. Pages 6-57 through 6-60.
---------------------------------------------------------------------------

    And the EPA does not expect that to the extent the prevention of
any premature deaths due to regulation of

HAP could be associated with the MATS rule, the value of that effect
would be significant. With respect to potential premature deaths due to
cardiovascular impacts from mercury exposure, as discussed further in
section II.C.4 of this preamble, there is inconsistency among available
studies as to the degree of association between methylmercury exposure
and various cardiovascular system effects, including studies showing no
association. As a result, based on the presently available information,
the EPA believes available evidence does not support a clear
characterization of the potential relationship between mercury exposure
and cardiovascular mortality. For that reason, the EPA has not modeled
risk (incidence) estimates for this health endpoint and has not
included benefits associated with that endpoint in the analysis. With
respect to potential premature deaths associated with inhalation
exposure to non-mercury HAP, based on existing case-study analyses for
EGUs which focus on the assessment of individual risk based on a number
of conservative assumptions regarding exposure, the EPA anticipates
that the mortality incidence associated with these non-mercury HAP
exposures would be low (see section II.C.3 of this preamble for
additional detail).\20\ In sum, while the EPA recognizes the importance
of unquantified benefits in a comparison against costs, the evaluation
of evidence of unquantified benefits is based on qualitative
information that helps understand the likelihood and potential scale of
those benefits, relative to the monetized benefits and monetized costs.
These qualitative assessments help confirm that unquantified benefits
do not alter the underlying conclusion that costs greatly outweigh HAP
benefits. This topic is discussed in more detail in section II.C.3 of
this preamble.
---------------------------------------------------------------------------

    \20\ U.S. EPA, Supplement to the Non-Hg Case Study Chronic
Inhalation Risk Assessment In Support of the Appropriate and
Necessary Finding for Coal- and Oil-Fired Electric Generating Units,
November 2011, EPA-452/R-11-013.
---------------------------------------------------------------------------

    The other factors identified by the commenters concern qualitative
concerns such as impacts to tribal cultures and the concentration of
public health risks occurring among certain population subgroups or for
individuals living proximate to EGUs. The distribution of potential
health effects may indicate more risk to some individuals than to
others or more impacts to some groups like tribes than others; but in a
cost-benefit comparison, the overall amount of the benefits stays the
same no matter what the distribution of those benefits is. The EPA,
therefore, believes it is reasonable to conclude that those factors to
which the EPA previously gave significant weight--including qualitative
benefits, and distributional concerns and impacts on minorities--will
not be given the same weight in a comparison of benefits and costs for
this action under CAA section 112(n)(1)(A).\21\
---------------------------------------------------------------------------

    \21\ Nor does the EPA agree with the commenters that Executive
Orders 12898 and 13045 require a particular outcome in the EPA's
appropriate and necessary finding. Executive orders recognize that
agencies must weigh conflicting goals, priorities, and associated
costs as a necessary part of reasoned decision making. Other more
recent executive orders, which emphasize the environmentally
responsible use and development of domestic natural resources, are
also part of the policy calculus to consider. See, e.g., Executive
Order No. 13783, 82 FR 16093 (March 28, 2017) (directing the EPA to
review for possible reconsideration any rule that could
``potentially burden the development or use of domestically produced
energy resources, with particular attention to oil, natural gas,
coal, and nuclear energy resources.
---------------------------------------------------------------------------

    None of the information underlying the EPA's action here
constitutes new factual findings, but rather is a reevaluation of the
existing record to arrive at what the Agency believes to be the better
policy regarding whether regulation is ``appropriate.'' In Nat'l Ass'n
of Home Builders v. EPA, the D.C. Circuit reviewed challenges brought
against the EPA that were similar to those concerns raised by
commenters here and found that ``this kind of reevaluation is well
within an Agency's discretion.'' 682 F.3d 1032, 1038 (D.C. Cir. 2012)
(NAHB). There, the EPA reversed course on a prior policy, and
petitioners in that case contended that ``EPA has provided no
justification for its decision to reverse course . . . that is grounded
in any information or experience that was not available to the Agency
when it [adopted] the original rule . . . Rather, EPA merely revisited
old arguments that had already been addressed as part of the original
rulemaking.'' NAHB, 682 F.3d at 1036. Petitioners insisted in that case
that the Agency was required to be held to a higher standard in
reversing its prior decision based on the same factual record, but the
D.C. Circuit disagreed. The Court held that FCC v. Fox ``foreclosed''
petitioners' argument, and that the Agency was permitted to rely on ``a
reevaluation of which policy would be better in light of the facts.''
Id. at 1036-38. It is well settled that such re-weighing or re-
balancing is permissible. See State Farm, 463 U.S. at 57 (``An agency's
view of what is in the public interest may change, either with or
without a change in circumstances.''); Am. Trucking Ass'ns v. Atchison,
Topeka & Santa Fe Ry. Co., 387 U.S. 397, 416 (1967) (declaring that an
agency, ``in light of reconsideration of the relevant facts and its
mandate, may alter its past interpretation and overturn past
administrative rulings''); Organized Village of Kake v. Dept. of
Agriculture, 795 F.3d 956 (9th Cir. 2015) (``We do not question that
the Department was entitled in 2003 to give more weight to
socioeconomic concerns than it had in 2001, even on precisely the same
record.'').
    As alluded to in these cases, the ``reasoned basis'' for an
agency's change of interpretation need not be overly complex. Even
Justice Breyer, who dissented from the FCC v. Fox majority, admitted,
``I recognize that sometimes the ultimate explanation for a change may
have to be, `We now weight the relevant considerations differently.' ''
556 U.S. at 550. Such change can, and often is, fueled by the basic
functioning of American democracy--when new presidential
administrations come into office--and the courts have recognized this
to be a legitimate basis for a re-weighing of priorities. See NAHB, 682
F.3d at 1038 (noting the ``inauguration of a new President and the
confirmation of a new EPA Administrator'' largely provided the
reasoning for the EPA's change in policy). Unlike in State Farm, where
the administering agency issued a rollback of a regulation requiring
passive restraints in automobiles without even mentioning airbags at
all, 463 U.S. at 48, 49, 51, here we acknowledge and address those
factors to which we are giving less weight than was given in the 2016
Supplemental Finding. Cf. Organized Village of Kake, 795 F.3d at 968
(suggesting that a policy reversal could be premised upon ``merely
decid[ing] that [the agency] valued socioeconomic concerns more highly
than environmental protection''). The commenters disagree with the way
the Agency has now weighed the facts and circumstances underlying the
original appropriate and necessary finding and the Agency's
consideration of cost in 2016. But that does not mean that the Agency
has not provided a ``reasoned basis'' for its action.
    Comment: Some commenters asserted that a ``more detailed
justification'' of the EPA's change in policy is required in this case
given the ``serious reliance interests'' of states, the public, and
industry in maintaining the appropriate and necessary determination and
the MATS rule (citing Fox, 556 U.S. at 515; Encino Motorcars, LLC v.
Navarro, 136 S. Ct. 2117 (2016)). With respect to state and public
interests, the commenters pointed to the fact that the implementation
of MATS has led to a dramatic decrease in HAP emissions

from power plants, and that the public has an interest in having those
controls remain in place and in the continuation of improvements in air
quality and the corresponding public health and environmental benefits.
Other commenters pointed to the major capital investments that
regulated utilities have already made to comply with MATS and asserted
that a reversal of the 2016 Supplemental Finding creates uncertainty
for the standards themselves. The commenters argued that these reliance
interests, which they claim depend on the maintenance of the 2016
Supplemental Finding, therefore, require the EPA to provide the
heightened justification required under Fox and Encino Motorcars for
its reversal of that finding.
    Response: The EPA disagrees with the commenters that the Agency is
required to provide a ``heightened justification'' for this action. In
Fox, the U.S. Supreme Court stated that as a general matter, no
heightened scrutiny or review applies to decisions by agencies to
reverse policies, and that policy changes need not be justified by
reasons more substantial than those required to adopt a policy in the
first instance. See Fox, 556 U.S. at 514-15. But the Court noted that
``in such cases it is not that further justification is demanded by the
mere fact of policy change; but that a reasoned explanation is needed
for disregarding facts and circumstances that underlay or were
engendered by the prior policy, i.e., . . . when its prior policy has
engendered serious reliance interests that must be taken into
account.'' Id. at 515. The Court elaborated on this principle in Encino
Motorcars v. Navarro, 136 S. Ct. 2117 (2016). There, the Court found
that the retail automobile and truck dealership industry had relied for
decades on the Department of Labor's (DOL) position that service
advisors are exempt from the Fair Labor Standard Act's overtime pay
requirements. Given this reliance and the impact that the DOL's change
in policy would have on the industry (citing ``systemic, significant
changes to the dealerships' compensation arrangements'' and the risk
that non-conforming dealerships could face ``substantial FLSA
liability''), the Court held that the DOL had not provided good reasons
for its change in policy, noting that the agency ``said almost
nothing'' and that it merely stated that exempting such employees from
overtime pay was contrary to the statute and it believed its
interpretation was reasonable. Encino Motorcars, 136 S. Ct. at 2126-27.
The Court stated that ``an agency may justify its policy choice by
explaining why that policy is more consistent with statutory language
than alternative policies,'' Id. (internal citations omitted), but
chided the DOL for failing to include such a justification in its
policy reversal.
    First, we note that commenters raising serious reliance interests
differ in at least one major way from the petitioners in Encino
Motorcars. While those petitioners faced very real impacts based on the
Agency's changed position (``systemic, significant'' changes to
employee compensation and potential liabilities from failure to comply
with the changed policy), the reliance interests cited by the
commenters are not upended by this final action. As we stated in the
proposal, the EPA finds that its re-evaluation of the costs and
benefits of regulation of HAP emissions from power plants will not
rescind or affect the regulatory program upon which the commenters
rely, due to binding D.C. Circuit precedent (see section II.D of this
preamble). To the contrary, the EPA is finalizing the results of the
proposed RTR of MATS in this final action. The EPA determined that
after compliance with MATS, the residual risks due to emissions of HAP
from the Coal- and Oil-Fired EGU source category are acceptable in
accordance with CAA section 112, and that there are no developments in
HAP emissions controls to achieve further cost-effective reductions
beyond the current standards. Therefore, based on the results of the
RTR analyses, the Agency is promulgating this final action that
maintains MATS in its current form.
    Second, unlike the DOL in Encino Motorcars, the EPA has provided
its reasons for changing its determination that the regulation of HAP
emissions from power plants is not ``appropriate.'' As explained in the
proposal and in this preamble, the EPA believes that a consideration of
costs that compares the costs of compliance with the HAP-specific
benefits of regulation ``is more consistent with statutory language''
than the 2016 Supplemental Finding's ``preferred approach.'' Further,
as discussed in section II.C.3 of this preamble, we do not think the
determination that regulation is ``appropriate'' under CAA section
112(n)(1)(A), an air toxics provision, should primarily hinge on the
monetary benefits associated with reductions in emissions of pollutants
not regulated under CAA section 112. We believe the explanations
provided in this action fully comply with the case law's requirement to
provide a reasoned explanation for our reversal of the 2016
Supplemental Finding.
3. The EPA's Alternative Benefit-Cost Approach Used in the 2016
Supplemental Finding Improperly Considered Co-Benefits From Non-HAP
Emissions Reductions
    The 2016 Supplemental Finding presented an alternative approach
under which the EPA made an independent finding under CAA section
112(n)(1)(A) based on a formal benefit-cost analysis \22\ that it was
appropriate and necessary to regulate EGUs under CAA section 112. See
81 FR 24427. The formal benefit-cost analysis used in the 2016
Supplemental Finding relied on information reported in the RIA
developed for the 2012 MATS Final Rule pursuant to Executive Orders
12866 and 13563 and applicable statutes other than the CAA (e.g., the
Regulatory Flexibility Act and the Unfunded Mandates Reform Act), as
informed by Office of Management and Budget (OMB) guidance \23\ and the
EPA's Economic Guidelines.\24\
---------------------------------------------------------------------------

    \22\ We use the term ``formal benefit-cost analysis'' to refer
to an economic analysis that attempts to quantify all significant
consequences of an action in monetary terms in order to determine
whether an action increases economic efficiency. A benefit-cost
analysis evaluates the favorable effects of policy actions and the
associated opportunity costs of those actions. The favorable effects
are defined as benefits. Opportunities forgone define economic
costs. A formal benefit cost analysis seeks to determine whether the
willingness to pay for an action by those advantaged by it exceeds
the willingness to accept the action by those disadvantaged by it.
The key to performing benefit-cost analysis is the ability to
measure both benefits and costs in monetary terms so that they are
comparable. Assuming all consequences can be monetized, actions with
positive net benefits (i.e., benefits exceed costs) improve economic
efficiency. This usage is consistent with the definition of a
benefit-cost analysis used in the economics literature and the EPA's
Guidelines for Preparing Economic Analyses.
    \23\ U.S. OMB. 2003. Circular A-4 Guidance to Federal Agencies
on Preparation of Regulatory Analysis. Available at https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf.
    \24\ U.S. EPA. 2014. Guidelines for Preparing Economic Analyses.
EPA-240-R-10-001. National Center for Environmental Economics,
Office of Policy. Washington, DC. December. Available at https://www.epa.gov/environmental-economics/guidelines-preparing-economic-analyses. Docket ID Item No. EPA-HQ-OAR-2009-0234-20503.
---------------------------------------------------------------------------

    The quantified benefits accounted for in the formal benefit-cost
analysis in the 2016 Supplemental Finding's alternative approach
included both HAP and non-HAP air quality benefits. Based on the 2011
RIA, the EPA projected the quantifiable benefits of HAP reductions
under the rule to be $4 to $6 million in 2015.\25\ The RIA also
identified unquantified benefits associated with reducing HAP emissions
from EGUs.

The EPA projected that the co-benefits associated with reducing these
non-HAP pollutants would be substantial. Indeed, these projected co-
benefits comprised the overwhelming majority (approximately 99.9
percent) of the monetized benefits of MATS ($36 billion to $89 billion
in 2015). The compliance costs of the 2012 MATS Final Rule were
projected to be $9.6 billion in 2015.\26\ These compliance costs are an
estimate of the increased expenditures in capital, fuel, and other
inputs by the entire power sector to comply with MATS emissions
requirements, while continuing to meet a given level of electricity
demand.
---------------------------------------------------------------------------

    \25\ Like the 2011 RIA, all benefits and costs in this and
subsequent sections of this preamble are reported in 2007 dollars.
    \26\ See Table 3-5 of the RIA: https://www3.epa.gov/ttn/ecas/docs/ria/utilities_ria_final-mats_2011-12.pdf.
---------------------------------------------------------------------------

a. Summary of 2019 Proposal
    The EPA proposed to find that it had erred in the 2016 Supplemental
Finding's benefit-cost analysis in giving equal weight to the air
quality co-benefits projected to occur as a result of the reductions in
HAP. The focus of CAA section 112(n)(1)(A) is HAP emissions reductions.
    The EPA outlined in detail in the 2019 Proposal that the Agency had
erred in concluding in the 2016 Supplemental Finding that the statutory
text of CAA section 112(n)(1)(A) and the legislative history of CAA
section 112 more generally supported the position that it was
reasonable to give equal weight to co-benefits in a CAA section
112(n)(1)(A) appropriate and necessary finding. 81 FR 24439. The EPA
explained in the 2019 Proposal that, because the vast majority of the
estimated monetized benefits in the 2011 RIA that were estimated to
result from MATS are associated with reductions in fine particulate
matter (PM2.5) precursor emissions, the EPA had erred in the
2016 Supplemental Finding by giving equal weight to non-HAP co-benefits
in making the appropriate and necessary determination. As the 2019
Proposal observed, Congress, in the National Ambient Air Quality
Standards (NAAQS) program, established a rigorous system for setting
standards of acceptable levels of criteria air pollutants requisite to
protect public health with an adequate margin of safety, and by state,
regional, and national rulemakings establishing control measures to
meet those levels.
    The EPA did acknowledge the importance of unquantified benefits in
the 2019 Proposal, but also pointed out the limitations of the Agency's
ability to monetize HAP-specific benefits. The EPA explained that
unquantified benefits are relevant to any comparison of the benefits
and costs of regulation. Because unquantified benefits are, by
definition, not considered in monetary terms, the EPA proposed that the
Administrator would evaluate the evidence of unquantified benefits and
determine the extent to which they alter any appropriate and necessary
conclusion based on the comparison of monetized costs and benefits.
b. Final Rule
    The EPA is finalizing the determination outlined in the 2019
Proposal. The EPA believes that the alternative approach to the 2016
Supplemental Finding was fundamentally flawed in applying a formal
cost-benefit analysis to the specific decision making standard directed
by CAA section 112(n)(1)(A) because, in the context of the appropriate
and necessary finding, doing so implied that an equal weight was given
to the non-HAP co-benefit emission reductions and the HAP-specific
benefits of the regulation. The total cost of compliance with MATS
($9.6 billion in 2015) vastly outweighs--by a factor of 1 thousand, or
3 orders of magnitude--the monetized HAP benefits of the rule ($4 to $6
million in 2015). In these circumstances, to give equal weight to the
monetized PM2.5 co-benefits would permit those benefits to
become the driver of the regulatory determination, which the EPA
believes would not be appropriate for the reasons stated in the
proposal and set forth below.
c. Comments and Responses
    Comment: Many commenters argued that the EPA's proposed approach to
considering co-benefits in the CAA section 112(n)(1)(A) appropriate and
necessary determination is not consistent with the statute. The
commenters believe that basic principles of statutory construction do
not allow the EPA to read CAA section 112(n)(1)(A) only in isolation.
The commenters asserted that the EPA has not explained why CAA section
112(n)(1)(A)'s reference to regulation of EGUs allows the Agency to
disregard a portion of the consequences of its decision. One commenter
noted that the language in the Senate Report on the 1990 amendments to
CAA section 112, which directs the EPA to consider the co-benefits of
HAP regulation, is the closest specific indication of congressional
intent for interpreting CAA section 112(n). The commenter also pointed
to the portion of CAA section 112(n) that requires the EPA to conduct a
study of hazards to health likely to occur from utility HAP emissions
after implementation of other non-HAP provisions of the CAA, and
suggested that this provision implies that the EPA should evaluate non-
HAP benefits of HAP regulations to see if they are sufficient to
establish the case for HAP regulation. One commenter noted that the
EPA's approach arbitrarily excludes from consideration a critically
important set of the consequences of the EPA's decision, namely the
public health concerns at the heart of the CAA.
    Response: The EPA agrees with the commenters that it is critical to
examine the language in CAA section 112(n)(1)(A), as well as the
overall context of CAA section 112, in determining the scope of the
cost consideration for the appropriate and necessary determination. In
CAA section 112, Congress has a particularized focus on reducing HAP
emissions and addressing public health and environmental risks from
those emissions. In CAA section 112(n)(1)(A), Congress directs the EPA
to decide whether regulation of EGUs is appropriate and necessary under
CAA section 112, i.e., whether the deployment of specific CAA
provisions targeted at reducing HAP emissions from the EGU sector is
warranted. The EPA believes that it cannot answer this question by
pointing to benefits that are overwhelmingly attributable to reductions
in an entirely different set of pollutants not targeted by CAA section
112. The EPA believes that it is illogical for the Agency to make a
determination, informed by a study of what hazards remain after
implementation of other CAA programs, that regulation under CAA section
112, which is expressly designed to deal with HAP emissions, is
``appropriate'' principally on the basis of criteria pollutant impacts.
    The EPA believes that relying almost exclusively on benefits
accredited to reductions in pollutants not targeted by CAA section 112
is particularly inappropriate given that those other pollutants are
already comprehensively regulated under other CAA provisions, such as
those applying to the NAAQS. As the EPA outlined in the 2019 Proposal,
the determination that it is not appropriate to give equal weight to
non-HAP co-benefits in making the appropriate and necessary
determination is further supported by the fact that Congress
established a rigorous system for setting standards of acceptable
levels of criteria air pollutants and provided a comprehensive
framework directing the implementation of those standards in

order to address the health and environmental impacts associated with
those pollutants. See, e.g., 42 U.S.C. 7409; 7410; 7501; 7502; 7505a;
7506; 7506a; 7507; 7509; 7509a; 7511; 7511a; 7511b; 7511c; 7511d;
7511e; 7511f; 7512; 7512a; 7513; 7513a; 7513b; 7514; and 7515. The vast
majority of the monetized benefits in the 2011 RIA that were estimated
to result from MATS are associated with reductions in PM2.5
precursor emissions, principally nitrogen oxides (NOX) and
sulfur dioxide (SO2). NOX, SO2, and
PM2.5 are already addressed by a multitude of statutory
provisions governing levels of these pollutants, including the NAAQS
provisions that require the EPA to set standards for criteria
pollutants requisite to protect public health with an adequate margin
of safety, and by state, regional, and national rulemakings
establishing control measures to meet those levels.
    The 2016 Supplemental Finding pointed to CAA section 112(n)(1)(A)'s
directive to ``perform a study of the hazards to public health
reasonably anticipated to occur as a result of emissions by electric
utility steam generating units of [HAP] after imposition of the
requirements of [the CAA],'' and noted that the requirement to consider
co-benefit reduction of HAP resulting from other CAA programs
highlighted Congress' understanding that programs targeted at reducing
non-HAP pollutants can and do result in the reduction of HAP emissions.
Id. The finding also noted that the Senate Report on CAA section
112(d)(2) recognized that MACT standards would have the collateral
benefit of controlling criteria pollutants. Id. However, these
statements acknowledging that reductions in HAP can have the collateral
benefit of reducing non-HAP emissions and vice versa, provides no
support for the proposition that any such co-benefits should be
considered on equal footing as the HAP-specific benefits when the
Agency makes its finding under CAA section 112(n)(1)(A).
    The study referenced in CAA section 112(n)(1)(A) specifically
focuses on the hazards to public health that will reasonably occur as a
result of HAP emissions, not harmful emissions in general. (``The
Administrator shall perform a study of the hazards to public health
reasonably anticipated to occur as a result of emissions by electric
utility steam generating units of pollutants listed under subsection
(b) of this section after imposition of the requirements of this
chapter.'') According to that section, ``[t]he Administrator shall
regulate electric utility steam generating units under this section, if
the Administrator finds such regulation is appropriate and necessary
after considering the results of the study required by this
subparagraph.'' The text on its face suggests that Congress wanted the
Administrator's appropriate and necessary determination to be focused
on the health hazards related to HAP emissions and the potential
benefits of avoiding those hazards by reducing HAP emissions. While the
provision in one sense does acknowledge the existence of co-benefits--
i.e., by referencing the potential for ancillary reductions of HAP
emissions by way of CAA provisions targeting other pollutants--it does
not follow from this that any ancillary reductions of criteria
pollutants that may be projected to result from the regulation of EGU
HAP emissions should, therefore, play a part in the Administrator's
consideration under CAA section 112(n)(1)(A) whether the regulation of
EGUs is ``appropriate and necessary.'' To the contrary, the statutory
direction to consider whether it is appropriate and necessary to
regulate HAP after criteria pollutants have been addressed by the CAA's
other requirements suggests that it is not proper for the co-benefits
of further criteria pollutant reductions to provide the dominant
justification for an affirmative CAA section 112(n)(1)(A)
determination. Certainly, Congress' instruction to the EPA that it
study HAP effects under CAA section 112 after implementation of other
CAA provisions cuts against any suggestion that such benefits should be
given equal consideration in a CAA section 112(n)(1)(A) determination.
    Comment: Several commenters argued that the EPA's proposed
approach, of not providing consideration to co-benefits equal to the
consideration provided to the benefits specific to HAP reductions,
takes a too-narrow approach that conflicts with Michigan. Commenters
pointed out that the Court found that CAA section 112(n) tells the EPA
to undertake a ``broad and all-encompassing'' review of ``all the
relevant factors.'' 135 S. Ct. at 2707. Commenters argued that if the
Court read ``appropriate'' to be a ``broad and all-encompassing term,''
then the EPA cannot excise relevant factors from consideration.
Commenters also stated that the Court, in instructing the EPA to
consider cost, appeared to adopt a broad reading of the word ``cost,''
including ``more than the expense of complying with regulations; any
disadvantage could be termed a cost.'' 137 S. Ct. at 2707.
    Response: Nothing in the Michigan decision decides this issue. To
the contrary, the Court said that the proper treatment of co-benefits
is ``a point we need not address.'' 135 S.Ct. at 2711. Additionally,
commenters seem to mistake the EPA's position (see, e.g., Environmental
Protection Network (EPN) comment at 25 (April 17, 2019) (Docket ID Item
No. EPA-HQ-OAR-2018-0794-2261) (referring to ``EPA's crabbed claim that
it can focus only on reduction of `HAP emissions--without even
considering reductions in non-HAP pollutants').'' See also States and
Local Governments comment at 35-36 (April 17, 2019) (Docket ID Item No.
EPA-HQ-OAR-2018-0794-1175) (``In proposing to exclude consideration of
[co-benefits], EPA misinterprets and misapplies the Supreme Court's
directive in Michigan.'')). The commenters essentially argue that the
language in Michigan requires the EPA to review ``all the relevant
factors,'' including co-benefits. As described at length in the 2019
Proposal and other parts of this section of this preamble, the EPA is
considering what significance co-benefits have for its determination
under CAA section 112(n)(1)(A)--but we are concluding that the finding
must be justified overwhelmingly by the HAP benefits due to the
statutory structure.
    Comment: Some commenters argued that existing case law, beyond the
Michigan decision, supports inclusion of indirect benefits into an
agency's benefit-cost analysis. A commenter quoted the D.C. Circuit's
statement in American Trucking Ass'ns v. EPA that the EPA must consider
both the direct and indirect effects of pollutants, rather than only
``half of a substance's health effects.'' 175 F.3d 1027, 1051-53 (D.C.
Cir. 1999), rev'd on other grounds sub nom. Whitman v. Am. Trucking
Ass'ns, Inc., 531 U.S. 457 (2001). The commenter also cited a Fifth
Circuit case in which the Court held that the EPA had to consider the
indirect safety harm that could result from the use of substitute, non-
asbestos brakes when attempting to ban asbestos-based brakes under the
Toxic Substances Control Act. Corrosion Proof Fittings v. EPA, 947 F.2d
1202, 1225 (5th Cir. 1991). A few commenters also noted the D.C.
Circuit's favorable treatment of the EPA's consideration of co-benefits
in regulating HAP from boilers, process heaters, and incinerators in
U.S. Sugar Corp. v. EPA, 830 F.3d 579, 591, 625 (D.C. Cir. 2016).
    Response: As explained elsewhere in this preamble, the EPA is
interpreting and applying the statutory directive to make an
appropriate and necessary determination under CAA section 112(n)(1)(A)
and determining what role

consideration of co-benefits should play in making that determination.
None of the case law the commenters cite pertains to CAA section
112(n)(1)(A), and, therefore, the case law is not directly relevant to
this action.
    As explained in the 2019 Proposal and in this preamble, the EPA
believes that it would be inconsistent with the statute and with case
law to base the appropriate and necessary finding on a monetized
benefit estimate that is almost exclusively attributable to reductions
of non-HAP pollutants. Further, the CAA sets out a specific regulatory
scheme for the PM pollutants in question, the NAAQS, and as a first
principle the EPA believes those regulations, not CAA section 112,
should be the primary method by which the Agency targets those
pollutants.
    Comment: Several commenters argued that the EPA's approach of
giving less weight to co-benefits in the appropriate and necessary
determination is fundamentally arbitrary. The commenters pointed out
that the PM2.5 emission reductions are a direct result of
HAP emissions controls, and that there is no way to reduce the HAP
emissions without reducing PM emissions. Some commenters asserted that
excluding some benefits from the appropriate and necessary
determination creates a biased analysis. One commenter argued that the
EPA's approach is arbitrary and contrary to Michigan and other U.S.
Supreme Court precedent because it ``fai[ls] to consider [such] an
important aspect of the problem.'' Michigan, 135 S. Ct. at 2707
(quoting State Farm, 463 U.S. at 53).
    Response: The EPA acknowledges the existence and importance of
these co-benefits. However, when the EPA is comparing benefits to costs
as a required prerequisite to regulation, it is critical to examine the
particular statutory provision that is being implemented. That
statutory provision may limit the relevance of certain costs and
benefits--e.g., serve to establish that any benefits attributable to
the ancillary reduction of pollutant emissions that are not the focus
of the provision at issue are not ``an important aspect of the
problem'' that Congress is seeking to address. As noted in the 2019
Proposal and in earlier responses to comments, in CAA section
112(n)(1)(A), Congress directs the EPA to decide whether regulation of
EGUs is appropriate and necessary under CAA section 112; the EPA
believes that it is not appropriate to answer this question in the
affirmative by pointing to benefits that are overwhelmingly
attributable to reductions in an entirely different set of pollutants
that CAA section 112 is not designed to address. In fact, the EPA
believes that it would be arbitrary and capricious to do so. See Motor
Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983) (``Normally, an agency rule would be arbitrary and capricious if
the agency has relied on factors which Congress has not intended it to
consider.'').
    The EPA is not turning a blind eye to the reasonably predictable
consequences of MATS. The 2011 RIA appropriately details the magnitude
of the PM2.5-related co-benefits in the form of avoided
premature deaths, hospital admissions, emergency department visits and
asthma attacks, among other endpoints. However, CAA section
112(n)(1)(A) requires a threshold determination of whether any
regulation of EGUs under CAA section 112 is ``appropriate and
necessary.'' The EPA believes that this inquiry must be focused
primarily on the risks posed by the pollutants targeted by CAA section
112, i.e., HAP emissions. The gross disparity between monetized costs
and HAP benefits, which should be the primary focus of the
Administrator's determination in CAA section 112(n)(1)(A), is so great
as to make it inappropriate to form the basis of the necessary
statutory finding. While the Agency acknowledges that PM co-benefits
are substantial, the Agency cannot rely on PM co-benefits to supplant
the primary factors Congress directed the Administrator to consider.
    Comment: Several commenters asserted that the EPA's approach to
considering co-benefits under the CAA section 112(n)(1)(A) analysis was
inappropriate because it is unprecedented in the EPA's regulatory
practice and contrary to OMB and EPA policy. Commenters asserted that
co-benefits are universally accepted as an important tool in regulatory
economics and economic planning. Commenters quoted OMB Circular A-4 as
directing agencies in conducting RIAs to ``look beyond the direct
benefits and direct costs of your rulemaking and consider any important
ancillary benefits and countervailing risks.'' The commenters also
identified the EPA's ``Guidelines for Preparing Economic Analyses''
that states: ``An economic analysis of regulatory or policy options
should present all identifiable costs and benefits that are incremental
to the regulation or policy under consideration. These should include
directly intended effects and associated costs, as well as ancillary
(or co-) benefits and costs.'' Commenters also cited to previous clean
air rules where the EPA has afforded co-benefits equal weight in cost-
benefit analyses.
    Response: The EPA developed the 2011 RIA for the 2012 MATS Final
Rule pursuant to Executive Orders 12866 and 13563, as well as certain
other applicable statutes, as informed by OMB guidance and the EPA's
Economic Guidelines. It is true that, in this action, the EPA is
drawing on information generated in that RIA in order to make the
determination required under CAA section 112(n)(1)(A) concerning
whether regulation of EGUs under CAA section 112 is appropriate. How
costs are to be considered in making the congressionally-directed CAA
section 112(n)(1)(A) determination, however, is not governed
independent from statutory requirements, by preexisting OMB or EPA
guidelines, nor could it be. Furthermore, for the many reasons
explained elsewhere in this preamble and in the 2019 Proposal, the CAA
section 112(n)(1)(A) determination is governed by the particular
statutory provision at issue, and, therefore, is distinct from any
other CAA action.
    In the context of conducting the CAA section 112(n)(1)(A)
determination, the EPA finds it is not only appropriate but indeed,
necessary for the EPA to interpret and apply the particular provision
of CAA section 112(n)(1)(A), which as mentioned earlier specifically
cites to HAP listed under section 112(b) of the CAA. To be valid, the
EPA's analytical approach to that provision must recognize Congress'
particular concern about risks associated with HAP and the benefits
that would accrue from reducing those risks. OMB and EPA guidance
outline regulatory principles that agencies are encouraged to follow to
the extent permissible under law. These guidance documents, and the
standard economic principles reflected in them, are not necessarily
informative regarding how Congress intended the EPA to make the CAA
section 112(n)(1)(A) determination, nor should they be read to override
statutory text and structure that, as explained earlier in this
preamble, requires a focus on a limited set of costs and benefits.
Although an analysis of all reasonably anticipated benefits and costs
in accordance with generally recognized benefit-cost analysis practices
(including extending analytic efforts to ancillary impacts in a
balanced manner across both benefits and costs) is appropriate for
informing the public about the potential effects of any regulatory
action, as well as for complying with the requirements of Executive
Order 12866, it does not follow that equal consideration of all
benefits and costs, including co-benefits, is warranted, or even

permissible, for the specific statutory provision requiring the EPA to
make an appropriate and necessary finding called for under CAA section
112(n)(1)(A).
    Comment: Some commenters asserted that the EPA's 2019 Proposal
erroneously suggests that CAA sections 110 and 112 must be treated as
mutually exclusive authorities for reducing the public health impacts
of PM emissions. Commenters argued that there is no basis to ignore the
benefits of reducing pollutants merely because they are also subject to
regulation under state and federal implementation plans approved to
implement the NAAQS. One commenter noted that the existence of other
CAA provisions that deal with criteria pollutant emissions likely
indicates Congress' deep concern about the health and environmental
risks they pose. One commenter argued that there is no legal support
for the idea that CAA section 110 or 112 requires exclusivity; the EPA
is not required to pick one avenue through which it can impact PM
emissions. The commenter noted that many CAA provisions can address PM,
such as those for interstate transport and regional haze, and the EPA
itself has encouraged states in their implementation planning to
consider selecting controls that will minimize emissions of multiple
pollutants. Another commenter acknowledged that the EPA does not argue
that the other provisions should be the exclusive vehicle for
addressing criteria pollutants, but this commenter asserted that the
2019 Proposal did not explain how criteria pollutant reductions could
be realized more effectively by some other legal mechanism and did not
claim that criteria pollutants have been fully controlled through those
other programs. One commenter also argued that the EPA's proposal is
particularly unfounded because many metal HAP are emitted as PM.
    Response: The EPA disagrees with the commenters. The EPA's
discussion of co-benefits, and the impropriety of giving them equal
weight to HAP-specific benefits within the context of the appropriate
and necessary determination, is based on an interpretation of CAA
section 112(n)(1)(A), a provision enacted by Congress to address the
unique situation facing EGUs. We have limited our analysis to the
specifically tailored provision of CAA section 112(n)(1)(A), in which
Congress recognized that EGUs would face regulation under numerous