represent largely irreversible investments for firms that must be paid
off regardless of future economic conditions, as opposed to other
important variable costs, such as fuel costs, that may vary according
to economic conditions and generation needs. For an action that was
projected to result in a large number of pollution control retrofits
nationwide for multiple HAP, the EPA determined it was reasonable to
consider projected capital costs as one component of a comprehensive
evaluation of overall compliance costs. This is further supported by
the EPA's projection that the annual projected capital costs
represented about 26 percent of the total annual compliance cost
projected for 2015. For this rulemaking, the EPA was able to access
reliable historical data from multiple sources over a sufficient time
horizon, which enabled comparisons of the EPA's projections of
incremental capital expenditures under MATS to sector-level historical
trends in capital expenditures.
    We disagree with the comment alleging that the EPA's analysis of
this metric is ``too broad''. Specifically, we do not agree with the
commenter's suggestion that we should restrict our analysis of capital
expenditures to focus on only the entities directly regulated by MATS
(i.e., ``the entities that own the affected sources''). As discussed in
Section IV.A.3, the EPA views a sector-level assessment of costs,
including capital expenditure requirements, to be the correct scale of
analysis for this notice, in part because analyzing cost at the sector-
level better captures impacts on entities, many of which own complex
holdings that include units that are not regulated by MATS. Further,
adopting the commenter's methodology for analyzing capital expenditures
more narrowly would force the agency to ignore costs associated with
installing additional new generating technologies that would be
attributable to MATS (because those new units that are installed are
not directly regulated by MATS and are not necessarily owned by
entities that own units regulated by MATS), and those costs are not
insignificant and increase over time. We also note that although the
commenter urges the EPA to analyze historical annual capital
expenditures by a subset of units, the commenter provides no
information regarding that metric, nor is the agency aware of data to
reliably analyze that metric. Therefore, for all of the reasons above,
we decline to confine our analysis of capital expenditures to only
those units that are directly regulated by MATS.
    Moreover, we disagree with the commenter's implied premise that an
estimate of the capital expenditure costs associated with installing
controls to comply with MATS actually reflects capital expenditure
impacts on entities owning ``affected sources''. As noted in Section
IV.A.3, many of these sources are able to pass-through compliance costs
to ratepayers, and, thus the cost of compliance, including capital
expenditure costs, are in many cases ultimately borne by consumers. The
EPA's sector-level approach to analyzing cost for this metric, as for
others, takes into account all costs whether they are borne by
producers or consumers, and is therefore the most comprehensive and
well-suited to evaluating whether such costs are reasonable.
    Additionally, in response to comments, the EPA supplemented its
analysis of annual capital costs with annual production costs, the sum
of which provides a more comprehensive metric to use to compare against
total projected compliance costs (see Section IV.A.4 above). This
addition confirmed the EPA's earlier finding that the compliance costs
of this rule are projected to be well within historical variability,
and continues to demonstrate that the agency's projected costs are
reasonable when weighed against historical metrics.
6. Retail Electricity Prices
    Comment: A commenter supporting the EPA's retail price of
electricity metric stated that in evaluating the economic impacts of
CAA regulation, the EPA has often considered the projected costs of
regulation to electricity consumers. Additionally one commenter noted
that recent data show that the EPA's estimate for 2015 was conservative
and that actual electricity prices have been lower than the EPA
projected. Commenters supporting the metric concluded that the agency's
analysis demonstrates that on a regional and national basis, the
increases in the retail price are reasonable in light of the benefits
afforded, and well within the range of variability.
    A commenter stated that the EPA's retail price of electricity
metric masks the true effects of the rule because the commenter
believes that the EPA failed to acknowledge that, of the 11 years
examined, only 3 years saw greater average price increases than would
be caused by the rule. The commenter added that the EPA did not
acknowledge that the MATS rule causes average retail price of
electricity increases that are almost double that of an average of the
11 examined years and that the EPA did not recognize that the price
increases caused by the rule are additive.
    Response: The EPA reviewed changes in average retail price of
electricity over the 2000-2011 period and compared the projected impact
of MATS on the average retail price of electricity to annual
variability over this period. The EPA believes that the estimated
increase in electricity price is reasonable because it falls well
within the range of historical variation. The EPA does not believe that
comparing the projected impact to an average or percentile of
historical fluctuation is the appropriate approach for examining this
particular impact. This is because the context of whether MATS incurs a
disproportionate change is relevant in the context of positive changes
in price, not simply the average trend in price changes, which includes
both net-positive and net-negative changes. MATS will impact
electricity prices; what is relevant is whether that change is
disproportionate to the differences in electricity prices that happen
for various different reasons, and that reveal themselves in year-to-
year fluctuations. To compare the effect of MATS to an average of those
variations over time, essentially dampening those variations to an
average growth rate in electricity prices, would prove misleading when
trying to compare the effect of MATS on retail electricity price with
other influences.
    Additionally, the EPA notes that the commenters' point regarding
additive impacts is incorrect. The 0.3 cents per kilowatt-hour is
incremental to the EPA's estimated average retail electricity price in
the absence of the rule, not historical levels (which are actually
higher in 2006-2011, on average, than the EPA's base case estimates for
2015). As the EPA explains in the preamble to the final MATS rule,
``Even with this rule in effect, electricity prices are projected to be
lower in 2015 and 2020 than they were in 2010.'' In the EPA's
consideration of the potential impacts of MATS on retail electricity
prices, the agency appropriately considered the estimated increase in
prices projected to occur as a result of MATS in the context of
historical variability.

7. Reliability of Electricity Supply
    Comment: Several commenters took issue with the EPA's analysis of
the impacts of MATS on power sector generation capacity and stated that
impacts on reliability alone are not a measure of the reasonableness of
costs. Commenters stated that the EPA vastly underestimated the number
of retirements that have occurred as a result of MATS and presented
several estimates of retirements and facility closures. Several
commenters alleged that the EPA arbitrarily compares its projection of
MATS-related coal-fired capacity retirements to the nation's total
generation capacity and the nation's coal-fired generation capacity.
    Other commenters stated that the analysis of the impact on the
sector's generating capacity supports the agency's finding. Commenters
noted that retirement decisions are based on consideration of numerous
factors (e.g., age of the unit, capacity factors, fuel prices, etc.)
making it difficult to determine whether a given coal- or oil-fired
unit retired due to MATS compliance obligations or due to other
unrelated factors that make operation uneconomic.
    One commenter noted that the EPA's modeling and analysis in the
MATS RIA provides the best estimate of the impact of MATS on
retirements and stated that the fact that retirements have been higher
than projected does not suggest that they were a result of MATS, much
less that the EPA erred in concluding that the retirement of 4.7
gigawatts (GW) of generation capacity would be a reasonable burden for
the electric power industry to bear. Commenters stated that the EPA's
resource adequacy analyses showed that reserve margins can be
maintained while the power sector complies with MATS and supports the
agency's determination that MATS compliance costs are reasonable.
    Response: In Section III.A.2 above, the EPA explains why
commenters' assertions that the EPA underestimated the retirements due
to MATS are unsupported and do not demonstrate that the EPA's
assumptions and modeling for the MATS RIA are flawed. In fact, numerous
factors unrelated to MATS have affected the rate of retirements in this
sector (see Section III.A.2). Moreover, the EPA notes that, even while
commenters argued that the EPA underestimated the total number of
retirements that would occur, they do not provide any examples, nor
could they, that the retirements that have occurred since promulgation
of MATS have actually caused reliability problems.\25\
---------------------------------------------------------------------------

    \25\ We note that, when promulgating MATS, the EPA recognized
the statutory concern for meeting environmental goals without
jeopardizing electric reliability, and consequently took steps to
ensure that sources would be able to comply with the rule while
maintaining a reliable supply of electricity. The rule set a 3-year
compliance deadline for existing sources, which is the longest time
period allowed by the statute. See 77 FR 9407. The rule also
provided EGU specific guidance addressing how sources could obtain
an extension for a fourth year from the relevant permitting
authorities under CAA section 112(i)(3)(B) if such time is needed
for the installation of controls. See id. at 9409-10. Finally, the
EPA separately issued an enforcement response policy concurrently
with MATS to provide additional flexibility for certain reliability-
critical power plants. Memorandum from Cynthia Giles, Assistant
Administrator of the Office of Enforcement and Compliance Assurance,
The Environmental Protection Agency's Enforcement Response Policy
for Use of Clean Air Act Section 113(a) Administrative Orders in
Relation to Electric Reliability and The Mercury and Air Toxics
Standard (Dec. 16, 2011); see also 77 FR 9411. To date, only a few
sources have approached the agency regarding the policy.
---------------------------------------------------------------------------

    As some commenters highlighted, the EPA's proposed supplemental
finding indicates that the vast majority of the generation capacity in
the power sector directly affected by the requirements of MATS would be
able to absorb the anticipated compliance costs and remain operational.
The EPA's analysis conducted in conjunction with promulgation of the
final rule demonstrated the feasibility of installing the retrofit
controls projected by the EPA.\26\ Given the fact that HAP control
technologies are technically feasible and available, it is important to
understand that the economics that drive retirements are based on
multiple factors including: Expected demand for electricity, the cost
of alternative generation, and the cost of continuing to generate using
an existing unit. The EPA's analysis shows that factors other than
MATS, such as the supply of natural gas, would have a greater impact on
the number of projected retirements than the MATS rule itself.
---------------------------------------------------------------------------

    \26\ See An Assessment of the Feasibility of Retrofits for the
Mercury and Air Toxics Standards Rule. Docket ID No. EPA-HQ-OAR-
2009-0234-20001.
---------------------------------------------------------------------------

    Additionally, in order to ensure that any retirements resulting
from MATS would not adversely impact the ability of the power sector to
meet the demand for electricity, the EPA conducted a regional analysis
of the impacts of projected retirements on electric reliability. This
resource adequacy analysis looked at capacity projections in each of
the 32 modeled subregions in the contiguous U.S. and demonstrated that,
with the addition of very little new capacity, average reserve margins
are significantly higher than required.\27\ Additionally, several
external analyses have reached conclusions that are consistent with the
EPA's analysis.\28\
---------------------------------------------------------------------------

    \27\ U.S. EPA. 2011. Resource Adequacy and Reliability in the
Integrated Planning Model Projections for the MATS Rule, http://www3.epa.gov/ttn/atw/utility/revised_resource_adequacy_tsd.pdf.
Docket ID No. EPA-HQ-OAR-2009-0234-19997.
    \28\ 77 FR 9408.
---------------------------------------------------------------------------

    With regard to commenters' assertion that the impacts on
reliability alone are not a measure of whether a rule's compliance
costs are reasonable, given Congress' overall goal of maintaining the
nation's productive capacity, it is reasonable for the EPA to consider
such impacts as part of its consideration of costs under CAA section
112(n)(1)(A). The potential impact of MATS on reliability was one of a
series of independent analyses, each supporting conclusions that the
costs of MATS are reasonable.

B. Comments on Consideration of Benefit-Cost Analysis in the MATS RIA

1. Co-Benefits
    Comment: Several commenters supported the EPA's conclusions
regarding the benefit-cost analysis for MATS and also supported the
inclusion of monetized co-benefits in that analysis. These commenters
asserted that it would not be reasonable or legally defensible for the
EPA to ignore the real and significant advantages of reductions in
PM2.5 and SO2 emissions that result from reducing
emissions of HAP from power plants. These commenters agreed that CAA
section 112(n)(1)(A) reflects congressional intent that co-benefits are
important considerations, and they highlighted legislative history,
court instructions to agencies to consider indirect effects, and the
EPA's consideration of co-benefits in justifying other CAA regulations.
Commenters supporting the inclusion of co-benefits also noted that the
EPA's consideration of co-benefits is consistent with well-settled
principles of regulatory analysis supported by multiple presidential
administrations of both parties as well as practices by states
evaluating the benefits and costs of implementing state regulations on
mercury.
    Other commenters, however, argued that the EPA must conduct a
monetized benefit-cost analysis to support the appropriate and
necessary finding and that the agency may not include monetized co-
benefits in such an analysis. These commenters argued that the plain
language of CAA section 112(n)(1)(A) establishes that a finding of

whether regulation of HAP emitted by EGUs is ``appropriate'' must be
based on the costs and benefits of regulating HAP, not other pollutants
like PM2.5. These commenters further asserted that it makes
no difference whether such reductions in fine particulate matter
(PM2.5) are a ``direct consequence'' of the use of
filterable PM as a surrogate for non-mercury metal HAP. These
commenters argued that reductions in PM emissions are not relevant for,
and cannot form the basis of, an ``appropriate'' finding.
    One commenter also maintains that the EPA claims that Congress
intended for the agency to take into account criteria pollutant co-
benefits in shaping HAP regulation of EGUs under CAA section 112 and
argues such a position is a logical fallacy.
    Several commenters asserted that considering co-benefits
circumvents the established regulatory framework of the CAA. These
comments state that criteria pollutant emissions, like PM, are to be
addressed through the national ambient air quality standards
(``NAAQS'') program under CAA section 109. These commenters argued that
PM co-benefits are irrelevant to the ``appropriate'' determination and
that reliance on criteria pollutant emission reductions in this
determination is an impermissible ``end run'' around the NAAQS program.
Several commenters asserted that the EPA double-counts the co-benefits
of MATS because the criteria pollutant emissions reductions should be
attributable to other regulations, such as the PM NAAQS or the Cross-
State Air Pollution Rule.
    One commenter noted that although consideration of co-benefits in a
benefit-cost analysis is fully consistent with economic principles and
guidance documents, it is irrelevant to the decision about whether or
not to regulate EGUs that co-benefit reductions are a direct
consequence (or even an indirect consequence or mere chance relation)
to HAP reductions. The commenter also asserted that the EPA's reliance
on OMB guidance (OMB, 2003) is misplaced because the RIA benefit-cost
analysis seeks to achieve a different purpose than is required for
determining whether regulating HAP from EGUs is appropriate.
    The commenters disagreeing with the inclusion of co-benefits assert
that when co-benefits associated with PM2.5 are excluded
from the benefit-cost analysis for MATS, the quantified and monetized
net benefits are overwhelmingly negative, which does not support a
conclusion that it is appropriate to regulate HAP emissions from power
plants.
    Response: The EPA disagrees with the commenters stating that the
EPA may not consider monetized co-benefits in determining that it is
appropriate to regulate HAP emissions from EGUs if the EPA uses a
formal benefit-cost analysis to support the finding. As explained in
the proposed supplemental finding and the Legal Memorandum accompanying
the proposal, CAA section 112(n)(1)(A) does not mandate any particular
type of cost analysis. The EPA further explained in the proposed
supplemental finding (80 FR 75039-41), the Legal Memorandum, and in
Section IV.A above, why a formal benefit-cost analysis is not the
preferred way of analyzing cost under CAA section 112(n)(1).
Nevertheless, the EPA had conducted a formal benefit-cost analysis for
MATS in the RIA, as required under Executive Orders 12866 and 13563.
Thus, in responding to the Supreme Court's directive to consider cost,
while the agency maintains that a formal benefit-cost analysis is not
statutorily required or, in the Administrator's judgment, the best way
to consider cost under CAA section 112(n)(1), we find that the formal
benefit-cost analysis performed for the MATS rulemaking demonstrates
that the benefits of the rule do substantially outweigh the costs. That
analysis therefore fully and independently supports the EPA's finding
that the consideration of cost does not cause us to alter our
conclusion that it is appropriate and necessary to regulate HAP
emissions from coal- and oil-fired EGUs.
    As discussed in this response, the EPA included the air quality co-
benefits associated with reductions in PM2.5 and
SO2 (a PM2.5 precursor) emissions when the agency
evaluated the direct and indirect consequences of MATS in the RIA.\29\
Regulation of a particular pollutant often necessarily and unavoidably
results in reductions of other non-target pollutants. Reductions of the
non-target pollutants are often referred to as ancillary reductions and
the associated benefits referred to as co-benefits. All of the
estimated PM co-benefits in the MATS RIA are attributable to the
emissions reductions that would occur as a direct result of achieving
the HAP emission limits under MATS, and these co-benefits are
important, real, quantifiable, and monetizeable. Specifically, as
outlined in the proposed supplemental finding (80 FR 75041), installing
control technologies and implementing the compliance strategies
necessary to reduce the HAP emissions directly regulated by the MATS
rule also results in concomitant (co-benefit) reductions in the
emissions of other pollutants such as directly emitted PM2.5
and SO2. While reductions of PM2.5 and
SO2 are not the objective of the MATS rule, these emission
reductions are a direct consequence of regulating the HAP emissions
from EGUs.\30\
---------------------------------------------------------------------------

    \29\ As noted in the proposed supplemental finding (80 FR
75041), ``PM2.5 emissions are comprised in part by the
mercury and non-mercury HAP metals that the MATS rule is designed to
reduce. The only way to effectively control the particulate-bound
mercury and non-mercury metal HAP is with PM control devices that
indiscriminately collect all PM along with the metal HAP, which are
predominately present as particles. Similarly, emissions of the acid
gas HAP (hydrogen chloride, hydrogen fluoride, hydrogen cyanide, and
selenium oxide) are reduced by acid gas controls that are also
effective at reducing emissions of SO2 (also an acid gas,
but not a HAP).'' SO2 emissions form sulfate particles in
the atmosphere and contribute to ambient concentrations of
PM2.5. In the MATS RIA, the PM2.5 co-benefits
estimates included reducing exposure to both directly emitted
particles as well as secondarily-formed sulfate particles. The MATS
RIA did not quantify the benefits from reducing direct exposure to
SO2.
    \30\ Consider a hypothetical individual that quits smoking to
decrease the likelihood he will develop lung cancer later in life.
Although the objective of his quitting is to decrease the incidence
of lung cancer, that individual will also unavoidably benefit from a
decreased risk of cardiovascular disease, gum disease, and other
health risks. The EPA believes that it would be unreasonable not to
consider these co-benefits of quitting smoking, even though they are
not the goal motivating the individual's health decision.
---------------------------------------------------------------------------

    As an initial matter, the Supreme Court left it to the agency to
determine a reasonable approach to considering costs in the finding,
and the Court explicitly declined to address whether it would be
reasonable to consider monetized co-benefits in evaluating the cost of
the rule. Michigan v. EPA, 135 S. Ct. at 2711 (``[e]ven if the Agency
could have considered ancillary benefits when deciding whether it is
appropriate and necessary--a point we need not address--it plainly did
not do so here'') (emphasis in original). The EPA thus first looks to
whether the statutory text of the CAA addresses this issue. The
statutory text of CAA section 112(n)(1)(A) supports the EPA's
conclusion that it is reasonable to consider monetized co-benefit
pollutant reductions as part of such an analysis. That provision
directs the EPA to perform a study of the hazards to public health from
EGU HAP emissions that are likely to remain after imposition of other
provisions of the CAA, including the Acid Rain Program. This
requirement to consider ancillary (i.e., co-benefit) reductions in HAP
emissions that are the result of other CAA programs highlights
Congress' understanding that programs targeted at reducing pollutants
other than HAP can and do result in the reduction of HAP emissions. The
statutory text thus

recognizes the relevance of benefits associated with concomitant
reductions in pollutants other than the targeted pollutants. See CAA
section 112(n)(1)(A) (requiring consideration of remaining HAP from
EGUs ``after imposition of the other requirements of this chapter
[i.e., the CAA]''). The benefits associated with these concomitant
reductions are just as real as benefits from reductions in the targeted
pollutants.
    In light of the requirement to consider the co-benefits of other
CAA programs, the EPA believes that it is reasonable to conclude that
the CAA would also allow the EPA to consider other pollutant reductions
directly resulting from regulation of HAP emissions if a monetized
benefit-cost analysis were required (or used as a means of considering
cost at the agency's discretion) to support the appropriate and
necessary finding. In addition, in the legislative history to CAA
section 112(d)(2), the Senate Report recognized that MACT standards
would have a collateral benefit of controlling criteria pollutants as
well and viewed this as an important benefit of the air toxics program.
See S. Rep. No. 101-228, 101st Cong. 1st sess. at 172; Legal
Memorandum, page 25.
    Even if one were to disagree that CAA section 112(n)(1)(A) and the
legislative history expressly support our consideration of monetized
co-benefits, nothing in the CAA, or the supporting legislative history,
suggests that benefits associated with pollutants other than the
targeted pollutants are irrelevant to a benefit-cost analysis or must
be ignored by the EPA in this context. There is no statutory provision
prohibiting consideration of direct co-benefits. The EPA believes that,
consistent with economic principles and best practices regarding
benefit-cost analysis and the fundamental linkages between reducing HAP
emissions and reducing SO2 and PM2.5 emissions as
a direct consequence of actions taken to meet the standards, it is
reasonable to consider co-benefits in making the appropriate and
necessary finding. Chevron U.S.A. Inc. v. Nat'l Res. Defense Council,
467 U.S. 837 (1984) (holding that a court will defer to an agency's
position on how to interpret an ambiguous statutory provision if ``the
agency's answer is based on a permissible construction of the
statute''); Catawba Cty. V. EPA, 571 F.3d 20 (D.C. Cir. 2009)
(acknowledging that the EPA is warranted deference especially when
administering complicated provisions of the CAA). Further, as explained
in previous Sections of this notice, the Legal Memorandum (pages 22-24)
and the proposed supplemental finding (80 FR 75040), neither the
statute nor the Michigan decision support, much less mandate, that the
EPA's consideration of benefits must be limited to monetized HAP-
specific benefits.
    The EPA further notes that consideration of co-benefits is also
consistent with economic principles and best practices, executive
guidance on regulatory review, and longstanding agency practice under
administrations of both parties. Commenters argued, on the one hand,
that the EPA is required to undertake a formal benefit-cost analysis to
support the finding. At the same time, commenters contend that the
agency cannot follow standard economic principles when undertaking such
an analysis in this context. The EPA agrees that a formal benefit-cost
analysis is not the preferred way of analyzing cost under CAA section
112(n)(1). However, if a benefit-cost analysis is to be undertaken, and
relied on, to support the finding, it should be conducted following
standard economic principles. Commenters' argument that these
principles should not be followed in this context undermines their
argument that such a formal benefit-cost analysis is required. The EPA
followed well-established principles for conducting such an analysis in
the MATS RIA. Consistent with standard practice, the benefit-cost
analysis for MATS accounted for all of the significant consequences of
a policy decision (i.e., direct and indirect, intended and unintended,
beneficial and harmful). In commenters' view, however, formal benefit-
cost analysis is not the best tool for evaluating costs and benefits
under CAA section 112(n)(1). Their conclusion may weigh in favor of
using an alternate approach such as EPA's preferred approach, but it
does not provide a sufficient basis to conduct a distorted form of a
benefit-cost analysis that ignores standard economic principles and
well-established practices for conducting such analyses.
    As noted in the proposed supplemental finding (80 FR 75039), the
agency is directed to include ancillary benefits in benefit-cost
analysis by economic guidance documents from OMB (2003) \31\ and the
EPA (2010).\32\ The EPA's Guidelines (U.S. EPA, 2010) are based on a
well-developed body of economics literature identifying rigorous
methods for conducting benefit-cost analysis, were extensively peer-
reviewed by the independent Environmental Economics Advisory
Committee,\33\ and represent the current consensus of the economics
discipline as to the purpose and appropriate practice of benefit-cost
analysis. As discussed in the proposed supplemental finding (80 FR
75039), the core purpose of a benefit-cost analysis is to determine
whether a policy's overall net benefits to society are positive.
Actions with positive net benefits (i.e., benefits exceed costs)
increase economic efficiency. A key requirement for conducting a proper
benefit-cost analysis is that all known consequences of an action
should be considered.\34\
---------------------------------------------------------------------------

    \31\ See p. 26 of OMB's Circular A-4: ``Your analysis should
look beyond the direct benefits and direct costs of your rulemaking
and consider any important ancillary benefits and countervailing
risks. An ancillary benefit is a favorable impact of the rule that
is typically unrelated or secondary to the statutory purpose of the
rulemaking.''
    \32\ See p. 11-2 of EPA's Guidelines: ``An economic analysis of
regulatory or policy options should present all identifiable costs
and benefits that are incremental to the regulation or policy under
consideration. These should include directly intended effects and
associated costs, as well as ancillary (or co-) benefits and
costs.''
    \33\ U.S. EPA--Science Advisory Board (U.S. EPA-SAB). 2009.
Science Advisory Board (SAB) Advisory on EPA's draft Guidelines for
Preparing Economic Analyses (2008). EPA-SAB-09-018. September.
Available at https://yosemite.epa.gov/sab/sabproduct.nsf/
559B838F18C36F078525763C0058B32F/$File/EPA-SAB-09-018-unsigned.pdf.
    \34\ Under a strict economic efficiency test, an action should
only be undertaken if the benefits exceed the costs, assuming all
significant consequences can be quantified and monetized. However,
as both the EPA's and OMB's guidance acknowledge, there are often
other important considerations, such as distributional concerns,
that limit the reasonableness of employing strict economic
efficiency tests in decision-making. As noted in the proposed
supplemental finding (80 FR 75040), distributional concerns, such as
impacts to the most exposed and sensitive individuals in a
population, are important for MATS.
    See p. 1-2 of the EPA's Guidelines: ``It is important to note
that economic analysis is but one component in the decision-making
process and under some statutes it cannot be used in setting
standards. Other factors that may influence decision makers include
enforceability, technical feasibility, affordability, political
concerns, and ethics, to name but a few.''
    See p. 2 of OMB's Circular A-4: ``Where all benefits and costs
can be quantified and expressed in monetary units, benefit-cost
analysis provides decision makers with a clear indication of the
most efficient alternative, that is, the alternative that generates
the largest net benefits to society (ignoring distributional
effects). This is useful information for decision makers and the
public to receive, even when economic efficiency is not the only or
the overriding public policy objective.''
---------------------------------------------------------------------------

    In conducting benefit-cost analyses, the EPA routinely considers
consequences (both positive and negative) that are ancillary to the
intended purpose of a regulation. For example, the $9.6 billion cost
estimated in the MATS RIA included costs that would be passed on to
electricity customers and higher fuel costs, which are beyond the costs
borne by owners of coal- and oil-fired units regulated by

MATS. If it were unreasonable to consider co-benefits, then it would be
unreasonable to consider these ancillary costs. The EPA notes that it
similarly accounts for negative consequences such as increases in
pollution emissions or concentrations (also called ``disbenefits'') in
benefit-cost analyses when they occur.\35\
---------------------------------------------------------------------------

    \35\ See e.g., p. 5-14 of the MATS RIA.
---------------------------------------------------------------------------

    Because controlling HAP emissions necessarily results in fewer
emissions of other non-HAP pollutants, the economic value of these
consequences (i.e., co-benefits) are clearly within the scope of a
proper benefit-cost analysis. Based on previous peer-reviewed studies
(e.g., U.S. EPA, 2011),\36\ the large economic value of reducing air
pollution, particularly ambient PM2.5, is well-known.
Excluding such a large positive consequence has no basis in economic
principles. Further, such deliberate disregard for the important
consequences of an action would result in a benefit-cost analysis that
would not be recognizable to most economists \37\ and would provide an
incorrect conclusion regarding the net impact of MATS on economic
efficiency. In addition, because the monetized value of the
PM2.5 co-benefits were estimated to be $33 to $90 billion
per year, it would likely be unreasonable to fail to consider such
important economic consequences of MATS.
---------------------------------------------------------------------------

    \36\ U.S. EPA. 2011. The Benefits and Costs of the Clean Air Act
1990 to 2020: EPA Report to Congress. Office of Air and Radiation,
Office of Policy, Washington, DC. March. Available at https://www.epa.gov/sites/production/files/2015-07/documents/fullreport_rev_a.pdf.
    \37\ See e.g., Chapter 1 (``Introduction'') of Just, Richard E.,
Darrell L. Hueth, and Andrew Schmitz. 2005. The Welfare Economics of
Public Policy: A Practical Approach to Project and Policy
Evaluation. Edward Elgar Publishing, Cheltenham, UK.
---------------------------------------------------------------------------

    The EPA also disagrees with commenters' contentions that it is
inappropriate for the EPA to consider co-benefits from reducing
criteria pollutants below the level established in the NAAQS program.
The EPA believes that the commenters mischaracterized the NAAQS
program. As the EPA has consistently stated, the NAAQS are not zero-
risk standards.\38\ Unlike the CAA section 112 program, the agency is
not required to take into account the health effects experienced by the
most susceptible individual within at-risk populations when setting the
NAAQS.\39\ Further, there is no scientific basis for ignoring health
benefits (including avoiding premature death) that occur as a result of
reducing PM2.5. In fact, there is a substantial body of
scientific evidence supporting the existence of health impacts from
exposure to PM2.5, even at low concentrations below the
NAAQS (U.S. EPA, 2009).\40\ As a result, consistent with the robust
scientific evidence and recommendations from multiple panels of the
independent Science Advisory Board, the EPA routinely includes benefits
of reductions in air pollution at levels below the NAAQS in benefits
assessments. The most recent Integrated Science Assessment for
Particulate Matter (PM ISA) concludes that the current science supports
use of log-linear, no-threshold concentration-response functions,
recognizing uncertainty in those relationship at concentrations where
little data exists (U.S. EPA, 2009). In other words, there is no
evidence of a PM2.5 concentration below which health effects
would not occur.\41\ Based on these peer-reviewed scientific
conclusions in the PM ISA, the EPA maintains that the most
scientifically-defensible approach for estimating the benefits from
reducing exposure to PM2.5 includes benefits both above and
below the levels of the NAAQS. The EPA responds to additional technical
comments regarding the calculation of PM2.5 co-benefits in
the RTC document for this action.
---------------------------------------------------------------------------

    \38\ In the preamble to the final revisions of the PM NAAQS in
2012 (78 FR 3090), the EPA noted that ``[t]he CAA does not require
the Administrator to establish a primary NAAQS at a zero-risk level
or at background concentration levels, see Lead Industries v. EPA,
647 F.2d at 1156 n.51, but rather at a level that reduces risk
sufficiently so as to protect public health with an adequate margin
of safety.''
    \39\ In the preamble to the final revisions of the PM NAAQS in
2012 (78 FR 3090), the EPA noted that ``[t]he legislative history of
section 109 indicates that a primary standard is to be set at ``the
maximum permissible ambient air level . . . which will protect the
health of any [sensitive] group of the population,'' and that for
this purpose ``reference should be made to a representative sample
of persons comprising the sensitive group rather than to a single
person in such a group.'' S. Rep. No. 91-1196, 91st Cong., 2d Sess.
10 (1970).''
    \40\ U.S. EPA. 2009. Integrated Science Assessment for
Particulate Matter (Final Report). EPA-600-R-08-139F. National
Center for Environmental Assessment--RTP Division. December.
Available at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546. Docket ID No. EPA-HQ-OAR-2009-0234-
20501.
    \41\ The recognition that there is ``no population threshold,
below which it can be concluded with confidence that
PM2.5-related effects do not occur'' (78 FR 3098) and
``there is no evidence of a threshold'' (78 FR 3119, 3138) is
consistent throughout the 2012 PM NAAQS rulemaking process,
including in the assumptions for quantifying the mortality and
morbidity health risks in the peer-reviewed risk assessment
supporting the rulemaking.
    U.S. EPA. 2010. Quantitative Health Risk Assessment for
Particulate Matter--Final Report. EPA-452/R-10-005. Office of Air
Quality Planning and Standards, Research Triangle Park, NC.
September. Available at http://www.epa.gov/ttnnaaqs/standards/pm/data/PM_RA_FINAL_June_2010.pdf.
---------------------------------------------------------------------------

    The EPA further disagrees that the monetized PM2.5
health benefits from MATS are double-counted with the health benefits
achieved by other regulations, such as the Cross-State Air Pollution
Rule or the NAAQS. The EPA's standard practice for its rules is to
estimate, to the extent data and time allow, all benefits of the
emissions reductions achieved by a rule beyond control requirements for
other rules. If this rule was duplicative with other rules, then there
would be no additional costs or benefits attributable to this rule. As
stated in the EPA's previous response on this issue in the 2011 MATS
rulemaking (MATS RTC, Vol 2, pp. 482-484),\42\ the agency includes
other rules such as the Cross-State Air Pollution Rule in the
``baseline'' in estimating the benefits and costs for rules like MATS.
Any emission changes expected as a result of MATS are additional
emission reductions beyond previous regulations. Therefore, the
benefits from reducing PM2.5 are not double counted--they
are real additional health benefits from emissions reductions achieved
by MATS alone. Further, the PM2.5 health benefits expected
from MATS are not double-counted with benefits estimated in the NAAQS
RIAs. The NAAQS RIAs hypothesize, but do not predict, the control
strategies that states may choose to enact. In implementing MATS,
emission controls may lead to reductions in ambient PM2.5
concentrations below the NAAQS in some areas and assist other areas
with attaining these NAAQS. As noted above, because the NAAQS are not
set at a level of zero risk and the science fully supports quantifying
benefits below the NAAQS, the EPA considers them to be legitimate
components of the total benefits estimate. Subsequent to the final MATS
rule, the EPA proposed and finalized a revision to the PM NAAQS (78 FR
3086 (Jan. 15, 2013)). The RIA accompanying that rule (U.S. EPA, 2012)
\43\ explicitly included MATS in the baseline (p. 3-6) to avoid double-

counting the benefits and costs of MATS in that rulemaking.
---------------------------------------------------------------------------

    \42\ U.S. EPA. 2011. EPA's Responses to Public Comments on EPA's
National Emission Standards for Hazardous Air Pollutants from Coal-
and Oil-Fired Electric Utility Steam Generating Units. December.
Volume 2 of 2. Docket ID No. EPA-HQ-OAR-2009-0234-20126.
    \43\ U.S. EPA. 2012. Regulatory Impact Analysis for the Final
Revisions to the National Ambient Air Quality Standards for
Particulate Matter. EPA-452/R-12-003. Office of Air Quality Planning
and Standards, Health and Environmental Impacts Division, Research
Triangle Park, NC. December. Available at http://www.epa.gov/ttnecas1/regdata/RIAs/finalria.pdf.
---------------------------------------------------------------------------

    In conclusion, for all of the reasons stated above, it is
appropriate for the benefit-cost analysis to consider co-benefits,
which are a direct consequence of actions to reduce HAP emissions. It
is consistent with economic guidance documents and best practices to
include such benefits in a formal benefit-cost analysis. The inclusion
of such benefits is consistent with the underlying science. In
addition, including such benefits is consistent with statutory
requirements in CAA section 112(n)(1)(A) and the legislative history
for the CAA section 112(d) maximum achievable control technology or
MACT program. The final MATS RIA demonstrates that the quantified and
monetized benefits and the unquantified benefits of the rule
significantly outweighed the costs of the rule; thus, that analysis
fully and independently supports the EPA's determination that it is
appropriate to regulate HAP emissions from EGUs.
2. Monetized HAP Benefits
    Comment: Several commenters stated that the quantified and
monetized mercury benefits in the MATS RIA vastly understated the full
benefits from reducing mercury emissions and that there are many
categories of unquantified HAP benefits. These commenters supported
this conclusion by submitting recent research to the docket for this
rulemaking, including studies that quantify additional categories of
benefits not included the MATS RIA. Each of these cited studies \44\
indicate that the monetized mercury benefits from MATS could be in the
hundreds of millions to billions of dollars per year. For example, the
cited Giang and Selin (2016) study found that the monetized mercury
benefits from implementation of MATS would exceed $3.7 billion (in 2005
dollars) per year in lifetime benefits for affected individuals and
$1.1 billion per year in economy-wide benefits. Additional commenters
stated that new studies (e.g., Zhang et al. (2016), Castro and
Sherwell, 2015; Drevnick et al., 2012; Evers et al., 2007; Hutcheson et
al., 2014; Cross et al., 2015) \45\ demonstrate that reductions in
mercury deposition to U.S. ecosystems and resulting human and
ecological exposures were underestimated in the MATS RIA.
---------------------------------------------------------------------------

    \44\ Giang, Amanda, and Noelle E. Selin. 2016. ``Benefits of
Mercury Controls for the United States.'' Proceedings of the
National Academy of Sciences 113 (2): 286-291. Docket ID No. EPA-HQ-
OAR-2009-0234-20544.
    Rice, Glenn E, James K Hammitt, and John S Evans. 2010. ``A
Probabilistic Characterization of the Health Benefits of Reducing
Methyl Mercury Intake in the United States.'' Environmental Science
& Technology 44 (13) (July 1): 5216-24. Docket ID No. EPA-HQ-OAR-
2009-0234-19897.
    NESCAUM. 2005. Economic Valuation of Human Health Benefits of
Controlling Mercury Emissions from U.S. Coal-Fired Power Plants.
Available at: http://www.nescaum.org/documents/rpt050315mercuryhealth.pdf.
    \45\ Zhang et al. 2016. ``Observed decrease in atmospheric
mercury explained by global decline in anthropogenic emissions.''
PNAS 113 (3): 526-531. Docket ID No. EPA-HQ-OAR-2009-0234-20558,
Exhibit 4.
    Castro, M.S. and J. Sherwell. 2015. ``Effectiveness of emission
controls to reduce the atmospheric concentrations of mercury.''
Envtl. Sci. Tech. 49(24): 14000-14007.
    Drevnick, P.E., et al. 2007. ``Spatial and temporal patterns of
mercury accumulation in lacustrine sediments across the Great Lakes
region.'' Environmental Pollution 161: 252-260. Evers, D.C., et al.
2007. ``Biological mercury hotspots in the northeastern United
States and southeastern Canada.'' Bioscience 57(1): 29-43. Docket ID
No. EPA-HQ-OAR-2009-0234-20559, Exhibit I-22.
    Hutcheson, M.S., et al. 2014. ``Temporal and spatial trends in
freshwater fish tissue mercury concentrations associated with
mercury emissions reductions.'' Envtl. Sci. Tech. 48: 2193-2202.
    Cross, F.A., et al. 2015. ``Decadal declines of mercury in adult
bluefish (1972-2011) from the mid-Atlantic coast of the U.S.A.''
Envtl. Sci. Tech. 49: 9064-9072.
---------------------------------------------------------------------------

    Several commenters agreed that consideration of unquantified
benefits is appropriate and consistent with economic principles and
best practices, executive guidance on regulatory review, and
longstanding EPA practice under administrations of both parties. These
commenters noted that it is important to account for the full range of
benefits associated with the action, including benefits that cannot be
monetized due to lack of data. For example, several commenters noted
that the monetized mercury benefits in the MATS RIA did not capture the
breadth and severity of the hazards that mercury poses to wildlife and
the ecosystem services that wildlife provides, including benefits to
fish, sensitive bird species, marine mammals, and amphibian
populations. Several commenters asserted that because the monetized
benefits in the MATS RIA do not cover all of the benefits from reducing
HAP emitted from power plants, a formal benefit-cost comparison is
incomplete and potentially misleading. However, these commenters
concluded that recent scientific findings on the quantified and
unquantified benefits of reducing HAP exposure supports the EPA's
determination that it is appropriate to regulate HAP from power plants
after considering the costs.
    However, numerous other commenters asserted that the $4 to $6
million in monetized mercury benefits in the RIA were the only real
benefits attributable to MATS, and thus the rule is not justified
because these small benefits do not exceed the projected $9.6 billion
in costs.
    Response: For all of the reasons discussed above in Sections IV.A.1
and IV.B.1, the EPA disagrees with commenters that the only benefits
that should be included in a benefit-cost analysis are the HAP-specific
monetized benefits. When all of the benefits are properly considered,
the monetized benefits of MATS far outweigh the costs.
    Further, the EPA agrees with the commenters stating that the
monetized mercury health benefits in the MATS RIA significantly
underestimate the HAP health benefits associated with MATS. In the MATS
RIA, the EPA could only quantify and monetize a small subset of the
health and environmental benefits attributable to reducing mercury and
none of the health and environmental benefits attributable to
reductions in other HAP. As noted in the proposed supplemental finding
(80 FR 75040), the monetized mercury benefits did not account for ``(1)
benefits from reducing adverse health effects on brain and nervous
system development beyond IQ loss; (2) benefits for consumers of
commercial (store-bought) fish (i.e., the largest pathway to mercury
exposure in the U.S.); (3) benefits for consumers of self-caught fish
from oceans, estuaries or large lakes such as the Great Lakes; (4)
benefits for the populations most affected by mercury emissions (e.g.,
children of women who consume subsistence-level amounts of fish during
pregnancy); (5) benefits to children exposed to mercury after birth;
and (6) environmental benefits from reducing adverse effects on birds
and mammals that consume fish.'' This is because data and methods for
monetizing these benefits are largely unavailable in scientific
literature, including gaps in toxicological data, uncertainties in
extrapolating results from high-dose animal experiments to estimate
human effects at lower doses, limited monitoring data, difficulties in
tracking diseases such as cancer that have long latency periods, and
insufficient economic research to support the valuation of the health
impacts often associated with exposure to individual HAP. However, the
EPA acknowledges the submission of new research from several commenters
that further corroborates the EPA's conclusion that the HAP benefits
are underestimated in the MATS RIA and demonstrates the potential
extent of that underestimation. See Section 3-3 of the RTC for the
supplemental finding for additional details regarding new studies cited
by commenters.

    The EPA also agrees that consideration of unquantified benefits is
appropriate and consistent with economic principles and best practices,
executive guidance on regulatory review, and longstanding EPA practice.
The EPA agrees that it is important to recognize the full range of
impacts associated with an action in a benefit-cost analysis, including
those impacts that cannot be quantified or monetized due to a lack of
data, for which the MATS RIA accounted qualitatively.
    Although the MATS RIA did not quantify and monetize all of the
benefits that would result from reducing HAP emissions, the EPA
maintains that the benefits of this rule (both quantified and
unquantified) are substantial and far outweigh the costs, which
independently supports the determination that regulating HAP emissions
from EGUs is appropriate.
3. Impacts to Tribes
    Comment: One commenter representing several federally-recognized
Indian tribes and inter-tribal organizations strongly agreed that a
formal benefit-cost analysis is not a preferred approach to considering
whether the costs of compliance are reasonable. The commenter stated
that the EPA's inclusion of non-quantifiable benefits in the proposed
supplemental finding is essential to the commenter's support of the
agency's methodology because the benefits of MATS are difficult to
monetize--and in the case of the impacts to American Indian culture--
are impossible to monetize. The commenter stated that benefits of MATS
to American Indians are fundamentally different in kind than the
economic costs the rule imposes on coal- and oil-fired EGU operators
and ratepayers and provided examples of substantial non-quantitative
benefits of MATS that are unique to tribal communities. The commenter
stated that American Indians are disproportionately impacted by mercury
emissions because many are subsistence fishers that rely on locally-
caught fish for daily sustenance and consume fish at far higher rates
than the general population. The commenter stated that American Indians
are therefore at unusually high risk for neurodevelopmental disorders,
cardiovascular disease, autoimmune disorders, infertility, and other
adverse health effects from methylmercury exposure, the impacts of
which the EPA could not monetize. In addition to health concerns, the
commenter describes how methylmercury contamination threatens
longstanding Indian cultural traditions and critical social practices
of fishing and fish consumption that are central to many tribes'
cultural identity. The commenter explained that tribes are often
connected to particular waters for cultural, spiritual, or other
reasons (and others' fishing rights are limited to certain grounds by
treaty), so they cannot simply move their fishing to another location
to avoid mercury contamination. In addition, mercury fish advisories
harm Indian subsistence and fishing economies, including commercial
harvests and tourist revenues. The commenter states that MATS provides
critical protections for Indian health, fishing rights, and traditional
cultures that help the United States fulfill its legal duties to
protect tribal rights and resources of American Indians and tribes.
    Response: The EPA acknowledges the supportive comments of the
Indian tribes and inter-tribal organizations. The EPA shares the
tribes' concerns about the potential impact of mercury emissions on
tribes and agrees that tribes are likely to be affected differently by
mercury contamination compared to the general population. The EPA
acknowledges the importance of subsistence fishing and fishing cultures
to numerous tribes and agrees that those who traditionally consume fish
at higher rates than the general population are disproportionately
exposed to higher levels of mercury. The EPA is committed to honoring
and respecting tribal treaty rights by ensuring that its actions do not
conflict with those rights, and by implementing its programs to enhance
protection of treaty rights where there is discretion to do so. The EPA
believes that MATS will substantially reduce emissions of mercury in
the U.S. and that this reduction will benefit communities with
subsistence fishing lifeways, including American Indians and Alaska
Natives. The EPA also acknowledges that it was unable to monetize many
of the benefits of MATS and recognizes the difficulty in attempting to
quantify or monetize impacts to American Indian culture.

C. Comments on the Legal Interpretation of CAA Section 112(n)(1)

    Comment: Some states, tribes, industries, environmental
organizations, and health organizations, and others generally supported
the EPA's interpretation of the statute as set forth in the proposed
supplemental finding and Legal Memorandum. Some commenters expressly
agree that the purpose of CAA section 112 is to achieve prompt,
permanent and ongoing reductions in HAP emissions from stationary
sources to reduce the inherent risks associated with exposure to such
emissions. Some commenters further agreed that these goals apply to HAP
emissions from EGUs and that the EPA determined a reasonable approach
to incorporating cost into the appropriate and necessary finding in
light of the statute and the Michigan decision. Several of these
commenters specifically agreed that cost should not be the predominant
or overriding factor in the appropriate and necessary finding.
    Response: The EPA agrees that the interpretation of the statute and
the Michigan decision set forth in the companion Legal Memorandum is
reasonable. As stated above and in detail below, the EPA stands by the
interpretation in the Legal Memorandum in this final action.
    Comment: Some state and industry commenters disagreed with several
aspects of the EPA's interpretation of CAA section 112 and its reading
of the Supreme Court's decision in Michigan. Several commenters argued
that the Supreme Court's decision in Michigan, in essence, requires the
EPA to discard all aspects of the EPA's prior appropriate and necessary
finding. These commenters implicitly suggest that the Michigan decision
by itself invalidates aspects of the finding unrelated to EPA's
erroneous conclusion that it was not required to consider cost under
section 112(n)(1)(A). These commenters argued that the agency must
disregard or reevaluate all of its prior findings concerning the
hazards to public health and the environment posed by HAP emissions
from EGUs. They also argued that the EPA must reconsider all of its
prior interpretations of CAA section 112(n)(1), including its
conclusion that CAA section 112(n)(1) is a listing provision and not a
regulatory provision.
    For example, these commenters asserted the Supreme Court's decision
in Michigan requires the EPA to consider the potential cost of
regulating HAP emissions from EGUs under statutory provisions other
than CAA section 112(d). Among the approaches that the commenters
asserted the EPA must consider are regulation of HAP emissions under
CAA sections 112(n), 112(f), and 111(d). At least one commenter also
asserted that the EPA must determine whether the cost of regulation of
HAP emissions by the individual states would be more cost effective
than regulation of HAP emissions from EGUs under the CAA at all. No
commenter suggested a specific mechanism for regulating under those
other authorities or for determining the

cost of such regulation. They appear to suggest, however, that the EPA
must compare the cost of these undefined approaches to regulating HAP
against the potential cost of standards under CAA section 112(d), and
that the EPA must regulate under the least cost option or only to the
level necessary to address the identified risks.
    As support for their positions, commenters point to the Supreme
Court's Michigan decision; to the CAA section 112(n) Revision Rule and
the Clean Air Mercury Rule (CAMR); to the requirement in CAA section
112(n)(1)(A) to consider ``alternative control strategies'' for
emissions of HAP that warrant regulation and to regulate EGUs ``under
this section [112]''; and to statements in the legislative history.
Specifically as concerning the citation to the requirement to consider
``alternative control strategies'', commenters asserted that the EPA
improperly interpreted the requirement when conducting the CAA section
112(n)(1)(A) Utility Study that was issued in 1998, and that if the EPA
had properly conducted the Utility Study, it would have had the
information necessary to conduct these additional analyses.
    Some commenters also challenged the EPA's prior findings that HAP
emissions from EGUs pose hazards to public health and the environment,
specifically the findings for mercury, non-mercury metal HAP, and acid
gas HAP. Some of these commenters also acknowledged that the Supreme
Court only addressed the requirement to consider the cost of regulation
in the threshold finding and did not disturb any other findings or
legal conclusions in the MATS rule or the White Stallion decision. The
commenters also resubmitted many comments previously submitted on the
proposed MATS rule and addressed in the D.C. Circuit Court challenge to
the MATS standards in White Stallion. In addition, the comments raised
issues that were submitted in petitions for reconsideration on the MATS
final rule and that were denied by the agency.\46\ The comments
included arguments that the risk threshold of 1-in-1 million is not
reasonable, that the EPA cannot base the appropriate and necessary
finding on environmental risks, and that the volume of HAP emissions is
not a legitimate basis for listing, even when the sources are emitting
at major source levels.
---------------------------------------------------------------------------

    \46\ 80 FR 24218; ``Denial of Petitions for Reconsideration of
Certain Issues: MATS and Utility NSPS'' (March 2015). Docket ID No.
EPA-HQ-OAR-2009-0234-20493.
---------------------------------------------------------------------------

    The same commenters also argued that the EPA must evaluate the cost
of regulating each HAP individually and may only regulate those HAP for
which a specific finding is made and then only to the level of
regulation that is required to address the identified risk. The
commenters maintained that the EPA must separately consider the cost of
regulation of each HAP emitted by EGUs under various approaches (as
identified above) before regulating any of the HAP at all, and
certainly before regulating all the EGU HAP under CAA section 112(d).
    Commenters also argued that CAA section 112(n)(1)(A) is not a
listing provision as the EPA states in the proposal. Legal Memorandum
Accompanying at 2, 11-12. The commenters argued that CAA section
112(n)(1)(A) does not mention listing because listing is only a
precondition to regulation under CAA section 112(d), and that the EPA
was not required or even authorized to regulate EGUs under that
subsection. The commenters asserted that whether to list EGUs is not
the question raised by CAA section 112(n)(1)(A). Instead, the
commenters asserted, the question is whether additional regulation of
EGU HAP emissions under CAA section 112 is ``appropriate and
necessary.'' The commenters argued that the statutory question calls
for a decision to authorize or to preclude specific regulation of EGU
HAP emissions under CAA section 112. One commenter further asserted
that the Supreme Court's opinion in Michigan confirms that New Jersey
v. EPA, 517 F.3d 574 (D.C. Cir. 2008), was wrongly decided on this
point. The commenter asserted that the New Jersey holding cannot stand
because the D.C. Circuit Court found that even if the ``appropriate and
necessary'' CAA section 112(n) finding and CAA section 112(c) listing
of EGUs were erroneous, the EPA could only remove EGUs from the list of
source categories regulated under CAA section 112(d) if it followed the
delisting requirements of CAA section 112(c)(9). Id. at 583. The
commenter maintained that holding cannot stand because, according to
the commenter, the Supreme Court's opinion makes clear that the
``appropriate and necessary'' finding is the gateway to deciding to
regulate EGU HAP emissions under CAA section 112, and if that finding
is not made, then regulation cannot be imposed. See Michigan, 135 S.
Ct. at 2707.
    Commenters further maintained that CAA section 112(n)(1)(A)
requires the EPA to decide whether regulation of HAP emissions from
EGUs ``under this section'' is ``appropriate and necessary'' after
considering a study that addresses ``hazards to public health'' that
remain ``after imposition of the requirements of this chapter,'' and
``alternative control strategies for emissions which may warrant
regulation.'' Commenters characterized the EPA's first task as a
requirement to find whether a residual public health hazard is posed by
specific EGU HAP emissions remaining after those emissions have been
reduced under other provisions of the Act. Commenters also asserted
that, if the EPA finds that any remaining EGU HAP emissions pose a
hazard, then the EPA must determine how and ultimately whether to
regulate those emissions ``under this section [112].'' Commenters
argued that the EPA must therefore calculate a ``preliminary estimate''
of the costs of the specific form of CAA section 112 regulation that it
is considering. Commenters also maintained that the EPA's
interpretation of the statute--which the commenters characterized as
mandating regulation under CAA section 112(d) if the EPA finds that one
HAP emitted by one EGU is found to pose either a residual health or
environmental risk--is no longer valid because of the Michigan
decision.
    Commenters also asserted that CAA section 112(n)(1)(A) is, on its
face, a residual risk regulatory provision and, as such, it requires
the EPA to make a risk management decision regarding whether health
risks exist, and if so, the degree to which they need to be reduced
further. The commenters maintained that regulation must necessarily
depend on what remaining risks, if any, are identified, that certain
HAP should only be regulated to the extent necessary to address the
risks and only if the monetized HAP-specific benefits exceed the costs
of standards, and that the EPA must undertake this analysis before
regulating each HAP individually. Commenters asserted that the statute
allows the EPA to regulate only those HAP from EGUs that do pose some
risk, and then only to the extent ``appropriate'' (from a cost point of
view) and ``necessary'' (from a risk reduction point of view). The
commenters argued that the EPA's approach impermissibly uses the risk
allegedly associated with one HAP to regulate another HAP. The
commenters maintain that the EPA must instead evaluate different
regulatory approaches available to it in order to determine costs and
benefits on an individual HAP basis. The commenters concluded that the
EPA cannot interpret the statute to permit regulation of all HAP under
CAA section 112(d)(2)-(3) because that approach results in high HAP
control

costs for no HAP benefit, at least for some pollutants (e.g., acid
gases), according to the comments.
    For acid gas HAP, the commenters appear to maintain that the EPA
could potentially use CAA section 112(d) to regulate, but that the
nature of such regulation must change to satisfy the Michigan decision.
For example, some commenters asserted that the agency could impose less
costly health-based emissions limits for acid gas HAP. The commenters
point to other CAA section 112 standards that include CAA section
112(d)(4) health-based emissions limits for the acid gases, including
the recently promulgated CAA section 112(d)(4) standards for hydrogen
chloride, hydrogen fluoride, and chlorine for the Brick and Structural
Clay Products Manufacturing and Clay Ceramics Manufacturing source
categories as support for their position. 80 FR 65470-71 (Oct. 26,
2015).
    Response: The EPA does not agree with these comments. For the
reasons set forth below, the EPA stands by the interpretation of the
statute and the Michigan decision set forth in the companion Legal
Memorandum.
    These comments focus on several primary arguments: (1) The Michigan
decision rendered invalid all aspects of the EPA's interpretation of
CAA section 112(n)(1)(A) as set forth in the MATS record and the
portions of the White Stallion decision upholding the EPA's
interpretation; (2) the EPA cannot satisfy its obligation to consider
cost without evaluating alternatives to regulating HAP emissions from
EGUs under CAA section 112(d); and 3) that the requirement to consider
cost renders invalid and/or insufficient the EPA's prior analyses of
the significant hazards posed by HAP emissions from EGUs as well as the
EPA's specific findings regarding the risks to public health and the
environment. The EPA explains below why we disagree with these
arguments.
    1. The Michigan decision does not disturb aspects of the EPA's
interpretation of CAA section 112(n)(1)(A) that are unrelated to its
prior conclusion that cost need not be considered.
    Many of the comments in opposition to the EPA's interpretation of
the statute are largely, if not wholly, premised on the position that
the Supreme Court's decision in Michigan that the EPA must consider
cost in the appropriate and necessary finding rendered invalid, in all
respects, the EPA's prior interpretation of CAA section 112(n)(1)(A)
and also the specific findings that supported the appropriate and
necessary finding in the original 2000 listing and in the reaffirmation
of that finding in the MATS rulemaking.\47\ In essence, many of the
comments opposed to the proposed supplemental finding are premised on a
belief that the Supreme Court decision in Michigan invalidated
interpretations and analyses presented in the MATS rule that were
unrelated to the EPA's erroneous decision not to consider cost when
evaluating whether regulation is appropriate and necessary. That
premise and the assertions on which it is based lack merit.
---------------------------------------------------------------------------

    \47\ The record in support of the appropriate and necessary
finding is extensive and includes: (1) The three studies requires by
CAA section 112(n)(1) and the additional NAS study of methylmercury
directed in the appropriations report for the EPA's fiscal year 1999
appropriations; (2) the 2000 Finding, 65 FR 79825 (December 20,
2000) (Finding it appropriate and necessary to regulate HAP
emissions from coal- and oil-fired EGUs and adding such units to the
CAA section 112(c) list of sources that must be regulated under CAA
section 112(d)); (3) the Proposed MATS rule, 76 FR 24976, 24980-
25020 (May 3, 2011) (The EPA affirmed the 2000 Finding was valid at
the time it was made based on the available information, and
reaffirmed that it remains appropriate and necessary to regulate HAP
emissions from EGUs based on new information and analyses in the
proposed MATS rule); and (4) the Final MATS rule, 77 FR 9304, 9310-
9366 (February 16, 2012) (reaffirming the appropriate and necessary
finding and denying a petition to delist coal- and oil-fired EGUs
from the CAA section 112(c) list).
---------------------------------------------------------------------------

    We note that many of the commenters opposed to the proposed
supplemental finding were parties to the Michigan case. The Court
granted certiorari to consider one issue: Whether it was reasonable for
the EPA to refuse to consider cost when making the section 112(n)(1)(A)
``appropriate and necessary'' finding. Michigan, 135 S. Ct. at 2704.
The Court held that the EPA was obligated to consider cost, but
emphasized that ``it will be up to the Agency to decide (as always,
within the limits of reasonable interpretation) how to account for
cost.'' 135 S. Ct. at 2711.\48\ It thus remanded the rule to the D.C.
Circuit Court ``for further proceedings consistent with this opinion.''
Id. at 2712.\49\
---------------------------------------------------------------------------

    \48\ In addition, the Supreme Court specifically stated in the
Michigan decision that ``EPA has interpreted the Act to mean that
power plants become subject to regulation on the same terms as
ordinary major and area sources, see 77 Fed. Reg. 9330 (2012), and
we assume without deciding that it was correct to do so.'' Id. at
2705. This statement indicates that the Court did not intend for the
Michigan decision to call into question legal interpretations, such
as those relating to the terms on which power plants are to be
regulated if an appropriate and necessary finding is made, that are
beyond the scope of the grant of certiorari. All aspects of the
agency's interpretation of section 112(n)(1)(A) were commented on
during the MATS rulemaking and many were challenged and unanimously
affirmed in the D.C. Circuit's White Stallion decision. The parties
could have petitioned, and in one case did petition, the Supreme
Court to review those other decisions. The Supreme Court explicitly
limited its grant of certiorari and addressed only one question,
leaving all other aspects of the White Stallion decision in place.
It would not be reasonable to interpret the Supreme Court's decision
in Michigan as reaching beyond the scope of the grant of certiorari
to address issues that were decided by the EPA in the MATS
rulemaking, and either not litigated in the lower court or
unanimously upheld by that court in the White Stallion decision.
    \49\ On remand, the D.C. Circuit considered competing motions to
govern the proceedings. Some states and industry asked for vacatur
while the EPA, other states, industry groups and environmental NGOs
asked the court to remand without vacatur. On December 15, 2015, the
same D.C. Circuit panel that had originally heard the challenges to
the MATS rule in the White Stallion case unanimously decided to
remanded the proceeding to the EPA without vacatur of the rule.
White Stallion Energy Center, LLC v. EPA, No. 12-1100 (Dec. 15,
2015) (order granting remand without vacatur). Docket ID No. EPA-HQ-
OAR-2009-0234-20567.
---------------------------------------------------------------------------

    In sum, the Michigan decision obligates the EPA to take cost into
account when deciding whether regulation is appropriate and necessary
but does not disturb other legal interpretations and technical findings
made by the agency in support of the appropriate and necessary finding.
The interpretation set forth in the Legal Memorandum reasonably
incorporates a consideration of cost into the appropriate and necessary
finding. The EPA's legal interpretation of CAA section 112(n)(1)(A)
was, with the exception of the cost issue, unanimously upheld by the
D.C. Circuit Court, and undisturbed by the Supreme Court decision. The
agency thus used that legal structure as the starting point for the
incorporation of cost into the appropriate and necessary finding. See
White Stallion Energy Center, LLC v. EPA, 748 F.3d 1222 (D.C. Cir.
2014) (Judge Kavanaugh dissented only on the issue of cost). The
commenters opposed to the EPA's interpretation make conclusory
statements that the prior interpretations are rendered invalid because
the EPA must consider cost in the appropriate and necessary finding.
However, none of the commenters opposed to the agency's interpretation
demonstrate in any substantive way that the agency's interpretation in
the Legal Memorandum is unreasonable, and in developing the
interpretation the agency considered not only the Michigan decision,
but also the purpose of the 1990 amendments to CAA section 112 to
obtain prompt, permanent and ongoing reductions in HAP emissions; the
structure and context of the statute; and the long rulemaking and
litigation history at issue in this case. The commenters did not
clearly articulate an alternative to the EPA's reasoned interpretation
of the role of cost in the appropriate and necessary finding; thus,

the EPA finds no reason to revise the interpretations set forth in the
proposed supplemental finding and the companion Legal Memorandum.
    Furthermore, while not expressly stated, the commenters appear to
assume that the EPA could never justify the cost of the MATS rule and
that no analysis of whether the costs of the rule are reasonable would
even be relevant. The Administrator disagrees and believes the EPA
should evaluate and consider the cost of the MATS rule. Furthermore,
having concluded that the cost of MATS is reasonable under several
metrics and that the rule will not impair the ability of the industry
to provide reliable electricity, the Administrator believes she must
consider those conclusions. In light of those conclusions and the
findings that HAP emissions pose significant hazards to public health
and the environment that will not be addressed through imposition of
the other requirements of the CAA, the Administrator concludes in this
final notice that regulation is appropriate and necessary.\50\ The EPA
went through an extensive process that spanned approximately 20 years
before finally establishing standards for HAP emissions from EGUs in
2012. The agency took comment on its legal interpretations and on its
findings that HAP emissions from EGUs pose hazards to public health and
the environment. Many of those interpretations and findings were
challenged in the D.C. Circuit Court in petitions to review MATS, and
some were not. With the exception of the cost issue, the challenges
were unanimously rejected by that Court in the White Stallion
decision.\51\
---------------------------------------------------------------------------

    \50\ In light of New Jersey v. EPA, 517 F.3d 574 (D.C. Cir.
2008), the EPA may only remove coal and oil-fired EGUs from the CAA
section 112(c) list if it demonstrates that the delisting criteria
in CAA section 112(c)(9) have been met. A finding by the EPA that
regulation of these sources is not appropriate or necessary would
not be a sufficient basis for the EPA to remove EGUs from the CAA
section 112(c) list, but the D.C. Circuit Court could vacate the
rule upon review if the court concluded the agency's revised finding
was unreasonable.
    \51\ Judge Kavanaugh dissented on the cost issue but otherwise
joined the majority on all other challenges to the appropriate and
necessary finding and HAP standards, including the EPA's decision to
decline to establish a health based emission limit for acid gas HAP
under section 112(d)(4) and to establish a more stringent beyond-
the-floor standard for Hg from certain coal-fired EGUs. The fact
that Judge Kavanaugh dissented on the cost issue alone suggests that
it is separate and distinct and that a decision that cost must be
taken into consideration does not upend the other holdings in White
Stallion.
---------------------------------------------------------------------------

    The EPA's approach to evaluating cost is also supported by the
Michigan decision wherein the Court directed the agency to ``consider
cost--including, most importantly, cost of compliance--before deciding
whether regulation is appropriate and necessary.'' 135 S. Ct. 2711. The
``cost of compliance'' at issue in that case was the cost of MATS, and,
as the EPA finds that the costs associated with the rule are reasonable
under several different metrics, the agency cannot and should not
ignore those conclusions. The Michigan decision itself does not, as
some commenters appear to suggest, draw any conclusions regarding
whether the cost of MATS is reasonable, or otherwise undermine the
EPA's conclusion that the costs are reasonable. In addition, the EPA
does not rely on this conclusion alone to support a determination that
regulation is appropriate and necessary. Instead, as explained in
greater detail in the proposed notice and this final action, the EPA's
conclusion that the cost of MATS is reasonable is but one of the
factors the agency considers when determining whether regulation is
appropriate and necessary.
    2. Cost considerations can reasonably be incorporated as an
additional factor to be considered under CAA section 112(n)(1)(A)
without disturbing the EPA's prior interpretation of the statutory
structure.
    The agency has reversed its prior conclusion that cost need not be
considered when making an appropriate and necessary finding and adopted
a new interpretation of the role of cost in that finding. That new
interpretation is consistent with the Michigan decision and the EPA's
non-cost-related interpretations of CAA section 112(n)(1)(A) that went
through notice and comment during the MATS rulemaking and were upheld
in White Stallion. The commenters appear to assume, without much
explanation, that the requirement to consider cost renders the EPA's
prior interpretation unreasonable because, according to the commenters,
the approach set forth in the proposed supplemental finding did not, in
their view, give sufficient weight to cost. The commenters seek to
overturn several of the EPA's prior conclusions regarding CAA section
112(n)(1)(A) such as: (1) The appropriate and necessary finding can be
based on a finding that significant hazards to public health and/or the
environment remain after imposition of the requirements of the Act; (2)
the finding can be based on an identified hazard for any one HAP; and
(3) the most reasonable approach to regulating HAP emissions from EGUs
is listing under CAA section 112(c) and regulation under CAA section
112(d) after a finding that regulation is appropriate and necessary.
The Michigan decision does not undermine the legitimacy of any prior
interpretation except the conclusion that cost need not be considered.
It was thus reasonable for the EPA to take these prior conclusions into
consideration when determining the manner in which to incorporate a
consideration of cost into the appropriate and necessary finding.
    The EPA discussed the Michigan decision in the proposed
supplemental finding and explained how cost can be reasonably
incorporated into the statutory structure that was otherwise
unanimously affirmed by the D.C. Circuit. Thus, the agency expressly
stated in the proposed supplemental finding that it was not reopening
or requesting comment on issues beyond its proposed approach to
incorporating a consideration of cost as an additional factor into the
appropriate and necessary finding. 80 FR 75028. Comments on other
interpretations are therefore outside the scope of this rulemaking.
Nonetheless, the EPA explains below why it disagrees with the comments
and also addresses the specific arguments raised by the commenters in
support of their positions.
    As background, the EPA issued MATS in response to the New Jersey
decision vacating the EPA's CAA Section 112(n) Revision Rule removing
coal- and oil-fired EGUs from the CAA section 112(c) list and CAMR
regulating such units under CAA section 111(d) instead of CAA section
112(d). New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008) (vacating the
delisting action as inconsistent with the statute because the EPA did
not comply with the requirements for delisting in CAA section
112(c)(9), and also vacating CAMR because the EPA stated that the rule
could not be legally supported if EGUs remained on the CAA section
112(c) list). The New Jersey court did not address the legal
interpretations of CAA section 112(n)(1)(A) nor the conclusions that
HAP emissions from EGUs did not pose a hazard to public health that
supported the appropriate and necessary finding.\52\
---------------------------------------------------------------------------

    \52\ Several commenters wrongly asserted that the Section 112(n)
Revision Rule was based on a determination that it was neither
appropriate nor necessary to regulate HAP emissions because of cost.
In fact, the EPA concluded that cost need not be considered in that
revised finding because the agency concluded that HAP emissions from
EGUs did not pose a hazard to public health warranting regulation
based on the agency's interpretations of the statute in the 112(n)
Revision Rule.
---------------------------------------------------------------------------

    The EPA recognized in MATS that it must reevaluate the prior
interpretations of the statute and the technical findings concerning
the hazards to public health from HAP emissions from EGUs as part

of the appropriate and necessary finding. In the process of reviewing
the conclusions in the Section 112(n) Revision Rule, the EPA determined
that the interpretations contained in that rule should be revised to
better reflect the structure and intent of the statute and concluded
that the prior technical findings were either insufficient (e.g., for
mercury) or essentially absent (e.g., non-mercury metal HAP and acid
gas HAP). Thus, the agency addressed in detail how it intended to
interpret the statute going forward, how the interpretation of the
statute in MATS was consistent with the 2000 Finding, and how the new
interpretation differed from the interpretation in the Section 112(n)
Revision Rule. See 76 FR 24986-24998. The agency received numerous
comments on the interpretations and the EPA responded to those comments
in the final MATS rule and the RTC document. See 77 FR 9319-9336; see
also MATS RTC, Vol. I.\53\ In affirming all of the changes in
interpretation, the White Stallion court found that the agency has
authority to change its interpretation of CAA section 112(n)(1)(A) as
long as ``the policy is permissible under the statute, that there are
good reasons for it, and that the agency believes it to be better.''
White Stallion, 748 F.3d at 1235. Stated another way, a change is
prohibited unless the agency determines that the alternative is legally
permissible, that there is a good reason for the change, and that the
alternative interpretation is better. Id. As explained further below,
the commenters' suggested alternatives may not be reasonably supported
under the terms of the statute. In addition, the EPA neither believes
there are good reasons to adopt the alternatives offered nor finds that
they would better address the identified risks and further the goals of
the statute. The commenters appear to (and in at least one case
expressly) place cost above all other considerations and the agency
does not see ``good reasons'' for adopting that interpretation above
our own in the comments, in the statute, or in the legislative history.
See Legal Memorandum. There is no basis for concluding that any of
these alternative approaches are mandatory, and the agency does not
believe they are ``better'' than the approach we set forth in the MATS
rule and the proposal notice. Among other things, as discussed below,
the alternatives offered by commenters lack structure, are not easily
supported by the statutory language, and do not further the statutory
goals better than the EPA's approach.
---------------------------------------------------------------------------

    \53\ The commenters do not in any meaningful way attempt to
demonstrate why the prior reasoned interpretations are suddenly
unreasonable because of cost. The agency maintains the lack of
specificity and failure to explain more fully why those prior
interpretations must be rejected because of cost is a significant
flaw in the comments. See CAA section 307(d)(7)(B) (``Only an
objection to a rule or procedure which was raised with reasonable
specificity during the period for public comment . . . may be raised
during judicial review.'').
---------------------------------------------------------------------------

    Under the commenters' approaches, the EPA would be required to make
specific separate cost findings for each HAP, but only if the EPA has
determined that the HAP at issue poses a hazard to public health (not
the environment). The commenters argued that the Michigan decision
mandates this approach, but it does not. The Supreme Court did not
disturb the EPA's prior conclusions (which were upheld in White
Stallion) that the appropriate and necessary finding can be based on a
finding that any one HAP emitted by EGUs poses a hazard to public
health or the environment, that the statute contemplates that
regulation under CAA section 112 will occur by listing pursuant to CAA
section 112(c) based on the appropriate and necessary finding, and that
EGUs are regulated like other sources once listed. In fact, the Supreme
Court specifically limited its grant of certiorari and did not, as some
petitioners had requested, grant certiorari on the question of whether
the EPA ``may regulate EGU HAP emissions that pose no hazard to public
health.'' See UARG Petition for Writ of Certiorari, July 14, 2014.\54\
The request for certiorari on this question focused on the lower
court's conclusion that it was permissible for the EPA to regulate acid
gas HAP from EGUs absent specific conclusions regarding public health
hazards associated with such emissions from EGUs. The Supreme Court
also explicitly acknowledged and did not disturb the conclusion that
once the agency finds it appropriate and necessary to regulate HAP
emissions from EGUs, power plants are regulated like other sources. See
Michigan at 2705. The approach selected by the EPA is consistent with
these undisturbed prior conclusions, and nothing in Michigan mandates
that the EPA take a different approach now.
---------------------------------------------------------------------------

    \54\ Docket ID No. EPA-HQ-OAR-2009-0234-20563.
---------------------------------------------------------------------------

    The rationale for these conclusions is valid and in no way
undermined by the conclusion that the EPA must incorporate cost
considerations into the appropriate and necessary finding. The EPA
stated in MATS that ``the use of the terms section, subsection, and
subparagraph in section 112(n)(1)(A) demonstrates that Congress was
consciously distinguishing the various provisions of section 112 in
directing EPA's action under section 112(n)(1)(A). Congress directed
the agency to regulate utilities ``under this section'' not ``under
this subparagraph [112(n)],'' and accordingly EGUs should be regulated
under section 112 in the same manner as other categories for which the
statute requires regulation.'' See Final MATS, 77 FR 9326. The agency
also cited the New Jersey case wherein the D.C. Circuit Court found
that CAA section 112(n)(1) ``governs how the Administrator decides
whether to list EGUs'' and that once listed, EGUs are subject to the
requirements of section 112. Id. citing New Jersey, 517 F.3d at 583 The
New Jersey court expressly noted that ``where Congress wished to exempt
EGUs from specific requirements of section 112, it said so
explicitly,'' noting that ``section 112(c)(6) expressly exempts EGUs
from the strict deadlines imposed on other sources of certain
pollutants.'' Id. The EPA concluded that ``Congress did not exempt EGUs
from the other requirements of section 112, and, once listed, the EPA
is reasonably regulating EGUs pursuant to the standard-setting
provisions in section 112(d), as it does for all other listed source
categories.'' Id.
    During the MATS rulemaking, the EPA explicitly considered and
rejected comments suggesting that the agency could regulate under CAA
section 112(n)(1), and neither the EPA's conclusion nor its rationale
are affected by the Michigan decision. As the agency explained ``even
assuming for the sake of argument, that we could issue standards under
section 112(n)(1), we would decline to do so because there is nothing
in section 112(n)(1)(A) that provides any guidance as to how such
standards should be developed.'' Id. The EPA noted that ``[a]ny
mechanism we devised, absent explicit statutory support, would likely
receive less deference than a CAA section 112(d) standard issued in the
same manner in which the Agency issues standards for other listed
source categories.'' Id.\55\ A requirement to consider cost does not
change these conclusions.
---------------------------------------------------------------------------

    \55\ Several commenters asserted that the EPA indicated that it
must regulate HAP emissions from EGUs under CAA section 112(d), but
this argument is contradicted by the quoted statement from the final
rule explaining that any other mechanism would likely receive less
deference. The EPA maintained in the MATS rule that the best reading
of the statute was that an affirmative appropriate and necessary
finding should be followed by listing under CAA section 112(c) and
regulation under CAA section 112(d). See e.g., 77 FR 9326. The EPA
did not, however, identify an alternative approach to regulation
``under this section [112]'' that is as reasonable or defensible as
the approach we followed, and the commenters have not provided any.

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

    The White Stallion court upheld the EPA's determination to regulate
---------------------------------------------------------------------------
under CAA section 112(d) and held:

    EPA acted properly in regulating EGUs under Sec.  112(d).
Section 112(n)(1)(A) directs the Administrator to ``regulate
electric steam generating units under this section, if the
Administrator finds such regulation is appropriate and necessary.''
CAA Sec.  112(n)(1)(A). EPA reasonably interprets the phrase ``under
this section'' to refer to the entirety of section 112. See Desert
Citizens Against Pollution v. EPA, 699 F.3d 524 (D.C. Cir. 2012).
Under section 112, the statutory framework for regulating HAP
sources appears in Sec.  112(c), which covers listing, and Sec.
112(d), which covers standard-setting. See CAA Sec.  112(c), 112(d).
This court has previously noted that ``where Congress wished to
exempt EGUs from specific requirements of section 112, it said so
explicitly.'' New Jersey, 517 F.3d at 583. EPA reasonably concluded
that the framework set forth in Sec.  112(c) and Sec.  112(d)--
rather than another, hypothetical framework not elaborated in the
statute--provided the appropriate mechanism for regulating EGUs
under Sec.  112 after the ``appropriate and necessary''
determination was made. Therefore, EPA's interpretation is entitled
to deference and must be upheld.

    White Stallion, 748 F.3d at 1243-44 (emphasis added).
    The White Stallion court also addressed, and rejected, arguments
that the EPA erred by regulating all HAP emissions from EGUs:

    Although the petitioners attempt to distinguish National Lime on
grounds that it concerned ``major sources'' rather than EGUs, they
have not provided any compelling reason why EGUs should not be
regulated the same way as other sources once EPA has determined that
regulation under Sec.  112 is ``appropriate and necessary.'' It also
bears emphasis that the plain text of Sec.  112(n)(1)(A) directs the
Administrator to ``regulate electric utility steam generating
units''--not to regulate their emissions as petitioners suggest.
This source based approach to regulating EGUs HAPs was affirmed in
New Jersey, 517 F.3d at 582, which held that EGUs could not be
delisted without demonstrating that EGUs, as a category, satisfied
the delisting criteria set forth in Sec.  112(c)(9). The notion that
EPA must ``pick and choose'' among HAPs in order to regulate only
those substances it deems most harmful is at odds with the court's
precedent.

    White Stallion, 748 F.3d at 1244-45.\56\
---------------------------------------------------------------------------

    \56\ The findings in the White Stallion are premised in part on
the holding in the New Jersey decision and those findings undermine
many of the commenters' arguments against the EPA's interpretation
of the proper role of cost in the appropriate and necessary finding.
This fact explains why the commenters opposed to EPA's
interpretation argue that the Michigan decision demonstrates that
the New Jersey decision was wrongly decided. The commenters are
incorrect in their assertions and certain commenters petitioned the
Supreme Court for certiorari to review the New Jersey decision, and
the request was denied. The commenters point to no legal precedent
for their position and rely instead on a convoluted argument
associated with the EPA's inability to delist a listed sources
category without complying with CAA section 112(c)(9). However, the
commenters failed to acknowledge that the EPA is not the only entity
that can remove a source category from the section 112(c) list, and
the other entity, in this case the D.C. Circuit Court, is not
required to comply with the section 112(c)(9) requirements. CAA
Section 112(e)(4) of the statute clearly authorizes judicial review
of any listing decision pursuant to section 307(d) when the EPA
issues section 112(d) standards. The courts thus have authority to
determine that a listing was improper and to vacate any such
listing. In this manner, an improper source category listing could
be corrected.
---------------------------------------------------------------------------

    There is no basis for commenters' assertion that these
interpretations are rendered unreasonable or otherwise invalid by the
requirement that the EPA consider cost as part of the appropriate and
necessary determination. Moreover, the agency's incorporation of a
consideration of cost into the prior interpretation is reasonable,
supported by the statutory text and context of the provision, and
consistent with the purpose of the statute. See Legal Memorandum.
    3. The EPA is not required to consider the potential cost of
alternative approaches to regulating HAP emissions from EGUs before
finding that regulation is appropriate and necessary.
    As explained above, commenters maintain that listing under CAA
section 112(c) and regulation under CAA section 112(d) is not
reasonable for EGUs and that the EPA must instead look to other
provisions of the statute to develop a regulatory approach that is only
as costly as necessary to address specifically identified hazards to
public health (hazards to the environment would not be sufficient to
justify regulation of any HAP according to many commenters opposed to
the agency's interpretation). The commenters point to various
provisions including CAA sections 112(n)(1), 112(f), and 111(d), and to
the potential for state action,\57\ and the commenters assert that the
EPA must consider all these different approaches for each HAP, in
addition to, or instead of, evaluating the cost reasonableness of MATS.
The EPA does not agree that these alternative approaches are mandated
by the Michigan decision or by the statute for the reasons above and as
explained further below.
---------------------------------------------------------------------------

    \57\ The comments suggesting that the EPA must consider
potential state action prior to making the appropriate and necessary
finding is in direct conflict with CAA section 112(n)(1)(A). That
provision only requires the agency to consider the potential impact
of CAA requirements on HAP emissions from EGUs when determining
whether hazards to public health remain ``after imposition of the
requirements of this chapter [the CAA].'' See CAA section
112(n)(1)(A). In light of this limitation, we do not believe the
agency could reasonably defer federal regulation of HAP emissions
from EGUs because of potential state action.
---------------------------------------------------------------------------

    As an initial matter, the commenters do not suggest a clear
framework for developing standards under those alternative approaches
and the statute does not provide one. The D.C. Circuit stated that the
EPA is not required to adopt a ``hypothetical framework not elaborated
in the statute''; thus, even if HAP emissions could theoretically be
regulated under the alternative provisions of the CAA identified by the
comments, the agency could reasonably decline to adopt those
alternative approaches in lieu of the reasonable approach affirmed in
White Stallion. See 748 F.3d at 1244.
    The lack of a statutory framework for the alternative approaches
suggested by commenters would frustrate if not wholly undermine the
agency's ability to achieve prompt, permanent and ongoing reductions in
HAP emissions from EGUs after completion of the studies, thus unduly
frustrating the purpose of CAA section 112. As the EPA explained in the
Legal Memorandum, CAA section 112(n)(1) required the agency to conduct
the three studies that Congress thought most relevant to a
determination of whether to regulate HAP emissions from EGUs within 4
years of the 1990 amendments to ensure that the EPA would have the
information required to make the appropriate and necessary finding.
Legal Memorandum at 13-18. The EPA maintains that this direction
ensured that the agency could list and regulate HAP emissions from EGUs
if warranted. Conversely, the commenters' different and supposedly
mandated approaches would make it virtually impossible to obtain prompt
reductions in HAP emissions,\58\ and none of the approaches would
require ongoing evaluation of HAP emissions from EGUs. In addition,
because of the legal uncertainty

surrounding the alternative approaches, the potential for loss in court
makes the risk that the standards will not be permanent arguably
unacceptable.
---------------------------------------------------------------------------

    \58\ We note that collectively the comments would mandate a
significant process after the agency completes the section 112(n)
studies that would necessarily delay potential regulation
indefinitely. Even if we assume that the commenters would argue that
EPA need not take the time to evaluate the cost of standards under
section 112(d) (i.e., the MATS HAP standards), a position with which
we disagree as explained above, the different approaches to
considering cost under the different provisions would be difficult
for a number of reasons, including the fact that there are no
defined mechanisms for setting the level of the standard and there
is no indication in the comments when the EPA would be authorized to
conclude that sufficient alternatives had been evaluated. Even if
only one of the alternative approaches were chosen, because there
are no defined standards, commenters could provide endless
alternative approaches with different costs and benefits. The EPA
declines to interpret the statute in ways that are not mandated by
the statute and that we believe would frustrate the purpose of the
statute.
---------------------------------------------------------------------------

    We next address the commenters' assertion that the EPA could
regulate under CAA section 112(f) and that such an approach is proper
because CAA section 112(n)(1)(A) is a residual risk provision.\59\ As a
legal matter, the commenters have failed to explain how the EPA could
jump to regulation under CAA section 112(f)(2) when that provision, on
its face, only applies after promulgation of CAA section 112(d)
standards. See CAA section 112(f)(2)(A) (requiring review ``within 8
years after promulgation of standards . . . pursuant to subsection (d)
of this section''). In addition, CAA section 112(f)(2) embodies the
failed approach to regulating HAP that existed prior to the 1990
amendments wherein the agency listed as HAP only those air pollutants
that the agency determined pose a risk and then regulate sources of
those identified HAP based solely on the risk to human health. See
Legal Memorandum at 9. As explained in the Legal Memorandum, the
statute was completely revised in 1990 to ensure that there would be
prompt, permanent and ongoing reductions in HAP emissions from
stationary sources that meet the listing criteria. Id. at 6-7. CAA
section 112(d) contains the statutory mechanism adopted to ensure
prompt reductions and the risk approach incorporated into CAA section
112(f) was explicitly relegated to secondary status. Id. at 6-11. Under
this statutory scheme, the risk analysis is conducted when standards
are reviewed and no provision authorizes setting standards, in the
first instance, based on a CAA section 112(f) risk analysis. In
addition, the fact that CAA section 112(n)(1)(A) uses the terms
``section, ``subsection'' and ``subparagraph'' in a very careful and
deliberate manner is an indication that Congress consciously directed
the EPA to the relevant provisions of CAA section 112. If Congress
intended the EPA to regulate under CAA section 112(f), it could have
directed the EPA to that provision; in fact, however, the statute
directs the agency to regulate under CAA section 112 as a whole.
---------------------------------------------------------------------------

    \59\ The characterization of CAA section 112(n)(1)(A) as a
residual risk provision of a kind with the CAA section 112(f)
residual risk program is not reasonable. As indicated in the Legal
Memorandum, the only EGU specific regulatory program enacted in the
1990 amendments to the CAA was the title IV acid rain program (ARP).
The ARP was a trading program directed at the reduction in
SO2 and NOX. Conversely, under CAA section
112(f), the EPA evaluates whether a residual risk from HAP emissions
remains within 8 years of implementation of section 112(d)(2) MACT
standards. See CAA section 112(f)(2)(A). The requirement to comply
with a trading program that does not require controls on any
particular source or for any HAP does not in any meaningful way
compare to the application of MACT standards that require reductions
in all HAP emitted from a source category. As explained throughout
the MATS rulemaking, CAA section 112(n)(1)(A) was included in the
CAA in large part because EGUs were uniquely affected by the ARP and
there was a belief that ARP trading program and other CAA programs
applicable to all major stationary sources (e.g., NSR, PSD, haze)
might address any risks associated with HAP emissions from EGUs. CAA
section 112(n)(1)(A) required the EPA to estimate potential HAP risk
after implementation of the ARP and other programs, and the EPA
found unacceptable risks remain in 2000 and again in 2012, more than
20 years after the CAA amendments.
---------------------------------------------------------------------------

    Commenters' challenges based on the legislative history are equally
misplaced. The EPA has reviewed the legislative history cited by the
commenters and the agency does not agree that it mandates or even
supports the commenters' assertions concerning the proper consideration
of cost. Commenters on the MATS rule used much of the same legislative
history to argue against the non-cost related aspects of EPA's
interpretation of CAA section 112(n)(1)(A), and the agency explained
why the legislative history did not undermine the EPA's interpretation
or compel a different approach. See e.g., 77 FR 9320-9323. The Michigan
decision did not rely on the legislative history at all in its opinion,
much less adopt the commenters' interpretation of that history.
Instead, the Supreme Court relied on the context of the statute,
specifically citing the requirement to consider cost in the Mercury
Study required pursuant to CAA section 112(n)(1)(B). See Michigan, 135
S. Ct. at 2708 and 2710. For these reasons, and after review of the
additional legislative history cited, the EPA confirms that the
legislative history does not mandate a particular approach to
considering cost pursuant to section 112(n)(1)(A). See RTC, Chapter 1
(providing additional discussion of the legislative history cited by
commenters).
    Commenters also argue that the direction to conduct the Utility
Study in CAA section 112(n)(1)(A) required the agency to consider
regulation of HAP under other CAA authorities and that the agency
incorrectly interpreted the scope of the study. Specifically, the
commenters assert that the requirement to ``develop and describe . . .
alternative control strategies'' for HAP emissions was a requirement to
devise alternative regulatory approaches (other than CAA section
112(d)) for reducing HAP emissions from EGUs and further required the
agency to evaluate the comparative cost of the different approaches.
The commenters argue that if the EPA had done what it was ``supposed''
to do in the study, it would have had the information commenters
maintain is necessary to properly consider cost. The commenters'
argument is flawed for several reasons. First, a natural reading of the
statute does not support the type of analysis the commenters suggest is
mandated and the legislative history does not support that conclusion
either. In addition, the EPA completed the Utility Study in 1998 and to
comply with the requirement to consider alternative control strategies
the agency considered mechanisms to reduce HAP from EGUs before,
during, and after combustion. See Utility Study, Chapter 13. The
Utility Study was the last of the CAA section 112(n)(1) studies
completed and Congress never indicated that the agency erred in the
conduct of that study. Conversely, in the EPA's Fiscal Year 1999
appropriations report, Congress did direct the agency to fund a NAS
study to determine a reference dose for methylmercury, which is
essentially the same study that was required in CAA section
112(n)(1)(C), and the appropriations report stated that the EPA should
not make the appropriate and necessary finding until after
consideration of the NAS study. See Legal Memorandum, citing H.R. Conf.
Rep. No 105-769, at 281-82 (1998). The fact that Congress specifically
requested more information in relation to one of the CAA section
112(n)(1) studies undermines the commenters' position that the EPA
erred in the conduct of the Utility Study. Finally, the commenters fail
to note that CAA section 112(n)(1)(A), unlike CAA section 112(n)(1)(B),
did not require the agency to consider the cost of the alternative
control strategies that the agency identified, thus further undermining
their position that EPA erred in its conduct of the Utility Study.
Congress could have explicitly required the EPA to consider the costs
of alternative control strategies under CAA section 112(n)(1)(A). The
fact that it did not do so is significant, particularly in light of the
fact that it did include such a requirement in the very next
subsection. For all these reasons, we reject the contention that the
EPA erred in the conduct of the Utility Study.
    4. The Michigan decision does not affect the EPA's prior analyses
and conclusions regarding the risks of HAP and its prior findings of
hazards to public health and the environment from EGU HAP emissions.
    The commenters challenge either expressly or impliedly the legal
and technical bases on which the agency determined that HAP emissions
from EGUs pose hazards to public health and

the environment. Specifically, the commenters state that environmental
harms cannot form the basis for a finding that it is appropriate to
regulate HAP emissions from EGUs, that the 1-in-1 million standard is
not reasonable, that HAP volume (particularly major source levels) is
not a basis for determining risk, and that the agency has not
demonstrated that a sufficient risk exists to warrant regulation of HAP
emissions from EGUs. While we believe these comments are outside the
scope of the proposed supplemental finding because they raise issues
unrelated to cost, we respond briefly below.
    As to the consideration of environmental harms and the 1-in-1
million standard, the White Stallion court unanimously affirmed the
reasonableness of these standards for evaluating whether it is
appropriate to regulate HAP emissions from EGUs. White Stallion, 748
F.3d at 1236 (finding that ``EPA reasonably relied on the Sec.
112(c)(9) delisting criteria [including the 1-in-1 million standard] to
inform the interpretation of the undefined statutory term `hazard to
public health.' ''), and 748 F.3d at 1242 (finding that ``[i]n the
absence of any limiting text, and considering the context (including
Sec.  112(n)(1)(B)) and purpose of the CAA, the EPA reasonably
concluded that it could consider environmental harms in making its
`appropriate and necessary' determination.''). The Michigan decision
indirectly confirms that environmental harms are a valid basis for the
finding because it is CAA section 112(n)(1)(B) that the Supreme Court
cites as the context that demonstrates costs are relevant to the
appropriate finding. The Michigan decision noted that the EPA used CAA
section 112(n)(1)(B) to justify (in part) the consideration of
environmental harms in support of the appropriate finding so it was
unreasonable in the majority's view to ignore costs, which were also a
required consideration under that provision. Michigan, 135 S. Ct. at
2708. It is unreasonable to conclude based on the Michigan decision
that the statute requires a consideration of cost and precludes in any
way a consideration of environmental impacts. Id. (``Chevron allows
agencies to choose among reasonable interpretations of a statute; it
does not license interpretive gerrymandering under which an agency
keeps parts of statutory context it likes while throwing away parts it
does not.'').
    Commenters note that the White Stallion court specifically declined
to determine ``whether environmental effects alone would allow the EPA
to regulate EGUs under Sec.  112, because EPA did not base its decision
solely on environmental effects'', and they argue that because the
agency must consider cost, the appropriate finding for acid gas HAP
cannot stand because it was based only on environmental effects.\60\
748 F.3d at 1242. Initially, we note that the commenters are not
correct that the appropriate finding for acid gas HAP was based solely
on environmental effects, as it was also based on the major source
status of almost all EGUs and the concern about the potential for these
emissions to add to the already high atmospheric levels of other
chronic respiratory toxicants. See, e.g., 76 FR 25015-16; 77 FR 9363.
More importantly, as with all of these comments, the arguments are
based on an assumption that the EPA's prior interpretations of the act
are invalid (e.g., that the EPA will list under CAA section 112(c) and
regulate under CAA section 112(d) if we determine regulation is
appropriate and necessary; that the EPA can base the finding on a
hazard from one HAP), and we explain above why the consideration of
cost does not mandate or otherwise support a change in the agency's
interpretation in the MATS rule, as supplemented by the Legal
Memorandum.\61\
---------------------------------------------------------------------------

    \60\ The commenters' argument against regulating acid gas HAP
does not apply to the non-mercury metal HAP risk assessment because
that assessment found a hazard to public health, and commenters
agreed that hazards to public health form a valid basis for the
appropriate finding. For this reason, the commenters instead attempt
to reargue issues raised and responded to in the MATS rule and the
agency's response to petitions for reconsideration. See 80 FR 24218
(April 30, 2015) (providing notice of the document titled ``Denials
of Petitions for Reconsideration of Certain Issues: MATS and Utility
NSPS'', March 2015. Docket ID No. EPA-HQ-OAR-2009-0234-20493).
Specifically, the commenters cited data submitted after the final
MATS rule was issued as supporting their conclusion that non-mercury
metal HAP do not pose a significant risk. The EPA responded to the
petitions in the reconsideration denials document, and certain
commenters are currently challenging the agency's denial of that
petition for reconsideration in the D.C. Circuit Court. For these
reasons, the specific arguments challenging the sufficiency of the
finding are outside the scope of this action and they require no
additional response.
    \61\ Though some commenters acknowledged that the findings from
the lower court were not disturbed, they appear to ignore the fact
that the White Stallion court unanimously found that the hazards to
public health from mercury emissions alone supported the appropriate
finding. 748 F.3d at 1245. The commenters' attempt to use the
limited nature of the White Stallion decision (i.e., find the
determination sufficiently supported by the mercury health risks
alone) as a justification for rearguing the merits of the other
technical findings the EPA cited in support of the conclusion that
regulation of HAP emissions from EGUs is appropriate and necessary
(e.g., the non-mercury metal HAP related health findings, the
mercury-related environmental findings, the acid gas HAP-related
environmental findings, and the finding that the volume of HAP from
EGUs support the decision to regulate). The commenters have not
shown in any way how a consideration of cost necessarily implicates
the actual development of the specific risks finding in the MATS
record, and the agency explained in the Legal Memorandum that cost
plays no role in those analyses. See Legal Memorandum at 10-11.
Instead, cost is a factor only if the agency has first concluded
that HAP emissions from EGUs pose a hazard to public health or the
environment that will not be addressed through imposition of the
other requirements of the act. Id. For these reasons, neither the
requirement to consider cost nor issues related to the manner in
which the EPA incorporated cost into the appropriate and necessary
finding, has any impact on the health and environmental findings,
and commenters' challenges are thus beyond the scope of this
rulemaking.
---------------------------------------------------------------------------

    Concerning the consideration of the volume of HAP emissions in the
appropriate finding, the EPA explained in the Legal Memorandum why
volume of HAP is relevant to the appropriate finding because one of the
goals of the CAA is to obtain permanent reductions in the volume of HAP
emissions from major stationary sources. See, e.g., Legal Memorandum at
17. The commenters do not directly address the EPA's argument and
instead state that CAA section 112(n)(1)(A) clearly prohibits the
consideration of the volume of HAP as a basis for regulating HAP
emissions from EGUs.\62\ The commenters' next point to acid gas HAP
specifically and argue that the EPA cannot consider major source levels
of those HAP because CAA section 112(n)(1)(A) was enacted in part
because of the Acid Rain Program and if Congress wanted to regulate
major source levels of HAP from EGUs it would simply have directed the
agency to list and regulate EGUs. That argument is unpersuasive as
Congress could have just as easily prohibited the EPA from regulating
acid gas HAP emissions from EGUs if that was the intent. In addition,
the EPA does not believe the commenters' interpretation is better than
the agency's in light of the overall context of the CAA and the purpose
of the 1990 CAA amendments. The history of CAA section 112(n)(1)(A)
suggests that it was included due to uncertainty about whether the Acid
Rain Program in Title IV and other CAA programs would sufficiently
reduce HAP emissions from EGUs and Congress' interest in better
understanding the impact of such reductions on risk before authorizing

regulation of HAP emissions from EGUs under CAA section 112. The Acid
Rain Program required significant reductions in EGU SO2
emissions and, as explained in the MATS record, other acid gases (e.g.,
hydrogen chloride and hydrogen fluoride) are removed from flue gas more
easily than SO2 such that control of that pollutant could
potentially address the acid gas HAP emissions, and to a lesser extent
mercury and non-mercury metal HAP emissions. In fact, as the record
reflects, the Acid Rain Program led to the installation of far fewer
controls than estimated at a cost that was considerably below estimates
at the time of promulgation. As a result the co-benefit HAP reductions
attributable to the Acid Rain Program and other CAA programs were
limited. The EPA believes adopting the commenters' interpretation that
the agency must ignore the volume of HAP from EGUs would potentially
undermine one of the purposes of CAA section 112, and we therefore
decline to adopt that interpretation in the absence of express
statutory support. For all these reasons, we maintain our position from
the MATS rule that the volume of HAP emissions from EGUs, including
acid gas HAP emissions, may form the basis for finding that HAP
emissions from EGUs pose a hazard to public health and the environment
that is appropriate to regulate. See e.g. Legal Memorandum at 10-11.
---------------------------------------------------------------------------

    \62\ The commenters appear to assume that the EPA was concerned
only with the volume of acid gas HAP emissions from EGUs. In fact,
the EPA determined that EGUs emitted almost half of all U.S.
anthropogenic emissions of mercury, and more than half of all U.S.
anthropogenic emissions of selenium, hydrogen chloride, hydrogen
fluoride, and arsenic, along with significant volumes of other HAP
such as nickel. The agency maintains it would be unreasonable not to
at least consider the significant contribution of HAP emissions from
EGUs in light of the statutory goals as discussed in the MATS record
and the Legal Memorandum.
---------------------------------------------------------------------------

    The EPA also disagrees with commenters' assertion that the acid gas
HAP that are emitted from EGUs do not warrant regulation under CAA
section 112. CAA Section 112(b) identifies the HAP that Congress
determined warrant regulation under CAA section 112. Congress also
provided a mechanism to remove pollutants from the CAA section 112(b)
list. See CAA section 112(b)(3). If such HAP are not harmful to human
health or the environment as the commenters contend, they may petition
the Administrator to remove those pollutants from the CAA section
112(b) list. If the EPA grants such a petition, the agency would not be
required to regulate such emissions from EGUs or any other sources.
Absent such an action, the EPA must regulate all HAP on the CAA section
112(b) list. See e.g., Sierra Club v. EPA, 479 F.3d 875, 883 (D.C. Cir.
2007); Nat'l Lime Ass'n v. EPA, 233 F.3d 625, 634 (D.C. Cir. 2000).
    Finally, the agency also does not agree that it may establish a
standard under CAA section 112(d)(4), which allows the agency to factor
health thresholds into its decisions on standards in cases where health
thresholds have been established for pollutants, simply based on cost
and the Michigan decision. The EPA considered and rejected the
establishment of a CAA section 112(d)(4) standard in the MATS
rulemaking. In the proposed MATS rule, the EPA stated its basis for
declining to establish a CAA section 112(d)(4) standard, which included
concern over the combination of EGU acid gases with other acid gases
emitted from other sources, and the agency requested data that would
support the establishment of such standard. The commenters on the MATS
rule objected to the determination but provided no data to support
their position. The agency's decision was challenged in White Stallion,
and the D.C. Circuit unanimously rejected those challenges. White
Stallion, 748 F.3d at 1248. While the commenters again renew their
arguments, they still have not provided the information that the agency
indicated in the MATS proposal (in May 2011) was necessary to establish
a CAA section 112(d)(4) standard for acid gas HAP from EGUs with their
comments on the cost proposal.

D. Comments on Topics That Are Beyond the Limited Scope of the
Supplemental Finding

    Because of the limited nature of the Supreme Court's remand, the
EPA only solicited comments on its consideration of cost in its
proposal reaffirming the appropriate determination. We explained that
analyses presented in the proposed notice and in the accompanying Legal
Memorandum did not affect or alter other aspects of the appropriate and
necessary interpretation or finding or the CAA section 112(d) emission
standards promulgated in MATS. The EPA also clearly explained that the
analyses in the proposed supplemental finding did not, in any way,
alter the RIA prepared for the final MATS.
    Therefore, we clearly stated that we would not accept comment on
the scientific or technical aspects of the prior findings or the
analyses supporting our conclusions regarding the hazards to public
health and environmental benefits from HAP emissions from EGUs. These
findings include that mercury and other HAP emissions pose significant
hazards to public health and the environment, that EGUs are the largest
emitter of many HAP, that effective control strategies for HAP
emissions are available, and that HAP hazards remain after
implementation of other CAA provisions.
    The EPA did not open for comment or propose to revise any other
aspects of the appropriate and necessary interpretation or finding, or
the MATS standards themselves, as part of the proposed action. The
final MATS standards were supported by an extensive administrative
record and based on available control technologies and other practices
already used by the better-controlled and lower-emitting EGUs, and the
EPA previously concluded that the standards are achievable and reduce
hazards to public health and the environment from HAP emitted by EGUs.
76 FR 24976 (MATS proposal); 77 FR 9304 (MATS final). Further, the
public had ample opportunity to comment on all aspects of the CAA
section 112(d) standards, the RIA, and the appropriate and necessary
finding beyond the consideration of cost; and the EPA responded to all
of the significant comments.\63\
---------------------------------------------------------------------------

    \63\ 77 FR 3919-62; 77 FR 9386-9423; U.S. EPA. 2011. EPA's
Responses to Public Comments on EPA's National Emission Standards
for Hazardous Air Pollutants from Coal- and Oil-Fired Electric
Utility Steam Generating Units. December 2011. Volumes 1 and 2.
Docket ID No. EPA-HQ-OAR-2009-0234-20126.
---------------------------------------------------------------------------

    The Supreme Court's decision in Michigan neither called into
question nor reversed the portions of the D.C. Circuit Court's opinion
unanimously rejecting all other challenges to the appropriate and
necessary interpretation and finding and the HAP emission standards
that the EPA promulgated in the final MATS rule. Industry, states,
environmental organizations, and public health organizations challenged
many aspects of the EPA's appropriate and necessary finding and the
MATS emissions standards, including: (1) The EPA's reliance on the CAA
section 112(c)(9) delisting criteria for determining the level of risk
worth regulating; (2) the EPA's decision not to consider cost in making
the appropriate and necessary determination and listing of EGUs; (3)
the EPA's use of identified environmental harms as a basis for finding
it appropriate and necessary to regulate HAP emissions from EGUs; (4)
the EPA's consideration of the cumulative impacts of HAP emissions from
EGUs and other sources in determining whether EGUs pose a hazard to
public health or the environment; (5) the EPA's regulation of EGUs
pursuant to CAA section 112(d) after adding EGUs to the CAA section
112(c) list pursuant to the appropriate and necessary finding; (6) the
EPA's determination that all HAP from EGUs should be regulated; (7) the
EPA's technical basis for concluding that EGUs pose a hazard to public
health or the environment; (8) the EPA's determination to regulate all
EGUs as defined in CAA section 112(a)(8) in the same manner whether or
not the

individual units are located at major or area sources of HAP; (9) the
EPA's emissions standards for mercury and acid gas HAP, including the
EPA's decision not to set health-based emission standards for acid gas
HAP; (10) the EPA's use of certified data submitted by regulated
parties; (11) the EPA's denial of a delisting petition filed by an
industry trade group; (12) the EPA's decision not to subcategorize a
certain type of EGU; and (13) the EPA's decision to allow EGUs to
average HAP emissions among certain EGUs. The D.C. Circuit Court denied
all challenges to the CAA section 112(n)(1)(A) appropriate and
necessary finding and to the CAA section 112(d) MATS rule, and, with
the exception of the cost issue relevant to the CAA section
112(n)(1)(A) finding, all the challenges were unanimously rejected. For
that reason, the EPA clearly explained in the proposed supplemental
finding that it was not soliciting comment nor revisiting, in any way,
those final actions that were unanimously upheld in White Stallion
Energy Center v. EPA, 748 F.3d 1222 (April 15, 2014). 80 FR 75028-29.
    The EPA further clarified that reference or citation to any final
decision, interpretation, or conclusion in the MATS record does not