These costs fall particularly hard on low incomes families, the elderly and the disabled. The Low Income Home Energy Assistance Program (LIHEAP) and similar governmental agencies are chronically overwhelmed with requests for support for utility bills when home heating costs surge. Millions of families cannot sustain the escalating electric rates and home heating costs caused by high and volatile natural gas prices: 21 percent of LIHEAP recipients are families with children under five years of age, 37 percent are elderly, and 50 percent are disabled. [EPA-HQ-OAR-2009-0491-3732.1_NODA, p. 8]
Peabody Energy Company
But the unresolved questions relating to shale gas are so profound and far-reaching that any EPA action that leads to an increase in dependence on gas for power generation opens the door to not only markedly higher costs of electricity, but also substantial increases in the price of natural gas for families and businesses. [EPA-HQ-OAR-2009-0491-3762.1_NODA, pp. 4-5]
Response:
EPA is sensitive to the impact of costs of pollution control on low-income individuals, families and businesses and strives to design our policies and programs to achieve environmental goals in a cost-effective manner. As described in section VII.A of the rule preamble, EPA believes that the use of the limited interstate trading remedy in this final Transport Rule is the most cost-effective and practical way of eliminating significant contribution from upwind states to downwind nonattainment and maintenance areas within the requirements of the Clean Air Act. While EPA agrees that some consumers are less able to afford increases in electricity or natural gas costs than others, as noted in the preamble EPA estimates that the price effects will be modest. The final Transport Rule is estimated to increase residential electricity prices in 2014 less than $1/month. EPA also projects that electric power sector-delivered natural gas price will increase by about 0.3% over the 2012-2030 timeframe and that natural gas use for electricity generation will increase by approximately 200 billion cubic feet (BCF) by 2014.  Both of these increases are generally less than what occurs as a result of fluctuating fuel prices and other respective market factors (see section XII.H. of the preamble). In addition, the total costs (approximately $800 million) are much smaller than the health benefits (estimated at more than $110 billion) that will accrue to the same consumers, including less risk of premature death, fewer heart attacks, fewer asthma attacks, fewer hospitalizations, and the recovery of millions of days when people miss work or school due to pollution-related symptoms. Overall, EPA estimates that for every dollar in costs to comply with this rule, consumers will receive as much as $350 in health and quality of life benefits.
Organization: New Orleans City Council
Florida Municipal Electric Association (FMEA)
Louisiana Energy and Power Authority (LEPA)
Comment:
Florida Municipal Electric Association (FMEA)
EPA has provided a cursory assessment and explanation of the impacts of its Proposed Transport Rule on the utility sector. But EPA has not attempted to analyze the combined impact of this proposal with other rules it has either recently promulgated, or is actively developing. Each of these rules individually will have a significant impact on the cost of electricity generation and transmission; combined, EPA's initiatives could have a crippling and irreparable impact. Nor has EPA attempted to assess the Proposed Transport Rule's impact, or the impact of all relevant rules combined, on electric system reliability, our national economy (especially given these sensitive and volatile economic times), or the disproportionate impact on lower socio-economic groups and individuals. [EPA-HQ-OAR-2009-0491-2656.1, pp.6-7]
Louisiana Energy and Power Authority (LEPA)
While EPA ostensibly considered the health and environmental impacts of reduced air emissions on low income, minority, and Native American populations, the EPA does not appear to have accounted for the fact that those populations in LEPA's control area, as well as other areas affected by the proposed rule, could be left without power because of the Transport Rule. [EPA-HQ-OAR-2009-0491-2700.1, pp.14-15]
New Orleans City Council
New Orleans has struggled to rebuild itself after the devastation of Hurricanes Katrina, Rita, Gustav and Ike. Many in the city still struggle with daily life. As of October 2009, approximately 62,400 of ENO's 112,000 (or roughly 55%) residential customers fell into the U.S. Department of Housing and Urban Development's low income classification. These customers simply cannot afford increases in their utility bills, and the Council has been fighting to keep utility bills as low as possible as the city rebuilds. [EPA-HQ-OAR-2009-0491-2719.1, p.2.]
Response:
EPA shares commenters' concerns regarding potential economic costs of the Transport Rule, especially for low-income individuals and communities. EPA also recognizes that these same individuals and communities already bear large costs associated with the effects of air pollution on their health and quality of life. As a result, EPA was careful to design the Transport Rule in a way that provides significant public health benefits while keeping any electricity price or reliability impacts to a minimum. For example, as noted in sections VI and VII of the preamble, EPA considered the costs of pollution control and the emission reductions possible at those costs within the given timeframe in setting the budgets for each state. EPA also designed the rule with some flexibility, including limited interstate emissions trading and variability and assurance provisions, that will allow sources to accommodate shifts in power generation without affecting environmental protection or energy reliability.
The projected costs of the final rule are not likely to be excessively burdensome even for low-income groups or individuals. EPA projects a very small increase in electricity price as a result of this rule of approximately $1/month in 2014. Furthermore, the data are clear that the benefits of this rule, especially for those most vulnerable to the health effects of air pollution, greatly exceed the costs: the Transport Rule provides as much as $350 in benefits for every dollar in costs.
Organization: Public Interest Law Center of Philadelphia
Comment:
Public Interest Law Center of Philadelphia
The fundamental problem with emissions trading is the increased localized pollution burden it creates for communities situated near plants who purchase the additional allowances. Because of historic plant-siting decisions, these negatively affected communities are very likely to consist of minority and poor populations who already suffer disproportionately from increased rates of asthma, heart disease, and other health challenges that are exacerbated by the very air pollutants that CATR seeks to control. The EPA identifies these areas as Environmental Justice ("EJ") communities and seeks to promote the "fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementations, and enforcement of environmental laws, regulations, and policies." Office of Envtl. Justice, U.S. EPA, Environmental Justice 2000 Biennial Report, at vii (2000). To achieve this goal, and to adhere to the requirements of Title VI of the Civil Rights Act of 1964 and the amendments thereto, the EPA must be cognizant not to create disparate impacts from environmental policies such as emissions trading. More specifically, the Agency must examine the possibility that the Transport Rule may impact EJ communities disproportionately by creating incentives that could lead to worsened local air quality conditions, thus depriving residents of EJ areas of many, if not all, of the overall benefits the regulation is designed to achieve at the state and regional levels. [EPA-HQ-OAR-2009-0491-2817.1, p.3]
If the Transport Rule is implemented in any of its current proposed forms (all of which include either some form of emissions trading or in-state company-level averaging), we would suggest the EPA simultaneously implement programs aimed at protecting EJ communities that may suffer disproportionate harms as a result of locally unfavorable emissions imbalances created by intrastate or limited interstate emissions trading. [EPA-HQ-OAR-2009-0491-2817.1, p.4]
Specifically, we would suggest rules that limit the number of emission allowances available to affected power plants in close proximity to EJ communities and/or automatically escalate, through a weighting formula, the costs of emissions allowances for such affected sources in close proximity to EJ communities. This would prevent, or at least decentivize, such sources from perpetuating or even increasing levels of localized pollution in the areas that are most susceptible to the negative health consequences of NOX and SO2 emissions. [EPA-HQ-OAR-2009-0491-2817.1, p.4]
Regardless of the approach the Agency ultimately selects, the Agency should also implement programs to measure and monitor the effects of NOX and SO2 emissions allowance trading in EJ communities. If these studies reveal continued poor air quality or a decrease in air quality over time, the EPA should use its authority under the Clean Air Act to designate  -  even under the preferred approach or the intrastate trading approach  -  an individual emissions cap on the plant. Through this safety valve mechanism, the Agency can prevent local EJ communities from bearing a disproportionate burden of a state's pollution allowance. [EPA-HQ-OAR-2009-0491-2817.1, p.5]
If the Proposed Transport Rule is to be promulgated as a final rule in any of the three proposed formats, the EPA must conduct a detailed environmental justice analysis of the adverse health and environmental effects of emissions trading between plants, and the full report of that study should be made part of this rule making docket and should be made available to the public. If the goal of the Transport Rule is to promote cleaner air quality for millions of Americans, the EPA needs to ensure that residents of EJ communities do not suffer the paradoxical result of decreased air quality and increased adverse health impacts while communities that are more affluent and more white enjoy the full benefits of cleaner air that the Transport Rule is designed to return. [EPA-HQ-OAR-2009-0491-2817.1, p.6]
[These comments were submitted as testimony at the Philadelphia, Pennsylvania public hearing on August 26, 2010.  See Docket Number EPA-HQ-OAR-0491-1938, pp.123-127.]
Under any of the Transport Rule proposals, then, environmental justice communities may suffer a perverse fate. Take Pennsylvania, a covered state for both nitrogen oxide and sulfur dioxide, as an example. A facility located in the less populous part of the state that achieves more than its required reductions might then trade its extra allowances to a power plant located close to one or more environmental justice communities in the more populous southeast part of the state.
Although the overall state emission budget might thus be met, the power plant located near the environmental justice communities would, thanks to trading, be allowed to continue emitting pollutants at higher levels. The same result could occur under Alternative Two, which allows company-level averaging.
Because local pollution would remain high, the nearby environmental justice communities would not receive the same public health and environmental benefits under the Transport Rule as the communities surrounding the facility on the other end of the trade. Indeed, the disproportionate imposition of environmental burdens on vulnerable communities would be perpetuated.
If EPA's nascent focus on environmental justice under Administrator Jackson is to be seen as something other than mere lip service, the agency must ensure that the Transport Rule is consistent with its environmental justice obligations. If there is to be allowance trading, whether intrastate or interstate, it must be controlled in a manner that offers true protection to the environmental justice communities who would otherwise bear the pollution burdens.
Environmental justice communities are, to borrow the memorable words of civil rights activist Fannie Lou Hamer, 'sick and tired of being sick and tired.' EPA should not, in promulgating a Transport Rule that can provide so many public health and environmental benefits to all, leave open the possibility that vulnerable communities of color and of poverty will continue to be subjected to unequal treatment, based solely on the vicissitudes of power sector variability.
Response:
EPA has assessed the environmental justice effects of the Transport Rule, including its limited interstate trading provisions. This analysis was included in the proposed Transport Rule for public comment; it was updated and improved based on new data and modeling that became available in section XII.J of the final Transport Rule. This analysis included a structural analysis of the rule as well as analyses of emissions, air quality, and health benefits, and opportunities for public participation. All of these analyses indicate large health and environmental benefits for these communities; none show evidence of adverse effects. As a result, EPA concludes that we do not expect any disproportionate or adverse human health or environmental effects on minority, low-income, or tribal populations in the United States as a result of implementing this final Transport Rule.
During the comment period, EPA received several comments suggesting different types of restrictions on emissions trading or use of trading ratios to weight emission reductions in some areas more heavily than others. EPA's response to these comments is in section VII.A of the preamble to the final Transport Rule.
EPA and the states do maintain a nationwide network of ozone and fine particulate monitoring stations that can be used to assess changes in air quality as a result of this Transport Rule and other actions to improve air quality. These data are publically available to communities, state representatives, and anyone else who is interested in assessing changes in air quality over time.
It is important to note that EPA's authority for this rule is limited to eliminating emissions from upwind states that "significantly contribute" to nonattainment or interfere with maintenance of a national ambient air quality standard in a downwind state. Air quality at any location is a combination of pollution from local sources and pollution that is transported from more distant sources; as a result, large reductions in emission from far away sources can significantly improve air quality even if a local source does not reduce its emissions.
In addition, this rule is only one of several tools that EPA, states, and communities are using to improve air quality in the nation's most polluted areas. Other actions include implementation of the Mercury and Air Toxics standards to reduce toxic emissions from power plants, emissions standards for cars, trucks, and other vehicles, and actions states take to attain and maintain the national ambient air quality standards. In addition, it is important to note that nothing in this final rule allows sources to violate their title V permit or any other federal, state, or local emissions or air quality requirements.

XIII. Regulatory Impact Analysis

Organization: American Clean Skies Foundation (ACSF)
Comment:
American Clean Skies Foundation (ACSF)
The generating sector has the ability to accommodate additional fuel switching without compromising reliability. Under the current CATR proposal, EPA has projected that by 2014 approximately 1.2 GW of current coal-fired generation will be uneconomic to maintain. This is only 0.1% (l/10th of 1%) of the nation's generation capacity and about the size of a single, large coal-fired power plant. Greater reductions in coal-fired generation can be accommodated by the grid to meet the goals of the CAA and the Proposed Rule. Indeed, recent analysis by M.J. Bradley & Associates demonstrates that at least 10 to 20 GW of gas-fired generation could be substituted without threatening electric reliability and would 'help millions of Americans breathe easier, live healthier." [EPA-HQ-OAR-2009-0491-2759.1, pp.7-8]
Key assumptions in the proposed rule were based on EIA's Annual Energy Outlook (AEO) 2008. AEO 2008 contains significantly outdated information. Indeed, EPA itself recognizes the need to consider the AEO 2010 analysis. [EPA-HQ-OAR-2009-0491-2759.1, p.9]
5. EPA makes misstatements regarding natural gas generation that should be corrected.
EPA makes various misstatements regarding natural gas generation that should be corrected. [EPA-HQ-OAR-2009-0491-2759.1, p.9]
EPA overlooks the ability of clean-burning natural gas to provide base-load generation. EPA says that coal power plants 'typically supply 'base-load' electricity, the portion of electricity loads which are continually present, and typically operate throughout the day,' and that gas-fired generation 'is more often used to meet the variable portion of the electricity load and typically supplies 'peak' power." This fails to recognize the role that modem, base-load, high efficiency combined cycle power plants now play in the nation's generation portfolio. [EPA-HQ-OAR-2009-0491-2759.1, pp.9-10]
EPA also erroneously 'projects that most future growth in electric demand will be met with a combination of new natural gas- and coal-fired capacity." This projection conflicts with more current information that shows natural gas and renewables dominating new capacity additions. For instance, the Energy Information Agency AEO 2010 projects that most new capacity additions will use natural gas or renewable energy. [EPA-HQ-OAR-2009-0491-2759.1, p.10]
Response:
EPA agrees with the commenter that electric reliability will not be threatened or affected by the implementation of the Transport Rule.  Our TSD on reliability, which is in the public docket for this rule, provides evidence to this statement. EPA has updated the EIA data to be used for the Transport Rule analyses to be based on AEO 2010 from AEO 2008.  This has the effect of addressing the commenter's concerns regarding EPA's statements on natural gas and base-load generation, and the amount of new electric power capacity that is projected to come from natural gas-fired units.
Organization: George Washington University Regulatory Study Center
Comment:
George Washington University Regulatory Study Center
Executive order 12866 requires that major regulatory actions such as the Transport Rule be accompanied by a Regulatory Impact Analysis (RIA) that details the estimated costs and benefits associated with the proposed regulation. EPA has prepared an RIA for the Transport Rule, and goes into significant detail regarding the estimated health and welfare benefits associated with the Rule's required emissions reductions, and the economic costs of those reductions. While EPA presents some analysis of the uncertainty in the estimates of the concentration-response relationship for health effects (especially for the premature mortality risks associated with exposure to fine PM), the EPA's treatment of uncertainty in the Transport Rule RIA is problematic in several ways. In particular, the RIA lacks a more complete quantitative analysis that includes the major sources of uncertainty in its health benefits analysis. Without such an analysis, there is insufficient information in the RIA to make valid conclusions about the expected value of the benefits associated with the Transport Rule -- and therefore to make a fully-informed assessment of the Rule as a whole. The third section of these comments discusses these issues. [EPA-HQ-OAR-2009-0491-2573.1, p.6]
IV. The Treatment of Uncertainty in EPA's Analysis of Health Benefits
As required by Executive Order 12866, the EPA includes an extensive RIA with the proposed Transport Rule. While the RIA provides some analysis of the uncertainty in the benefits estimates, its treatment of uncertainty falls short in several ways. Thus, the Transport Rule does not provide the necessary assessment of the quality and certainty of the estimates presented in the RIA. This issue is not limited to the Transport Rule -- recent EPA RIAs have all generally suffered from the absence of an adequate uncertainty analysis. As a result, the EPA should conduct and document a robust, quantitative analysis of uncertainty not only in the final version of the Transport Rule, but in other future rules as well. [EPA-HQ-OAR-2009-0491-2573.1,p.25]
A. Quantitative Analysis of Uncertainty in EPA Rules
In a 2002 report titled Estimating the Public Health Benefits of Proposed Air Pollution Regulations, the National Research Council (NRC) of the National Academy of Sciences raised specific and detailed concerns with the EPA's treatment of uncertainty in the health benefits analysis for its RIAs.53, 54 While previous recommendations varied regarding the best way to address uncertainty, the 2002 report was unequivocal in recommending that EPA conduct a more comprehensive quantitative assessment of uncertainty in its primary regulatory analysis.55 The NRC report specifically called on EPA to conduct probabilistic, multiple-source uncertainty analyses present it in a clear and transparent way to decision makers and other interested readers. We agree with the NRC's criticisms and believe that the Transport Rule illustrates the shortcomings in EPA's recent RIAs. [EPA-HQ-OAR-2009-0491-2573.1, pp.25-26]
Analysis of benefits for EPA air rules typically requires a complex chain of analyses, including establishment of baselines such as the demographics and health status of the exposed population, estimates of the change in emissions with regulatory action, the effect of emissions changes on air quality, the resulting changes in the exposure of the population, and the resulting effect of changes in exposure on health. Because of the potential compounding of high-end or low-end assumptions in developing benefits estimates, EPA's approach generally masks the extent of the actual uncertainty in benefits estimates, giving policymakers and the public a misleading picture about the characteristics of the estimates presented in the analysis and their overall uncertainty. Without a quantitative uncertainty analysis, it is not possible to know whether the range of results that EPA presents in an RIA are within the ballpark of likely effects -- particularly where conservative assumptions or defaults are used -- or instead represent an overstatement or understatement of the likely outcomes. Thus, EPA's approach does not provide sufficient information about the expected value of net benefits or the expected value of benefits generally -- two variables that are key to judging whether expected benefits outweigh expected costs. [EPA-HQ-OAR-2009-0491-2573.1,p.26]
EPA's basic approach to presenting the uncertainty in its health benefits estimates in the Transport Rule RIA suffers from the same flaws as the approach critiqued in the 2002 NRC report. EPA has largely focused on the concentration-response relationship between exposure to air pollution and the associated health outcomes. EPA continues to develop a primary analysis presenting incidence estimates based on concentration-response functions from selected studies (or groups of studies). These estimates include "95th percentile confidence intervals" based on the standard errors of the effect estimates taken from the selected studies for each of the health endpoints. EPA uses Monte Carlo methods to generate the confidence intervals around the health incidence estimates and the monetized benefit estimates.58 [EPA-HQ-OAR-2009-0491-2573.1,p.26]
The problem with EPA's use of Monte Carlo analysis is that other key elements in the analysis -- for example, projected reductions in emissions and exposure -- are treated as known without any uncertainty.59 Thus, in discussing this approach, the NRC report found that "...no estimate can be considered best if only one of the large number of uncertainties is included in the analysis producing that estimate" (NRC 2002, 138). Further, the committee also found the intervals between the 5th and 95th percentiles of the distributions should not be interpreted as "90 percent credible intervals," or interpreted as a range within which "the true benefit lies with 90 percent probability" -- both of which labels the EPA has used in RIAs. [EPA-HQ-OAR-2009-0491-2573.1, p.27]
In response to concerns raised by the 2002 NRC report, EPA's Office of Air and Radiation (OAR) completed an expert elicitation study in 2006 -- the one significant response to the 2002 NRC report -- to better characterize the concentration-response relationship between fine PM exposure and premature mortality. However, EPA's Transport Rule RIA continues to provide only a qualitative discussion for many of the sources of uncertainty in the analysis, even though outside panels and studies continue to call for improved quantitative uncertainty analysis. Without a more comprehensive quantitative uncertainty analysis that addresses the important sources of uncertainty, it is difficult to know whether the resulting health benefit estimates reflect expected values or where these estimates fall within their associated probability distributions. To paraphrase the NRC report, no estimate can be considered best until the quantitative analysis includes the major sources of uncertainty in the analysis producing that estimate. And if estimates of health benefits do not reflect expected values, then there should be little reason to have any confidence in claims that benefits exceed the costs of a particular regulatory action. By developing probability distributions for each of the key components and combining these for the primary estimate, a quantitative uncertainty analysis would place EPA's estimates of benefits in the context of a comprehensive probability distribution. This would provide a better characterization of the EPA estimates and their uncertainty. [EPA-HQ-OAR-2009-0491-2573.1,p.27]
The following discussion illustrates this concern with EPA's benefits estimates and -- given the uncertainties in EPA's analysis -- suggests that there could potentially be a substantial bias in the benefits estimates. [EPA-HQ-OAR-2009-0491-2573.1, p.28]
B. Air Quality Modeling
One critical area is the development of a quantitative uncertainty analysis for the exposure assessment, including the underlying air quality modeling. The 2002 NRC report stated that "...it is difficult to know how much confidence to place in the predictions ..." without evaluating the uncertainty in air quality modeling (NRC 2002, 6). As an illustration of the potential importance of this uncertainty, the recent NRC report on the Hidden Cost of Energy provides estimates of the benefits per ton associated with controlling emissions of SO2, NOx, and fine PM from coal-fired power plants that are substantially smaller than EPA's recent estimates (in some cases an order of magnitude smaller; see Table 3). Although a portion of this difference is attributable to a difference in the threshold assumption for the concentration-response, much of the difference in the estimates arises from differences in the air quality modeling used in the NRC report and by EPA63 (NRC 2009b, 73). Such differences could significantly alter estimated benefits by accounting for a difference of at least a factor of five in effect estimates. (See Figure 1.)  [EPA-HQ-OAR-2009-0491-2573.1, p.28]
We have argued above that EPA needs to develop a quantitative uncertainty analysis to support its estimates of the extent to which individual states contribute and/or interfere with maintenance in the non-attainment areas of neighboring states. This analysis is also a critical element to a quantitative uncertainty analysis for the RIA analysis of health benefits. [EPA-HQ-OAR-2009-0491-2573.1,p.28]
C. Alternate Concentration Response Functions
EPA's draft Transport Rule RIA presents a "primary" or "core" estimate with "confidence intervals" for the estimated health effects based on the standard error in the effect estimates from the selected health studies. The health benefits of reducing the risk of premature mortality dominate the health effects estimate -- as reflected by the co-primary estimates developed from the most recent epidemiological-based estimates from the American Cancer Society study and from the Laden "six-city" study. [EPA-HQ-OAR-2009-0491-2573.1,p.28]
Differences in modeling the concentration-response relationship may account for a difference of at least a factor of five in effect estimates. Laden et al. (2006), in an update of the Six City study, provide estimates of the concentration response relationship that are 2.5 times greater than the effect estimates from the American Cancer Society study. In addition, a recent expert elicitation study of the fine PM-mortality relationship using European experts -- a part of the Harvard Kuwait public health project -- developed a combined estimate across experts for the concentration-response relationship for fine PM. (See Figure 2.) The ranges for the combined estimates (between the 5th and 95th percentile) are substantially greater than the ranges reported for the 2002 Pope and 2006 Laden studies. This wider range reflects the view among the experts that the published confidence intervals developed by EPA from the Pope (2002) and Laden (2006) studies -- confidence intervals based on the standard error for the effect estimates -- significantly understate the uncertainty of the fine PM-mortality relationship. [EPA-HQ-OAR-2009-0491-2573.1,p.29]
The Harvard-Kuwait study also explored the experts' views on the toxicity of the various components of fine PM. While they expressed uncertainty given the limited emerging literature on this issue, the experts viewed fine PM emitted directly from combustion processes as likely to be more toxic than the ambient mix of PM. In addition, they all viewed sulfate, nitrate, and crustal fine particulates as less toxic than the ambient mixture. The combined median estimates for long-term mortality associated with exposure to the least toxic component were less than half of the updated 2002 Pope estimate and comparable to the lower end 5th percentile estimate from that stud. (See Figure 2) In addition, the estimate from the 2006 Laden study is at the upper end (or even beyond) the range identified by the experts for low toxicity components in the Harvard-Kuwait study. Use of the combined expert estimate for lower toxicity components from the Harvard-Kuwait study would reduce estimated benefits by at least a factor of two. [EPA-HQ-OAR-2009-0491-2573.1,p.29]
F. Uncertainty in EPA's Cost Estimates
EPA does not develop a quantitative uncertainty analysis for its cost estimates. The RIA only provides a point estimate of the cost of the Transport Rule. The RIA also provides a qualitative discussion with a concluding statement that in EPA's judgment the cost estimates are likely to overstate future costs. The reasons for a quantitative uncertainty analysis with regard to health effects also apply with equal force to the importance of performing such an analysis for the regulatory cost analysis. Addressing uncertainty for health effects without equivalent efforts in these other areas is akin to having only "one hand clapping."  [EPA-HQ-OAR-2009-0491-2573.1,p.31]
Third, we recommend that EPA undertake further efforts to develop a quantitative uncertainty analysis for its Transport Rule RIA. We believe that it is particularly important to develop such an analysis for the air quality modeling component of the RIA. Taking these steps would make the cost-benefit analysis in the RIA more robust, transparent, and defensible. [EPA-HQ-OAR-2009-0491-2573.1,p.32]

53 Earlier NRC reports raised similar concerns. These earlier reports found that proper characterization of uncertainty is essential and most have expressed the concern that analyses of health benefits understate associated uncertainties and leave decision makers with a false sense of confidence in the health benefits estimates.
54 While the 2002 NRC report focused its attention on the uncertainty in the analysis of health benefits of air pollution regulations, the report recommended that EPA should also perform a similar quantitative uncertainty analysis for the valuation of health benefits and for the regulatory cost analysis. (NRC 2002, 127 and 148).
55 Throughout this discussion, the term "uncertainty" refers to both "variability" that reflects the statistical variation in estimates as well as to the uncertainty associated with a more fundamental lack of knowledge. Variability comes from the fact that there is variation within a population in terms of differences in exposure and in susceptibility. Variability cannot be reduced, but it can be better characterized with better data. Uncertainty results from a lack of knowledge about key elements or processes in the risk assessment. It can be represented by quantitative analysis -- and can be reduced with additional research -- but cannot be eliminated. One element of uncertainty is that which exists about the variability of a population estimate -- and thus the analyst often cannot be precise about the extent of variability. (For a more complete discussion, see NRC 2009a, 93-99.)
58 Monte Carlo analysis involves the random sampling from the probability distribution functions for the various elements that comprise a "model" (in this case relating changes in emissions to health outcomes like increased risk of mortality). This process generates thousands of possible outcomes that allow the development of a probability distribution function for the outcome of interest (for example, mortality). EPA also uses the health effects distributions for the individual health end-points in conjunction with a distribution of the value of reducing the risks of these effects in a Monte Carlo analysis to generate a distribution for monetized benefit estimates.
59 Note that it is possible to construct a platform for calculating benefits that would incorporate uncertainty for each of the components in the benefits analysis. For example, the Fast Environmental Regulatory Evaluation Tool (FERET) allows the user to represent the emissions profile as a distribution in addition to developing distributions for health effects and for their valuation. See Farrow, Scott, Eva Wong, Rafael Ponce, Elaine Faustman, and Richard Zerbe, Facilitating Regulatory Design and Stakeholder Participation: The FERET Template with an Application to the Clean Air Act. In Improving Regulation: Cases in Environment, Health, and Safety. Washington, D.C.: Resources for the Future Press, 429-442.
63 The NRC report reports that its estimates of premature mortality differ from EPA's by a factor of four (NRC 2009, 73). Krupnick et al. (2006) examined the effect of adopting alternative source-receptor models and reported that there was a 3.5 fold difference in the mean benefit estimates for the two air quality models evaluated in that study (97).
Response:
EPA has provided an extensive characterization of uncertainty for the benefits analysis in the Transport Rule.  Such a characterization is found in the RIA for the proposed rule, and applies the findings of the 2006 PM2.5 expert elicitation study.   This characterization builds on previous uncertainty characterizations prepared for previous RIAs (e.g., PM2.5 NAAQS RIA in 2006, ozone RIA in 2008), and is among the responses the Agency has prepared in response to the 2002 NRC report.  The RIA also includes the Agency's basis for how it derives the "core" estimate of benefits for the Transport Rule.  Finally, a listing of the uncertainties in the cost estimates is presented in the RIA, though this is not a full characterization of uncertainty in the cost estimates.
Organization: National Mining Association (NMA)
Comment:
National Mining Association (NMA)
EPA Must Produce a Cumulative Impact Analysis of Its Regulatory Program Affecting the Use of Coal
As discussed in more detail below, NMA believes that the regulatory analysis supporting the proposed Transport Rule is fatally flawed because it fails to take into account the cumulative impact of all of EPA's now-numerous completed, pending and expected rulemakings that are intended to and will have the effect of substantially reducing the usage of coal in the United States.1 These rulemakings include those affecting the use of coal for electric generation, where EPA is implementing a coordinated program to create, in its words, a "clean, efficient, and completely modern power sector," those affecting the use of coal for industrial, commercial and institutional purposes, such as the two rules specifically at issue here, and those directly affecting coal mining. [EPA-HQ-OAR-2009-0491-2868.1, p.2]
All of these rulemakings together will produce a dramatic and cascading series of effects not only in the coal industry but throughout the economy. There will be direct effects on coal employment and indirect effects on employment generally in the economy as a result of higher energy prices. Higher energy prices will also affect GDP and economic activity generally. American competitiveness will also be affected, as higher prices undermine the ability of American business to compete, with resulting off-shoring of American business and jobs. [EPA-HQ-OAR-2009-0491-2868.1,p.2]
Impact analysis performed by EPA now proceeds on a rulemaking-by-rulemaking basis, as if one rulemaking is unconnected to the next and as if the regulatory consequences are not cumulative. As a result, EPA's impact analyses mask the cumulative effect of the Agency's overall regulatory program. Individual-regulation impact analyses often predict limited effects, when in truth the overall program may produce extremely large consequences. [EPA-HQ-OAR-2009-0491-2868.1,p.2]
This balkanized approach to impact analysis impairs the public's right to notice and comment regarding EPA regulation. For instance, EPA's Regulatory Impact Analysis for the proposed Transport Rule shows relatively minor effects, which might lead the public to believe that the rule is relatively innocuous. Cumulative analysis, on the other hand, could lead to a far different conclusion -- that coal usage will decline dramatically as a result of the combined effect of numerous EPA rulemakings with attendant serious economic consequences. Armed with that information, the public would likely provide significantly different comment on the rule. [EPA-HQ-OAR-2009-0491-2868.1,p.2]
Cumulative impact analysis is not just good policy, it is required by law, both by Executive Order 12866 and the notice and comment rulemaking provisions of the Clean Air Act ("CAA"). NMA therefore urges EPA to defer final action on the two rules at issue here until the necessary cumulative impact assessment is produced. The specific type of analysis that NMA recommends is set forth as an attachment to these comments. [EPA-HQ-OAR-2009-0491-2868.1, p.3]
The effect of each EPA individual rule affecting coal, including the rules at issue here, cannot be understood without a cumulative analysis
Given EPA's intent to transform the power sector from what it is today into something different and given its efforts to reduce coal use throughout the economy, EPA must produce a cumulative and economy-wide assessment of this program. As EPA has proposed and finalized each individual regulation, including the proposed Transport Rule, EPA's impact analysis has been limited to the effect of the specific regulation in question. However, to understand the effect that all the rules together will create, it is necessary to study the effect of that program in toto. [EPA-HQ-OAR-2009-0491-2868.1,p.7]
These effects could be extremely large. For instance, EPA projects the annual cost of the SO2 NAAQS to be $2.9 billion to $3.0 billion in 2020, with most of those costs associated with the power sector13; the annual cost of the Transport Rule (all in the EGU sector) to be $3.7 billion in 2012 and $2.8 billion in 2014, with another $2 billion in 2020 and 2025; the annual cost of the ozone standard to be $32  -  44 billion, again with much of that cost in the EGU sector; and the total costs of the coal combustion residue rule to be over $8 billion under the Subtitle D option and over $20 billion with the Subtitle C option. Despite the request from NMA and others for EPA to assess the cost of its GHG regulatory program, EPA has refused to do so, and so that cost is unknown but could be very substantial as well. The other programs identified above will also add significant cost, with the new EGU MACT standards expected to have a potentially a very large impact. [EPA-HQ-OAR-2009-0491-2868.1, pp.7-8]
But these estimates, as large as they are, mask the overall effect of the regulations when considered cumulatively. The proposed Transport Rule is an example. EPA's draft Regulatory Impact Analysis ("RIA") for this proposed rule envisions relatively small impacts to coal usage. EPA projects that EGUs can meet the requirements of the rule by switching from high sulfur to low sulfur coal and by installing pollution control equipment, with the result that EPA estimates the retirement of only 1.2 GW of "small and infrequently used" coal-fired generating units by 2014.18 Based on the foregoing, EPA projects additional cost to the utility industry of $3.7 billion in 2012 and $2.8 billion in 2014 ($2006). [EPA-HQ-OAR-2009-0491-2868.1, p.8]
This EPA projection of almost no impact to the coal industry, however, is not meaningful because it is based on an analysis of the Transport Rule in isolation. Thus, even if EPA's projected assessment of the effect of the Transport Rule on coal is correct, that assessment assumes that there are no other forthcoming EPA regulations that will affect the use of coal, an assumption that is clearly wrong. The control options that the Transport Rule RIA envisions appear to exhaust (and likely go beyond exhausting) the ability of the power sector to absorb EPA regulation without large-scale closings of coal plants. The next regulation following the Transport Rule that adds cost to coal-fueled electric generation therefore will force plant closings, but it is incorrect to say that it was that next regulation and not the Transport Rule that causes the plant closings. Both rules and indeed the entire program cause that effect. [EPA-HQ-OAR-2009-0491-2868.1,pp.8-9]
EPA itself recognizes the need for cumulative analysis in an analogous situation. EPA requires that EPA reviewers of Environmental Impact Statements ("EISs") under the National Environmental Protection Act ("NEPA") take cumulative impacts into account, including consideration of "impacts that are due to past, present, and reasonably foreseeable actions." According to EPA, in assessing environmental impacts, it is necessary to assess "[t]he combined, incremental effects of human activity" rather than just the impacts of the particular action for which federal approval is sought. This is based on the recognition that individual actions "may be insignificant by themselves," but that cumulative impacts accumulate over time, from one or more sources and these cumulative effects must be taken into consideration. [EPA-HQ-OAR-2009-0491-2868.1, p.9]
The Council on Environmental Quality ("CEQ") also requires cumulative impact analysis in EISs. CEQ regulations require that agencies considering major actions that could affect environmental quality consider the "overall, cumulative impact of the action proposed (and of further actions contemplated)."23 [EPA-HQ-OAR-2009-0491-2868.1,p.9]
EPA's and CEQ's reasons for requiring cumulative impact analysis in EISs apply with equal force to economic analysis that EPA performs of its regulations. Where effects of a proposed action accumulate with those of other related actions, examining the effects of the proposed action in isolation will mask the overall effect of the action. That is as true for EPA's regulatory efforts to reduce coal usage as it is for environmental analysis in the NEPA context. To again cite the proposed Transport Rule as an example, as stated, EPA concludes that the rule will not materially affect the use of coal for electric generation. But under the rationale of CEQ's NEPA regulations, cumulative impact analysis should be conducted because "[c]umulative impacts can result from individually minor but collectively significant actions taking place over a period of time." [EPA-HQ-OAR-2009-0491-2868.1,p.10]
Cumulative impact analysis is also legally required under the rulemaking provisions of the CAA where, as here, EPA has undertaken coordinated and comprehensive regulation of the power and coal sectors through a series of related rulemakings. The purpose of these CAA rulemaking provisions is both to ensure good regulatory outcomes and to protect the public's right to have adequate notice of the need for and effect of EPA regulatory action so that the public can provide meaningful comment. [EPA-HQ-OAR-2009-0491-2868.1, p.12]
In this context, section 307(d)(3) of the CAA requires that a rule be accompanied by a statement of its basis and purpose, including "the major legal interpretations and policy considerations underlying the proposed rule."For the reasons discussed above, an underlying policy consideration of the Transport rule at issue here is EPA's overall intent to incent reductions in coal usage and increases in resources that EPA considers to be "clean." That being the case, EPA must provide an analysis of the consequences of this policy so that the public can comment adequately. As stated, the coal industry and public at large might have an entirely different view of these proposed rules if EPA produced a cumulative assessment rather than the narrow assessment reflected in the RIA. [EPA-HQ-OAR-2009-0491-2868.1,pp.12-13]
The U.S. Court of Appeals for the D.C. Circuit has stated that "[i]t is not consonant with the purpose of a rulemaking proceeding to promulgate rules on the basis of inadequate data, or on data that, [in] critical degree, is known only to the agency." Unless the public knows the overall consequences of EPA's regulations in context of other related regulations, the public's right to provide adequate comment is compromised. [EPA-HQ-OAR-2009-0491-2868.1,p.13]
Additional support for cumulative analysis is found in section 318 of the CAA, which requires that the Administrator undertake an analysis of the cost of complying with various EPA actions, including rulemakings under section 111(d). Under section 318(d), such analyses "shall be as extensive as practicable" consistent with the standards set forth in that provision. [EPA-HQ-OAR-2009-0491-2868.1,p.13]
NMA believes that the cumulative impact assessment should examine the following factors. [EPA-HQ-OAR-2009-0491-2868.1,p.13]
:: Overall impacts on the economy. Specifically, the effect on GDP and jobs. In this regard, some of EPA's regulations (in particular, the NAAQS) will not just affect energy but will affect other sectors of the economy as well both directly (for example, through direct regulation of manufacturing sources) and indirectly (for example, through increased energy costs). EPA should examine all reasonably foreseeable effects of its regulations on the overall economy. [EPA-HQ-OAR-2009-0491-2868.1,p.13]
:: Energy. This part of the analysis should include impacts on energy production and usage, energy costs, including fuel costs and retail electricity prices, and energy employment should be determined. Changes in the energy mix in the United States should be shown over time, including electric capacity additions and reductions by fuel type. Employment and energy cost impacts should be estimated for each energy sector. [EPA-HQ-OAR-2009-0491-2868.1, p.13]
:: Competitiveness. This part of the analysis should include impacts on industrial and manufacturing production and competitiveness. EPA should determine the impacts of regulation on cost of production and employment in the relevant sectors, and the extent to which production and jobs will be reduced as a result of higher costs and foreign competition. [EPA-HQ-OAR-2009-0491-2868.1, p.14]
:: Study design. Scenarios should be constructed for a business-as-usual case (without adoption of the contemplated regulations) and a case where EPA adopts the contemplated regulations. Additional scenarios may be included to test the findings under different appropriate assumptions. Where EPA regulation does not directly regulate but instead requires states to adopt regulations meeting EPA standards (for instance, EPA regulation under the NAAQS program and NSR/PSD program), EPA should estimate state regulatory responses, using a range if necessary. All assumptions, analytical methods and underlying data (or appropriate citations to data sources) should be provided. All impacts should be broken down on a state-by-state basis. Regulations included in the study should not be limited to just those listed in NMA's comments but should include any other EPA regulations that EPA believes will affect the nation's economy, production and usage of energy and manufacturing. [EPA-HQ-OAR-2009-0491-2868.1,p.14]

2. The draft RIA is fundamentally flawed for another reason as well. On September 1, 2010, EPA published a Notice of Data Availability (NODA) indicating that EPA had changed the assumptions it used in its modeling in support of the proposed rule, with one of the principal changes being changed natural gas supply and price assumptions. EPA, however, did not publish a new draft RIA that reflects the new modeling assumptions. At this point, therefore, the public does not know exactly what the regulatory impacts of the rule will be. NMA will address this point in more detail in its comments on the NODA. [EPA-HQ-OAR-2009-0491-2868.1, p.2]
23. 35 Fed. Reg. 7390, 7391 (1970). It should be emphasized that CEQ does not distinguish between cumulative analysis of environmental impacts and of socioeconomic impacts. Under CEQ regulations, agencies must examine the effect of the proposed action on the "human environment." 40 C.F.R. § 1508.14 states that "[h]uman environment" shall be interpreted comprehensively to include the natural and physical environment and the relationship of people with that environment." While "economic or social effects are not intended by themselves to require preparation of an environmental impact statement," "[w]hen an environmental impact statement is prepared and economic or social and natural or physical environmental effects are interrelated, then the environmental impact statement will discuss all of these effects on the human environment." This applies to cumulative analysis: where socioeconomic effects accumulate from multiple actions, they must be assessed cumulatively, just as environmental effects must be assessed cumulatively. Thus, cumulative analysis is as relevant for examining socioeconomics as it is for analyzing environmental impacts. [EPA-HQ-OAR-2009-0491-2868.1 ,pp.9-10]
Response:
In implementing these rules, emission controls may lead to reductions in ambient PM2.5 and ozone below the National Ambient Air Quality Standards (NAAQS) for PM and ozone in some areas and assist other areas with attaining these NAAQS. Because the PM and ozone NAAQS RIAs also calculate PM and ozone benefits and costs, there are important differences worth noting in the design and analytical objectives of each RIA. The NAAQS RIAs illustrate the potential costs and benefits of attaining a new air quality standard nationwide based on an array of emission control strategies for different sources. In short, NAAQS RIAs hypothesize, but do not predict, the control strategies that States may choose to enact when implementing a NAAQS. The setting of a NAAQS does not directly result in costs or benefits, and as such, the NAAQS RIAs are merely illustrative and are not intended to be added to the costs and benefits of other regulations that result in specific costs of control and emission reductions. However, some costs and benefits estimated in this RIA account for the same air quality improvements as estimated in the illustrative PM2.5 and ozone NAAQS RIA.
The setting of a NAAQS does not directly result in costs or benefits, and as such, the NAAQS RIAs are merely illustrative and are not intended to be added to the costs and benefits of other regulations that result in specific costs of control and emission reductions. However, some costs and benefits estimated in this RIA account for the same air quality improvements as estimated in the illustrative PM2.5 and ozone NAAQS RIA.
By contrast, the emission reductions for the Transport rule are from a specific class of well-characterized sources. In general, EPA is more confident in the magnitude and location of the emission reductions for these rules. It is important to note that emission reductions anticipated from these rules do not result in emission increases elsewhere (other than potential energy disbenefits). Emission reductions achieved under these and other promulgated rules will ultimately be reflected in the baseline of future NAAQS analyses, which would reduce the incremental costs and benefits associated with attaining the NAAQS. EPA remains forward looking towards the next iteration of the 5-year review cycle for the NAAQS, and as a result does not issue updated RIAs for existing NAAQS that retroactively update the baseline for NAAQS implementation.
The Agency in this RIA did provide an estimate of early retirements of coal-fired units that may occur in reaction to the implementation of the proposed Transport Rule.   EPA estimated that relative to the base case for our analysis, about 1.2 GW of coal-fired capacity is projected to be uneconomic to maintain operation (less than 1 percent of all coal-fired capacity in the Transport Rule states, and thus less than 1 percent of all such U.S. coal-fired capacity) by 2014. Thus, few closings of coal-fired units are estimated based on EPA modeling.  Uneconomic units, for the most part, are small and infrequently used generating units that are dispersed throughout the states covered in the Transport Rule.  In practice, units projected to be uneconomic to maintain may be "mothballed," retired, or kept in service to ensure transmission reliability in certain parts of the grid, and our modeling is unable to distinguish between these potential outcomes.
Organization: Western Business Roundtable
Comment:
Western Business Roundtable
2. EPA and Other Agencies Employ Selective Approaches on Cumulative Impacts Analysis
Federal agencies only employ this narrow analytical approach when it comes to economic impacts. Environmental impacts analyses tend to draw broad and deep conclusions of predicted cumulative impacts. [EPA-HQ-OAR-2009-0491-2746.1 p.4]
The Council on Environmental Quality ("CEQ") requires cumulative environmental impact analyses in EISs. CEQ regulations require that agencies considering major actions that could affect environmental quality consider the "overall, cumulative impact of the action proposed (and of further actions contemplated)."4 [EPA-HQ-OAR-2009-0491-2746.1 p.4]
EPA requires its review of NEPA Environmental Impact Statements to take cumulative impacts into account, including consideration of "impacts that are due to past, present, and reasonably foreseeable actions."5 According to EPA, in assessing environmental impacts, it is necessary to assess "[t]he combined, incremental effects of human activity" rather than just the impacts of the particular action for which federal approval is sought.6 [EPA-HQ-OAR-2009-0491-2746.1 p.4]
Yet, NEPA was enacted to "promote efforts which will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man."7 Thus, NEPA requires federal agencies to balance protection of the environment against the needs of people. Because neither of the purposes is stated as predominant over the other, it is logical to conclude that NEPA envisions a balancing test, whereby any imposition of standards, denial of permits, or other regulatory actions taken on behalf of the environment must be balanced against the impacts (including health and economic) of those actions on the people affected. 8 [EPA-HQ-OAR-2009-0491-2746.1 p.4]
Agencies can balance those equities only by conducting a full, transparent and rational cost/benefit analysis which takes into account both environmental concerns and the economic and other issues that impact citizens' welfare. [EPA-HQ-OAR-2009-0491-2746.1 p.4]
3. Cumulative Impact Analysis is Required by Law and Regulation
What is most concerning about the approach being taken by federal agencies is the fact that it flies in the face of explicit federal requirements. [EPA-HQ-OAR-2009-0491-2746.1 p.4]
Executive Order 12866:
Executive Order 12866 specifically requires cumulative analysis as follows:
 "Each agency shall tailor its regulations to impose the least burden on society, including individuals, businesses of differing sizes, and other entities (including small communities and governmental entities), consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations."9 [EPA-HQ-OAR-2009-0491-2746.1 p.4]
 "[I]n deciding whether and how to regulate, agencies should assess all costs and benefits of available regulatory alternatives."10 [EPA-HQ-OAR-2009-0491-2746.1 p.4]
[An Agency is to] "base its decisions on its best reasonably obtainable scientific, technical, economic, and other information concerning the need for, and consequences of, the intended regulation."11
Moreover, EPA cannot say that cumulative analysis is not "practicable" within the meaning of the Order. The federal government obviously has very sophisticated modeling techniques at its disposal. In fact, agencies use predictive modeling all the time to evaluate and estimate future environmental impacts, including the potential future impacts of climate change. [EPA-HQ-OAR-2009-0491-2746.1 p.5]
Here, EPA has laid out a series of explicit steps it intends to take to reach a particular outcome. If an action by EPA in furtherance of that objective is so unformed as to defy economic impacts analysis, EPA needs to delay rulemaking until it has better information on the requirements it wants to impose. [EPA-HQ-OAR-2009-0491-2746.1 p.5]
Clean Air Act (CAA):
Cumulative impact analysis is also legally required under the rulemaking provisions of CAA Section 307(d)(3) requires that a rule be accompanied by a statement of its basis and purpose, including "the major legal interpretations and policy considerations underlying the proposed rule."12 [EPA-HQ-OAR-2009-0491-2746.1 p.5]
Here EPA is clearly undertaking a broad restructuring of the power sector through an already defined set of rulemakings. The Transport Rule is one of that set of rulemakings. Thus, EPA must provide a full analysis of the overall "policy" implications. [EPA-HQ-OAR-2009-0491-2746.1 p.6]
Section 318 of the CAA is also relevant to this discussion. It requires that the Administrator undertake an analysis of the cost of complying with various EPA actions, including rulemakings under section 111(d). Under section 318(d), such analyses "shall be as extensive as practicable" consistent with the standards set forth in that provision.13 [EPA-HQ-OAR-2009-0491-2746.1 p.6]
We have noted this elsewhere in these comments, but it bears repeating. NEPA requires a full, transparent and rational cost-benefit analysis that takes into account both environmental concerns and the economic and other issues that impact citizens' welfare.14 [EPA-HQ-OAR-2009-0491-2746.1 p.6]
Response:

In implementing rules such as the Transport Rule, emission controls may lead to reductions in ambient PM2.5 and ozone below the National Ambient Air Quality Standards (NAAQS) for PM and ozone in some areas and assist other areas with attaining these NAAQS. Because the PM and ozone NAAQS RIAs also calculate PM and ozone benefits and costs, there are important differences worth noting in the design and analytical objectives of each RIA. The NAAQS RIAs illustrate the potential costs and benefits of attaining a new air quality standard nationwide based on an array of emission control strategies for different sources. In short, NAAQS RIAs hypothesize, but do not predict, the control strategies that States may choose to enact when implementing a NAAQS. The setting of a NAAQS does not directly result in costs or benefits, and as such, the NAAQS RIAs are merely illustrative and are not intended to be added to the costs and benefits of other regulations that result in specific costs of control and emission reductions. However, some costs and benefits estimated in this RIA account for the same air quality improvements as estimated in the illustrative PM2.5 and ozone NAAQS RIA.
The setting of a NAAQS does not directly result in costs or benefits, and as such, the NAAQS RIAs are merely illustrative and are not intended to be added to the costs and benefits of other regulations that result in specific costs of control and emission reductions. However, some costs and benefits estimated in this RIA account for the same air quality improvements as estimated in the illustrative PM2.5 and ozone NAAQS RIA.
By contrast, the emission reductions for the Transport rule are from a specific class of well-characterized sources. In general, EPA is more confident in the magnitude and location of the emission reductions for these rules. Emission reductions achieved under these and other promulgated rules will ultimately be reflected in the baseline of future NAAQS analyses, which would reduce the incremental costs and benefits associated with attaining the NAAQS. EPA remains forward looking towards the next iteration of the 5-year review cycle for the NAAQS, and as a result does not issue updated RIAs for existing NAAQS that retroactively update the baseline for NAAQS implementation.
The Agency in this RIA did provide an estimate of early retirements of coal-fired units that may occur in reaction to the implementation of the proposed Transport Rule.   EPA estimated that relative to the base case for our analysis, about 1.2 GW of coal-fired capacity is projected to be uneconomic to maintain operation (less than 1 percent of all coal-fired capacity in the Transport Rule states, and thus less than 1 percent of all such U.S. coal-fired capacity) by 2014. Thus, few closings of coal-fired units are estimated based on EPA modeling.  Uneconomic units, for the most part, are small and infrequently used generating units that are dispersed throughout the states covered in the Transport Rule.  In practice, units projected to be uneconomic to maintain may be "mothballed," retired, or kept in service to ensure transmission reliability in certain parts of the grid, and our modeling is unable to distinguish between these potential outcomes.  This analysis was the most detailed the Agency could provide as practicable.
XIV. Regulatory Text

Organization: Duke Energy
Comment:
Duke Energy
Comments on EPA's Proposed Transport Rule Regulatory Text.
EPA has not proposed regulatory language for the intrastate trading and direct control alternative remedy programs. If EPA decides to finalize a Transport Rule based on either of those alternatives, which Duke Energy does not support, it will be necessary for EPA to publish proposed regulatory language for public comment.  The following citations refer to the NOx annual program specifically, but the same comments apply to the ozone season and annual SO2 control programs. [EPA-HQ-OAR-2009-0491-2689.1, p.64]
Response:
The final rule does not adopt the intrastate trading and direct control remedies.  See section VII.A of the preamble.
Organization: North Carolina Department of Environment and Natural Resources
Comment:
North Carolina Department of Environment and Natural Resources
The NCDAQ appreciates the fact that all four subsections are structurally similar. This assists in ease of understanding the applicable requirements and implementation for regulators, the regulated the community and the public. [EPA-HQ-OAR-2009-0491-2767.1 p.8]
Response:
See section XI of the preamble.

XIV.A. Part 97

Organization: Attorney General of North Carolina
Comment:
Attorney General of North Carolina
1. The use of the term owner's share in proposed rules 40 C.F.R. §§97.402, .502, .602 and .702 to refer to two different concepts is confusing. Definition no. 1 appears to refer simply to the owner's emissions for a single control period. Definitions 2 and 3 appear to refer to the owner's portion of the budget for that control period. The use of a single term with two entirely different definitions is unnecessarily confusing. Moreover, the three definitions are then followed by three separately numbered "provided" clauses and it is not clear whether these clauses are meant to apply to all of the definitions. Using a term such as owner's emissions for definition no. 1 would provide better clarity.   [EPA-HQ-OAR-2009-0491-2685.1 p.35]
There appears to be a cross reference error in the rule text. Section 97.412(b) refers to "paragraph (a)(4) of this section . . . ." 75 Fed. Reg. at 45,377/3. There does not appear to be any paragraph (a)(4) in §97.412. The cross reference was likely intended to be to paragraph (a)(3) instead. This error appears to have been made in the analogous language in §§97.512, 97.612 and 97.712.   [EPA-HQ-OAR-2009-0491-2685.1 p.36]
Response:
The term "owner's share" is not used or defined in the final rule.  In the final rule, the assurance provisions are implemented on a common-designated-representative basis, rather than on an owner basis.  The term "common designated representative's share" is used in the final rule, and the definition is much simpler than that of "owner's share" in the proposed rule.  See sections VII.E and XI of the preamble.
Proposed sections 97.412, 97.512, 97.612, and 97.712 are revised in the final rule.
Organization: City of Tallahassee
Comment:
City of Tallahassee
EPA HAS APPROPRIATELY RELIED ON NAMEPLATE CAPACITY TO IDENTIFY UNITS SUBJECT TO THE TRANSPORT RULE [EPA-HQ-OAR-2009-0491-2669.1, p.5]
The proposed Transport Rule only applies to any "stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving . . . a generator with a nameplate capacity of more than 25 MWe producing electricity for sale." 75 Fed. Reg. at 45372. "Nameplate capacity" is defined as "the maximum electrical generating output (in MWe) that the generator is capable of producing on a steady state basis and during continuous operation (when not restricted by seasonal or other deratings) . . . as specified by the manufacturer of the generator . . . ." 75 Fed. Reg. at 45370 (emphasis added). EPA's definition of nameplate capacity is consistent with definitions promulgated by other regulatory agencies heavily involved with the electric utility industry, including the Energy Information Administration ("EIA"). The EIA defines generator nameplate capacity as the "maximum rated output of a generator . . . under specific conditions designated by the manufacturer." U.S. Energy Information Administration, Glossary http://www.eia.doe.gov/glossary/index.cfm?id=G (last visited Sept. 27, 2010)(emphasis added)). [EPA-HQ-OAR-2009-0491-2669.1, p.5]
Nameplate capacity is the appropriate measure of generator capacity and should continue to set the threshold for applicability of the Transport Rule. Nameplate capacity provides a bright-line test for operators and regulators to determine whether a unit is subject to regulation under the Transport Rule. Unlike instantaneous peaks in generation that represent only a snapshot in time, nameplate capacity represents the generating capacity the unit is designed to sustain for a period of time. This is a more accurate and consistent measure of capacity because generating units designed to operate at a steady state may vary significantly for short periods. Using generator nameplate capacity to distinguish between units subject to the Transport Rule and those that are not in the final rule will avoid uncertainty and ensure units are accurately and appropriately categorized for the life of the unit (unless and until the design capacity is modified and the manufacturer acknowledges a change to the nameplate capacity). [EPA-HQ-OAR-2009-0491-2669.1, p.5]
Response:
See sections VII.B and XI of the preamble.
Organization: City Utilities of Springfield
Comment:
City Utilities of Springfield
Issue: The preamble states that EPA proposes to define a "New Unit" as: "Any covered EGU not listed in the table in Appendix A of the trading rule applicable to that program; any unit listed in Appendix A whose allocation is subject to the requirement that the Administrator not record the allocation or that the Administrator deduct the amount of the allocation (see previous discussion in footnote), or any unit listed in Appendix A that stopped operating for three allowances as an existing unit, but resumes operation (page 45310, column 1)"  [EPA-HQ-OAR-2009-0491-2721.1 p.3-4]
However, that definition does not appear in the Definition sections at §97.402, 97.502, 97.602, or 97.702. Instead, the term is operationally defined within the context of the language applicable to the new unit set-aside program. We believe it is important to include the definition of "New Unit" as stated in the preamble, as this appeared to be a point of considerable confusion in the prepublication rule text. [EPA-HQ-OAR-2009-0491-2721.1 p.4]
Response:

The final rule revised the description of the categories of units (i.e., "new units") eligible for allocations from the new unit set-aside.  Because the units eligible for such allocations are described in detail in the final Transport Rule trading program rules and the term "new unit" itself is not used in these rules except as part of a section title and as part of the term "new unit set-aside," EPA does not believe that it is necessary to include, and define, the term in the definitions sections of these rules.   See section VII.D.2 of the preamble.
Organization: Duke Energy
Comment:
Duke Energy
75 Fed. Reg. at 45368.
The definition of "biomass" in subparagraph (1) would appear to exclude any whole trees or other agricultural products unless those were grown specifically for use as fuel. These crops have multiple uses within the agricultural/forest products market. While there is ongoing public discourse concerning what sources may be counted as biomass in terms of renewable energy, that discussion is not relevant to the Proposed Transport Rule, and this rulemaking is not the appropriate arena to settle that issue. For purposes of the Proposed Transport Rule, biomass should be considered any organic material or agricultural/forest product that may be harvested and used as a fuel, in addition to the definitions for biomass byproducts and segregated materials for energy recovery as defined in subparagraphs (2) and (3). [EPA-HQ-OAR-2009-0491-2689.1,p.64]
75 Fed. Reg. at 45369.
The definitions include both the terms "commence commercial operation" and "commence operation." It is not clear how these different terms are used within the regulation. A search of the rule does not show any instances where "commence operation" is used. This latter definition is very broad, and includes essentially any minor operation whether or not any fuel is being combusted. Depending on the intended use of that term, the definition of "commence operation" may not be appropriate. [EPA-HQ-OAR-2009-0491-2689.1, pp.64-65]
75 Fed. Reg. at 45369.
[Do we care? Do we prefer that a non-fossil unit (i.e. a biomass unit) should be under the TR rather than some later industrial Transport Rule???] The definition of "fossil fuel-fired" states that any amount of fossil fuel combusted in 1990 and later will qualify a unit as a fossil fuel-fired unit. Fossil fuels in de minimis amounts related to startup or combustion stabilization should not define a unit as fossil-fired. Similar to NSPS classification for utility and non-utility steam generating units, a cut-off of 10% fossil fuel may be more appropriate for defining a unit as fossil fuel-fired. [EPA-HQ-OAR-2009-0491-2689.1,p.65]
75 Fed. Reg. at 45370
The definition of "nameplate capacity" should also include a reduction in capacity following any repowering project that would result in a lower rating for the electric generating unit. For example, repowering a fossil-fired unit to burn biomass may result in a substantial reduction in capacity. [EPA-HQ-OAR-2009-0491-2689.1,p.65]
75 Fed. Reg. at 45374.
Response:
The definition of "biomass" in the final Transport Rule trading programs includes, among other things, "[a]ny organic material grown for the purpose of being converted to energy".  EPA does not interpret this definition as excluding whole trees or other agricultural products grown for multiple uses, one of which is for conversion to energy.  This interpretation applies only to this definition and may or may not apply to other definitions of "biomass" in other contexts.
The final rule does not use or define the term "commence operation".   The term "commence commercial operation" is used and defined in the final rule.  See section XI of the preamble.
The final rule defines "fossil-fuel-fired" as combusting any amount of fossil fuel in 2005 or later.  EPA rejects, for several reasons, the commenter's approach of excluding so-called "de minimis" amounts of fossil fuel use.  The approach in the final rule is consistent with the approach used in prior EPA trading programs covering the electric generation industry, e.g., the Acid Rain Program, the NOx Budget Trading Program, and the CAIR trading programs.  The commenter did not provide any basis for using different approach in the Transport Rule trading programs covering the same industry or specifically for using a suggested level of 10% of total fuel use as the cut-off for what would constitute "de minimis" fossil fuel use in these programs.   As noted by the commenter, the NSPS regulations refer to a 10% level of fossil fuel use in connection with certain NOx (but not SO2) emission requirements for certain types of units.  However, the exemption from NOx emission requirements based on the unit having annual capacity factor for coal, oil, and natural gas of 10% or less is limited to industrial, commercial, and institutional steam generating units and does not apply to electric utility steam generating units.    Compare  40 CFR 60.44Da (setting NOx emissions standard for electric utility steam generating units, without any exemption for units with 10% or less fossil fuel use) and 60.44b (setting NOx emissions standards for industrial, commercial, and institutional steam generating units, with an exemption for units with 10% or less fossil fuel use).  The use of the 10% cutoff in a different set of regulations applicable to a different category of units does not support the commenter's claim that the 10% level should be used to exempt units from the Transport Rule emission reduction requirements.  Moreover, the commenter failed to specify, much less justify, any period of time during which fossil fuel use would have to be less than 10%.  If the applicability of the Transport Rule trading programs were to depend on exceeding a specific level of fossil fuel use, a unit's regulatory status could change during the course of the year.  Specifically, a unit's fossil fuel use can vary, depending on, among other things, changes in unit operation and fuels.  As noted by the commenter, some units use fossil fuel for startup and combustion stabilization, and so fossil fuel use can vary depending on the frequency of startups and shutdowns and on factors (such as the moisture content and other characteristics of the other fuels being combusted) affecting the need for combustion stabilization.  A unit that was excluded from the Transport Rule trading programs because of its "de minimis" fossil fuel use would not report fuel use to EPA, and so determination of which units were subject to the trading programs, and assurance of compliance, would be problematic.
EPA rejects the commenter's suggestion of including in the definition of "nameplate capacity" language that would include reductions in capacity due to derating due to a change in fuel.  This suggested language would have the effect of allowing owners and operators to remove a unit from coverage by the Transport Rule trading programs by changing the fuel combusted.  The final Transport Rule trading programs do not specify either an emission level for specific units or specific emissions controls for specific units, but instead give owners and operators the flexibility to adopt the compliance strategies (including changing fuels) that they determine to be appropriate.  In light of this flexibility, EPA takes the approach in the final Transport Rule that once a unit is subject to the trading programs, the unit remains subject, regardless of the compliance strategy adopted by the owners and operators.  Moreover, if a unit were removed from the trading programs because of a change in fuel, the owners and operators would not report future fuel use to EPA and so determination of which units were subject to the trading programs, and assurance of compliance, would be problematic.
Organization: Eco Power Solutions (USA) Corp.
Comment:
Eco Power Solutions (USA) Corp.
Finally, the proposed rule wisely provides the Agency with flexibility to adapt monitoring strategies to new technology. That flexibility should be retained in any final rule. [EPA-HQ-OAR-2009-0491-2692.1, p. 2]
In the proposed rule EPA has preserved for itself flexibility to consider petitions under Sec. 75.66 to approve alternatives to conventional continuous monitoring systems (See Sec. 97.435 as to the NOx Annual program, Sec. 97.535 as to the NOx Seasonal program, Sec. 97.635 as to the SO2 Group 1 program, and Sec 97.735 as to the SO2 Group 2 program). That flexibility is essential in adjusting to new technologies that, among other things, may use different chemical reactions than conventional technologies and therefore may need to be monitored differently. [EPA-HQ-OAR-2009-0491-2692.1, p. 11] [See 2692.1, p. 11 for further discussion of flexibility.]
Response:
See sections H and XI of the preamble.
Organization: Shell Chemicals
Comment:
Shell Chemicals
The Proposal at 40 CFR § 97 .404 (75 FR 45372) addresses applicability with respect to this rule. Under 40 CFR 97.404(a)1, the rule applies to, 'Any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine . . . producing electricity for sale' (emphasis added). As discussed in the FERC filing for this facility: [EPA-HQ-OAR-2009-0491-2572, pp.1-2]
'None of Shell, the Owner/Lessor, the Beneficiary, the trustee, or ALAC (i) is directly or indirectly engaged in the generation or sale of electric energy other than as QFs, foreign utilities, exempt wholesale generators (EWGs), or self-generation ; or (ii) owns or operates any electric facilities other than QFs, foreign utilities, eligible facilities of EWGs, or self-generation facilities. Therefore, none of Shell, the Owner/Lessor, the Beneficiary, the trustee, or ALAC is an electric utility, electric utility holding company, or any person owned by either within the meaning of section 292 .206 of the Commission's regulations and the Commission's implementing precedent .' [EPA-HQ-OAR-2009-0491-2572, p.2]
As established through the certification provided in this FERC filing, Shell's Cogens do not qualify as units, ' . . .producing electricity for sale .' However, as is indicated in the QF filing, based on Shell's manufacturing energy demand, the company anticipated an average of 20% of the power generated may be available for sales. [EPA-HQ-OAR-2009-0491-2572, p.2]
The proposed rule addresses the potential for energy sale within its applicability regulations. According to 40 CFR § 97.404(b), a unit is not subject to the rule if it qualifies a s a Cogeneration Unit, and provided that the unit does not supply, '. . .in any calendar year more than one-third of the unit's potential electric output capacity or 219,000 MWh, whichever is greater, to any utility power distribution system for sale.' As provided above, the FERC filing for the Cogens at Shell mentioned an anticipated target of about 20% of energy being available for sale, which is below the typical limit of one-third. A review of Cogen operation since startup indicates that the actual exported energy (i.e., that portion that can said to be sold) has never exceeded 30% (average of 27%) of the total energy produced (about 25% compared to potential output) . In addition, the total exported energy has consistently fallen well below the value of 219,000 MWh when calculated on an annual basis (average approximately 180,000 MWh). [EPA-HQ-OAR-2009-0491-2572, p.2]
Response:
See section VII.B of the preamble.
Organization: South Carolina Department of Health and Environmental Control
Comment:
South Carolina Department of Health and Environmental Control
a) The word 'operation' in the definition of 'commence operation' on page 45369 is not in italics.
a) In the sentence, 'The written approve will state the unit's baseline heat input and baseline NOx emission rate,' did the EPA intend to use 'approval' instead of 'approve?'
[EPA-HQ-OAR-2009-0491-2677.1 p.23]
Response:
EPA has corrected all typographical errors of which it is aware.

XV. Air Quality Modeling Technical Support Document (TSD)

Organization: George Washington University Regulatory Study Center
Comment:
George Washington University Regulatory Study Center
In addition, the Technical Support Document for air quality modeling suggests that there is substantial variability in the estimates of downwind fine PM concentrations. Appendix A of the Air Quality Modeling Technical Support Document for the Transport Rule (AQMTSD) reports a broader range of performance statistics for air quality model performance than reported in the preamble to the Transport proposal. [EPA-HQ-OAR-2009-0491-2573.1, pp.21-22]
Response:
EPA has completed an expanded model performance evaluation using the predictions from the updated 2005 base year CAMx simulation conducted for the final Transport Rule.   This evaluation provides additional spatial and temporal performance results in response to comments.  The model performance results can be found in Appendix A of the Final Transport Rule Air Quality Modeling Technical Support Document.
Organization: Georgia Department of Natural Resources, Air Protection Branch
Comment:
Georgia Department of Natural Resources, Air Protection Branch
Air Quality Model Performance Evaluation
Georgia EPD has reviewed the air quality model performance for the modeling that is the basis of the Transport Rule (Transport Rule Air Quality Modeling Technical Support Document - Appendix A). We were shocked to find that the complete documentation consists of only 6 pages. Georgia EPD's modeled performance documentation that was submitted as part of the Atlanta PM2.5 SIP covered nearly 150 pages. The EPA model performance documentation included two summary tables. Table A-2 covers 8-hour ozone by month across the entire modeling domain. Table A-3 covers speciated PM2.5 data (IMPROVE, CSN, and CASTNet) by season across the entire modeling domain. These high level summary calculations can hide poor model performance by allowing positive and negative bias to cancel. Before modeling is used for regulatory applications, a more rigorous evaluation must be performed. Georgia EPD requested the station-by-station model and measurement files used to perform the model performance evaluation from EPA OAQPS, but the files were never sent. [EPA-HQ-OAR-2009-0491-2647.1, p.5]
Response:
EPA has completed an expanded model performance evaluation using the predictions from the updated 2005 base year CAMx simulation conducted for the final Transport Rule.   This evaluation provides additional spatial and temporal performance results in response to comments.  The model performance results can be found in Appendix A of the Final Transport Rule Air Quality Modeling Technical Support Document.
Organization: Iowa Department of Natural Resources (IDNR)
Comment:
Iowa Department of Natural Resources (IDNR)
Improving the Photochemical Modeling Performance Evaluation
Many of the technical assessments used in support of the Transport Rule are directly related to methods used in attainment demonstrations. As EPA has developed guidance which specifically applies to attainment demonstrations we believe it would be appropriate for EPA to follow the associated guidance recommendations that are related to conducting a model performance evaluation. In order to make the 2005 base year performance evaluation more robust and more consistent with existing guidance, we recommend EPA supplement the Air Quality Modeling Technical Support Document by considering and implementing the following: [EPA-HQ-OAR-2009-0491-2609.1, p.5]
1) The statistics provided are averaged over spatial and temporal scales which are too large. A statistical performance evaluation should be provided by state or other appropriate regional spatial scales. As averaging times increase statistics and plots tend to look better. Sub-seasonal averaging times are needed to properly interpret the information. Statistics should be provided on a daily (as related to particulate matter related) or hourly (as related to ozone) basis. [EPA-HQ-OAR-2009-0491-2609.1, p.5]
2) At a minimum adding the following three plot types, for at least the sites identified as nonattainment or maintenance areas in the 2012 basecase modeling (for site specific plots), would provide valuable information related to assessing model performance:
a. Time series of observed and predicted concentrations on a hourly or daily basis.
b. Scatter plots of predicted and observed concentrations.
c. Daily tile plots of predicted concentrations across the modeling domain with observations as an overlay. [EPA-HQ-OAR-2009-0491-2609.1, p.5]
There are additional performance evaluation methodologies that could be considered, such as inclusion of "soccer goal" plots, "bugle plots", box plots, and methods associated with a diagnostic evaluation. To the extent these methods would provide useful insights into the performance evaluation we encourage EPA to consider their inclusion. [EPA-HQ-OAR-2009-0491-2609.1, p.5]
Photochemical modeling is recognized as a useful tool and we have suggested expanding its use in previous comments. Such recommendations necessarily assume certain conditions are met. Principal among these assumptions is that acceptable level of model performance has been established.  It is difficult to determine that model performance is acceptable based purely on the available statistics which are averaged over the entire 12 km domain and entire seasons. We agree this is information that is useful as one component to the operational evaluation, but is not sufficient by itself.  By following the above suggestions we believe EPA can provide additional metrics, plots, and graphics needed to fully ascertain the adequacy of model performance and enhance existing technical support documentation. [EPA-HQ-OAR-2009-0491-2609.1,pp. 5-6]
Response:
EPA has completed an expanded model performance evaluation using the predictions from the updated 2005 base year CAMx simulation conducted for the final Transport Rule.   This evaluation provides additional spatial and temporal performance results in response to comments.  The model performance results can be found in Appendix A of the Final Transport Rule Air Quality Modeling Technical Support Document.
Organization: Kansas Department of Health and Environment
Comment:
Kansas Department of Health and Environment
Model performance is discussed for both ozone and PM2.5 in the air quality modeling TSD. Unfortunately, this performance evaluation covers the entire modeling domain. There are many differences (emissions, meteorology, etc.) between the Midwest and the remaining eastern portion of the country that could have a significant impact on model performance. KDHE recommends a regionally based model performance assessment that would allow a reader to understand the model performance in their region of interest. This is particularly important for PM2.5 due to the relatively large ammonia emissions in the Midwest. [EPA-HQ-OAR-2009-0491-2606.1, p.7]
As outlined in the current model performance discussion, there are some fairly large errors in sulfate and nitrate estimates. Although the model is being used in a relative sense, these errors could still impact a 'linkage' assessment for a specific region, especially with the linkage assessment threshold only being 1% of the NAAQS and including all anthropogenic emissions from a state. In addition, it would be useful if PM2.5 impacts for a state could be broken out by species component in order to answer the question, for example, is the Kansas contribution to PM2.5 dominated by either sulfate or nitrate? [EPA-HQ-OAR-2009-0491-2606.1, p.8]
Response:
EPA has completed an expanded model performance evaluation using the predictions from the updated 2005 base year CAMx simulation conducted for the final Transport Rule.   This evaluation provides additional spatial and temporal performance results in response to comments.  The model performance results can be found in Appendix A of the Final Transport Rule Air Quality Modeling Technical Support Document.
The approach used for calculating contributions includes (1) averaging model predictions across multiple days and across different seasons depending on the temporal patterns of observed exceedances and (2) the use of model predictions in a relative sense applied as calibrations to ambient measurements.   This approach is intended to mitigate the effects of biases in absolute model predictions.
Contributions to PM2.5 component species of sulfate and nitrate are provided in the docket for this rule [placeholder for docket number.]

XVI. Other Comments

Organization: Class of '85 Regulatory Group
East Kentucky Power Cooperative

Comment:
Class of '85 Regulatory Group
CAIR States Not Covered by CATR. The Proposal uses an entirely different methodology than was used in CAIR to determine whether a state interferes with attainment or maintenance in a downwind state. Under the new methodology, certain areas that were subject to CAIR do not 'contribute significantly' to downwind states' nonattainment of both the ozone and PM2.5 NAAQS and will be subject to fewer requirements under CATR.30 There is no reason for continuing to subject these areas to CAIR requirements until the effective date of the final CATR. The Group urges the Agency to state that these areas no longer have to meet CAIR requirements as of the date EPA publishes the final CATR. [EPA-HQ-OAR-2009-0491-2854.1,pp.14-15]

East Kentucky Power Cooperative
Further, EKPC requests that EPA clarify in the rule that should the Clean Air Transport Rule ('CATR') become final, the Clean Air Interstate Rule('CATR') will be terminated. EKPC also requests that EPA clarify the date by which CATR will take effect in relation to NOx. Should CATR become effective for NOx in2014 and should CAIR be terminated upon the effective date of CATR, then EPA should clarify the status of annual and ozone NOx limits in 2012 and2013. EPA should also clarify whether new units would be required to comply with the rule, and, if so, when compliance would be required and how new units would be calculated into state budgets. [EPA-HQ-OAR-2009-0491-2776.1, p.1]

Response:
 Despite the promulgation of the Transport Rule, all CAIR requirements related to the 2011 compliance period remain legally binding and fully enforceable, and sources are still required to submit CAIR allowances for the 2011 compliance period by March 2012.  The Transport Rule covers compliance for 2012 and beyond.  As such, all sources are legally required to comply with CAIR throughout the entire 2011 compliance period, irrespective of the Transport Rule promulgation timeframe.  This transition is consistent with the D.C. Circuit's December 23, 2008 opinion which permitted CAIR to remain in effect to "temporarily preserve the environmental values covered by CAIR" while EPA worked to remedy its flaws.  For more detailed information on the transition from CAIR to the Transport Rule, please see section IX.A in the preamble.  For more information on Transport Rule compliance deadlines, please see section VII.C of the preamble.
Organization: Big Rivers Electric Corporation
Comment:
Big Rivers Electric Corporation
The uncertainty of available allowances makes it impossible to plan on generation to meet the forecasted future customer electrical needs and maintain compliance with EPA regulations.[EPA-HQ-OAR-2009-0491-2661.1, p.4]
Response:
EPA thanks the commenter for their feedback regarding this Rule.  EPA is working as expeditiously as possible and within the full extent of its authority, under  Section 110(a)(2)(d) of the Clean Air Act, to ensure improved human health for all Americans through reductions in interstate transport of pollutants within the Transport Rule's 27 states.  For more information on the Transport Rule's allocations methodology, please see Section VII.D in the Preamble.
Comment:
Connecticut Department of Environmental Protection
Adopt stronger national rules for source categories identified by the Ozone Transport Commission. These national rules should cover:
o Performance standards for all electric generating units;
o Light and medium duty vehicles;
o Industrial, Commercial and Institutional (ICI) Boilers;
o Cement Kilns;
o Locomotive Engines; and
o Marine Engines
[EPA-HQ-OAR-2009-0491-2780.1 p.7]

Response:
Please refer to section VI.1 of the preamble for an explanation as to why the Agency chose to only regulate EGUs (stationary sources) in this rulemaking.
Organization: Consumers Energy
Comment:
Consumers Energy
D. EPA's Proposed Milestone Dates Are Unrealistic and Disregard for the Planning, Procurement, Permitting, and Installation Efforts that Must Take Place to Implement the Proposal
Consumers Energy is in the process of implementing a strategic plan that will comply with the final CAIR, which still remains in effect and remains enforceable. This plan will incur costs in excess of $1 billion. A conference call to discuss the proposed rule was hosted by UARG, on August 30, 2010. During a discussion regarding industry plans compared to the schedule in the proposed rule, an EPA staff member casually opined that the industry's plans, based upon prior EPA rulemaking, have no relevance to this proposed rule. We respectfully disagree.[EPA-HQ-OAR-2009-0491-2837.1, p.7]
1. 2012 Implementation Date for Consumers Energy Consumers Energy continues to analyze the voluminous proposed Transport Rule and offers these comments on how it may attempt to comply with the rule as currently proposed. Consumers Energy reserves the right to modify any proposed compliance plan or strategy at its discretion. Consumers has three likely options for compliance with the 2012 emission caps as currently in the proposed Transport Rule:
:: Install low NOx burners.
:: Increase our fuel blend to higher percentages of low-sulfur sub-bituminous coal.
:: Shutdown units or some combination of these three options. [EPA-HQ-OAR-2009-0491-2837.1, p.7]
None of these options can be implemented in the approximate six month time frame between issuance of the final rule, currently estimated to be June 2011, and the proposed compliance date of January 1,2012. In order for our actions to be regarded as prudent by the MPSC, issuance of the final rule is necessary. This would provide Consumers with the level of certainty, both in the rule making process and rate recovery, needed to proceed with any of the above described options. To be perfectly clear, none of the options could be completed by January 1, 2012 even if Consumers started work today. [EPA-HQ-OAR-2009-0491-2837.1, p.7]
:: It took 1.5 years to engineer, permit, procure and install low NOx burners on two of Consumers Energy's units. [EPA-HQ-OAR-2009-0491-2837.1, p.8]
2. 2014 Implementation Date for Consumers Energy
Similarly, implementation of the proposed rule by 2014 is not realistic and is fraught with logistical and regulatory difficulties. Consumers Energy is currently implementing a spending plan, costing well in excess of $1 billion, based on the final and still enforceable CAIR. Our company has moral ethical and regulatory obligations to install and operate equipment in the most cost effective, practical, and prudent manner for the benefit of its ratepayers. Therefore, Consumers Energy has put forth every effort to design the most efficient budget and schedule by utilizing scheduled outages and considering craft labor, site congestion, and the normal time to procure, design, fabricate, ship, and install pollution control equipment. [EPA-HQ-OAR-2009-0491-2837.1, p.8]
In order to have any possibility of achieving compliance by 2014, Consumers Energy would have to immediately modify our Strategic Plan - based solely on a proposed rule. All of the preceding discussion points assume that we will be able to procure all materials and secure the necessary skilled labor in a multi-state region where every other utility is undertaking the same work, at the same time. [EPA-HQ-OAR-2009-0491-2837.1, pp.8-9]
3. Comments Relative to the Electric Generating Utility Industry
Consumers Energy notes that in a September 10,2009, letter to Administrator Jackson, the Lake Michigan Air Directors Consortium (LADCO) strongly recommended that any CAIR replacement rule include an initial compliance date no earlier than 2017 for any significant additional emission reduction requirements. LADCO is a cooperative organization that supports the States of Wisconsin, Illinois, Indiana, Michigan and Ohio in matters relative to air regulatory policy. LADCO explained in its recommendations to EPA that it had conducted a state-by-state analysis that indicated that installation of significant new NOx and S02 controls, specifically, installation of selective catalytic reduction systems (SCRs) and flue gas desulfurization systems (FGDs or scrubbers) would not be possible in LADCO states before 2017. Moreover, despite EPA's suggestions to the contrary, promulgation of compliance dates later than those that EPA proposes would not result in increased emissions. CAIR remains in place and will continue to maintain a strong and effective program of emission reductions pending the initial compliance deadline for the Transport Rule - which is final and enforceable. [EPA-HQ-OAR-2009-0491-2837.1, p.9]
UARG has commissioned a broader study of the industry and the ability to comply with the 2012 and 2014 milestone dates contained in the proposed rule. Based on the actual track record of the industry, equipment suppliers and skilled labor required for installation, UARG has reached a conclusion that complements those made by LADCO and follow suit with the actual experience of Consumers Energy and many other electric generating utilities. EPA's implementation dates are unrealistic and unattainable. Consumers Energy endorses UARG's findings. We refer you to UARG's comments for the detailed analysis. [EPA-HQ-OAR-2009-0491-2837.1, p.9]
:: EPA uses its choices of emissions inventory and ambient air quality monitoring data to propose an implementation schedule that is considerably more ambitious than the schedule in the rule it is designed to replace, CAIR. For reasons described in our comments and those of the UARG, EPA's schedule is impossible for the industry to meet. [EPA-HQ-OAR-2009-0491-2837.1, p.15]
Response:
Several commenters stated that the Transport Rule goes well beyond the scope of CAIR and creates significant and additional uncertainties for the power generation sector.  In fact, the Transport Rule does create certainty by the fact that it will be replacing CAIR, which the Court ruled unlawful.
Please see section VII.C in the preamble for more information on EPA's rationale for the 2012 and 2014 compliance deadlines.
Many commenters criticized EPA's timeframe for issuing and implementation of the Transport Rule.  Although the Court did not specify a definitive date by which EPA should promulgate the Transport Rule, it did not give the Agency an infinite stay on CAIR and did, in fact, indicate that the Transport Rule was to be completed in a timely manner.  Section 307(d)(5) of the CAA requires the Administrator to give an opportunity for written or oral comments.  The Act does not specify the length of time, other than the record must be open 30 days after holding public hearings - with which EPA complied.
EPA posted the signed version of the Proposed Transport Rule to the web when it was signed on July 6, 2010.  The proposal was published in the Federal Register on August 2, 2010, and the public comment period closed on October 1, 2010.  This provided a 60 day comment period (or 90 days from the date posted to the web).
EPA posted the signed version of the first Transport Rule Notice of Data Availability (NODA) (IPM) to the web when it was signed on August 25, 2010.  The first NODA was published in the Federal Register on September 1, 2010, and the public comment period closed on October 15, 2010.  This provided a 45 day comment period (or 52 days from the date posted to the web).  EPA posted the signed version of the second Transport Rule NODA (emissions inventories) to the web when it was published in the Federal Register on October 27, 2010.  The public comment period closed on November 26, 2010, which provided a 30 day comment period.  EPA posted the signed version of the third Transport Rule NODA (allocations and related matters) to the web when it was signed on December 30, 2010.  The third NODA was published in the Federal Register on January 7, 2011.  The public comment period closed on February 7, 2011, which provided a 30 day comment period (or 38 days from the date posted to the web).
Given the timeframe EPA provided to the public for submission of comments, and indicative of the fact that the Agency received several hundred substantive comments, commenters did, in fact, have sufficient time to submit their comments for consideration.
Organization: Duke Energy
Dynegy, Inc.
DTE Energy
Comment:
DTE Energy
EPA contends the emission levels required by the 2012 compliance deadline reflect only the emission reductions that would occur in the absence of the Transport Rule. EPA's suggestion that already achieved emission reductions would be lost without this deadline is incorrect. With the loss of the pollution control exemption, most projects are permitted with corresponding emission limitations and will be operated even without this onerous deadline. Additionally, many of these post-combustion systems are not installed with a bypass, which means if the EGU is operating, the control equipment is operational. Furthermore, if EPA allows banking provisions for future compliance, the incentive to optimize operation of existing control technologies is increased. [EPA-HQ-OAR-2009-0491-2851.1,p.4]
Duke Energy
In sum, the fact that EPA's proposal to set an initial compliance deadline of January 1, 2012, is so burdened with uncertainty is a stark illustration of the ill-advised nature of this attempt to force implementation of such a complex and demanding rule in only six months. EPA should take the time necessary to correct the many errors in the proposed rule, and allow adequate time for sources to make the adjustments necessary to comply with the rule, rather than rushing to implementation as it proposes to do.  [EPA-HQ-OAR-2009-0491-2689.1, pp.11-12]
Dynegy, Inc.
First, as recognized by EPA, 'emissions reductions from scrubbers by 2012 or 2013 can only reasonably be achieved if that scrubber either exists today, or if it is currently under construction.' 75 Fed. Reg. at 45273. Scrubbers that have already been installed and those that are currently being installed are, almost without exception, already needed to meet enforceable emission reduction requirements, including state regulatory programs and NSR consent decrees or new source performance standards. As such, those existing or under construction scrubbers will be operated, as designed, to reduce SO2 emissions even without a Transport Rule taking effect in 2012. Similarly, the selective catalytic reduction (SCR) NOX control systems that have already been installed and those that are currently being installed are needed to meet enforceable emission reduction requirements or performance standards. Thus, the bulk of the emission reductions and attendant health benefits expected to be achieved by the proposed Transport Rule will occur in 2012-2013 regardless of whether the rule takes effect before 2014.  [EPA-HQ-OAR-2009-0491-2698.1,p.2]
Response:
EPA thanks the commenters for their comments and feedback.  EPA is working as expeditiously as possible and within the full extent of its authority, under  Section 110(a)(2)(d) of the Clean Air Act, to ensure improved human health for all Americans through reductions in interstate transport of pollutants within the Transport Rule's 27 states.  EPA is under a timeframe to promulgate the Transport Rule as expeditiously as practicable, as per the remand of CAIR by the Court to the Agency for development of the current Transport Rule.
Some commenters had concerns regarding the EPA's baseline analysis used and with the Agency's rationale for the 2012 compliance deadline.  For more detailed information regarding the Agency's baseline analysis, please see Section V.B of the Preamble.  For more detailed information regarding the Agency's rationale for the 2012 compliance deadline, please see Section VII.C in the Preamble.
Organization: Edison Electric Institute (EEI)
Comment:
Edison Electric Institute (EEI)
Achieving the substantial SO2 reductions to meet the proposed SO2 limit will be a difficult task in the timeframe proposed and additional time may be needed. Further additional tightening of the SO2 budget in the future may simply not be technically feasible. [EPA-HQ-OAR-2009-0491-2697.1, p.8]
[These comments were submitted as testimony at the Atlanta, Georgia public hearing on September 1, 2010.  See Docket Number EPA-HQ-OAR-0491-1939, pp.51-52.]
This proposed rule requires substantial additional sulfur dioxide, SO2, emissions reductions. SO2 emissions for power plants in Georgia already have been reduced 70 percent during the period of 1990 to 2009. The transport Rule would reduce SO2 emissions for power plants in Georgia by another two thirds by 2014. And the state's power plant SO2 budget would be reduced by 90 percent in 2014 compared to 1990 emission levels.
Response:
EPA thanks the commenter for their comments and feedback.  EPA is working as expeditiously as possible and within the full extent of its authority, under  Section 110(a)(2)(d) of the Clean Air Act, to ensure improved human health for all Americans through reductions in interstate transport of pollutants within the Transport Rule's 27 states.  EPA is under a timeframe to promulgate the Transport Rule as expeditiously as practicable, as per the remand of CAIR by the Court to the Agency for development of the current Transport Rule.
The commenter seems to have concerns regarding the achievement of substantial SO2 reductions proposed by the Agency.  For more detailed information regarding SO2 reductions under the Transport Rule, please see Sections V and VI in the Preamble.
Organization: Environmental Council of States (ECOS)
Comment:
Environmental Council of States (ECOS)
ECOS requests that EPA concurrently publish implementation guidance for this rule to states at the time of new rule issuance. Timely issuance of implementation guidance would facilitate state adoption of the new rule as well as increase state and EPA staff resource efficiency in completing activities related to new rule adoption. [EPA-HQ-OAR-2009-0491-2599.1, p.2]
Response:
EPA intends to provide states with Transport Rule implementation guidance.
Organization: Florida Electric Power Coordinating Group, Inc. (FCG)
Florida Municipal Electric Association (FMEA)
First Energy

Comment:
First Energy
FE strongly recommends that EPA take the additional necessary time to get this rule right as it is under no Court ordered deadline to address a CAIR remedy. EPA should utilize the upcoming revisions of Ozone and PM 2.5 NAAQS, and more recent emissions data and power sector estimates to develop a revised rule. EPA will achieve the stated health benefits (through continued air quality improvements via established and revised standards) and develop a much more defensible and cost effective rule. [EPA-HQ-OAR-2009-0491-2657.1, p.2; This comment can also be found at EPA-HQ-OAR-2009-0491-3772.1_NODA, p.2 10/15/2010]
Florida Electric Power Coordinating Group, Inc. (FCG)
Given the extensive changes that EPA must make to its August 2 initial proposal, EPA must publish a second proposal in the Federal Register before the rule is finalized. As explained below, EPA's proposal contains numerous material factual errors in its data, and flawed assumptions and predictions in its modeling. The correction of these extensive errors will necessarily change the compliance obligations of every state, company and unit, and affected parties must be given an opportunity to review and comment as to whether EPA has corrected its mistakes, and parties can meet their new compliance obligations. Accordingly, EPA is obligated to publish a second proposal to provide the public an opportunity to review and comment on the accuracy and achievability of EPA's corrected approach before this rule is finalized. [EPA-HQ-OAR-2009-0491-2658.1,p.2]
EPA's abbreviated and insufficient comment period underscores EPA's obligation to publish an additional proposal prior to finalizing this rule.  [EPA-HQ-OAR-2009-0491-2658.1,p.2]
Moreover, emission reductions beyond those required by CAIR are not necessary. EPA's data show that existing controls are working to reduce emissions -- emissions of S02 and NOx have declined steadily in recent years. See, e.g., EPA Report titled 'Clean Air Interstate Rule: 2009 Emission, Compliance and Market Analysis,' September 28,2010. The D.C. Circuit's opinion in North Carolina v. EPA did not hold that the overall levels of reductions required under CAIR were less than the levels necessary to comply with CAA section 110(a)(2)(D)(i)(I), nor did the court include in its opinion a mandate that the replacement rule for CAIR include a compliance date in 2012 or within any period of time as short as six months after final rule promulgation. [EPA-HQ-OAR-2009-0491-2658.1,p.3]
Florida Municipal Electric Association (FMEA)
EPA Should leave CAIR in place through Phase I. EPA's imposition of a 2012 compliance obligation is unreasonable and unrealistic, particularly since EPA intends to finalize the rule less than six months before it becomes effective. EPA attempts to dismiss this burden, however, by claiming that the emission levels required in 2012 generally reflect only the emission reductions that would occur even in the absence of the Transport Rule, primarily in compliance with CAIR. However, in a number of cases EPA has made incorrect assumptions regarding emission reductions that will occur at units by 2012. In addition, the approach set forth in the Proposed Transport Rule penalizes early emission reductions under CAIR and seriously weakens market incentives. [EPA-HQ-OAR-2009-0491-2731.1, p. 5]
without the Proposed Transport Rule, a presentation given by EPA in July indicated that the proposal would reduce SO2 emissions by an additional one million tons per year (TPY) in 2012 beyond what the Clean Air Interstate Rule would have accomplished: from a level of 5.1 million TPY under CAIR to 4.1 million TPY under the proposed rule. In fact, during a meeting held shortly after the proposed rule was issued, the Director of EPA's Clean Air Markets Division acknowledged that the 2012 state budgets in the Proposed Transport Rule would reduce SO2 emissions by 1.2 million TPY, from 5.1 million TPY under CAIR to 3.9 million TPY under the Proposed Transport Rule. EPA must explain this apparent discrepancy and how over a million tons of emissions would be eliminated by relying on controls already in use. [EPA-HQ-OAR-2009-0491-2731.1, p. 5]
EPA has also substantially underestimated the time required for facilities to install emission controls, meaning that additional emission reductions will take much longer to achieve than EPA has assumed. EPA's erroneous assumption is that it takes 27 months to design, permit and build an FGD system, and 21 months to design, permit and build an SCR. EPA's timeline apparently only considered the time needed to actually build the system, and disregarded the critical time necessary to design and permit the equipment. Substantial recent experience reveals the actual time needed. Specifically, the Southern Company recently installed 15 FGD systems and 15 SCRs. The average time needed for an FGD system was 54 months (the range was 40-69 months), and for an SCR was 36 months (the range was from 28-42 months). Progress Energy recently installed nine FGD systems and nine SCRs, and it took approximately 44 months for an FGD system, and 38 months for an SCR. In addition, utilities typically put emission control projects out for competitive bid, which adds several months to the process to help ensure that the most cost-effective expenditure is being made. Also, the resolution of other environmental issues takes time, including water use and discharge permitting, and ash and gypsum management. A recent control project in Florida was installed, and yet delayed several months to address such issues. None of these factors appear to have been considered by EPA. EPA must correct its control-installation timeline assumptions to match reality. [EPA-HQ-OAR-2009-0491-2731.1, pp. 5-6]
Moreover, emission reductions beyond those required by CAIR are not necessary. EPA's data show that existing controls are working to reduce emissions -- emissions of SO2 and NOx have declined steadily in recent years. See, for example, the EPA Report titled "Clean Air Interstate Rule: 2009 Emission, Compliance and Market Analysis," September 28, 2010. The D.C. Circuit's opinion in North Carolina v. EPA did not hold that the overall levels of reductions required under CAIR were less than the levels necessary to comply with CAA section 110(a)(2)(D)(i)(I), nor did the court include in its opinion a mandate that the replacement rule for CAIR include a compliance date in 2012 or within any period of time as short as six months after final rule promulgation. [EPA-HQ-OAR-2009-0491-2731.1, p. 6]
Response:
Several commenters stated that the Transport Rule goes well beyond the scope of CAIR and creates significant and additional uncertainties for the power generation sector.  In fact, the Transport Rule does create certainty by the fact that it will be replacing CAIR, which the Court ruled as unlawful.  Although the Court did not specify a definitive date by which EPA should promulgate the Transport Rule, the Court did not give the Agency an indefinite stay on replacing CAIR and did, in fact, indicate that the Transport Rule was to be completed in a timely manner.  Please see the Transport Rule Preamble section VII.C for more detailed information.
Organization: Hoppy's Lures
American Public Power Association (APPA)
Adirondack Mountain Club
Maryanski, Joseph
Conover, Barbara
Greisch, Edward
Locker, Robert
Public, Jean
Boudart, Jan
Hansen, Gordon
Ritz, Aaron
Comment:
Adirondack Mountain Club
New York also has a direct stake in the proposed Mercury Rule. Like NOX and SO2, mercury can be transported hundreds of miles from its source. Across the country, more than 12 million acres of lakes and 473,000 miles of rivers are contaminated by mercury. Forty-four states and territories have issued advisories urging people to avoid or limit consumption of fish due to high levels of mercury. In 2002, New York State alone had posted thirty-two health warnings for mercury covering 59,228 acres of our lakes. In fact, of the approximately 200 water bodies tested in New York, 38 have fish populations that are unsafe to eat because of mercury contamination. [EPA-HQ-OAR-2009-0491-2761, p.3]
Mercury is a highly toxic chemical with effects on the central nervous system comparable to those of lead, especially for unborn fetuses and very young children whose brains are still developing. Children and fetuses exposed to mercury can suffer poor attention span and language development, impaired memory and vision, problems processing information, and impaired fine motor coordination. [EPA-HQ-OAR-2009-0491-2761, p.3]
A recent study by the Centers for Disease Control and Prevention estimates that 1 in 12 women of childbearing years in the U.S. have unsafe levels of mercury in their blood. This means that approximately 300,000 children are born each year with a heightened risk for neurological and developmental problems related to mercury exposure. Even more recently, EPA's scientists stated that this is an underestimate of mercury exposure and that as many as 630,000 children may be born each year with unhealthy levels of mercury in their blood. [EPA-HQ-OAR-2009-0491-2761, p.4]
Evidence continues to mount that mercury causes reproductive problems in wildfowl populations, such as loon and mallard ducks. A recent study by the BioDiversity Research Institute (BRI) and the U.S. Fish & Wildlife Service found that 17 percent of loons sampled in the Adirondacks had mercury levels high enough to affect their reproductive success and behavior. Due to its neurotoxic effects, mercury causes behavioral changes in loons, making them lethargic and decreasing normal activities such as foraging and incubation. Adult birds incubate and feed their young less, while chicks feed less and ride on their parents' backs less, making them more susceptible to predation and chilling. [EPA-HQ-OAR-2009-0491-2761, p.4]
Electric power plants are the largest industrial source of mercury, emitting approximately 48 tons of mercury each year (approximately 30% of the country's mercury emissions). Amazingly, power plants are the only major mercury polluters yet to be regulated under federal clean air standards. Thus, in large part, our nation's mercury problem is due to the fact that while other sources must meet strict emission limits, power plants continue to spew unlimited quantities of mercury into our air, where the rain and snow wash it into our rivers, lakes and oceans, and, ultimately, into our food chain. [EPA-HQ-OAR-2009-0491-2761, p.4]
In December 2000, EPA said that mercury is the hazardous air pollutant (HAP) of greatest concern and determined that "...regulation of HAP emissions from coal- and oil-fired steam generating units under Section 112 (c) of the CAA is appropriate and necessary." Listing of power plants under 112 (c) triggers regulation under Section 112 (d), which requires that all HAPs from sources listed be regulated using a "maximum achievable control technologies" (MACT) standard. [EPA-HQ-OAR-2009-0491-2761, p.4]
In 2001, EPA's scientists said that existing coal-fired power plants could achieve an average of 90 percent mercury reductions under a MACT standard, regardless of the type of power plant or the type of coal burned. A more recent report from the Northeastern States for Coordinated Air Use Management also concluded that 90 percent mercury reductions are feasible. Up to 98 percent reductions have been observed in tests of other kinds of mercury controls. It has also been found that reductions can be accomplished very cost-effectively (on the order of 1/50th of a penny per KWh). According to the EPA, estimated costs for mercury control are similar to the costs associated with technologies currently used at power plants to control nitrogen oxide pollution. In 1999, in its multi-pollutant benefit report, EPA estimated that it would cost $2.7 billion to install mercury-specific control technologies on all plants without scrubbers, resulting in mercury emissions reductions of 70-90 percent. EPA estimates that those costs could decline by an additional 40 percent. This cost is a mere fraction of the $250 billion in revenue generated by the utility industry. [EPA-HQ-OAR-2009-0491-2761, p.4]
The lack of regulation put forward by the EPA our environment in danger of mercury pollution for far too long. Although EPA expects mercury reductions as an indirect result of the emissions controls of NOX and SO2, of which this rule directly addresses. [EPA-HQ-OAR-2009-0491-2761, p.4]
Under a cap and trade system, industry would essentially be given the option to decide which plants to clean up. Instead of determining where mercury needs to be reduced on the basis of science and environmental sensitivity, such determinations will be based on market dynamics. As it is, New York is downwind of Midwest plants that utilize the cheapest fuel -- high sulfur, bituminous coal. These plants can operate fifty percent cheaper than plants utilizing natural gas or low-sulfur coal. Unfortunately, the cheapest fuel is also the dirtiest and the combustion of such fuel releases significant amounts of mercury into the atmosphere. Since these Midwest power plants have no incentive to switch to cleaner fuel sources, it would seem that the only way to limit harmful emissions from these plants is to require them to install mercury control technologies. However, ADK fears this will be slowed under a free market cap and trade system. Plants would be able to avoid making mercury emissions reductions by buying credits from plants in other geographic locations that emit less than the standard. The bottom line is that market dynamics and the economics of fuel would lead to hot spots in New York. New York would continue to get mercury in levels that pose serious health and ecological threats. [EPA-HQ-OAR-2009-0491-2761, pp.4-5]
ADK suggests mercury budgets for each state be based on science and that the EPA restrict trading of emissions based on the upwind and downwind "linkages" as reported in CATR. [EPA-HQ-OAR-2009-0491-2761, p.5]
American Public Power Association (APPA)
APPA "real world" examples of pollution control installation timing:
- Holland, MI: Holland Board of Public Works (a municipally owned public utility in Holland, Michigan) has Unit 5, which is 27 MW, installed 1969, already with low NOx burners, has the capability to fire natural gas. As a result of this Regional Transport Rulemaking, this utility informs APPA that Holland will probably switch to natural gas rather than try to install further pollution controls, as the installation cost/ton NOx or SO2 reduced is way above the EPA's guidelines for reasonable cost. [EPA-HQ-OAR-2009-0491-2812.1, p.31]
APPA believes that the concerns about natural gas infrastructure (carrying capacity of the natural gas pipeline system to accommodate the possible fuel switching or conversions from coal to gas in 31 states and the storage concerns of that pipeline (especially in the Northeastern states) is significant. APPA believes it would take at least six years to expand the pipeline system in the 31 RT states. Further, APPA notes that many hearings have been held in California and in Washington, D.C. regarding the safety of the existing natural gas pipeline system after the tragic accident in San Bruno, California in September 2010. APPA is not qualified to know whether the existing pipeline system needs any retrofits or safety enhancements or if that accident was a single event. Regardless, if a significant portion of the electric utility sector would be pushed to natural gas conversions in the 31 Regional Transport states -- supply and infrastructure issues for natural gas delivery much be seriously considered. This natural gas pipeline and storage alone may justify additional time to make the deadlines no earlier than 2015. APPA encourages the U.S. EPA and Office of Management and Budget to consider these natural as issues. Please also see the New York Times story along with the references/link in that story indicating that there are other U.S. governmental agencies looking at the natural gas pipeline infrastructure and safety issues. On September 28, 2010 the U.S. Senate Committee on Commerce, Science, and Transportation held a hearing on pipeline safety. APPA encourages the EPA to consider the hearing results and other agency reviews of safety issues when looking at the deadlines for the Regional Transport rule. [EPA-HQ-OAR-2009-0491-2812.1, p.33]
Boudart, Jan
The Bush Administration refused to take action against arsenic in water even after its danger was understood. Now we have an administration that not only believes in science, but also believes in protecting its most important resource its people. WE MUST CHANGE THE ATTITUDE PERPETRATED BY THE GEORGE W. BUSH ADMINISTRATION! [EPA-HQ-OAR-2009-0491-3228, p.2]
And about 40 years ago, European governments took action against their citizens' exposure to lead as soon as its dangers were known. But in the U.S., the influence of paint manufacturers and corporations prevented action to the great suffering of many Americans. [EPA-HQ-OAR-2009-0491-3228, p.2]
You will notice that we have heard from several sheet-rock manufacturers and the representatives from their associations and coalitions. Did you notice who we are not hearing from? The laborers and workers who deal with the raw materials of sheet rock and Portland cement. They have not been mentioned as victims of unregulated handling of fly-ash and clinkers. Regulating coal ash will have a minor effect on the industrial uses. Factory owners will have to keep records, take measures to protect their workers and be subject to inspections. But they will still have access to what may be the cheapest raw material imaginable the coal ash. A waste product we want to get rid of. [EPA-HQ-OAR-2009-0491-3228, p.2]
Now we have another opportunity to place coal ash in a special category under subtitle C of the Resource Conservation and Recovery Act. If it is classified as hazardous, regulations will automatically go into effect. [EPA-HQ-OAR-2009-0491-3228, p.2]
We must act decisively to protect your born and unborn children and all the citizens of our Country. [EPA-HQ-OAR-2009-0491-3228, p.2]
Conover, Barbara