[Federal Register Volume 85, Number 211 (Friday, October 30, 2020)]
[Proposed Rules]
[Pages 68964-69113]
[FR Doc No: 2020-23237]

Vol. 85

Friday,

No. 211

October 30, 2020

Part II

Environmental Protection Agency

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40 CFR Parts 52, 78, and 97

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Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS;
Proposed Rule

Federal Register / Vol. 85 , No. 211 / Friday, October 30, 2020 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52, 78, and 97

[EPA-HQ-OAR-2020-0272; FRL-10013-42-OAR]
RIN 2060-AU84

Revised Cross-State Air Pollution Rule Update for the 2008 Ozone
NAAQS

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: This proposed action is taken in response to the United States
Court of Appeals for the District of Columbia Circuit's (D.C. Circuit)
remand of the Cross-State Air Pollution Rule (CSAPR) Update in
Wisconsin v. EPA on September 13, 2019. The CSAPR Update finalized
Federal Implementation Plans (FIPs) for 22 states to address their
interstate pollution-transport obligations under the Clean Air Act
(CAA) for the 2008 ozone National Ambient Air Quality Standards
(NAAQS). The D.C. Circuit found that the CSAPR Update, which was
published on October 26, 2016, as a partial remedy to address upwind
states' obligations prior to the 2018 Moderate area attainment date
under the 2008 ozone NAAQS, was unlawful to the extent it allowed those
states to continue their significant contributions to downwind ozone
problems beyond the statutory dates by which downwind states must
demonstrate their attainment of the air quality standards. On the same
grounds, the D.C. Circuit also vacated the CSAPR Close-Out in New York
v. EPA on October 1, 2019. This proposed rule, if finalized, will
resolve 21 states' outstanding interstate ozone transport obligations
with respect to the 2008 ozone NAAQS. The U.S. Environmental Protection
Agency (EPA) is taking this action under the Clean Air Act section
known as the ``good neighbor provision.''
    This action proposes to find that for 9 of the 21 states for which
the CSAPR Update was found to be only a partial remedy (Alabama,
Arkansas, Iowa, Kansas, Mississippi, Missouri, Oklahoma, Texas, and
Wisconsin), their projected nitrogen oxides (NOX) emissions
in the 2021 ozone season and thereafter do not significantly contribute
to a continuing downwind nonattainment and/or maintenance problem, and
therefore the states' CSAPR Update FIPs (or the SIPs subsequently
approved to replace certain states' CSAPR Update FIPs) fully address
their interstate ozone transport obligations with respect to the 2008
ozone NAAQS. This action also proposes to find that for the 12
remaining states (Illinois, Indiana, Kentucky, Louisiana, Maryland,
Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West
Virginia), their projected 2021 ozone season NOX emissions
significantly contribute to downwind states' nonattainment and/or
maintenance problems for the 2008 ozone NAAQS. EPA proposes to issue
new or amended FIPs for these 12 states to replace their existing CSAPR
NOX Ozone Season Group 2 emissions budgets for electricity
generating units (EGUs) with revised budgets via a new CSAPR
NOX Ozone Season Group 3 Trading Program. EPA is proposing
to require implementation of the revised emission budgets beginning
with the 2021 ozone season (which runs annually from May 1-September
30). Based on EPA's assessment of remaining air quality issues and
additional emission control strategies for EGUs and other emissions
sources in other industry sectors (non-EGUs), EPA further proposes that
the proposed NOX emission reductions fully eliminate these
states' significant contributions to downwind air quality problems for
the 2008 ozone NAAQS. EPA also proposes in this action an error
correction for its June 2018 approval of Kentucky's good neighbor SIP.

DATES: Comments must be received on or before December 14, 2020.
    Public Hearing: EPA will hold a virtual public hearing on November
12, 2020. Please refer to the SUPPLEMENTARY INFORMATION section for
additional information on the public hearing.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2020-0272, via the Federal eRulemaking Portal: https://www.regulations.gov/. Follow the online instructions for submitting
comments.
    Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to https://www.regulations.gov/, including any personal information
provided. For detailed instructions on sending comments and additional
information on the rulemaking process, see the ``Public Participation''
heading of the SUPPLEMENTARY INFORMATION section of this document. Out
of an abundance of caution for members of the public and our staff, the
EPA Docket Center and Reading Room are closed to the public, with
limited exceptions, to reduce the risk of transmitting COVID-19. Our
Docket Center staff will continue to provide remote customer service
via email, phone, and webform. We encourage the public to submit
comments via https://www.regulations.gov/ or email, as there may be a
delay in processing mail and faxes. Hand deliveries and couriers may be
received by scheduled appointment only. For further information on EPA
Docket Center services and the current status, please visit us online
at https://www.epa.gov/dockets.
    Throughout this proposal, EPA is soliciting comment on numerous
aspects of the proposed rule. EPA has indexed each comment solicitation
with an alpha-numeric identifier (e.g., ``C-1'', ``C-2'', ``C-3'', . .
.). Accordingly, we ask that commenters include the corresponding
identifier when providing comments relevant to that comment
solicitation. We ask that commenters include the identifier in either a
heading, or within the text of each comment (e.g., ``In response to
solicitation of comment C-1, . . .'') to make clear which comment
solicitation is being addressed. We emphasize that we are not limiting
comment to these identified areas and welcome comments on any matters
that are within scope of this action.
    EPA will announce further details on the virtual public hearing, as
well as registration information, at https://www.epa.gov/csapr/revised-cross-state-air-pollution-update. Refer to the SUPPLEMENTARY
INFORMATION section below for additional information.

FOR FURTHER INFORMATION CONTACT: Mr. Daniel Hooper, Clean Air Markets
Division, Office of Atmospheric Programs (Mail Code 6204M),
Environmental Protection Agency, 1200 Pennsylvania Avenue NW,
Washington, DC 20460; telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Preamble Glossary of Terms and Abbreviations

    The following are abbreviations of terms used in the preamble.

4-Step Good Neighbor Framework 4-Step Framework
AEO Annual Energy Outlook
AQAT Air Quality Assessment Tool
AQM TSD Air Quality Modeling Technical Support Document
CAA or Act Clean Air Act
CAIR Clean Air Interstate Rule
CAMx Comprehensive Air Quality Model with Extensions
CBI Confidential Business Information
CEMS Continuous Emission Monitoring Systems
CFR Code of Federal Regulations
CMDb Control Measures Database

CMV Commercial Marine Vehicle
CoST Control Strategy Tool
CRA Congressional Review Act
CSAPR Cross-State Air Pollution Rule
EGU Electric Generating Unit
EISA Energy Independence and Security Act
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
GWh Gigawatt-hour
IC Internal Combustion
ICI Industrial, Commercial, and Institutional
ICR Information Collection Request
IPM Integrated Planning Model
iSIP Infrastructure State Implementation Plan
km Kilometer
lb/mmBtu Pounds per Million British Thermal Units
LEC Low Emission Combustion
LNB Low-NOX Burners
MJO Multi-Jurisdictional Organizations
mmBtu Million British Thermal Units
MOVES Motor Vehicle Emission Simulator
MSAT2 Mobile Source Air Toxic Rule
NAAQS National Ambient Air Quality Standard
NEI National Emission Inventory
NESHAP National Emission Standards for Hazardous Air Pollutants
NOX Nitrogen Oxides
NODA Notice of Data Availability
Non-EGU Non-electric Generating Unit
NSPS New Source Performance Standard
NUSA New Unit Set-Aside
OSAT/APCA Ozone Source Apportionment Technology/Anthropogenic
Precursor Culpability Analysis
OMB Office of Management and Budget
OTR Ozone Transport Region
PEMS Predictive Emissions Monitoring System
PM2.5 Fine Particulate Matter
ppb Parts Per Billion
RACT Reasonably Available Control Technology
RIA Regulatory Impact Analysis
RICE Reciprocating Internal Combustion Engines
RRF Relative Response Factor
SCR Selective Catalytic Reduction
SIP State Implementation Plan
SMOKE Sparse Matrix Operator Kernel Emissions
SNCR Selective Non-catalytic Reduction
SO2 Sulfur Dioxide
TIP Tribal Implementation Plan
TSD Technical Support Document
tpy Ton Per Year
ULNB Ultra-low NOX Burner
VOC Volatile Organic Compound
WRF Weather Research and Forecasting Model

Table of Contents

I. Executive Summary
    A. Purpose of Regulatory Action
    B. Summary of the Major Provisions of the Regulatory Action
    C. Benefits and Costs
II. Public Participation
    A. Written Comments
    B. Participation in Virtual Public Hearing
III. General Information
    A. Does this action apply to me?
IV. EPA's Legal Authority for the Proposed Rule
    A. Statutory Authority
    B. Prior Good Neighbor Rulemakings Addressing Regional Ozone
V. Air Quality Issues Addressed and Overall Approach for the
Proposed Rule
    A. The Interstate Ozone Transport Challenge
    B. Relationship Between This Regulatory Action and the 2015
Ozone NAAQS
    C. Proposed Approach To Address the Remanded Transport
Obligations for the 2008 Ozone NAAQS
    1. Events Affecting Application of the Good Neighbor Provision
for the 2008 Ozone NAAQS
    2. FIP Authority for Each State Covered by the Proposed Rule
    3. The 4-Step Good Neighbor Framework
VI. Analyzing Downwind Air Quality and Upwind-State Contributions
    A. Overview of Air Quality Modeling Platform
    B. Emission Inventories
    1. Foundation Emission Inventory Data Sets
    2. Development of Emission Inventories for EGUs
    3. Development of Emission Inventories for Non-EGU Point Sources
    4. Development of Emission Inventories for Onroad Mobile Sources
    5. Development of Emission Inventories for Commercial Marine
Vessels
    6. Development of Emission Inventories for Other Nonroad Mobile
Sources
    7. Development of Emission Inventories for Nonpoint Sources
    C. Air Quality Modeling To Identify Nonattainment and
Maintenance Receptors
    D. Pollutant Transport From Upwind States
    1. Air Quality Modeling To Quantify Upwind State Contributions
    2. Application of Screening Threshold
VII. Quantifying Upwind-State NOX Reduction Potential To
Reduce Interstate Ozone Transport for the 2008 NAAQS
    A. The Multi-Factor Test
    B. Identifying Levels of Control Stringency
    1. EGU NOX Mitigation Strategies
    2. Non-EGU NOX Mitigation Strategies
    3. Mobile Source NOX Mitigation Strategies
    C. Control Stringencies Represented by Cost Threshold ($ per
ton) and Corresponding Emission Reductions
    1. EGU Emission Reduction Potential by Cost Threshold
    2. Non-EGU Emission Reduction Potential by Cost Threshold
    D. Assessing Cost, EGU and Non-EGU NOX Reductions,
and Air Quality
    1. EGU Assessment
    2. Non-EGU Assessment
    3. Overcontrol Analysis
VIII. Implementation of Emissions Reductions
    A. Regulatory Requirements for EGUs
    B. Quantifying State Emissions Budgets
    C. Elements of Proposed Trading Program
    1. Applicability
    2. State Budgets, Variability Limits, Assurance Levels, and
Penalties
    3. Unit-Level Allocations of Emission Allowances
    4. Transitioning From Existing CSAPR NOX Ozone-Season
Group 2 Trading Program
    5. Compliance Deadlines
    6. Monitoring and Reporting
    7. Recordation of Allowances
    8. Proposed Conforming Revisions to Regulations for Existing
Trading Programs
    D. Submitting a SIP
    1. SIP Option To Modify 2022 Allocations
    2. SIP Option To Modify Allocations in 2023 and Beyond
    3. SIP Revisions That Do Not Use the New Group 3 Trading Program
    4. Submitting a SIP To Participate in the New Group 3 Trading
Program for States Not Included
    E. Title V Permitting
    F. Relationship to Other Emission Trading and Ozone Transport
Programs
    1. Existing Trading Programs
    2. Title IV Interactions
    3. NOX SIP Call Interactions
IX. Costs, Benefits, and Other Impacts of the Proposed Rule
X. Summary of Proposed Changes to the Regulatory Text for the
Federal Implementation Plans and Trading Programs
    A. Amended CSAPR Update FIP Provisions
    B. New CSAPR NOX Ozone Season Group 3 Trading Program
Provisions
    C. Transitional Provisions
    D. Conforming Revisions, Corrections, and Clarifications to
Existing Regulations
XI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
    J. National Technology Transfer and Advancement Act (NTTAA)
    K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    L. Determinations Under CAA Section 307(b)(1) and (d)

I. Executive Summary

    The 2008 ozone National Ambient Air Quality Standards (NAAQS) is an
8-hour standard that was set at 75 parts

per billion (ppb).\1\ The U.S. Environmental Protection Agency (EPA)
published the Cross-State Air Pollution Rule (CSAPR) Update on October
26, 2016, which partially addressed the interstate transport of
emissions from 21 states with respect to the 2008 ozone NAAQS.\2\ 81 FR
74504. On December 21, 2018, EPA published the CSAPR Close-Out, which
found that the CSAPR Update was a complete remedy based on air quality
analysis of the year 2023.\3\
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    \1\ 73 FR 16436 (March 27, 2008).
    \2\ In the CSAPR Update, EPA found that the finalized Tennessee
emission budget fully addressed Tennessee's good neighbor obligation
with respect to the 2008 ozone NAAQS. 81 FR 74504, 74508 n. 19 (Oct.
26, 2016).
    \3\ 83 FR 65878 (Dec. 21, 2018).
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    On September 13, 2019, the United States Court of Appeals for the
District of Columbia Circuit (D.C. Circuit) remanded the CSAPR Update,
concluding that it was invalid in one respect because it unlawfully
allowed upwind states to continue their significant contributions to
downwind air quality problems beyond the statutory dates by which
downwind States must demonstrate their attainment of ozone air quality
standards. Wisconsin v. EPA, 938 F.3d 303, 318-20 (D.C. Cir. 2019)
(Wisconsin) (per curiam); see also id. 336-37 (concluding that remand
without vacatur was appropriate). Subsequently, on October 1, 2019, in
a judgment order, the D.C. Circuit vacated the CSAPR Close-Out on the
same grounds on which it had remanded without vacatur the CSAPR Update
in Wisconsin. New York v. EPA, 781 Fed. App'x 4, 7 (D.C. Cir. 2019)
(New York). The court found the CSAPR Close-Out inconsistent with the
Wisconsin holding because the rule analyzed the year 2023 rather than
2021 (``the next applicable attainment date'') and failed to
demonstrate that it was an impossibility to address significant
contribution by the 2021 attainment date.
    In this proposal to revise the CSAPR Update on remand, in
compliance with Wisconsin and New York, EPA has aligned its analysis
and the implementation of emission reductions required to address
significant contribution with the 2021 ozone season, which corresponds
to the July 20, 2021, Serious area attainment date for the 2008 ozone
NAAQS. EPA has further determined which emission reductions are
impossible to achieve by the 2021 attainment date and whether any such
additional emission reductions should be required beyond that date, see
Wisconsin, 938 F.3d at 320; New York, 781 Fed. App'x at 7.
    Unless explicitly raised in this proposal, EPA is not reopening any
determinations, findings, or statutory or regulatory interpretations
that are not required to address the Wisconsin remand. This proposed
action addressing the remand of the CSAPR Update in Wisconsin will also
have the effect of addressing the outstanding obligations that resulted
from the D.C. Circuit's vacatur of the CSAPR Close-Out in New York. See
New York, 781 Fed. App'x at 7.

A. Purpose of the Regulatory Action

    The purpose of this rulemaking is to protect public health and
welfare by reducing interstate transport of certain emissions that
significantly contribute to nonattainment, or interfere with
maintenance, of the 2008 ozone NAAQS in the U.S. Ground-level ozone
causes a variety of negative effects on human health, vegetation, and
ecosystems. In humans, acute and chronic exposure to ozone is
associated with premature mortality and a number of morbidity effects,
such as asthma exacerbation. Ozone exposure can also negatively impact
ecosystems, for example, by limiting tree growth. Studies have
established that ozone transport occurs on a regional scale (i.e.,
hundreds of miles) over much of the eastern U.S., with elevated
concentrations occurring in rural as well as metropolitan
areas.4 5 As discussed in more detail in Section V.A.1,
assessments of ozone control approaches have concluded that nitrogen
oxides (NOX) control strategies are effective to reduce
regional-scale ozone transport.\6\
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    \4\ Bergin, M.S. et al. (2007) Regional air quality: Local and
interstate impacts of NOX and SO2 emissions on
ozone and fine particulate matter in the eastern United States.
Environmental Sci & Tech. 41: 4677-4689.
    \5\ Liao, K. et al. (2013) Impacts of interstate transport of
pollutants on high ozone events over the Mid-Atlantic United States.
Atmospheric Environment 84, 100-112.
    \6\ See also 82 FR 51238, 51248 (Nov. 3, 2017) (citing 76 FR
48208, 48222 (Aug. 8, 2011)) and 63 FR 57381 (Oct. 27, 1998).
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    Clean Air Act (CAA or the Act) section 110(a)(2)(D)(i)(I), which is
also known as the ``good neighbor provision,'' requires states to
prohibit emissions that will contribute significantly to nonattainment
or interfere with maintenance in any other state with respect to any
primary or secondary NAAQS.\7\ The statute vests states with the
primary responsibility to address interstate emission transport through
the development of good neighbor State Implementation Plans (SIPs),
which are one component of larger SIP submittals typically required
three years after EPA promulgates a new or revised NAAQS. These larger
SIPs are often referred to as ``infrastructure'' SIPs or iSIPs. See CAA
section 110(a)(1) and (2). EPA supports state efforts to submit good
neighbor SIPs for the 2008 ozone NAAQS and has shared information with
states to facilitate such SIP submittals. However, the CAA also
requires EPA to fill a backstop role by issuing Federal Implementation
Plans (FIPs) where states fail to submit good neighbor SIPs or EPA
disapproves a submitted good neighbor SIP. See generally CAA section
110(k) and 110(c).
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    \7\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
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    On October 26, 2016, EPA published the CSAPR Update, which
finalized FIPs for 22 states that EPA found failed to submit a complete
good neighbor SIP (15 states) \8\ or for which EPA issued a final rule
disapproving their good neighbor SIP (7 states).\9\ The FIPs
promulgated for these states included new electric generating units
(EGUs) NOX ozone season emission budgets to reduce
interstate transport for the 2008 ozone NAAQS. These emission budgets
took effect in 2017 in order to assist downwind states with attainment
of the 2008 ozone NAAQS by the 2018 Moderate area attainment date. EPA
acknowledged at the time that the FIPs promulgated for 21 of the 22
states only partially addressed good neighbor obligations under the
2008 ozone NAAQS.\10\ The 22 states for which EPA promulgated FIPs to
reduce interstate ozone transport as to the 2008 ozone NAAQS are listed
in Table I.A-1.
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    \8\ Alabama, Arkansas, Illinois, Iowa, Kansas, Maryland,
Michigan, Mississippi, Missouri, New Jersey, Oklahoma, Pennsylvania,
Tennessee, Virginia, and West Virginia.
    \9\ Indiana, Kentucky, Louisiana, New York, Ohio, Texas, and
Wisconsin.
    \10\ In the CSAPR Update, EPA found that the finalized Tennessee
emission budget fully addressed Tennessee's good neighbor obligation
with respect to the 2008 ozone NAAQS.

 Table I.A--1 List of 22 Covered States for the 2008 8-Hour Ozone NAAQS
                           in the CSAPR Update
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                                  State
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Alabama
Arkansas
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maryland
Michigan
Mississippi
Missouri
New Jersey

New York
Ohio
Oklahoma
Pennsylvania
Tennessee
Texas
Virginia
West Virginia
Wisconsin
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    In response to the D.C. Circuit's remand of the CSAPR Update in
Wisconsin v. EPA and the court's vacatur of the CSAPR Close-Out in New
York v. EPA, this rule proposes to find that 12 of the 22 states listed
in Table I.A-1 require further ozone season NOX emission
reductions to address the good neighbor provision as to the 2008 ozone
NAAQS. As such, EPA proposes to promulgate new or revised FIPs for
these states that include new EGU NOX ozone season emission
budgets, with implementation of these emission budgets beginning with
the 2021 ozone season.\11\ The 12 states for which EPA is proposing to
promulgate new or revised FIPs to reduce interstate ozone transport as
to the 2008 ozone NAAQS in this rulemaking are listed in Table I.A-2.
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    \11\ As discussed in section V.C.2.c., in 2018 EPA approved a
SIP revision for Indiana replacing the state's CSAPR Update FIP with
equivalent state regulations. This SIP revision, like the CSAPR
Update FIP it replaced, was partial in nature. EPA is therefore
proposing in this action to issue a new FIP rather than a revised
FIP for Indiana.

   Table I.A--2 Proposed List of 12 Covered States for the 2008 8-Hour
                               Ozone NAAQS
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                                  State
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Illinois
Indiana
Kentucky
Louisiana
Maryland
Michigan
New Jersey
New York
Ohio
Pennsylvania
Virginia
West Virginia
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    EPA also proposes to adjust these states' emission budgets for each
ozone season thereafter to incentivize ongoing operation of identified
emission controls to address significant contribution, until such time
that our air quality projections demonstrate resolution of the downwind
nonattainment and/or maintenance problems for the 2008 ozone NAAQS. No
further budget adjustments would be made after that time (i.e., after
the 2024 ozone season in EPA's proposed analysis). EPA proposes to
implement the new state-level ozone season emission budgets through a
new CSAPR NOX Ozone Season Group 3 Trading Program. Based on
EPA's assessment of remaining air quality issues and additional
emission control strategies, EPA further proposes to find that these
NOX emission reductions fully eliminate these states'
significant contributions to downwind air quality problems for the 2008
ozone NAAQS.
    As discussed in more detail in Section V.C.2.b below, for one
state, Kentucky, EPA is proposing to make an error correction under CAA
section 110(k)(6) of its June 2018 approval of that state's SIP, which
had concluded that the CSAPR Update was a complete remedy based on
modeling of the 2023 analytic year. EPA proposes to determine that the
basis for that conclusion has been invalidated by the decisions in
Wisconsin and New York, and that Kentucky's good neighbor obligations
are outstanding. In light of the Wisconsin remand of Kentucky's FIP and
our proposed error correction, EPA has the necessary authority to amend
the CSAPR Update FIP for Kentucky.
    For the nine remaining states with FIPs promulgated under the CSAPR
Update that EPA previously found partially addressed good neighbor
obligations for the 2008 ozone NAAQS (Alabama, Arkansas, Iowa, Kansas,
Mississippi, Missouri, Oklahoma, Texas, and Wisconsin), EPA's updated
air quality and contributions analysis shows that these states are not
linked to any downwind air quality problems in 2021.\12\ Therefore, EPA
proposes to find that the existing CSAPR Update FIPs (or the SIP
revisions later approved to replace the CSAPR Update FIPs) for these
states satisfy their good neighbor obligations for the 2008 ozone
NAAQS.\13\ Consequently, EPA is not proposing to require additional
emission reductions from sources in these states in this proposed
rulemaking.
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    \12\ EPA's use of a contribution threshold to determine, without
further analysis of potential emissions reduction opportunities,
that certain states have no remaining good neighbor obligations with
respect to a given NAAQS is part of the analytic approach that was
followed in the CSAPR rulemaking and upheld by the Supreme Court.
See EPA v. EME Homer City Generation, L.P., 572 U.S. 489, 521-22
(2014).
    \13\ As discussed in section V.C.2.c., in 2017 and 2019 EPA
approved SIP revisions for Alabama and Missouri replacing the
states' CSAPR Update FIPs with equivalent state regulations. These
SIP revisions, like the CSAPR Update FIPs they replaced, were
partial in nature. EPA is therefore proposing to determine in this
action that the states' existing SIP provisions satisfy these
states' good neighbor obligations for the 2008 ozone NAAQS.
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B. Summary of the Major Provisions of the Regulatory Action

    To reduce interstate ozone transport under the authority provided
in CAA section 110(a)(2)(D)(i)(I), this rule proposes to further limit
ozone season (May 1 through September 30) NOX emissions from
EGUs in 12 states using the same framework used by EPA in developing
the CSAPR and other good neighbor rules (the 4-step good neighbor
framework or 4-step framework). The 4-step good neighbor framework
provides a process to address the requirements of the good neighbor
provision for ground-level ozone NAAQS: (1) Identifying downwind
receptors that are expected to have problems attaining or maintaining
the NAAQS; (2) determining which upwind states contribute to these
identified problems in amounts sufficient to ``link'' them to the
downwind air quality problems (i.e., here, a 1 percent contribution
threshold); (3) for states linked to downwind air quality problems,
identifying upwind emissions that significantly contribute to downwind
nonattainment or interfere with downwind maintenance of the NAAQS; and
(4) for states that are found to have emissions that significantly
contribute to nonattainment or interfere with maintenance of the NAAQS
downwind, implementing the necessary emissions reductions through
enforceable measures. In this proposed rule, EPA applies this 4-step
framework to respond to the D.C. Circuit's remand and to revise the
CSAPR Update with respect to the 2008 ozone NAAQS.
    In order to apply the first step of the 4-step framework to the
2008 ozone NAAQS, EPA performed air quality modeling coupled with
ambient measurements in an interpolation technique to project ozone
concentrations at air quality monitoring sites in 2021.\14\ EPA
evaluated 2021 projected ozone concentrations at individual monitoring
sites and considered current ozone monitoring data at these sites to
identify receptors that are anticipated to have problems attaining or
maintaining the 2008 ozone NAAQS.
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    \14\ The next relevant attainment date for the 2008 ozone NAAQS
is July 20, 2021, for Serious nonattainment areas. 80 FR 12264,
12268; 40 CFR 51.1103.

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    To apply the second step of the framework, EPA used air quality
modeling and an interpolation technique to quantify the contributions
from upwind states to ozone concentrations in 2021 at downwind
receptors. Once quantified, EPA then evaluated these contributions
relative to a screening threshold of 1 percent of the NAAQS (i.e., 0.75
ppb). States with contributions that equal or exceed 1 percent of the
NAAQS were identified as warranting further analysis for significant
contribution to nonattainment or interference with maintenance. States
with contributions below 1 percent of the NAAQS were considered to not
significantly contribute to nonattainment or interfere with maintenance
of the NAAQS in downwind states. Based on EPA's updated air quality and
contribution analysis using 2021 as the analytic year, EPA proposes
that the following 12 states have contributions that equal or exceed 1
percent of the 2008 ozone NAAQS, and thereby warrant further analysis
for significant contribution to nonattainment or interference with
maintenance: Illinois, Indiana, Kentucky, Louisiana, Maryland,
Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia, and West
Virginia.
    At the third step of the 4-step framework, EPA applied the multi-
factor test used in the CSAPR Update, which evaluates cost, available
emission reductions, and downwind air quality impacts to determine the
amount of linked upwind states' emissions that ``significantly''
contribute to downwind nonattainment or maintenance receptors. In this
action, EPA applies the multifactor test to both EGU and non-EGU source
categories and assesses potential emission reductions in all years for
which there is a potential remaining interstate ozone transport problem
(i.e., through 2025), in order to ensure a full remedy in compliance
with the Wisconsin decision.
    EPA identified a control strategy that reflects the optimization of
existing selective catalytic reduction (SCR) controls and installation
of state-of-the-art NOX combustion controls at EGUs, with an
estimated marginal cost of $1,600 per ton. It is at this control
stringency where incremental EGU NOX reduction potential and
corresponding downwind ozone air quality improvements are maximized.
That is, the ratio of emission reductions to marginal cost and the
ratio of ozone improvements to marginal cost are maximized relative to
the other control stringency levels evaluated. EPA finds that these
very cost-effective EGU NOX reductions will make meaningful
and timely improvements in downwind ozone air quality to address
interstate ozone transport for the 2008 ozone NAAQS, as discussed in
section VII.D.1 below. Further, this evaluation shows that emission
budgets reflecting the $1,600 per ton cost threshold do not over-
control upwind states' emissions relative to either the downwind air
quality problems to which they are linked at step 1 or the 1 percent
contribution threshold that triggers further evaluation at step 2 of
the 4-step framework.
    EPA notes that these proposed EGU control strategies (optimization
of existing SCR controls and installation of state-of-the-art
NOX combustion controls) were the same strategies selected
in the CSAPR Update for the 2017 ozone season, and which at that time
EPA characterized as only a partial remedy. For this rule, EPA extends
its evaluation of the reduction potential from these control strategies
to years beyond 2017 in order to assess a full remedy. EPA's updated
analysis, as discussed in more detail in Section VII, leads the Agency
to propose that these control strategies can provide additional cost-
effective emission reductions for the 2021 through 2024 ozone seasons.
While EPA's analysis indicates that the majority of EGUs implemented
these control strategies in response to the CSAPR Update, changes in
the power sector since the 2017 ozone season and updated air quality
and contribution analysis show that there is a demonstrated need to
update the emission budgets for these 12 states to fully eliminate
significant contribution.
    For non-EGU industry sectors and emissions sources, EPA applied the
step 3 multi-factor test to determine whether any emissions reductions
should be required from non-EGU sources to address significant
contribution under the 2008 ozone NAAQS. EPA acknowledges that its
current datasets with information on emissions, existing controls on
emissions sources, emission-reduction potential, and air quality
impacts for these sources are relatively incomplete and uncertain
compared to the datasets it has for EGUs. Nonetheless, using the best
information currently available to the Agency, the proposed analysis
suggests that there are relatively fewer emissions reductions available
at a cost threshold comparable to the cost threshold selected for EGUs.
Such reductions are estimated to have a relatively small effect on any
downwind receptor in the year by which such controls could likely be
installed. For these reasons, EPA proposes that limits on ozone season
NOX emissions from non-EGU sources are not required to
eliminate ``significant'' contribution under the 2008 ozone NAAQS (see
section VII.D.2).
    To improve the underlying data and assessment of emission reduction
potential from non-EGU sources for this and future regulatory efforts,
EPA is soliciting comment on the assessment of emission reduction
potential from the glass and cement manufacturing sectors discussed in
Sections VII.B.2, VII.C.2, and VII.D.2. In addition, EPA summarizes the
available information on all potential control measures for non-EGU
emissions sources or units with 150 tons per year or more of pre-
control NOX emissions in several industry sectors for the 12
states in Table I.A-2. This information illustrates that there are many
potential approaches to assessing emissions reductions from non-EGU
emissions sources or units. EPA is soliciting comment on the
completeness and accuracy of this additional information on potential
control measures for non-EGU emissions sources or units in several
industry sectors. Specifically, EPA summarized information on the
application, costs, and installation timing of ultra-low NOX
burners on industrial, commercial, and institutional (ICI) boilers and
low emission combustion on reciprocating internal combustion (IC)
engines.
    Based on EPA's analysis at step 3, the Agency proposes EGU
NOX ozone season emission budgets developed using uniform
control stringency represented by $1,600 per ton. EPA proposes to
determine that with implementation of this control strategy, the 12
states in Table I.A-2 will have fully addressed significant
contribution under the good neighbor provision for the 2008 ozone
NAAQS. EPA is proposing to align implementation of emission budgets
with relevant attainment dates for the 2008 ozone NAAQS, as required by
the D.C. Circuit's decision in Wisconsin v. EPA.\15\ As EPA's final
2008 Ozone NAAQS SIP Requirements Rule \16\ established the attainment
deadline of July 20, 2021, for ozone nonattainment

areas currently designated as Serious, EPA proposes to establish
emission budgets and implementation of these emission budgets starting
with the 2021 ozone season as shown in Table I.B-1.
---------------------------------------------------------------------------

    \15\ 938 F.3d 303, 320 (D.C. Cir. 2019) (holding that EPA must
align interstate transport compliance deadlines with downwind
attainment deadlines unless EPA can demonstrate an impossibility or
other necessity).
    \16\ 80 FR 12264, 12268; 40 CFR 51.1103.

                      Table I.B--1 Proposed EGU NOX Ozone Season Emission Budgets Emissions
                                            [Ozone season NOX tons] *
----------------------------------------------------------------------------------------------------------------
                      State                         2021 Budget     2022 Budget     2023 Budget     2024 Budget
----------------------------------------------------------------------------------------------------------------
Illinois........................................           9,444           9,415           8,397           8,397
Indiana.........................................          12,500          11,998          11,998           9,447
Kentucky........................................          14,384          11,936          11,936          11,936
Louisiana.......................................          15,402          14,871          14,871          14,871
Maryland........................................           1,522           1,498           1,498           1,498
Michigan........................................          12,727          11,767           9,803           9,614
New Jersey......................................           1,253           1,253           1,253           1,253
New York........................................           3,137           3,137           3,137           3,119
Ohio............................................           9,605           9,676           9,676           9,676
Pennsylvania....................................           8,076           8,076           8,076           8,076
Virginia........................................           4,544           3,656           3,656           3,395
West Virginia...................................          13,686          12,813          11,810          11,810
                                                 ---------------------------------------------------------------
    Total.......................................         106,280         100,096          96,111          93,092
----------------------------------------------------------------------------------------------------------------
* Note--the 2022 and beyond budgets incorporate the installation of state-of-the-art NOX combustion controls;
  whereas the 2021 budgets do not. Additionally, the 2024 emissions budget applies to 2024 and each year
  thereafter.

    As noted in Section I, EPA further determined which emission
reductions are impossible to achieve by the 2021 attainment date--and
whether any such additional emission reductions should be required
beyond that date.\17\ See Wisconsin, 938 F.3d at 320. EPA estimates
that one part of the selected control strategy--installation of state-
of-the-art NOX combustion controls--can occur between
approximately one to six months at any particular unit. As the final
rule will likely become effective either immediately prior to or
slightly after the start of the 2021 ozone season, EPA determined it is
not possible to install state-of-the-art NOX combustion
controls on a regional scale by the beginning of the 2021 ozone
season.\18\ EPA proposes to conclude that an emission reduction
strategy is impossible if it cannot be implemented statewide by the
relevant attainment date because statewide budgets are based on
fleetwide averages. Therefore, the proposed 2021 ozone season emission
budgets reflect only the control strategy of optimizing existing SCR
controls at the affected EGUs, but the proposed emission budgets for
the 2022 ozone season and beyond reflect both the continued
optimization of existing SCR controls and installation of state-of-the-
art NOX combustion controls. Detailed installation-timing
information for this technology is available in Section VII.B and the
EGU NOX Mitigation Strategies TSD.
---------------------------------------------------------------------------

    \17\ As described in detail in Sections VII.B and VII.C, some
mitigation efforts that require the installation of significant new
plant hardware (e.g., combustion control upgrade, selective
catalytic reduction, and non-selective catalytic reduction) are not
possible by the start of the 2021 ozone season. However, EPA
proposes some of these measures (i.e., combustion controls) be
factored into its quantification of significant contribution
starting at the later date of the start of the 2022 ozone season.
    \18\ On July 28, 2020, the U.S. District Court for the Southern
District of New York issued a decision establishing a deadline of
March 15, 2021, for EPA to issue a final rule fully resolving good
neighbor obligations under the 2008 ozone NAAQS for seven upwind
states. New Jersey v. Wheeler, No. 1:20-cv-01425 (S.D.N.Y. July 28,
2020).
---------------------------------------------------------------------------

    As discussed in section VII.D.1, EPA's air quality projections
anticipate that with the implementation of the identified control
stringency for EGUs represented by $1,600 per ton, downwind
nonattainment and maintenance problems for the 2008 ozone NAAQS will
persist through the 2024 ozone season. Therefore, EPA is proposing to
adjust emission budgets for upwind states that remain linked to
downwind nonattainment and maintenance problems through the 2024 ozone
season to incentivize the continued optimization of existing SCR
controls and installation of state-of-the-art NOX combustion
controls. The 2024 emission budgets would then continue to apply in
each year thereafter.
    As discussed below, EPA notes that emissions budgets are
implemented through the market-based mechanism of a trading program for
emission allowances. Under such a trading program, sources have the
compliance flexibility to make emissions reductions themselves or to
purchase allowances from other sources (either directly from those
sources or indirectly through a third party) that do not need those
allowances to cover their remaining emissions. Given this compliance
flexibility, EPA is taking comment on whether delaying the
incorporation of emission reduction potential from the installation of
state-of-the-art NOX combustion controls into state emission
budgets until 2022 is necessary (Comment C-1).
    To apply the fourth step of the 4-step framework (i.e.,
implementation), EPA proposes to include enforceable measures in the
promulgated FIPs to achieve the required emission reductions in each of
the 12 states. Specifically, the FIPs would require power plants in the
12 states to participate in a new CSAPR NOX Ozone Season
Group 3 Trading Program that largely replicates the existing CSAPR
NOX Ozone Season Group 2 Trading Program; with the main
differences being the geography and budget stringency. Aside from the
removal of the 12 covered states from the current CSAPR NOX
Ozone Season Group 2 Trading Program, this proposal leaves unchanged
the budget stringency and geography of the existing CSAPR
NOX Ozone Season Group 1 and Group 2 trading programs.
    For this rulemaking, EPA is proposing to authorize a one-time
conversion of allowances banked in 2017-2020 under the CSAPR Update
NOX Ozone Season Group 2 Trading Program into a limited
number of allowances that can be used for compliance in the CSAPR
NOX Ozone Season Group 3 Trading Program. Similar to the
approach taken in the CSAPR Update, EPA is proposing to base the
conversion on a formula that ensures emissions in the CSAPR
NOX Ozone Season Group 3 Trading Program region do not
exceed a specified level (defined as emissions up to the sum of

the states' ozone season emissions budgets and variability limits) as a
result of the use of banked allowances from the Group 2 trading
program. EPA also proposes to provide a process through which holders
of Group 2 allowances in non-facility accounts (``general''
accountholders) could designate any Group 2 allowances that they do not
wish to have converted to Group 3 allowances.
    The remainder of this preamble is organized as follows: Section IV
describes EPA's legal authority for this proposed action; section V
describes the human health and environmental context, as well as EPA's
proposed approach for addressing interstate transport for the 2008
ozone NAAQS; section VI describes its assessment of downwind receptors
of concern and upwind state ozone contributions to those receptors,
including the air quality modeling platform and emission inventories
that EPA used; section VII describes EPA's approach to quantify upwind
state obligations in the form of final EGU NOX emission
budgets; section VIII details the implementation requirements including
key elements of the CSAPR trading program and deadlines for compliance;
section IX describes the expected costs, benefits, and other impacts of
this proposed rule; section X discusses changes to the existing
regulatory text; and section XI discusses the statutes and executive
orders affecting this proposed rulemaking.

C. Costs and Benefits

    A summary of the key results of the cost-benefit analysis that was
prepared for this proposed rule is presented in Table I.C-1. Table I.C-
1 presents estimates of the present values (PV) and equivalent
annualized values (EAV), calculated using discount rates of 3 and 7
percent as directed by OMB's Circular A-4, of the compliance costs,
climate benefits, and net benefits of the proposed rule, in 2016
dollars, discounted to 2021. The estimated net benefits are the
estimated benefits minus the estimated costs of the proposed rule. The
table represents the present value of non-monetized benefits from
ozone, PM2.5 and NO2 reductions as a [beta],
while b represents the equivalent annualized value of these non-
monetized benefits. These values will differ across the discount rates
and depend on the B's in Tables IX.4 and IX.5 presented in Section IX.

    Table I.C--1 Estimated Compliance Costs, Climate Benfits and Net
            Benefits of the Proposed Rule, 2021 Through 2025
                  [Millions 2016$, discounted to 2021]
------------------------------------------------------------------------
                                          3%  Discount     7%  Discount
                                              rate             rate
------------------------------------------------------------------------
Present Value:
Benefits c d..........................       101+[beta]        15+[beta]
Climate Benefits c....................              101               15
Compliance Costs e....................               87               83
Net Benefits..........................        14+[beta]       -68+[beta]
Equivalent Annualized Value:
Benefits..............................             22+b              4+b
Climate Benefits......................               22                4
Compliance Costs......................               19               20
Net Benefits..........................              3+b            -17+b
------------------------------------------------------------------------
a All estimates in this table are rounded to two significant figures, so
  numbers may not sum due to independent rounding.
b The annualized present value of costs and benefits are calculated over
  a 5 year period from 2021 to 2025.
c Benefits ranges represent discounting of climate benefits at a real
  discount rate of 3 percent and 7 percent. Climate benefits are based
  on changes (reductions) in CO2 emissions.
d [beta] and b is the sum of all unquantified ozone, PM2.5, and NO2
  benefits. The annual values of [beta] and b will differ across
  discount rates. While EPA did not estimate these benefits in the RIA,
  Appendix 5B in the RIA presents PM2.5 and ozone estimates quantified
  using methods consistent with the previously published ISAs \19\ \20\
  to provide information regarding the potential magnitude of the
  benefits of this proposed rule.
e The costs presented in this table reflect annualized present value
  compliance costs calculated over a 5 year period from 2021 to 2025.

    Table 1.C-1 does not  include quantified and monetized health
benefits associated with reduced exposures to concentrations of ground-
level ozone and fine particulates. The Agency intends to update its
approach for quantifying the benefits of air quality changes by
considering the evidence reported in recently completed Integrated
Science Assessments for ground-level ozone and fine particulates and
accounting for forthcoming recommendations from the Science Advisory
Board on this issue. This process is still underway and will not be
completed in time for this proposed rule. See Section IX of this
preamble for more discussion. However, to provide perspective regarding
the scope of the estimated benefits, Appendix 5B of the RIA illustrates
the potential health effects associated with the changes in
PM2.5 and ozone concentrations as calculated using methods
developed prior to the 2019 p.m. ISA and 2020 Ozone ISA. That analysis
provides perspective regarding the scope of the estimated benefits. EPA
is in the process of recalibrating its benefits estimates for all PM
and ozone health endpoints. EPA intends to update its quantitative
methods for estimating the number and economic value of
PM2.5 and ozone health effects in time for publication as
part of the final rule.
---------------------------------------------------------------------------

    \19\ U.S. Environmental Protection Agency (U.S. EPA). 2009.
Integrated Science Assessment for Particulate Matter (Final Report).
EPA-600-R-08-139F. National Center for Environmental Assessment--RTP
Division, Research Triangle Park, NC. December. Available at: http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546>.
    \20\ U.S. Environmental Protection Agency (U.S. EPA). 2013.
Integrated Science Assessment of Ozone and Related Photochemical
Oxidants (Final Report). EPA/600/R-10/076F. National Center for
Environmental Assessment--RTP Division, Research Triangle Park.
Available at: http://cfpub.epa.gov/ncea/isa/recordisplay.cfm?deid=247492#Download>.
---------------------------------------------------------------------------

    As shown in Table I.C-1, the PV of the climate benefits of this
proposed rule, discounted at a 7-percent rate, is estimated to be about
$15 million, with an EAV of about $4 million. At a 3-percent discount
rate, the PV of the climate benefits is estimated to be about $101
million, with an EAV of $22 million. The PV of the compliance costs,
discounted at a 7-percent rate, is estimated to be about $83 million,
with an EAV of about $20 million. At a 3-percent discount rate, the PV
of the compliance costs is estimated to be about $87 million, with an
EAV of about

$19 million. The PV of the net benefits of this proposed rule,
discounted at a 7-percent rate, is estimated to be about -$68 million,
with an EAV of about -$17 million. At a 3-percent discount rate, the PV
of the net benefits is estimated to be about $14 million, with an EAV
of about $3 million .

II. Public Participation

A. Written Comments

    Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2020-
0272, at https://www.regulations.gov. Once submitted, comments cannot
be edited or removed from the docket. EPA may publish any comment
received to its public docket. Do not submit to EPA's docket at https://www.regulations.gov any information you consider to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Multimedia submissions (audio, video, etc.) must
be accompanied by a written comment. The written comment is considered
the official comment and should include discussion of all points you
wish to make. EPA will generally not consider comments or comment
contents located outside of the primary submission (i.e., on the web,
cloud, or other file sharing system). For additional submission
methods, the full EPA public comment policy, information about CBI or
multimedia submissions, and general guidance on making effective
comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
    EPA is temporarily suspending its Docket Center and Reading Room
for public visitors to reduce the risk of transmitting COVID-19.
Written comments submitted by mail are temporarily suspended and no
hand deliveries will be accepted. Our Docket Center staff will continue
to provide remote customer service via email, phone, and webform. We
encourage the public to submit comments via https://www.regulations.gov. For further information and updates on EPA Docket
Center services, please visit us online at https://www.epa.gov/dockets.
    EPA continues to carefully and continuously monitor information
from the Centers for Disease Control and Prevention (CDC), local area
health departments, and our Federal partners so that we can respond
rapidly as conditions change regarding COVID-19.

B. Participation in Virtual Public Hearing

    Please note that EPA is deviating from its typical approach because
the President has declared a national emergency. Because of current CDC
recommendations, as well as state and local orders for social
distancing to limit the spread of COVID-19, EPA cannot hold in-person
public meetings at this time.
    EPA will begin pre-registering speakers for the hearing upon
publication of this document in the Federal Register. To register to
speak at the virtual hearing, please use the online registration form
available at https://www.epa.gov/csapr/revised-cross-state-air-pollution-update or contact Ms. Kimberly Liu at<EMAIL_ADDRESS>or
202-564-6586 to register to speak at the virtual hearing. The last day
to pre-register to speak at the hearing will be November 6, 2020. On
November 10, 2020, EPA will post a general agenda for the hearing that
will list pre-registered speakers in approximate order at: https://www.epa.gov/csapr/revised-cross-state-air-pollution-update.
    EPA will make every effort to follow the schedule as closely as
possible on the day of the hearing; however, please plan for the
hearings to run either ahead of schedule or behind schedule.
    Each commenter will have 5 minutes to provide oral testimony. EPA
encourages commenters to provide EPA with a copy of their oral
testimony electronically (via email) by emailing it to Ms. Kimberly Liu
at<EMAIL_ADDRESS>EPA also recommends submitting the text of
your oral comments as written comments to the rulemaking docket.
    EPA may ask clarifying questions during the oral presentations but
will not respond to the presentations at that time. Written statements
and supporting information submitted during the comment period will be
considered with the same weight as oral comments and supporting
information presented at the public hearing.
    Please note that any updates made to any aspect of the hearing will
be posted online at https://www.epa.gov/csapr/revised-cross-state-air-pollution-update. While EPA expects the hearing to go forward as set
forth above, please monitor our website or contact Ms. Kimberly Liu at
<EMAIL_ADDRESS>or<PHONE_NUMBER> to determine if there are any
updates. EPA does not intend to publish a document in the Federal
Register announcing updates.
    If you require the services of a translator or special
accommodations such as audio description, please pre-register for the
hearing with Kimberly Liu at<EMAIL_ADDRESS>or<PHONE_NUMBER> and
describe your needs by November 5, 2020. EPA may not be able to arrange
accommodations without advanced notice.

III. General Information

A. Does this action apply to me?

    This proposed rule affects EGUs, and regulates the groups
identified in Table III.A-1:

                     Table III.A-1--Regulated Groups
------------------------------------------------------------------------
                        Industry group                           NAICS *
------------------------------------------------------------------------
Fossil fuel-fired electric power generation...................    221112
------------------------------------------------------------------------
* North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. For example, as
discussed in Section VII.D.2 below, EPA is requesting comment on
potential control strategies for emissions sources and industry sectors
outside of the fossil fuel-fired power sector. Some of these industry
sectors include cement, glass, chemical, and paper manufacturing,
pipeline transportation, and oil and gas extraction. To determine
whether your EGU entity is proposed to be regulated by this action, you
should carefully examine the applicability criteria found in 40 CFR
97.804, which EPA is not proposing to alter in this action. If you have
questions regarding the applicability of this action to a particular
entity, consult the person listed in the FOR FURTHER INFORMATION
CONTACT section.

IV. EPA's Legal Authority for the Proposed Rule

A. Statutory Authority

    The statutory authority for this final action is provided by the
CAA as amended (42 U.S.C. 7401 et seq.). Specifically, sections 110 and
301 of the CAA provide the primary statutory underpinnings for this
action. The most relevant portions of CAA section 110 are subsections
110(a)(1), 110(a)(2) (including 110(a)(2)(D)(i)(I)), 110(c)(1), and
110(k)(6).
    CAA section 110(a)(1) provides that states must make SIP
submissions ``within 3 years (or such shorter period as the
Administrator may prescribe) after the promulgation of a national
primary ambient air quality standard (or any revision thereof),'' and
that these SIP submissions are to provide for the ``implementation,
maintenance, and

enforcement'' of such NAAQS.\21\ The statute directly imposes on states
the duty to make these SIP submissions, and the requirement to make the
submissions is not conditioned upon EPA taking any action other than
promulgating a new or revised NAAQS.\22\
---------------------------------------------------------------------------

    \21\ 42 U.S.C. 7410(a)(1).
    \22\ See EPA v. EME Homer City Generation, L.P., 572 U.S. 489,
509-10 (2014).
---------------------------------------------------------------------------

    EPA has historically referred to SIP submissions made for the
purpose of satisfying the applicable requirements of CAA sections
110(a)(1) and 110(a)(2) as ``infrastructure SIP'' or ``iSIP''
submissions. CAA section 110(a)(1) addresses the timing and general
requirements for iSIP submissions, and CAA section 110(a)(2) provides
more details concerning the required content of these submissions.\23\
It includes a list of specific elements that ``[e]ach such plan''
submission must address.\24\
---------------------------------------------------------------------------

    \23\ 42 U.S.C. 7410(a)(2).
    \24\ EPA's general approach to infrastructure SIP submissions is
explained in greater detail in individual notices acting or
proposing to act on state infrastructure SIP submissions and in
guidance. See, e.g., Memorandum from Stephen D. Page on Guidance on
Infrastructure State Implementation Plan (SIP) Elements under Clean
Air Act Sections 110(a)(1) and 110(a)(2) (Sept. 13, 2013).
---------------------------------------------------------------------------

    CAA section 110(c)(1) requires the Administrator to promulgate a
FIP at any time within two years after the Administrator: (1) Finds
that a state has failed to make a required SIP submission; (2) finds a
SIP submission to be incomplete pursuant to CAA section 110(k)(1)(C);
or (3) disapproves a SIP submission. This obligation applies unless the
state corrects the deficiency through a SIP revision that the
Administrator approves before the FIP is promulgated.\25\
---------------------------------------------------------------------------

    \25\ 42 U.S.C. 7410(c)(1).
---------------------------------------------------------------------------

    CAA section 110(a)(2)(D)(i)(I), also known as the ``good neighbor
provision,'' provides the primary basis for this proposal.\26\ It
requires that each state SIP include provisions sufficient to
``prohibit[ ], consistent with the provisions of this subchapter, any
source or other type of emissions activity within the State from
emitting any air pollutant in amounts which will--(I) contribute
significantly to nonattainment in, or interfere with maintenance by,
any other State with respect to any [NAAQS].'' \27\ EPA often refers to
the emission reduction requirements under this provision as ``good
neighbor obligations'' and submissions addressing these requirements as
``good neighbor SIPs.''
---------------------------------------------------------------------------

    \26\ 42 U.S.C. 7410(a)(2)(D)(i)(I).
    \27\ Id.
---------------------------------------------------------------------------

    Once EPA promulgates a NAAQS, EPA must designate areas as being in
``attainment'' or ``nonattainment'' of the NAAQS, or
``unclassifiable.'' CAA section 107(d).\28\ For ozone, nonattainment is
further split into five classifications based on the severity of the
violation--Marginal, Moderate, Serious, Severe, or Extreme. Higher
classifications provide States with progressively more time to attain
and additional control requirements. See CAA sections 181, 182.\29\ In
general, states with nonattainment areas classified as Moderate or
higher must submit plans to EPA to bring these areas into attainment
according to the statutory schedule. CAA section 182.\30\ If an area
fails to attain the NAAQS by the attainment date associated with its
classification, it is ``bumped up'' to the next classification. CAA
section 181(b).\31\
---------------------------------------------------------------------------

    \28\ 42 U.S.C. 7407(d).
    \29\ 42 U.S.C. 7511, 7511a.
    \30\ 42 U.S.C. 7511a.
    \31\ 42 U.S.C. 7511(b).
---------------------------------------------------------------------------

    Section 301(a)(1) of the CAA also gives the Administrator the
general authority to prescribe such regulations as are necessary to
carry out functions under the Act.\32\ Pursuant to this section, EPA
has authority to clarify the applicability of CAA requirements and
undertake other rulemaking action as necessary to implement CAA
requirements. In this proposal, among other things, EPA is clarifying
the applicability of CAA section 110(a)(2)(D)(i)(I) with respect to the
2008 ozone NAAQS. In particular, EPA is using its authority under CAA
sections 110 and 301 to issue new or amended FIPs to revise
NOX ozone season emission budgets for 12 states to eliminate
their significant contribution to nonattainment or interference with
maintenance of the 2008 ozone NAAQS in another state, and EPA is making
findings as to 9 additional states that the CSAPR Update FIPs (or SIP
revisions later approved to replace those FIPs) are a complete remedy
and need no further revision.\33\ In addition, EPA is obligated to
respond to the D.C. Circuit's remand of the CSAPR Update in Wisconsin
v. EPA, 938 F.3d 303, with respect to the 21 states for which the FIPs
created by that rule were found to be only a partial remedy. This
proposal, if finalized, will wholly resolve the Agency's obligations on
remand. Finally, CAA section 301\34\ affords the Agency any additional
authority that may be needed in order to make certain other changes to
its regulations under 40 CFR parts 52, 78, and 97, as discussed in
Section VIII of this preamble.
---------------------------------------------------------------------------

    \32\ 42 U.S.C. 7601(a)(1).
    \33\ 42 U.S.C. 7410, 7601.
    \34\ 42 U.S.C. 7601.
---------------------------------------------------------------------------

B. Prior Good Neighbor Rulemakings Addressing Regional Ozone

    EPA has issued several rules interpreting and clarifying the
requirements of CAA section 110(a)(2)(D)(i)(I) with respect to the
regional transport of ozone for states in the eastern United States.
These rules, and the associated court decisions addressing these rules,
summarized here, provide important direction regarding the requirements
of CAA section 110(a)(2)(D)(i)(I).
    The NOX SIP Call, promulgated in 1998, addressed the
good neighbor provision for the 1979 1-hour ozone NAAQS.\35\ The rule
required 22 states and the District of Columbia to amend their SIPs to
reduce NOX emissions that contribute to ozone nonattainment
in downwind states. EPA set ozone season NOX budgets for
each state, and the states were given the option to participate in a
regional trading program, known as the NOX Budget Trading
Program.\36\ The D.C. Circuit largely upheld the NOX SIP
Call in Michigan v. EPA, 213 F.3d 663 (DC Cir. 2000), cert. denied, 532
U.S. 904 (2001).
---------------------------------------------------------------------------

    \35\ 63 FR 57356 (Oct. 27, 1998). As originally promulgated, the
NOX SIP Call also addressed good neighbor obligations
under the 1997 8-hour ozone NAAQS, but EPA subsequently stayed and
later rescinded the rule's provisions with respect to that standard.
See 84 FR 8422 (March 8, 2019).
    \36\ ``Allowance Trading,'' sometimes referred to as ``cap and
trade,'' is an approach to reducing pollution that has been used
successfully to protect human health and the environment. Trading
programs have two key components: Emissions budgets (the sum of
which provide a cap on emissions), and tradable allowances equal to
the budgets that authorize allowance holders to emit a specific
quantity (e.g., one ton) of the pollutant. This approach ensures
that the environmental goal is met while the tradable allowances
provide flexibility for individual participants to establish and
follow their own compliance path. Because allowances can be bought
and sold in an allowance market, these programs are often referred
to as ``market-based.''
---------------------------------------------------------------------------

    EPA's next rule addressing the good neighbor provision, the Clean
Air Interstate Rule (CAIR), was promulgated in 2005 and addressed both
the 1997 fine particulate matter (PM2.5) NAAQS and 1997
ozone NAAQS.\37\ CAIR required SIP revisions in 28 states and the
District of Columbia to reduce emissions of sulfur dioxide
(SO2) and/or NOX--important precursors of
regionally transported PM2.5 (SO2 and annual
NOX) and ozone (summer-time NOX). As in the
NOX SIP Call, states were given the option to participate in
regional trading programs to achieve the reductions. When EPA
promulgated the

final CAIR in 2005, EPA also issued findings that states nationwide had
failed to submit SIPs to address the requirements of CAA section
110(a)(2)(D)(i) with respect to the 1997 PM2.5 and 1997
ozone NAAQS.\38\ On March 15, 2006, EPA promulgated FIPs to implement
the emission reductions required by CAIR.\39\ CAIR was remanded to EPA
by the D.C. Circuit in North Carolina v. EPA, 531 F.3d 896 (D.C. Cir.
2008), modified on reh'g, 550 F.3d 1176. For more information on the
legal issues underlying CAIR and the D.C. Circuit's holding in North
Carolina, refer to the preamble of the CSAPR rule.\40\
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    \37\ 70 FR 25162 (May 12, 2005).
    \38\ 70 FR 21147 (April 25, 2005).
    \39\ 71 FR 25328 (April 28, 2006).
    \40\ 76 FR 48208, 48217 (Aug. 8, 2011).
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    In 2011, EPA promulgated the CSAPR to address the issues raised by
the remand of CAIR. The CSAPR addressed the two NAAQS at issue in CAIR
and additionally addressed the good neighbor provision for the 2006
PM2.5 NAAQS.\41\ The CSAPR required 28 states to reduce
SO2 emissions, annual NOX emissions, and/or ozone
season NOX emissions that significantly contribute to other
states' nonattainment or interfere with other states' abilities to
maintain these air quality standards.\42\ To align implementation with
the applicable attainment deadlines, EPA promulgated FIPs for each of
the 28 states covered by the CSAPR. The FIPs require EGUs in the
covered states to participate in regional trading programs to achieve
the necessary emission reductions. Each state can submit a good
neighbor SIP at any time that, if approved by EPA, would replace the
CSAPR FIP for that state.
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    \41\ 76 FR 48208.
    \42\ The CSAPR was revised by several rulemakings after its
initial promulgation in order to revise certain states' budgets and
to promulgate FIPs for five additional states addressing the good
neighbor obligation for the 1997 ozone NAAQS. See 76 FR 80760 (Dec.
27, 2011); 77 FR 10324 (Feb. 21, 2012); 77 FR 34830 (June 12, 2012).
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    The CSAPR was the subject of an adverse decision by the D.C.
Circuit in August 2012.\43\ However, this decision was reversed in
April 2014 by the Supreme Court, which largely upheld the rule,
including EPA's approach to addressing interstate transport in the
CSAPR. EPA v. EME Homer City Generation, L.P., 572 U.S. 489 (2014) (EME
Homer City I). The rule was remanded to the D.C. Circuit to consider
claims not addressed by the Supreme Court. Id. In July 2015 the D.C.
Circuit generally affirmed EPA's interpretation of various statutory
provisions and EPA's technical decisions. EME Homer City Generation,
L.P. v. EPA, 795 F.3d 118 (2015) (EME Homer City II). However, the
court remanded the rule without vacatur for reconsideration of EPA's
emissions budgets for certain states, which the court found may have
over-controlled those states' emissions with respect to the downwind
air quality problems to which the states were linked. Id. at 129-30,
138. For more information on the legal issues associated with the CSAPR
and the Supreme Court's and D.C. Circuit's decisions in the EME Homer
City litigation, refer to the preamble of the CSAPR Update.\44\
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    \43\ On August 21, 2012, the D.C. Circuit issued a decision in
EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012),
vacating the CSAPR. EPA sought review with the D.C. Circuit en banc
and the D.C. Circuit declined to consider EPA's appeal en banc. EME
Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. January
24, 2013), ECF No. 1417012 (denying EPA's motion for rehearing en
banc).
    \44\ 81 FR 74504, 74511 (Oct. 26, 2016).
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    In 2016, EPA promulgated the CSAPR Update to address interstate
transport of ozone pollution with respect to the 2008 ozone NAAQS.\45\
The final rule generally updated the CSAPR ozone season NOX
emissions budgets for 22 states to achieve cost-effective and
immediately feasible NOX emission reductions from EGUs
within those states.\46\ EPA aligned the analysis and implementation of
the CSAPR Update with the 2017 ozone season in order to assist downwind
states with timely attainment of the 2008 ozone NAAQS.\47\ The CSAPR
Update implemented the budgets through FIPs requiring sources to
participate in a revised CSAPR NOX ozone season trading
program beginning with the 2017 ozone season. As under the CSAPR, each
state can submit a good neighbor SIP at any time that, if approved by
EPA, would replace the CSAPR Update FIP for that state. The final CSAPR
Update also addressed the remand by the D.C. Circuit of certain states'
CSAPR phase 2 ozone season NOX emissions budgets in EME
Homer City II. Further details regarding the CSAPR Update are discussed
in Sections V.C.1.a-b below.
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    \45\ 81 FR 74504.
    \46\ One state, Kansas, was made newly subject to the CSAPR
ozone season NOX requirement by the CSAPR Update. All
other CSAPR Update states were already subject to ozone season
NOX requirements under the CSAPR.
    \47\ 81 FR 74516. EPA's final 2008 Ozone NAAQS SIP Requirements
Rule, 80 FR 12264, 12268 (Mar. 6, 2015), revised the attainment
deadline for ozone nonattainment areas designated as Moderate to
July 20, 2018. See 40 CFR 51.1103. In order to demonstrate
attainment by this deadline, states were required to rely on design
values calculated using ozone season data from 2015 through 2017,
since the July 20, 2018, deadline did not afford enough time for
measured data of the full 2018 ozone season.
---------------------------------------------------------------------------

    In December 2018, EPA promulgated the CSAPR ``Close-Out,'' which
determined that no further enforceable reductions in emissions of
NOX were required with respect to the 2008 ozone NAAQS for
20 of the 22 eastern states covered by the CSAPR Update, and reflected
that determination in revisions to the existing state-specific sections
of the CSAPR Update regulations for those states.\48\ Further details
on the CSAPR Close-Out are discussed in Section V.C.1.c below.
---------------------------------------------------------------------------

    \48\ 83 FR 65878, 65882 (Dec. 21, 2018). After promulgating the
CSAPR Update and before promulgating the CSAPR Close-Out, EPA
approved a SIP from Kentucky resolving that state's good neighbor
obligations for the 2008 ozone NAAQS. 83 FR 33730 (July 17, 2018).
In this action, EPA is proposing an error correction under CAA
section 110(k)(6) to convert this approval to a disapproval, because
the Kentucky approval relied on the same analysis which the D.C.
Circuit determined to be unlawful in the CSAPR Close-Out. Our action
with respect to Kentucky is discussed in Section V.C.2.b. below.
---------------------------------------------------------------------------

    The CSAPR Update and the CSAPR Close-Out were both subject to legal
challenges in the D.C. Circuit. Wisconsin v. EPA, 938 F.3d 303 (D.C.
Cir. 2019) (Wisconsin); New York v. EPA, 781 Fed. App'x 4 (D.C. Cir.
2019) (New York). As discussed in greater detail in Section V.C.1.d
below, in September 2019, the D.C. Circuit upheld the CSAPR Update in
virtually all respects, but remanded the rule because it was partial in
nature and did not fully eliminate upwind states' significant
contribution to nonattainment or interference with maintenance of the
2008 ozone NAAQS by ``the relevant downwind attainment deadlines'' in
the CAA. Wisconsin, 938 F.3d at 313-15. In October 2019, the D.C.
Circuit vacated the CSAPR Close-Out on the same grounds that it
remanded the CSAPR Update in Wisconsin, specifically that the Close-Out
rule did not analyze ``the next applicable attainment date'' of
downwind states. New York, 781 Fed. App'x at 7.

V. Air Quality Issues Addressed and Overall Approach for the Proposed
Rule

A. The Interstate Ozone Transport Challenge

    Interstate transport of NOX emissions poses significant
challenges with respect to the 2008 ozone NAAQS in the eastern U.S. and
thus presents a threat to public health and welfare.
1. Nature of Ozone and the Ozone NAAQS
    Ground-level ozone is not emitted directly into the air but is
created by chemical reactions between NOX and volatile
organic compounds (VOC) in

the presence of sunlight. Emissions from electric utilities and
industrial facilities, motor vehicles, gasoline vapors, and chemical
solvents are some of the major sources of NOX and VOC.
    Because ground-level ozone formation increases with temperature and
sunlight, ozone levels are generally higher during the summer.
Increased temperature also increases emissions of volatile man-made and
biogenic organics and can indirectly increase NOX emissions
as well (e.g., increased electricity generation for air conditioning).
    The 2008 primary and secondary ozone standards are both 75 ppb as
an 8-hour level.\49\ Specifically, the standards require that the 3-
year average of the fourth highest 24-hour maximum 8-hour average ozone
concentration may not exceed 75 ppb as a truncated value (i.e., digits
to right of decimal removed).\50\ In general, areas that exceed the
ozone standard are designated as nonattainment areas, pursuant to the
designations process under CAA section 107 and are subject to
heightened planning requirements depending on the degree of severity of
their nonattainment classification, see CAA sections 181, 182.
---------------------------------------------------------------------------

    \49\ 73 FR 16436 (Mar. 27, 2008).
    \50\ 40 CFR part 50, Appendix P to part 50.
---------------------------------------------------------------------------

2. Ozone Transport
    Studies have established that ozone formation, atmospheric
residence, and transport occur on a regional scale (i.e., thousands of
kilometers) over much of the eastern U.S.\51\ While substantial
progress has been made in reducing ozone in many areas, interstate
ozone transport is still an important component of peak ozone
concentrations during the summer ozone season.
---------------------------------------------------------------------------

    \51\ Bergin, M.S. et al. (2007) Regional air quality: Local and
interstate impacts of NOX and SO2 emissions on
ozone and fine particulate matter in the eastern United States.
Environmental Sci & Tech. 41: 4677-4689.
---------------------------------------------------------------------------

    EPA has previously concluded in the NOX SIP Call, CAIR,
and the CSAPR that, for reducing regional-scale ozone transport, a
NOX control strategy would be most effective. NOX
emissions can be transported downwind as NOX or, after
transformation in the atmosphere, as ozone. As a result of ozone
transport, in any given location, ozone pollution levels are impacted
by a combination of local emissions and emissions from upwind sources.
The transport of ozone pollution across state borders compounds the
difficulty for downwind states in meeting health-based air quality
standards (i.e., NAAQS). Assessments of ozone, for example those
conducted for the October 2015 Regulatory Impact Analysis of the Final
Revisions to the National Ambient Air Quality Standards for Ground-
Level Ozone (EPA-452/R-15-007), continue to show the importance of
NOX emissions for ozone transport. This analysis is in the
docket for this proposal and can be also found at EPA's website at:
https://www.epa.gov/ttnecas1/docs/20151001ria.pdf.
    Further, studies have found that EGU NOX emission
reductions can be effective in reducing individual 8-hour peak ozone
concentrations and in reducing 8-hour peak ozone concentrations
averaged across the ozone season. For example, a study that evaluates
the effectiveness on ozone concentrations of EGU NOX
reductions achieved under the NOX Budget Trading Program
(i.e., the NOX SIP Call) shows that regulating
NOX emissions in that program was highly effective in
reducing both ozone and dry-NO3 concentrations during the
ozone season. Further, this study indicates that EGU emissions, which
are generally released higher in the air column through tall stacks and
are significant in quantity, may disproportionately contribute to long-
range transport of ozone pollution on a per-ton basis.\52\
---------------------------------------------------------------------------

    \52\ Butler, et al., ``Response of Ozone and Nitrate to
Stationary Source Reductions in the Eastern USA''. Atmospheric
Environment, 2011.
---------------------------------------------------------------------------

    Previous regional ozone transport efforts, including the
NOX SIP Call, CAIR, and the CSAPR, required ozone season
NOX reductions from EGUs to address interstate transport of
ozone. EPA took comment on regulating EGU NOX emissions to
address interstate ozone transport in the notice-and-comment process
for these rulemakings. EPA received no significant adverse comments in
any of these proposals regarding the rules' focus on ozone season EGU
NOX reductions to address interstate ozone transport.
    As described in Section VII, EPA's analysis finds that the power
sector continues to be capable of making NOX reductions at
reasonable cost that reduce interstate transport with respect to
ground-level ozone. EGU NOX emission reductions can be made
in the near-term under this proposal by fully operating existing EGU
NOX post-combustion controls (i.e., Selective Catalytic
Reduction)--including optimizing NOX removal by existing
operational controls and turning on and optimizing existing idled
controls; installation of (or upgrading to) state-of-the-art
NOX combustion controls; and shifting generation to units
with lower NOX emission rates. Further, additional
assessment reveals that these available EGU NOX reductions
would make meaningful and timely improvements in ozone air quality.
    EPA also observes that significant emissions reduction potential
from EGUs is available through the post-combustion control retrofit
strategies. These controls reduce emissions and can have a meaningful
air quality impact, but, in contrast to the controls discussed above,
they are not available in the near-term, and are only available on a
longer time frame (reflecting the time required to develop, construct,
and install the technology) and are estimated to have a higher cost.
3. Health and Environmental Effects
    Exposure to ambient ozone causes a variety of negative effects on
human health, vegetation, and ecosystems. In humans, acute and chronic
exposure to ozone is associated with premature mortality and a number
of morbidity effects, such as asthma exacerbation. In ecosystems, ozone
exposure causes visible foliar injury, decreases plant growth, and
affects ecosystem community composition. See EPA's November 2014
Regulatory Impact Analysis of the Proposed Revisions to the National
Ambient Air Quality Standards for Ground-Level Ozone (EPA-452/P-14-
006), in the docket for this proposal and available on EPA's website
at: http://www.epa.gov/ttn/ecas/regdata/RIAs/20141125ria.pdf, for more
information on the human health and welfare and ecosystem effects
associated with ambient ozone exposure.

B. Relationship Between This Regulatory Action and the 2015 Ozone NAAQS

    On October 1, 2015, EPA strengthened the ground-level ozone NAAQS
to 70 ppb on an eight-hour averaging time, based on extensive
scientific evidence about ozone's effects on public health and
welfare.\53\ While reductions achieved by this rule may have the effect
of aiding in attainment and maintenance of the 2015 standard, this
action is taken solely with respect to EPA's authority to address
remaining CAA good neighbor obligations under the 2008 ozone NAAQS. EPA
and states are working outside of this proposed action to address the
CAA good

neighbor provision for the 2015 ozone NAAQS.
---------------------------------------------------------------------------

    \53\ 80 FR 65291 (Oct. 26, 2015). On July 13, 2020, based on a
review of the full body of currently available scientific evidence
and exposure/risk information, EPA proposed to retain the existing
ozone NAAQS. See https://www.epa.gov/ground-level-ozone-pollution/ozone-national-ambient-air-quality-standards-naaqs.
---------------------------------------------------------------------------

C. Proposed Approach To Address the Remanded Transport Obligations for
the 2008 Ozone NAAQS

1. Events Affecting Application of the Good Neighbor Provision for the
2008 Ozone NAAQS
    EPA is taking this action to address the remand of the CSAPR Update
in Wisconsin v. EPA, 938 F.3d 303 (D.C. Cir. 2019). This Section will
discuss the key, relevant aspects of the CSAPR Update, the related
CSAPR Close-Out, and the D.C. Circuit's decisions in Wisconsin and New
York v. EPA, 781 Fed. App'x 4 (D.C. Cir. 2019) (the latter of which
vacated the Close-out Rule based on the same reasoning as the Wisconsin
decision remanding the Update). The basis for EPA's authority under CAA
section 110(c) (42 U.S.C. 7410(c)) to promulgate good neighbor FIPs for
the 21 states subject to this action on remand is discussed in Sections
IV and V.C.2.
a. The CSAPR Update
    On October 26, 2016, the CSAPR Update was published in the Federal
Register. 81 FR 74504. The purpose of the CSAPR Update was to address
the good neighbor provision for the 2008 ozone NAAQS, as well as
address remanded CSAPR obligations for the 1997 ozone NAAQS. The CSAPR
Update required EGUs in 22 states to reduce ozone season NOX
emissions that significantly contribute to other states' nonattainment
or interfere with other states' abilities to maintain the 2008 ozone
NAAQS.
    To establish and implement the CSAPR Update emissions budgets, EPA
followed the same four-step analytic process that it used in the CSAPR,
an approach which reflects the evolution of the Agency's prior regional
interstate transport rulemakings related to ozone NAAQS. The 4-step
framework is described in more detail in Sections V.C.3 and VII.A.
    In the CSAPR Update, to evaluate the scope of the interstate ozone
transport problem at Step 1, EPA identified downwind areas that were
expected to have problems attaining and maintaining the 2008 ozone
NAAQS using modeling that projected air quality to a future compliance
year. 81 FR 74517. EPA aligned the analysis and implementation of the
CSAPR Update with the 2017 ozone season (May 1-September 30) in order
to assist downwind states with attainment of the 2008 ozone NAAQS by
the 2018 Moderate area attainment date. Id. at 74516. (EPA's final 2008
Ozone NAAQS SIP Requirements Rule established the attainment deadline
of July 20, 2018, for ozone nonattainment areas classified as
Moderate.\54\) Because the attainment date fell during the 2018 ozone
season, the 2017 ozone season was the last full season from which data
could be used to determine attainment of the NAAQS by that date.
---------------------------------------------------------------------------

    \54\ 80 FR 12264, 12268 (Mar. 6, 2015); see 40 CFR 51.1103.
---------------------------------------------------------------------------

    At Step 2, EPA identified upwind states that collectively
contribute to these identified downwind areas. In the CSAPR Update, EPA
used a screening threshold of 1 percent of the NAAQS to identify states
``linked'' to downwind ozone problems sufficient for further evaluation
for significant contribution to nonattainment or interference with
maintenance of the NAAQS under the good neighbor provision. 81 FR
74518. This same threshold for analysis was used in the CSAPR as to the
1997 ozone NAAQS. See 76 FR at 48237-38.
    At Step 3, EPA quantified emissions from upwind states that would
significantly contribute to nonattainment or interfere with maintenance
by first evaluating various levels of uniform NOX control
stringency, each represented by an estimated marginal cost per ton of
NOX reduced. EPA then applied the same multi-factor test
that was used in the CSAPR to evaluate cost, available emission
reductions, and downwind air quality impacts to determine the
appropriate level of uniform NOX control stringency that
addressed the impacts of interstate transport on downwind nonattainment
or maintenance receptors. EPA used this multi-factor assessment to
gauge the extent to which emission reductions could be implemented in
the future compliance year (i.e., 2017) and to evaluate the potential
for over- and under-control of upwind state emissions.
    Within the multi-factor test, EPA identified a ``knee in the
curve,'' i.e., a point at which the cost-effectiveness of the emission
reductions was maximized, so named for the discernable turning point
observable in a multi-factor (i.e., multi-variable) curve. See 81 FR
74550. EPA concluded that this was at the point where emissions budgets
reflected a uniform NOX control stringency represented by an
estimated marginal cost of $1,400 per ton (2011$) of NOX
reduced. This cost threshold in turn represented a control strategy of
installing or upgrading combustion controls and optimizing existing SCR
controls. In light of this multi-factor test, EPA determined this level
of stringency in emissions budgets represented the level at which
incremental EGU NOX reduction potential and corresponding
downwind ozone air quality improvements were maximized--relative to
other control stringencies evaluated--with respect to marginal cost.
That is, the ratio of emission reductions to marginal cost and the
ratio of ozone improvements to marginal cost were maximized relative to
the other levels of control stringency evaluated. EPA found that
feasible and cost-effective EGU NOX reductions were
available to make meaningful and timely improvements in downwind ozone
air quality to address interstate ozone transport for the 2008 ozone
NAAQS for the 2017 ozone season. Id. at 74508. Further, the Agency's
evaluation showed that emissions budgets reflecting the $1,400 per ton
cost threshold did not over-control upwind states' emissions relative
to either the downwind air quality problems to which they were linked
or the one percent contribution threshold in Step 2 that triggered
their further evaluation in Step 3. Id. at 74551-52.
    At Step 4, EPA finalized EGU ozone season NOX emissions
budgets developed using uniform control stringency represented by
$1,400 per ton. These budgets represented emissions remaining in each
state after elimination of the amounts of emissions that EPA identified
would significantly contribute to nonattainment or interfere with
maintenance of the 2008 ozone NAAQS in downwind states. EPA promulgated
FIPs requiring the covered power plants in the 22 covered states to
participate in the CSAPR NOX Ozone Season Group 2 Trading
Program starting in 2017.\55\
---------------------------------------------------------------------------

    \55\ The NOX ozone season trading program created
under the CSAPR was renamed the CSAPR NOX Ozone Season
Group 1 Trading Program and now applies only to sources in Georgia.
In the CSAPR Update, EPA found that Georgia did not contribute to
interstate transport with respect to the 2008 ozone NAAQS, but the
state has an ongoing ozone season NOX requirement under
the CSAPR with respect to the 1997 ozone NAAQS.
---------------------------------------------------------------------------

b. Partial Nature of the CSAPR Update
    At the time it promulgated the CSAPR Update, EPA considered the
FIPs to be ``partial'' and that the rule ``may not be sufficient to
fully address these states' good neighbor obligations'' for the 2008
ozone NAAQS for 21 of the 22 states included in that rule. 81 FR 74508,
74521 (Oct. 26, 2016). Based on information available at the time of
the rule's promulgation, EPA was unable to conclude that the CSAPR
Update fully addressed most of the covered states'

good neighbor obligations for the 2008 ozone NAAQS. Id. at 74521.
Information available at the time indicated that, even with the CSAPR
Update implementation, several downwind receptors were expected to
continue having problems attaining and maintaining this NAAQS and that
emissions from upwind states were expected to continue to contribute
greater than or equal to one percent of the NAAQS to these areas during
the 2017 ozone season. Id. at 74551-52. Further, EPA could not conclude
at that time whether additional EGU and non-EGU reductions implemented
on a longer timeframe than 2017 would be necessary, feasible, and cost-
effective to address states' good neighbor obligations for this NAAQS.
    Additionally, EPA determined it was not feasible to complete an
emissions control analysis that may otherwise have been necessary to
evaluate full elimination of each state's significant contribution to
nonattainment or interference with maintenance and also ensure that
emission reductions already quantified in the rule would be achieved by
2017. Id. at 74522. EPA was unable to fully consider both non-EGU ozone
season NOX reductions and further EGU reductions that may
have been achievable after 2017. Id. at 74521. See Section V.D.3 below.
    Thus, EPA also could not make an emissions reduction-based
conclusion that the CSAPR Update would fully resolve states' good
neighbor obligations with respect to the 2008 ozone NAAQS because the
reductions evaluated and required by the CSAPR Update were limited in
scope (both by technology and sector). As a result of the remaining air
quality problems and the limitations on EPA's analysis, for all but one
of the 22 affected states, EPA did not determine in the CSAPR Update
that the rule fully addressed those states' downwind air quality
impacts under the good neighbor provision for the 2008 ozone NAAQS. Id.
at 74521. For one state, Tennessee, EPA determined in the final CSAPR
Update that Tennessee's emissions budget fully eliminated the state's
significant contribution to downwind nonattainment and interference
with maintenance of the 2008 ozone NAAQS because the downwind air
quality problems to which the state was linked were projected to be
resolved with implementation of the CSAPR Update. Id. at 74552.
c. The CSAPR Close-Out
    Following implementation of the CSAPR Update and the approval of
Kentucky's SIP (under a court-ordered deadline),\56\ on December 21,
2018, EPA issued the CSAPR ``Close-Out'' to address any good neighbor
obligations that remained for the 2008 ozone NAAQS for the 20 remaining
states in the CSAPR Update region. See 83 FR 65878 (Dec. 21, 2018). The
CSAPR Close-Out made a determination that, based on additional
information and analysis, the CSAPR Update fully addressed the
remaining 20 affected states' good neighbor obligations for the 2008
ozone NAAQS. In particular, EPA determined that 2023 was an appropriate
future analytic year considering relevant attainment dates and the time
EPA estimated to be necessary to implement new NOX control
technologies at EGUs. Based on EPA's analysis of projected air quality
in that year, EPA determined that, for the purposes of addressing good
neighbor obligations for the 2008 ozone NAAQS, there would be no
remaining nonattainment or maintenance receptors in the eastern U.S. As
a result of this determination, EPA found that, with continued
implementation of the CSAPR Update, these 20 states would no longer
contribute significantly to nonattainment in, or interfere with
maintenance by, any other state with respect to the 2008 ozone NAAQS.
Id.
---------------------------------------------------------------------------

    \56\ 83 FR 33730 (July 17, 2018) (approval of Kentucky's SIP for
the 2008 ozone NAAQS). See section V.C.2.b. for discussion of our
proposed action for Kentucky in this notice.
---------------------------------------------------------------------------

d. D.C. Circuit Decisions in Wisconsin v. EPA and New York v. EPA
    The CSAPR Update was subject to petitions for judicial review, and
the D.C. Circuit issued its opinion in Wisconsin v. EPA on September
13, 2019. 938 F.3d 303. The D.C. Circuit upheld the CSAPR Update in all
respects save one: The court concluded that the CSAPR Update was
inconsistent with the CAA to the extent that it was partial in nature
and did not fully eliminate upwind states' significant contribution to
nonattainment or interference with maintenance of the 2008 ozone NAAQS
by the downwind states' 2018 Moderate attainment date. Id. at 313.
    The court identified three bases for this holding: (1) The D.C.
Circuit's prior opinion in North Carolina v. EPA, 531 F.3d 896 (2008),
which held, in the context of CAIR, that the good neighbor provision
requires states to eliminate significant contribution ``consistent with
the provisions'' of Title I of the CAA, including the attainment dates
applicable in downwind areas, 938 F.3d at 314 (citing 531 F.3d at 912);
(2) the unreasonableness of EPA's interpretation of the phrase
``consistent with the provisions [of Title I]'' in the good neighbor
provision as allowing for variation from the attainment schedule in CAA
section 181 because it would enable significant contribution from
upwind states to continue beyond that statutory timeframe, 938 F.3d at
315-18; and (3) the court's finding that the practical obstacles EPA
identified regarding why it needed more time to implement a full remedy
did not rise to the level of an ``impossibility,'' id. at 318-20. With
respect to the third basis, the court also found EPA must make a higher
showing of uncertainty regarding non-EGU point-source NOX
mitigation potential before declining to regulate such sources. Id. at
318-20.
    However, the court identified flexibilities that EPA retains in
administering the good neighbor provision, acknowledging that EPA has
latitude in defining which upwind contribution ``amounts'' count as
significant and thus must be abated, permitting EPA to consider, among
other things, the magnitude of upwind states' contributions and the
cost associated with eliminating them. 938 F.3d at 320. The court
further noted that, in certain circumstances, EPA can grant extensions
of the attainment deadlines under the Act; for instance, the court
cited CAA section 181(a)(5), which allows EPA to grant one-year
extensions from attainment dates under certain circumstances. Id.
Finally, the court noted that EPA can attempt to show
``impossibility.'' Id. The court also recognized that the statutory
command that compliance with the good neighbor provision must be
achieved consistent with Title I might be read, upon a sufficient
showing of necessity, to allow some deviation from downwind deadlines,
so long as it is rooted in Title I's framework and provides a
sufficient level of protection to downwind States. Id.
    The court in Wisconsin remanded but did not vacate the CSAPR
Update, finding that vacatur of the rule could cause harm to public
health and the environment or disrupt the trading program EPA had
established and that the obligations imposed by the rule may be
appropriate and sustained on remand. Id. at 336. The court also
rejected petitioners' request to place EPA on a six-month schedule to
address the remand, noting the availability of ``mandamus'' relief
before the D.C. Circuit should EPA fail to ``modify the rule in a
manner consistent with our opinion.'' Id. at 336-37.
    On October 1, 2019, in a judgment order, the D.C. Circuit vacated
the CSAPR Close-Out on the same grounds

that it remanded the Update in Wisconsin. New York v. EPA, 781 Fed.
App'x 4 (D.C. Cir. 2019). Because the Close-Out analyzed the year 2023
rather than 2021 (``the next applicable attainment date'') and failed
to demonstrate that it was impossible to address significant
contribution by the 2021 attainment date, the court found the rule ran
afoul of the Wisconsin holding. Id. at 7. ``As the EPA acknowledges,
the Close-Out Rule `relied upon the same statutory interpretation of
the Good Neighbor Provision' that we rejected in Wisconsin. Thus, the
Agency's defense of the Close-Out Rule in these cases is foreclosed.''
Id. at 6-7 (internal citation omitted). The court left open the
possibility that the flexibilities identified in Wisconsin, 938 F.3d at
320, and outlined above, may be available to EPA on remand. Id.
    Following Wisconsin and New York, EPA on remand must address good
neighbor obligations for the 21 states within the CSAPR Update region
for which the Update was only a partial remedy. As explained in the
following section, EPA already retains FIP authority as to 20 of these
states. In addition, EPA is proposing action pursuant to CAA section
110(k)(6) (42 U.S.C. 7410(k)(6)) to find that Kentucky's SIP was
approved in error and is thus proposing a FIP for Kentucky consistent
with the obligations proposed for the other remaining CSAPR Update
region states.
2. FIP Authority for Each State Covered by the Proposed Rule
    On March 12, 2008, EPA promulgated a revision to the ozone NAAQS,
lowering both the primary and secondary standards to 75 ppb. See
National Ambient Air Quality Standards for Ozone, Final Rule, 73 FR
16436 (March 27, 2008). Specifically, the standards require that an
area may not exceed 0.075 parts per million (75 ppb) using the 3-year
average of the fourth highest 24-hour maximum 8-hour rolling average
ozone concentration. These revisions of the NAAQS, in turn, triggered a
3-year deadline for states to submit SIP revisions addressing
infrastructure requirements under CAA sections 110(a)(1) and 110(a)(2),
including the good neighbor provision. Several events affected the
timely application of the good neighbor provision for the 2008 ozone
NAAQS, including reconsideration of the 2008 ozone NAAQS and legal
developments pertaining to the CSAPR, which created uncertainty
surrounding EPA's statutory interpretation and implementation of the
good neighbor provision.\57\ Notwithstanding these events, EPA
ultimately affirmed that states' good neighbor SIPs were due on March
12, 2011.
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    \57\ These events are described in detail in section IV.A.2 of
the CSAPR Update. See 81 FR 74515.
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a. FIP Authority for CSAPR Update States
    EPA subsequently took several actions that triggered EPA's
obligation under CAA section 110(c) to promulgate FIPs addressing the
good neighbor provision for several states.\58\ First, on July 13,
2015, EPA published a rule finding that 24 states failed to make
complete submissions that address the requirements of section
110(a)(2)(D)(i)(I) related to the interstate transport of pollution as
to the 2008 ozone NAAQS. See 80 FR 39961 (effective August 12, 2015).
This finding triggered a two-year deadline for EPA to issue FIPs to
address the good neighbor provision for these states by August 12,
2017. The CSAPR Update finalized FIPs for 13 of these states (Alabama,
Arkansas, Illinois, Iowa, Kansas, Michigan, Mississippi, Missouri,
Oklahoma, Pennsylvania, Tennessee, Virginia, and West Virginia),
requiring their participation in a NOX trading program. EPA
also determined in the CSAPR Update that the Agency had no further FIP
obligation as to nine additional states identified in the finding of
failure to submit because these states did not contribute significantly
to nonattainment in, or interfere with maintenance by, any other state
with respect to the 2008 ozone NAAQS. See 81 FR 74506.59 60
On June 15, 2016, and July 20, 2016, EPA published additional rules
finding that Maryland and New Jersey, respectively, also failed to
submit transport SIPs for the 2008 ozone NAAQS. See 81 FR 38963 (June
15, 2016) (New Jersey, effective July 15, 2016); 81 FR 47040 (July 20,
2016) (Maryland, effective August 19, 2016). The finding actions
triggered two-year deadlines for EPA to issue FIPs to address the good
neighbor provision for Maryland by August 19, 2018, and for New Jersey
by July 15, 2018. The CSAPR Update also finalized FIPs for these two
states.
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    \58\ This section of the preamble focuses on SIP and FIP actions
for those states addressed in the CSAPR Update. EPA has also acted
on SIPs for other states not mentioned in this action. The
memorandum, ``Proposed Action, Status of 110(a)(2)(D)(i)(I) SIPs for
the 2008 Ozone NAAQS,'' more fully describes the good neighbor SIP
status for the 2008 ozone NAAQS and is available in the docket for
this proposal.
    \59\ The nine states were Florida, Georgia, Maine,
Massachusetts, Minnesota, New Hampshire, North Carolina, South
Carolina, and Vermont. These determinations were not challenged in
Wisconsin, and EPA is not reopening these determinations in this
proposal.
    \60\ The two remaining states addressed in the findings of
failure to submit (California and New Mexico) were not part of the
CSAPR Update or the CSAPR Close-Out analysis and are not addressed
in this proposal.
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    In addition to these findings, EPA finalized disapproval or partial
disapproval actions for good neighbor SIPs submitted by Indiana,
Kentucky, Louisiana, New York, Ohio, Texas, and Wisconsin.\61\ These
disapprovals triggered EPA's obligation to promulgate FIPs to implement
the requirements of the good neighbor provision for those states within
two years of the effective date of each disapproval or, in the case of
Kentucky, within two years of the issuance of the judgment in a
subsequent Supreme Court decision.\62\ EPA promulgated FIPs in the
CSAPR Update for each of these states.
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    \61\ See the following actions: Indiana (81 FR 38957, June 15,
2016); Kentucky (78 FR 14681, March 7, 2013); Louisiana (81 FR
53308, August 12, 2016); New York (81 FR 58849, August 26, 2016);
Ohio (81 FR 38957, June 15, 2016); Texas (81 FR 53284, August 12,
2016); and Wisconsin (81 FR 53309, August 12, 2016).
    \62\ In the 2013 disapproval action for Kentucky, EPA stated
that it had no mandatory duty to issue a FIP because of the D.C.
Circuit's holding in EME Homer City Generation, L.P. v. EPA, 696
F.3d 7 (D.C. Cir. 2012), that EPA cannot impose good neighbor FIPs
without first quantifying states' obligations. See 78 FR 14681. In
2014, the Supreme Court reversed the D.C. Circuit's holding. EPA v.
EME Homer City Generation, L.P., 572 U.S. 489, 509-10 (2014). In
light of the Supreme Court's decision, on review of our 2013
disapproval action for Kentucky in the Sixth Circuit, EPA requested,
and the court granted, a vacatur and remand of the portion of EPA's
final action that determined that a FIP obligation was not
triggered. See Order, Sierra Club v. EPA, No. 13-3546, ECF No. 74-1
(6th Cir. Mar. 13, 2015). On remand, EPA determined that its FIP
obligation as to Kentucky was triggered as of June 2, 2014, the date
of issuance of the Supreme Court's judgment. See 81 FR 74513.
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    As discussed in more detail above in section V.C.1, in issuing the
CSAPR Update, EPA did not determine that it had entirely addressed
EPA's outstanding CAA obligations to implement the good neighbor
provision with respect to the 2008 ozone NAAQS for 21 of 22 states
covered by that rule. Accordingly, the CSAPR Update did not fully
satisfy EPA's obligation under CAA section 110(c) to address the good
neighbor provision requirements for those states by approving SIPs,
issuing FIPs, or some combination of those two actions. EPA found that
the CSAPR Update FIPs fully addressed the good neighbor provision for
the 2008 ozone NAAQS only with respect to Tennessee.

b. Correction of EPA's Determination Regarding Kentucky's SIP Revision
and Its Impact on EPA's FIP Authority for Kentucky
    After promulgating the CSAPR Update and before promulgating the
CSAPR Close-Out, EPA approved a SIP from Kentucky resolving that
state's good neighbor obligations for the 2008 ozone NAAQS. 83 FR 33730
(July 17, 2018). The action was separate from the CSAPR Close-Out
because it was taken in response to a May 23, 2017 order from the U.S.
District Court for the Northern District of California requiring EPA to
take a final action fully addressing the good neighbor obligation for
the 2008 ozone NAAQS for Kentucky by June 30, 2018.\63\ EPA was
obligated to address the outstanding obligation by either approving a
SIP submitted by Kentucky or promulgating a FIP to address any
remaining obligation.\64\
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    \63\ See Order, Sierra Club v. Pruitt, No. 3:15-cv-04328 (N.D.
Cal. May 23, 2017).
    \64\ The obligation ultimately derives from EPA's 2013 action
disapproving Kentucky's SIP addressing the 2008 ozone NAAQS on the
basis that Kentucky relied on the CAIR program for the 2008 ozone
NAAQS good neighbor obligation. However, as previously discussed,
the trigger for the timing of the obligation was the 2014 issuance
of the Supreme Court's judgment in EPA v. EME Homer City Generation,
L.P., 572 U.S. 489 (2014). See supra note 62.
---------------------------------------------------------------------------

    On May 10, 2018, Kentucky submitted a final SIP to EPA, on which
the Agency finalized approval consistent with the court-ordered
deadline. See 83 FR 33730. The Kentucky SIP revision that EPA approved
relied on the reductions from the CSAPR Update FIP for Kentucky and
provided a technical analysis, including emission projections and air
quality modeling for 2023, showing that with the CSAPR Update level of
reductions, the receptors to which Kentucky was linked were attaining
and maintaining the 2008 ozone NAAQS in 2023. This allowed EPA to
conclude that Kentucky did not have any further obligation for the 2008
ozone NAAQS, and EPA approved the SIP revision. Thus, the approval
relied on the same rationale and technical analysis that was eventually
used for the other CSAPR Update FIP states in the CSAPR Close-Out.
EPA's approval stated:

``no additional emission reductions are necessary to address the
good neighbor provision for the 2008 ozone NAAQS beyond those
required by the Cross-State Air Pollution Rule Update (CSAPR Update)
federal implementation plan (FIP). Accordingly, EPA is approving
Kentucky's submission because it partially addresses the
requirements of the good neighbor provision for the 2008 ozone
NAAQS, and it resolves any obligation remaining under the good
neighbor provision after promulgation of the CSAPR Update FIP. The
approval of Kentucky's SIP submission and the CSAPR Update FIP,
together, fully address the requirements of the good neighbor
provision for the 2008 ozone NAAQS for Kentucky.''

83 FR 33730.
    Subsequent to EPA's approval of the Kentucky SIP, EPA issued the
CSAPR Close-Out, which concluded that, based on essentially the same
analysis used for Kentucky, none of the other 20 CSAPR Update states
had further good neighbor obligations to address the 2008 8-hour ozone
NAAQS. In the Fall of 2019, the D.C. Circuit issued the Wisconsin and
New York decisions remanding the CSAPR Update Rule and vacating the
CSAPR Close-Out (see Section V.C.1.d.).
    Kentucky's CSAPR Update FIP, which Kentucky relied on in its SIP
revision, is part of the CSAPR Update remand, and EPA must address it
in this action. Further, the D.C. Circuit's review of the CSAPR Close-
Out found fault with, and vacated, the same rationale that EPA had used
to approve Kentucky's SIP in June 2018.
    Therefore, in light of the remand of Kentucky's CSAPR Update FIP in
Wisconsin and vacatur of the CSAPR Close-Out in New York, EPA is
proposing to determine in this action that its approval of Kentucky's
SIP as fully resolving the state's 2008 ozone NAAQS good neighbor
obligations was in error. Section 110(k)(6) of the CAA (42 U.S.C.
7410(k)(6)) gives the Administrator authority, without any further
submission from a state, to revise certain prior actions, including
actions to approve SIPs, upon determining that those actions were in
error. The court's remand of the partial FIP for Kentucky in Wisconsin
and the vacatur of EPA's conclusions for states identically situated to
Kentucky in the CSAPR Close-Out means that EPA's approval of Kentucky's
SIP was in error. EPA is compelled on remand to act consistently with
the court's opinion and has reassessed Kentucky's good neighbor
obligations under the 2008 ozone NAAQS here. In doing so, EPA's
proposed analysis identifies an additional emission reduction
obligation for Kentucky. Therefore, EPA is proposing to correct the
error in Kentucky's SIP approval through this notice and comment
rulemaking, as allowed by the CAA when a prior SIP approval was in
error. The proposed error correction under CAA section 110(k)(6) would
revise the approval of Kentucky's SIP to a disapproval and rescind any
statements that the SIP submission fully addresses the requirements of
the good neighbor provision for the 2008 ozone NAAQS for Kentucky. The
Kentucky approval relied on the same analysis which the D.C. Circuit
determined to be unlawful in the CSAPR Close-Out, because it only
addressed conditions in 2023 without a showing of impossibility
regarding the next attainment date in 2021. Kentucky's remanded partial
FIP has been reassessed in this action, consistent with EPA's
methodology to address the other 20 states with remanded CSAPR Update
FIPs, and consistent with the D.C. Circuit's direction in Wisconsin and
New York. As discussed in greater detail in the sections that follow,
EPA proposes to determine that there are additional emission reductions
that are required for Kentucky to fully satisfy its good neighbor
obligation for the 2008 ozone NAAQS. The analysis on which EPA proposes
this conclusion for Kentucky is the same, regionally consistent
analytical framework on which the Agency proposes action for all of the
other CSAPR Update states with remanded FIPs. The Agency recognizes
that it is possible, based on updated information for the final rule--
as applied within a regionally consistent analytical framework--that
Kentucky (or other states for which EPA proposes revised FIPs in this
action) may be found to have no further interstate transport obligation
for the 2008 ozone NAAQS. If such a circumstance were to occur, EPA
anticipates that it would not finalize this proposed error correction
or may modify the error correction such that our July 2018 approval of
Kentucky's SIP may be affirmed.
c. CSAPR Update SIP Revisions That Do Not Affect FIP Authority
    Subsequent to the promulgation of the CSAPR Update, EPA approved
SIPs fully replacing the CSAPR Update FIPs for Alabama, Indiana, and
Missouri.\65\ In those SIP approvals and consistent with the
conclusions of the CSAPR Update, EPA found that the SIPs partially
satisfy Alabama's, Indiana's, and Missouri's good neighbor obligations
for the 2008 ozone NAAQS. Thus, EPA continues to have an obligation to
fully address good neighbor requirements for the 2008 ozone NAAQS with
respect to Alabama and Missouri, stemming from the July 13, 2015,
findings of failure to submit, and Indiana, due to the June 15, 2016,
disapproval of the state's good neighbor SIP. See 80 FR 39961; 81 FR
38957. Other states have also submitted 2008 ozone NAAQS good neighbor
SIPs or

SIPs to replace their CSAPR FIPs, some of which EPA has approved and
some of which still remain pending. Because these circumstances do not
affect the scope or basis for this rulemaking, these actions are not
described in detail in this section.
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    \65\ 82 FR 46674 (Oct. 6, 2017) (Alabama); 83 FR 64472 (Dec. 17,
2018) (Indiana); 84 FR 66316 (Dec. 4, 2019) (Missouri).
---------------------------------------------------------------------------

d. Summary of Authority for FIPs for This Action
    Table V.C-1 summarizes the statutory deadline for EPA to address
its FIP obligation under CAA section 110(c) and the event that
activated EPA's obligation for each of the 21 CSAPR Update states that
are the subject of this final action. For more information regarding
the actions triggering EPA's FIP obligation and EPA's action on SIPs
addressing the good neighbor provision for the 2008 ozone NAAQS, see
the memorandum, ``Proposed Action, Status of 110(a)(2)(D)(i)(I) SIPs
for the 2008 Ozone NAAQS,'' in the docket for this action.

    Table V.C-1--Actions That Activated EPA's Statutory FIP Deadlines
------------------------------------------------------------------------
                                     Type of action
                                    (Federal Register     Statutory FIP
             State                citation, publication      deadline
                                          date)              [dagger]
------------------------------------------------------------------------
Alabama........................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Arkansas.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Illinois.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Indiana........................  SIP disapproval (81 FR        7/15/2018
                                  38957, 6/15/2016).
Iowa...........................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Kansas.........................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Kentucky.......................  SIP disapproval (78 FR         6/2/2016
                                  14681, 3/7/2013).
Louisiana......................  SIP disapproval (81 FR        9/12/2018
                                  53308, 8/12/2016).
Maryland.......................  Finding of Failure to         8/19/2018
                                  Submit (81 FR 47040,
                                  7/20/2016).
Michigan.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Mississippi....................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Missouri.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
New Jersey.....................  Finding of Failure to         7/15/2018
                                  Submit (81 FR 38963,
                                  6/15/2016).
New York.......................  SIP disapproval (81 FR        9/26/2018
                                  58849, 8/26/2016).
Ohio...........................  SIP disapproval (81 FR        7/15/2018
                                  38957, 6/15/2016).
Oklahoma.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Pennsylvania...................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Texas..........................  SIP disapproval (81 FR        9/12/2018
                                  53284, 8/12/2016).
Virginia.......................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
West Virginia..................  Finding of Failure to         8/12/2017
                                  Submit (80 FR 39961,
                                  7/13/2015).
Wisconsin......................  Partial SIP                   9/12/2018
                                  disapproval as to
                                  prong 2 (81 FR 53309,
                                  8/12/2016).
------------------------------------------------------------------------
[dagger] For states other than Kentucky, the FIP deadline is two years
  from the effective date of the SIP disapproval or Finding of Failure
  to Submit, which generally trails the publication date by 30 days. For
  Kentucky, the FIP deadline is two years after the issuance of the
  Supreme Court's judgment in EPA v. EME Homer City Generation, L.P.,
  572 U.S. 489 (2014). See supra note 62.

3. The 4-Step Good Neighbor Framework
    The CSAPR and the subsequent CSAPR Update, building on EPA's prior
methodologies in the NOX SIP Call and CAIR, established a 4-
step process to address the requirements of the good neighbor
provision.\66\ In this proposed action to address the remand of the
CSAPR Update, EPA follows the same steps. These steps are: (1)
Identifying downwind receptors that are expected to have problems
attaining or maintaining the NAAQS; (2) determining which upwind states
contribute to these identified problems in amounts sufficient to
``link'' them to the downwind air quality problems; (3) for states
linked to downwind air quality problems, identifying upwind emissions
that significantly contribute to downwind nonattainment or interfere
with downwind maintenance of the NAAQS; and (4) for states that are
found to have emissions that significantly contribute to nonattainment
or interfere with maintenance of the NAAQS downwind, implementing the
necessary emissions reductions through enforceable measures.
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    \66\ See CSAPR, Final Rule, 76 FR 48208, 48248-48249 (Aug. 8,
2011); CSAPR Update, Final Rule, 81 FR 74504, 74517-74521 (Oct. 26,
2016).
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    Step 1--In the CSAPR, downwind air quality problems were assessed
using modeled future air quality concentrations for a year aligned with
attainment deadlines for the NAAQS considered in that rulemaking. The
assessment of future air quality conditions generally accounts for on-
the-books emission reductions and the most up-to-date forecast of
future emissions in the absence of the transport policy being evaluated
(i.e., base case conditions). The locations of downwind air quality
problems are identified as those with receptors that are projected to
be unable to attain (i.e., nonattainment receptor) or maintain (i.e.,
maintenance receptor) the NAAQS. In the CSAPR Update, EPA also
considered current monitored air quality data to further inform the
projected identification of downwind air quality problems. These same
considerations are included for this proposal. EPA is not reopening the
definition of nonattainment and maintenance receptors promulgated in
the CSAPR Update. Further details and application of Step 1 for this
proposal are described in section VI.
    Step 2--The CSAPR and the CSAPR Update used a screening threshold
of 1 percent of the NAAQS to identify upwind states that were
``linked'' to downwind air pollution problems. States with
contributions greater than or equal to the threshold for at least one
downwind problem receptor (i.e., nonattainment or maintenance receptor
identified in Step 1) were identified as needing further evaluation for
actions to address transport if their air quality was impacted.\67\ EPA
evaluated a given state's contribution based on the average relative
downwind impact calculated over multiple days.\68\ States whose air

quality impacts to all downwind problem receptors were below this
threshold did not require further evaluation for actions to address
transport--that is, these states were determined to not contribute to
downwind air quality problems and therefore had no emission reduction
obligations under the good neighbor provision. EPA has used this
threshold because a notable portion of the transport problem in the
eastern half of the United States can result from relatively small
contributions from a number of upwind states. Use of the 1 percent
threshold for the CSAPR is discussed in the preambles to the proposed
and final CSAPR rules. See 75 FR 45237 (Aug. 2, 2010); 76 FR 48238
(Aug. 8, 2011). The same metric is discussed in the CSAPR Update Rule.
See 81 FR 74538. While EPA has updated its air quality data for
determining contributions, the Agency is not reopening the use of the 1
percent threshold in this action to address the remand of the CSAPR
Update. Application of Step 2 for this proposal is described in section
VI.
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    \67\ For ozone the impacts would include those from (VOC) and
NOX, and from all sectors.
    \68\ The number of days used in calculating the average
contribution metric has historically been determined in a manner
that is generally consistent with EPA's recommendations for
projecting future year ozone design values. Our ozone attainment
demonstration modeling guidance at the time of CSAPR recommended
using all model-predicted days above the NAAQS to calculate future
year design values (https://www3.epa.gov/ttn/scram/guidance/guide/final-03-pm-rh-guidance.pdf). In 2014 EPA issued draft revised
guidance that changed the recommended number of days to the top-10
model predicted days (https://www3.epa.gov/ttn/scram/guidance/guide/Draft-O3-PM-RH-Modeling_Guidance-2014.pdf). For CSAPR Update we
transitioned to calculating design values based on this draft
revised approach. The revised modeling guidance was finalized in