EPA's proposal of this rule in the form of a federal implementation plan (FIP) is questionable and problematic. The Clean Air Act contemplates that states must be givena meaningful opportunity to develop state implementation plans (SIPs). EPA's proposal effectively bypasses the states, at least with respect to the initial phase of the program as the 2012 compliance deadline would make it virtually impossible for states to develop, submit and receive approval of SIPs in time to implement the program. Given the issues noted above with respect to the proposed 2012 and 2014 compliance deadlines as well as the assumptions used to establish the state budgets and unit allocations, EPA should withdraw this proposed FIP, address the technical issues noted and re-propose the rule (as an SNPR) in the form of a SIP Call that would appropriately allow the states to implement the requirements into their state implementation plans. [EPA-HQ-OAR-2009-0491-2715.1, p.15-16]
E.ON U.S.
EPA has precluded the states from playing their proper implementation role under the program.
Under the Clean Air Act (CAA) EPA is assigned the authority to set standards, while the states are generally assigned the role of implementing necessary reduction programs. By setting deadlines that do not allow enough time for the states to develop implementation plans and framing its program as a Federal Implementation Plan (FIP), EPA has effectively precluded the states from playing their proper role in implementing emissions reductions, particularly for the first phase of the program. Under EPA's proposed approach, state specific reduction determinations that are rightfully the responsibility of the states will be made by EPA. EPA's position that promulgation of FIPs "would in no way affect the right of states to submit . . . a SIP that replaced the federal requirements of the FIP with a SIP..." ignores the relevant provisions of the CAA and established precedent in implementing new requirements. The CAA allows the states the opportunity to develop SIPs and to submit them to EPA for review and approval before implementation of a new or revised NAAQS. Under the CAA, EPA may promulgate a FIP within two years after the Administrator finds that a state has failed to submit a SIP or has submitted a deficient SIP. In this instance, EPA has proposed an unlawful implementation process that precludes the states from assuming "primary responsibility" for air quality within their boundaries. See CAA, Section 101 (a)(3) and Section 107(a). [EPA-HQ-OAR-2009-0491-2797.1, pp.6-7]
Response:
As explained in this section of the RTC, in section IV of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs," EPA has a legal obligation to promulgate the FIPs in this final rule.
Further, in section VI of the preamble to the final rule, EPA explains the rationale behind the compliance dates in the final rule.  Section VII also explains the importance of aligning compliance dates with NAAQS attainment deadlines.
Organization: Duke Energy
Comment:
Duke Energy
Footnote 9: The D.C. Circuit's finding that the 2015 compliance deadline for the second phase of CAIR was unlawful because "EPA did not make any effort to harmonize CAIR's Phase Two deadline for upwind contributors to eliminate their significant contribution with the attainment deadlines for downwind areas," 531 F.3d at 912, does not mandate a 2012 compliance deadline. In the preamble to the proposed rule, EPA attempts to justify its proposed 2012 compliance deadline in part by asserting that it is coordinated with the attainment deadline for the 8-hour ozone NAAQS. In doing so, EPA focuses on the June 2013 maximum deadline for areas designated "serious" for 8-hour ozone, but acknowledges that "[areas] that have not yet attained the [8-hour ozone] standard have maximum attainment dates ranging from 2010 . . . to 2018." 75 Fed. Reg. at 45301/1. EPA also relies heavily on the statement in CAA section 172(a)(2)(A) that the attainment date for nonattainment areas "shall be the date by which attainment can be achieved as expeditiously as practicable" to justify the proposed 2012 and 2014 compliance deadlines. See, e.g., id. at 45300/2 ("EPA chose these dates to coordinate with the NAAQS attainment deadlines and to assure that reductions are made as expeditiously as practicable"); id. at 45300/3 ("EPA believes that [the 2014] deadline is as expeditious as practicable for the installation of the controls needed for compliance"); id. at 45301/2 (in addition to being coordinated with the 2013 maximum attainment deadline for serious ozone nonattainment areas, the 2012 deadline "is also consistent with the requirement that states attain the NAAQS as expeditiously as practicable"). This requirement, that attainment be achieved as expeditiously as practicable, must be read in the context of the remainder of the Act. It does not give EPA the authority to impose a FIP before allowing states the opportunity to develop and submit SIPs. Neither the CAA nor the court's opinion in North Carolina v. EPA requires EPA to accelerate the PTR's compliance dates to the extent proposed. [EPA-HQ-OAR-2009-0491-2689.1, p.10]
Footnote 10: According to LADCO, a fundamental assumption for this state-by-state analysis was a July 2012 start date for the planning, engineering, and construction of any new NOx or SO2 controls, reflecting a January 2011 promulgation date for the final Transport Rule and another 18 months for adoption of SIPs. See id. at 1, attachment at 4. Thus, LADCO properly recognized that a substantial amount of time would be necessary after promulgation of EPA's final rule for states to develop SIPs and submit them to EPA for approval. [EPA-HQ-OAR-2009-0491-2689.1, p.11]
Response:
As described in this section of the RTC, in section IV.C.2. of the preamble to the final rule and in the TSD entitled "Status of CAA 100(a)(2)(D)(i)(I) SIPs Final Rule TSD," EPA has the authority and legal obligation to promulgate all of the FIPs in this rule.
Further, Section VII of the preamble to the final rule contains a discussion of the need to align compliance dates with NAAQS attainment deadlines.
Organization: Dynegy, Inc.
Comment:
Dynegy, Inc.
Finally. proposing the Transport Rule as a Federal Implementation Plan (FIP) that would take effect in 2012 effectively undercuts the role of states under Clean Air Act Section 110(a)(I) to develop their own State Implementation Plans (SIP). EPA's position that a FIP is the only way to implement this program in order to meet the Agency's arbitrarily self-imposed January 1, 2012 starting date fails due to its circular logic. Moreover, under the Clean Air Act, the FIP process is to be employed only when a state is provided adequate notice to develop a SIP but fails to submit a SIP in a timely manner. EPA's desire to create a new program by 2012 is not an adequate reason to ignore Section 110(a)(1) and push aside state primacy under the Clean Air Act. Beginning implementation of the Transport Rule 30 to 36 months after promulgation, instead of January 1, 2012, would provide states with sufficient time to develop and submit SIPs in accordance with the division of state and federal authority under the Clean Air Act. [EPA-HQ-OAR-2009-0491-2698.1,p.3]
Response:
For the reasons explained in this section of the RTC, in section IV.C.2 of the preamble to the final rule, and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate the Federal Implementation Plans in this action.
Section 110(a)(1) of the Clean Air Act requires states to submit, within three years of promulgation or revision of a NAAQS, a plan which provides for implementation, maintenance, and enforcement of the standard.  The deadline for submission clearly runs from promulgation or revision of the NAAQS, not as the commenter suggests, from the date on which EPA gives some sort of additional notice to the state.  Section 110(a)(2) then lays out in greater detail what such plans must contain.  Among other things, they must include provisions sufficient to satisfy section 110(a)(2)(D)(i)(I).  These implementation plans are commonly referred to as infrastructure SIPs.  They are distinct and separate from the nonattainment SIPs that states with designated nonattainment areas are required to submit.
Organization: East Kentucky Power Cooperative
Comment:
East Kentucky Power Cooperative
EKPC Concerns Regarding Rule Implementation
Given EPA's proposal to immediately implement the reductions required through a Federal Implementation Plan ('FIP'), EKPC requests clarification regarding implementation of the rule and its oversight. EKPC requests clarification as to whether EPA or the state will be responsible for developing and managing allowed intrastate trading programs. EKPC further requests clarification regarding enforcement of the emissions reductions and how units with allowance deficits will be addressed. The chart below provides examples of the allowance deficits that EKPC will face if the rule is finalized: [EPA-HQ-OAR-2009-0491-2667.1, p.4; See p.4 of this comment summary for a chart providing examples of the allowance deficits that EKPC will face if the rule is finalized]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate each of the FIPs in this final rule.  EPA will implement all FIPs finalized in this action.  Section X of the preamble to the final rule explains the steps taken by EPA to make it easier for states to replace the FIPs, in whole or in part, with SIPs.  The allowance allocation system used in the final FIPs is also explained in the preamble to the final rule.
Organization: Edison Electric Institute (EEI)
Comment:
Edison Electric Institute (EEI)
EPA's Approach to the Transport Rules is at Variance with the CAA's Division of Federal and State Responsibilities
EPA states that the Transport Rule is designed to address interstate transport in relation to several existing NAAQS. EPA states that the upcoming revision to the ozone NAAQS, (scheduled for late October 2010), will require an additional rulemaking (i.e., Transport Rule II); this rule would be proposed in 2011 and finalized in mid-2012. [EPA-HQ-OAR-2009-0491-2697.1, pp.14-15]
A broader CAA question arises, however, regarding whether EPA should be constructing additional Transport Rules at all on the basis that it has proposed to do so. That is, EPA is proposing to determine significant contribution in Federal Implementation Plans (FIPs) prior to timeframes allowed for the development and submittal of SIPs. EEI member company opinions vary on the legality and value of the proposed FIP approach. Some companies would prefer earlier emission reductions. Other companies believe that EPA should not pursue this course, but instead follow CAA requirements and the Agency's historic implementation of the SIP/FIP process.  [EPA-HQ-OAR-2009-0491-2697.1, p.15]
EPA states that addressing transport through § 110(a)(2)(D)(i)(I) "before downwind state nonattainment SIPs are due . . . would aid downwind states in developing plans for attaining and maintaining the new NAAQS." This action, however, does not comport with the SIP planning process provided for in the CAA. CAA § 110(a)(2)(D) requires "each" implementation plan to contain adequate provisions to prohibit emissions that "contribute significantly to nonattainment . . or interfere with maintenance by, any other State . . ." By acting before states have the ability to develop and submit SIPs to EPA, the Agency is impermissibly attempting to define the actionable level of pollution transport without reference to whether states submit approvable SIPs and without reference to the independent analysis and action by states provided for in the CAA. This raises the question of whether EPA should provide guidance and tools to the states to assist in their SIP revisions as opposed to implementing proposed Transport Rule FIPs as in the Proposed Rule. [EPA-HQ-OAR-2009-0491-2697.1, p.15]
Response:
EPA is promulgating the FIPs in this rule because, for the reasons explained in this section of the RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs," it has a legal obligation to do so.  Section 110(c) of the Clean Air Act describes the circumstances under which EPA is obligated to promulgate a FIP.
 Organization: Edison Mission Energy (EME)
Comment:
Edison Mission Energy (EME)
EPA's aggressive emission reduction timelines are contrary to law. Title I of the Clean Air Act ("CAA") gives states, not EPA, primary responsibility for attaining air standards within their borders. Under Title I, the proper process for implementing measures to attain air quality standards, like the emission reduction contemplated by the Transport Rule, is for EPA to give the states an opportunity to propose a state implementation plan ("SIP") that achieves those goals. Title I does not permit EPA to skip the SIP development process and impose a federal implementation plan ("FIP") on the states first as it has done here, nor does the D.C. Circuit's opinion in North Carolina v. EPA remanding CAIR. By ignoring the cooperative federalism dictates of Title I, the Transport Rule fails to comply with the CAA. [EPA-HQ-OAR-2009-0491-2707.1, pp.2-3] [[These comments can also be found in Section VII.C.]]
EPA's Proposal To Impose Emission Reductions On States By Directly Implementing Federal Implementation Plans Is Contrary To The Cooperative Federalism Dictates Of Title I Of The CAA [EPA-HQ-OAR-2009-0491-2707.1, p.6]
While EME supports efforts to reduce emissions and has made enforceable commitment to aggressive and substantial emissions reductions, we are concerned that EPA's proposed approach does not comply with the CAA. Specifically, we believe that EPA's decision to forego SIP revisions for many states and proceed directly to the promulgation of FIPs is contrary to the cooperative federalism dictates of Title I and the case law interpreting the respective roles of EPA and the states in carrying out the CAA's requirements. [EPA-HQ-OAR-2009-0491-2707.1, pp.6-7]
Statutory Framework Underlying EPA's Authority to Promulgate Federal Implementation Plans [EPA-HQ-OAR-2009-0491-2707.1, p.7]
The CAA commits to the states "the primary responsibility for assuring air quality within [the state] . . . by submitting an implementation plan . . . which will specify the manner in which national primary and secondary ambient air quality standards will be achieved and maintained . .. ." However, EPA may determine that a state's SIP does not meet the requirements of the CAA. Section 110(k)(5) provides that if EPA finds that a SIP is "substantially inadequate to attain or maintain" the relevant NAAQS, to "mitigate adequately" interstate pollutant transport or otherwise fails to comply with requirements of the CAA, EPA "shall require the State to revise the plan as necessary to correct such inadequacies." The CAA requires that EPA notify the state of the inadequacies in the SIP and allows EPA to set "reasonable deadlines (not to exceed 18 months after the date of such notice)" to submit SIP revisions. [EPA-HQ-OAR-2009-0491-2707.1, p.7]
If and when a state submits a SIP revision, EPA must make a determination of completeness -- whether the revised SIP meets the minimum criteria established by EPA pursuant to § 110(k)(1)(A). The CAA directs EPA to make this determination within 60 days of receipt of the SIP revision, but the decision must be made no later than six months after receipt. If EPA makes no determination within six months after receipt, the SIP revision is deemed to meet the minimum requirements established under § 110(k)(1)(A) by operation of law. Following submission of a completed SIP revision, EPA must act within 12 months and either approve or disapprove the revision. (EPA may also partially approve or disapprove the submission, or 'conditionally' approve it.) [EPA-HQ-OAR-2009-0491-2707.1, p.7]
EPA Blurs the Issue of the Statutory Findings Required for Promulgating FIPs and is Mistaken in Its Conclusions [EPA-HQ-OAR-2009-0491-2707.1, p.8]
EPA acknowledges in the preamble to the Transport Rule that it cannot promulgate a FIP unless it finds that a state has failed to make a required SIP submission, that a SIP submission is incomplete, or it disapproves a SIP submission. EPA attempts to evade the issue by making generalized findings without specifying to which state they apply. Moreover, although EPA acknowledges that the findings required by § 110(c)(1) have not yet been made for some states, it never specifies which states fall into that category, obscuring the basis for the rule and undermining the public comment process. The Agency's approach is flatly contrary to the CAA. [EPA-HQ-OAR-2009-0491-2707.1, p.8]
EPA's Rationale Regarding 1997 Ozone and PM2.5 NAAQS is Flawed for States That Have EPA-Approved SIPs in Place [EPA-HQ-OAR-2009-0491-2707.1, p.8]
EPA notes in the Transport Rule's preamble that in 2005 it found certain states had failed to make submissions meeting the requirements of § 110(a)(2)(D)(i) regarding the interstate transport of pollution. EPA later promulgated CAIR and concluded that state SIP submissions satisfying CAIR would satisfy § 110(a)(2)(D)(i) requirements. Most states submitted SIP revisions complying with the CAIR requirements, and EPA approved most of those SIP revisions. Table 1 [See p.9 of this comment summary for Table 1 entitled, States with SIPs EPA Approved Under CAIR as Fully Complying with Section 110(d)(2)(a)(i)] details states included in CAIR that later submitted SIP revisions, whichEPA approved as fully complying with those states' obligations under § 110(d)(2)(a)(i). [EPA-HQ-OAR-2009-0491-2707.1, p.9]
The CAA is clear that it is EPA's action in disapproving a SIP (or finding it incomplete)that triggers the FIP process. EPA, however, inexplicably argues that the D.C. Circuit Court of Appeals' remand of CAIR in December 200822 somehow acts as a repeal of EPA's approvals of the CAIR-based SIP revisions and that the 2005 findings of failure to submit are now back into effect for the states in which EPA approved SIP revisions under CAIR.23 EPA states in the preamble that, in light of North Carolina v. EPA, "a CAIR SIP can no longer be considered an adequate section 110(a)(2)(D)(i)(I) SIP submission."24 The preamble does not provide any legal basis for this conclusion nor does EPA argue that it has made the required finding that a SIP is "substantially inadequate to attain or maintain" the relevant NAAQS or to "mitigate adequately" interstate pollutant transport under § 110(k)(5). The CAA does not support EPA's conclusion that it may implement a FIP for these states. [EPA-HQ-OAR-2009-0491-2707.1, p.10]
[See EPA-HQ-OAR-2009-0491-2707.1, pp.10-15 for additional comments pertaining to EPA's Rationale Regarding 1997 Ozone and PM2.5 NAAQS is Flawed for States That Have EPA-Approved SIPs in Place]
These cases  -  all of which address the interplay between state and federal authority under Title I  -  have all found that Congress intended to give the states great discretion in developing SIPs, so long as those SIPs meet the minimum requirements set forth in the CAA. By implementing FIPs without giving the states an opportunity to develop measures to meet the applicable air quality standards, the Transport Rule usurps the states' role, expressly provided for in the CAA and affirmed by the case law, as the entity Congress chose for deciding how air quality standards are to be met on a state-by-state basis. This is equally so with states currently operating under SIPs EPA approved as meeting § 110(a)(2)(D)(i) standards for 1997 8-hour ozone and PM2.5 NAAQS. [EPA-HQ-OAR-2009-0491-2707.1, p.15]
That said, EME submits that EPA should not be in the business of allocating Phase II allowances at all, but rather should leave that work to the states. As explained in Section IV.A, the regulatory approach in the Proposed Rule bypasses the authority Congress committed to the states -- "primary responsibility for assuring air quality within [the state] . . . by submitting an implementation plan" -- by directly implementing FIPs and making unit-level allocation determinations. In doing so, EPA has not only acted contrary to the cooperative federalism dictates of Title I of the CAA, as a practical matter it has established a regulatory structure that does not take advantage of state-level relationships and expertise in terms of understanding the challenges facing individual EGUs. As a result, EPA has sacrificed the potential efficiencies that could be achieved through state decision-making on unit-level allocations. [EPA-HQ-OAR-2009-0491-2707.1, p.34]
There are a large number of units covered by the Transport Rule, and presumably it was challenging for EPA to collect accurate individual information about all of the EGUs in 32different states. We understand from others, like UARG, that EPA has made inaccurate or ill found assumptions with respect to individual EGUs (e.g., making incorrect assumptions about control technology that will be online by 2012, and unrealistic assumptions about the control efficiency of existing equipment). Such errors are inevitable given the magnitude of the data EPA needed to collect. However, that such errors are inevitable does not mean they are unavoidable  -  or that they should not be corrected. [EPA-HQ-OAR-2009-0491-2707.1, p.34]
EPA could have avoided the massive data collection necessitated by its FIP approach if it had followed the dictates of Title I which required EPA to give the affected states an opportunity to implement the Transport Rule through the SIP process. Under such an approach the States, and not EPA, would have initial responsibility for allocating allowances. Moreover, allowing the States to handle allocations would have been more cost-effective because state regulators are uniquely situated to make the most effective and economical allocations of allowances to EGUs within their borders. This is because they have a detailed understanding about source mix in a state and circumstances surrounding individual EGUs, or groups of EGUs. They are best situated to make the trade-offs necessary to ensure that allowance allocations are fair, because the universe of affected sources in an individual state is much smaller then the total number of sources covered by the Rule. Moreover, if states are allowed to establish the allocations, they would likely select allocation approaches tailored to the specific circumstances in a given state, as opposed to the one-size-fits-all approach employed by EPA. [EPA-HQ-OAR-2009-0491-2707.1, p.34-35]
In contrast to the approach taken in the Transport Rule, EPA had previously given states the flexibility to determine unit-level NOx allocations under CAIR. Before that, EPA gave states the flexibility to determine unit-level NOx allocations under the NOx SIP call. These prior rulemakings confirmed the wisdom of giving the states a lead role in making unit-level allocation decisions. Nowhere does EPA explain why that same logic does not apply with equal force in the Transport Rule context. That said, to the extent EPA attempts to retain authority over the Phase II unit-level allocations, it should do so in a manner that does not penalize existing sources that have already obtained meaningful emissions reductions. [EPA-HQ-OAR-2009-0491-2707.1, p.35]
Response:
As explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.  As explained in that TSD, for each FIP finalized in this rule, EPA has made specific findings with respect to the state and pollutant at issue, or taken specific action to disapprove a specific 110(a)(2)(D)(i)(I) SIP from the state with respect to the relevant pollutant.   In addition, the statute explicitly recognizes EPA's authority to include emission trading programs in a FIP and to establish enforceable emission limitations in a FIP.  See  42 U.S.C. § 7602(y).  Any FIP that includes an economic incentive program based on marketable permits or allowances, must include a mechanism for distributing such allowances.  The grant of authority to EPA to include emission trading programs in a FIP thus necessarily includes the authority to distribute allowances for use in such programs.  In response to comments and information obtained by EPA, EPA has also made numerous revisions and corrections to the data used to develop the proposal.  The revised and corrected data was used to develop the final rule.  Finally, section X of the preamble explains the steps taken by EPA to make it easier for states to replace the FIPs in whole or in part.
Organization: EquiPower Resources Corp.
Comment:
EquiPower Resources Corp.
The Transport Rule has co-opted state authority and adopted a regulatory approach that is flawed and contrary to law. Under Title I of the Clean Air Act ("CAA"), states have the primary responsibility for attaining air quality standards through promulgation of State Implementation Plans ("SIPs"). Therefore, EPA does not have the authority to directly implement Federal Implementation Plans ("FIPs") as it proposes and is acting contrary to law. Setting aside EPA's lack of authority to implement FIPs, EPA's approach is also flawed in that it ignores significant distinctions in state regulatory regimes. EPA should allow states to promulgate SIPs to meet the air quality standards as Congress intended. [EPA-HQ-OAR-2009-0491-2704.1, p.2]
THE TRANSPORT RULE'S APPROACH OF BYPASSING STATE AUTHORITY TO PROMULGATE SIPS IS FLAWED AND CONTRARY TO LAW [EPA-HQ-OAR-2009-0491-2704.1, p.12]
EPA Does Not Have Authority to Directly Implement FIPs And Must First Give The Affected States An Opportunity To Propose SIPs [EPA-HQ-OAR-2009-0491-2704.1, p.12]
In sum, if EPA has made a finding that these states' SIPs are "substantially inadequate to attain or maintain" the relevant NAAQS, to "mitigate adequately" interstate pollutant transport or otherwise fail to comply with requirements of the CAA, the CAA requires that EPA notify the states of the inadequacies in the SIPs and allows EPA to set "reasonable deadlines" for states to submit SIP revisions.42 It does not allow EPA to immediately propose FIPs for those states. Thus, EquiPower recommends that EPA comply with the procedural requirements of the CAA and: (1) issue a SIP call; (2) allow states reasonable time to propose SIPs; and (3) then determine whether the SIPs meet the requirements of the CAA. Only after it takes those actions would the Agency be in a position, if necessary, to implement FIPs in the 32 states covered by the Transport Rule. [EPA-HQ-OAR-2009-0491-2704.1, pp.15-16; for additional comments pertaining to EPA Does Not Have Authority to Directly Implement FIPs And Must First Give The Affected States An Opportunity To Propose SIPs see pp.12-16]
EPA'S PROPOSAL HAS SIGNIFICANT DATA QUALITY FLAWS THAT RESULTED IN SIGNIFICANT ERRORS IN STATE BUDGET AND UNIT-LEVEL ALLOCATION CALCULATIONS WHICH MUST BE CORRECTED [EPA-HQ-OAR-2009-0491-2704.1, p.17]
If EPA Allowed States To Craft SIPs As Congress Intended, This Would Alleviate Data Quality Concerns [EPA-HQ-OAR-2009-0491-2704.1, p.17]
As explained in Section IV.A. above, Congress recognized the wisdom of allowing states to decide the best mechanisms for ensuring that air quality standards are met by committing to the states  -- "primary responsibility for assuring air quality within [the state] . . . by submitting an implementation plan." In bypassing this authority by directly implementing FIPs and dictating unit-level allocations, EPA has not only acted contrary to the cooperative federalism dictates of Title I of the CAA, it has also made important unit-level decisions without the benefit of the detailed data needed to achieve accuracy in its allocations. The result is that there are a number of errors in EPA's data and assumptions, as described in more detail below. While it is inevitable that errors would be made with EPA collecting individual information about all of the EGUs in 32 different states, these errors could have been (and still can be) avoided if states are afforded their proper role under the CAA. [EPA-HQ-OAR-2009-0491-2704.1, pp.17-18]
State regulators are in the best position to craft SIPs and decide unit-level allocations as they have a detailed understanding about the generation mix in their state, the status of controls on those EGUs, and the performance of individual EGUs or groups of EGUs. They are also best-situated to compile data and perform the necessary analysis because the universe of affected sources in an individual state is much smaller than the total number of sources covered by the Transport Rule. Additionally, in states with delegated air programs, individual EGUs are obligated to report data directly to them. More importantly, if states are allowed to establish the allocations, they would likely select allocation approaches tailored to the specific circumstances in a given state, as opposed to the one-size-fits-all approach employed by EPA under the Transport Rule's FIP. [EPA-HQ-OAR-2009-0491-2704.1, p.18]
In contrast to the approach taken in the Transport Rule, EPA had previously given states the flexibility to determine unit-level NOx allocations under CAIR.49 Before that, EPA gave states the flexibility to determine unit-level NOx allocations under the NOx SIP call.50 These prior rulemakings confirmed the wisdom of giving the states a lead role in making unit-level allocation decisions. No where does EPA explain why that same logic does not apply with equal force in the Transport Rule context. [EPA-HQ-OAR-2009-0491-2704.1, p.18]
EPA should follow the procedures established in the CAA and allow states to craft SIPs because this approach would take advantage of state-level relationships and expertise in understanding the challenges facing individual EGUs. Individual states are not likely to have the same errors in their underlying data, assumptions and analysis that EPA has made in the Transport Rule. If EPA were to proceed with a SIP-approach, as required by law, states would be able to correct the specific errors noted in the subsections that follow. [EPA-HQ-OAR-2009-0491-2704.1, p.18]
o EPA does not have authority to directly implement FIPs because it has not made the statutorily-required findings and EPA's approach is contrary to the cooperative federalism dictates of Title I of the CAA.
o Therefore, EPA should issue a SIP call and allow states reasonable time to propose SIPs. [EPA-HQ-OAR-2009-0491-3928[1].1, pp.2-3]
Response:
As explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.  In response to comments, EPA made numerous revisions and corrections to the data used to develop this final rule.  Finally, in section X of the preamble, EPA explains the steps taken to make it easier for States to either replace the FIPs in whole, or to take over allocation of allowances under the FIP.
Organization: Exelon
Comment:
Exelon
THE TRANSPORT RULE IS REQUIRED BY SECTION 110(A) OF THE CAA.
Expeditious implementation of the proposed Transport Rule is not only an economic imperative, it is required by law. The rule is long overdue. It has been almost twelveyears since EPA made a finding that interstate transport of ozone significantly contributed to nonattainment and interfered with maintenance in downwind states and five years since it made the finding with respect to PM2.5. The pollution reductions required by the Transport Rule, and its deadlines for making these reductions, represent the minimum required by Section 110(a)(2)(D)(i)(I) of the CAA, 42 U.S.C. § 7410(a)(2)(D)(i)(I) (hereafter, "Section 110(a)"). Section 110(a) requires that states adopt and implement State Implementation Plans ("SIPs") containing adequate provisions to prohibit sources from within the state from emitting amounts of air pollutants that will "contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard." The deadlines for eliminating significant contribution to nonattainment have long since passed, and neither the Transport Rule states, through their SIPs nor EPA in its past attempts to promulgate a Federal Implementation Plan ("FIP"), has succeeded in eliminating these emissions and their health impacts. EPA is therefore legally required to promulgate a FIP and to do so "as soon as practicable." [EPA-HQ-OAR-2009-0491-2666.1, pp.7-8]
EPA has found, and the modeling that has been conducted in connection with the development of the Transport Rule confirms, that air pollutants from EGUs within each of the states covered by the Transport Rule "contribute significantly to nonattainment in" and "interfere with maintenance by" other states with respect to the NAAQS for ozone, NOX and particulate matter. Accordingly, the EPA is required by Section 110(c)(1) of the CAA, 42 U.S.C. § 7410(c)(1), to promulgate a FIP that will satisfy the requirements of Section 110(a). 14 In the proposed Transport Rule, like the EPA's prior attempt to promulgate a FIP to satisfy the requirements of Section 110(a) in the CAIR, EPA has mandated a cap and trade program requiring reductions in emissions of the pollutants significantly contributing to nonattainment or interfering with maintenance. The use of the cap and trade mechanisms is expressly authorized by Section 110(a)(2)(A) of the CAA, 42 U.S.C. § 7410(a)(2)(A), and the CAA's definition of FIP, id.§ 7602(y). [EPA-HQ-OAR-2009-0491-2666.1, p.8]
In North Carolina, the court invalidated EPA's first attempt to satisfy the requirements of Section 110(a)(1) through CAIR. The court held that the regional cap and trade program established in CAIR did not satisfy the requirements of Section 110(a) because it failed to prohibit sources from within a state from contributing to nonattainment in other states. The court reasoned that EPA would not satisfy the statutory requirement "unless it is promulgating a rule that achieves something measureable toward the goal of prohibiting sources `within the State' from contributing to nonattainment or interfering with maintenance `in any other state.'"15 The court specified that a complete remedy to Section 110(a) problems requires the elimination of emissions from sources that contribute significantly to downwind nonattainment and must measure each state's "significant contribution" to downwind nonattainment. The proposed Transport Rule satisfies these requirements and, in order to meet its statutory duty, EPA must proceed to promulgate the proposed rule as expeditiously as feasible. [EPA-HQ-OAR-2009-0491-2666.1, pp.8-9]
THE TRANSPORT RULE APPROPRIATELY ADDRESSES ALL OF THE DEFICIENCIES IN CAIR IDENTIFIED BY THE COURT IN NORTH CAROLINA.
The proposed Transport Rule would create a cap and trade program that fully remedies all of the deficiencies that led the court to invalidate CAIR in North Carolina, where it held that: (1) it was unlawful for EPA to allow for regionwide caps on emissions without making state specific quantitative contribution determinations or imposing state specific emissions requirements; (2) CAIR lacked a fixed date for upwind states to eliminate their "significant contribution" to downwind nonattainment; (3) the NOX caps established in CAIR unlawfully considered fuel factors rather than air quality factors; and (4) the CAIR trading program unlawfully related each states' SO2 reductions to their CAA Title IV allowances. Each of these deficiencies is corrected in the proposed Transport Rule. [EPA-HQ-OAR-2009-0491-2666.1, p.9; for additional comments pertaining to THE TRANSPORT RULE APPROPRIATELY ADDRESSES ALL OF THE DEFICIENCIES IN CAIR IDENTIFIED BY THE COURT IN NORTH CAROLINA, see pp.9-10 of this comment summary]
BOTH EPA'S PROPOSED ALLOCATION METHODOLOGY AND THE ALTERNATIVES SUGGESTED HERE ARE AUTHORIZED UNDER THE CAA, BUT EXELON'S PROPOSED ALTERNATIVES WILL BETTER PROMOTE THE LEGISLATIVE INTENT.
Thus, the statute specifically authorizes promulgation of a FIP that includes economic incentives, such as marketable permits and auctions of emissions allowances.
Courts have traditionally balanced the requirement of notice to affected parties against the public's interest in having the law established firmly and expeditiously. In general, courts have not required republication of a proposed rule as long as the final rule is the "logical outgrowth" of the proposed rule. Notice is the primary consideration used by the courts to determine whether a proposed rule requires republication. Under both the Administrative Procedure Act ("APA") and the CAA, a court will evaluate whether the changes to a proposed rule are so significant that the final regulations are not the "logical outgrowth" of the proposed rule. However, it is within EPA's authority to promulgate a final rule that differs in some aspects from the proposed rule. The D.C. Circuit Court explained that Congress contemplated administrative flexibility when creating the APA and the CAA. The court further clarified that the notice and comment process does not begin anew each time a proposed rule is changed in response to public comments on a proposed rule. Only in instances where the final rule deviates too sharply from the proposed rule may republication be necessary to avoid depriving affected parties of notice and an opportunity to respond. [EPA-HQ-OAR-2009-0491-2666.1, pp.45-46]
None of the modifications proposed by Exelon even approach the level that might require republication. Indeed, Exelon's comments primarily address issues on which EPA expressly solicited comment in the preamble to the proposed rule, including the allowance allocation methodology, the compliance assurance provisions and the implementation schedule. There is no party whose rights could be adversely affected by the Transport Rule, modified as proposed by Exelon, who can claim that it did not have notice and an opportunity to be heard based upon the proposed Transport Rule and all of the supporting documentation that EPA has made available during the comment period. [EPA-HQ-OAR-2009-0491-2666.1, p.46]

14 That section requires that "[t]he Administrator shall promulgate a Federal implementation plan at any time 2 years after the Administrator  -  (A) finds . . . the [state implementation] plan or plan revision submitted by the State does not satisfy the minimum criteria" for SIPs.
Response:
EPA agrees with the commenter that it has a legal obligation to promulgate the FIPs in this action.  EPA also agrees that the Transport Rule address the deficiencies in CAIR identified by the court in the North Carolina decision.  The statute explicitly recognizes EPA's authority to include emission trading programs in a FIP and to establish enforceable emission limitations in a FIP.  Specifically, the term "Federal Implementation Plan" is defined in section 302 of the Clean Air Act as "a plan (or portion thereof) promulgated by the Administrator to fill all or a portion of a gap or otherwise correct all or a portion of an inadequacy in a State implementation plan, and which includes enforceable emission limitations or other control measures means or techniques (including economic incentives, such as marketable permits or auctions of emissions allowances) and provides for attainment of the relevant national ambient air quality standard."  42 U.S.C. § 7602  (emphasis added).  Any FIP that includes an economic incentive program based on marketable permits or allowances, must include a mechanism for distributing such allowances.  The grant of authority to EPA to include emission trading programs in a FIP thus necessarily includes the authority to distribute allowances for use in such programs.  To implement the emission trading programs established, EPA must select a methodology to be used for allocating allowances. For the reasons explained in section VII.D. of the preamble and in the TSD on allowance allocations, EPA believes the methodology selected for allocation of allowances under the FIP is within EPA's authority and consistent with the statutory mandate of section 110(a)(2)(D)(i)(I) as interpreted by the courts.
Organization: Florida Electric Power Coordinating Group, Inc. (FCG)
Comment:
Florida Electric Power Coordinating Group, Inc. (FCG)
Finally, EPA's unreasonable 2012 date does not allow states time to develop their own SIPs to address interstate transport issues, despite EPA's pledge that states are free to do so. This issue is discussed more fully below.  [EPA-HQ-OAR-2009-0491-2658.1, p.4] [[This comment can also be found in Section VII.C.]]
Accordingly, EPA should not include a compliance deadline of 2012, and take the time to develop a more accurate, complete and defensible rule. [EPA-HQ-OAR-2009-0491-2658.1, p.4]
Response:
Sections VI and VII of the preamble explain the rationale for the compliance dates used in the final rule.
Organization: Florida Municipal Electric Association (FMEA)
Comment:
Florida Municipal Electric Association (FMEA)
FMEA has serious concerns with the more aggressive implementation schedule and specific electric generating unit (EGU) reduction requirements proposed in the Clean Air Transport Rule (CATR), frequently called the Proposed Transport Rule. There appears to be no mandate by the U.S. District of Columbia Court of Appeals (Court) that would require the Proposed Transport Rule compliance schedule, which forces the Environmental Protection Agency (EPA) to impose Federal Implementation Plans (FIPs) on affected states, including Florida, rather than permitting states to develop State Implementation Plans (SIPs). States are best suited to understanding the state-specific circumstances and developing the lowest cost method of meeting requirements of the Transport Rule. [EPA-HQ-OAR-2009-0491-2731.1, p. 1]
EPA's proposed approach is seriously misguided. The decision to impose FIPs rather than allow states time to develop state implementation plans ("SIPs") to implement section 110(a)(2)(D)(i)(I) obligations rests on an unlawful view of the CAA and the federal-state cooperative relationship under the Act. The Proposed Transport Rule (PTR) compliance schedule is wholly unreasonable, particularly its imposition of a January 1, 2012 initial compliance deadline that will fall only a few months after EPA plans to take final action in this rulemaking. EPA has failed to propose a defensible methodology for determining statewide emission reduction obligations and has required additional emission reductions even where they have not been shown to be needed to meet the air quality objectives that EPA asserts. More importantly, APPA believes that the U.S. EPA in this proposed rule has arrogated to itself, in contravention of the law, the right and responsibility to determine how a state's emission reduction requirements must be accomplished, thereby assuming an exceptionally heavy burden to show that it has applied its unit allowance allocation methodology accurately and consistently. Review of the PTR's supporting information, however, reveals that EPA's approach on this score is anything but accurate and consistent. Moreover, in many respects, EPA's explanation of the elements of the PTR, and its information and calculations offered in support of the PTR, are opaque to the point of incomprehensibility. These points are explained further below. [EPA-HQ-OAR-2009-0491-2731.1, pp. 4-5]
For these reasons, APPA believes that the PTR is inadequate as a proposed rule to replace CAIR. EPA should develop and offer for comment a new proposal that corrects the serious flaws in the PTR. [EPA-HQ-OAR-2009-0491-2731.1, p. 5]
Response:
As explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule, and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate each of the FIPs in this final rule.
Organization: Gainesville Regional Utilities (GRU)
Comment:
Gainesville Regional Utilities (GRU)
In its proposed Clean Air Transport Rule (CATR) the Environmental Protection Agency (EPA) has abandoned important provisions of CAIR that appear to have little to do with the Court remand of the rule. GRU has serious concerns with the more aggressive implementation schedule and specific electric generating unit (EGU) reduction requirements discussed in the proposed CATR. There appears to be no mandate by the United States District of Columbia Court of Appeals that would require the proposed CATR compliance schedule, which forces the EPA to impose Federal Implementation Plans (FIPs) on affected states, including Florida, rather than permitting states to develop State Implementation Plans (SIPs). States are best suited to understanding their own specific circumstances and developing the lowest cost method of meeting the requirements of the proposed CATR. [EPA-HQ-OAR-2009-0491-2674.1, p.1]
Response:
As explained this section of the RTC, in section IV.C.2 the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs Final Rule TSD", EPA has the authority and legal obligation to promulgate all of the FIPs in this rule.
Further, sections VI and VII of the preamble to the final rule explain the rationale supporting EPA's decision to use the compliance deadlines in the final rule and the importance of aligning compliance dates with NAAQS attainment deadlines.
Organization: Golden Spread Electric Cooperative
Comment:
Golden Spread Electric Cooperative
As proposed, overall the emission reductions required under both the 2012 and 2014 compliance deadlines are overly optimistic and otherwise unachievable.
Most of the major problems with this proposal, or action, begin with EPA eliminating requirements under CAIR and "proposing FIPs to immediately implement the emission reduction requirements identified and quantified by EPA in this action." The unreasonable and unnecessary proposed compliance deadlines in the proposed CATR present further complications for EPA as the agency attempts to circumnavigate its responsibilities under the Clean Air Act (CAA) Section 110 that clearly requires states be given opportunities to implement Section 110 obligations through the SIP process. EPA has not explained why it has chosen to accelerate this proposed CAIR replacement or why it finds it necessary to do so based on the courts' decisions in North Carolina v. EPA, 513 F.3d 896, (DC Cir 2008). GSEC recommends that CAIR remain in effect until each state has been given the opportunity to meet the requirements set forth in the CAA Section 110 (a) based on the timetable(s) set forth in Section 110(a)(1).  [EPA-HQ-OAR-2009-0491-2808.1 p.4] [[This comment can also be found in Section VII.C.]]
Response:
For the reasons explained in this section of the RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs," EPA has a legal obligation to promulgate each of the FIPs in this final rule.
Organization: Holland Board of Public Works
Comment:
Holland Board of Public Works
A compliance deadline of 2012 does not leave much time after the anticipated final rule is promulgated in 2011 to determine a cost-effective, cost-stable method of operating our affected unit. This deadline also does not allow our state to develop a State Implementation Plan (SIP) that could be crafted to take in mitigating factors for small municipalities that the EPA's modeling program cannot. [EPA-HQ-OAR-2009-0491-2861.1,p.1] [[This comment is also in Section VII.C.]]
Response:
As explained in this section of the RTC, in section IV of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs," EPA has a legal obligation to promulgate the FIPs in this final rule.  Further, in section VI of the preamble to the final rule, EPA explains the rationale behind the compliance dates in the final rule.  Section VII also explains the importance of aligning compliance dates with NAAQS attainment deadlines.
Organization: Illinois Environmental Protection Agency
Comment:
Illinois Environmental Protection Agency
The Illinois EPA recommends that the final Transport Rule allow for a State Implementation Plan (SIP)-based regulatory process with the initial budgets established for 2014, and subsequent budgets in 2016 or 2017. In Illinois, affected sources would continue to comply with CAIR and Illinois' multi-pollutant standards until the Transport Rule reductions become effective.
This approach is consistent with key recommendations made in a September 2, 2009 letter to U.S. EPA Administrator Jackson from a collaborative of 17 states in the eastern U.S. Those recommendations were based on in-depth technical evaluations of feasible control options and timing of implementation and a good-faith effort by the states to reach a consensus on the overall approach to reducing interstate transport consistent with the decision of the DC Circuit Court. Using a later date than 2012 for the initial budgets under the Transport Rule FIP allows states sufficient time to develop SIPs and would allow emission sources sufficient time to plan and optimize control measures. Allowing states sufficient time to develop SIPs may ultimately prove to be a more timely approach for reducing interstate transport than will U.S. EPA's FIP approach, due to the likelihood of further litigation.  [EPA-HQ-OAR-2009-0491-2781.1 p.1]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.  Sections VI and VII of the preamble to the final rule explain EPA's decision to use the compliance dates in the final rule.  Among other things, EPA has an obligation to align the compliance dates with the attainment deadlines for the relevant NAAQS.
Organization: Indiana Cast Metals Association (INCMA)
Indiana Manufacturers Association, Inc. (IMA)
Georgia Department of Natural Resources, Air Protection Branch
Comment:
Georgia Department of Natural Resources, Air Protection Branch
[These comments were submitted as testimony at the Atlanta, Georgia public hearing on September 1, 2010.  See Docket Number EPA-HQ-OAR-0491-1939, p.94.]
Finally, EPA's approach to establishing federal implementation plans or FIPs in every state subject to this rule is unjustified and undermines the federal-state partnership the EPA administrator has said is important to successful implementation of the Clean Air Act.
Indiana Cast Metals Association (INCMA)
There is not enough time to develop a state implementation plan, forcing Indiana to rely on the federal implementation plan. This is counter to the spirit of the Clean Air Act and an unneeded and hasty short-circuit of an established regulatory process. [EPA-HQ-OAR-2009-0491-2178.1, p.1]
Indiana Manufacturers Association, Inc. (IMA)
Resons to delay include: Lack of time to develop a state implementation plan, forcing us to rely on the federal implementation plan. This is counter to the spirit of the Clean Air Act and an unneeded and hasty short-circuit of an established regulatory process. [EPA-HQ-OAR-2009-0491-1813.1, p. 1]
Response:
As explained in this section of the RTC, in section IV of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs," EPA has a legal obligation to promulgate the FIPs in this final rule.
Organization: International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO Boilermakers Union)
Comment:
International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers (AFL-CIO Boilermakers Union)
An additional shortcoming of the Transport Rule's exceedingly ambitious deadlines is that it short-circuits the traditional prerogative of states under the Clean Air Act to take primary responsibility for addressing air pollution through SIPs. [EPA-HQ-OAR-2009-0491-2672.1, p.3]
Second, the proposed 2012 deadline runs contrary to the 'cooperative federalism' policy of the CAA by depriving states of the opportunity to first come into compliance with Section 110 by amending their SIPs. [EPA-HQ-OAR-2009-0491-2672.1, pp.3-4] [[This comment can also be found in Section VII.C.]]
2. Circumventing State Prerogatives to Develop SIPs. The 2012 deadline is also inconsistent with the CAA policy of 'cooperative federalism' because it will result in the imposition of a Federal Implementation Plan (FIP) without giving the states adequate opportunity to revise their SIPs to comply with Section 110. As EPA acknowledged in the NOx SIP Call, 'Congress' clear preference throughout Title I is that states are to decide and plan how they will control their sources of air pollution, and the mechanism for imposing those controls at the state level is SIPs. In previous rulemakings implementing Section 110(a)(2)(D)(I)(i), EPA has effectuated Congress' 'clear preference' by providing adequate time for states to submit revised SIPs addressing interstate transport before proceeding to implement a FIP. In CAIR, for example, EPA gave states the maximum statutory period of eighteen months to submit compliant SIPs before implementing a FIP (and gave states additional lead time to comply with emission requirements). The proposed Transport Rule, however, would be promulgated just six to nine months before emission requirements take effect - a timeframe that essentially guarantees that most states will become subject to a FIP. This circumvention of state prerogatives is inappropriate, inconsistent with the 'clear preference' of Congress, and contrary to EPA's past practice. [EPA-HQ-OAR-2009-0491-2672.1, p.5]
In further support of our recommended deferral, we note that EPA has extended deadlines in the CAA in the past where timely compliance was rendered impossible due to delays in issuing agency guidance. For example, in Natural Resources Defense Council v. EPA, the D.C. Circuit determined that states should be allowed to submit enhanced vehicle inspection and maintenance standards after a deadline provided in the CAA, because delays in issuing necessary EPA guidance had prevented states from meeting the statutory deadline. Here, states were not in a position to comply with the interstate transport requirements of Section 110(a)(2)(D)(i) in the absence of EPA's technical and policy analysis determining which states are contribution to downwind attainment problems and how much each upwind state is required to abate. These issues entailed statutory analysis and technical judgment that only EPA could provide. [EPA-HQ-OAR-2009-0491-2672.1, p.10]
Accordingly, the states should not be considered bound by the original three-year deadline provided for meeting the interstate transport requirements of the 1997 PM2.5 and Ozone NAAQS, and the 2006 PM2.5 NAAQS. Instead, EPA should provide a reasonable period from the publication of the final Transport Rule for revision of SIPs to address interstate transport issues. [EPA-HQ-OAR-2009-0491-2672.1, p.10] [[These comments can also be found in Section VII.C.]]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.  The commenter has not cited to any provision that would give EPA authority to alter the deadlines established in the Clean Air Act.  In NRDC v. EPA, the D.C. Circuit extended certain deadlines where the deadlines were intended to run from the date on which EPA issued certain statutorily required guidance.  In this case, however, the deadlines run from the date of promulgation of the NAAQS.  Further the statute does not direct or require EPA to issue guidance with respect to the requirements of section 110(a)(2)(D)(i)(I) and EPA lacks authority to alter the statutory deadline.
Organization: JEA
Comment:
JEA
EPA did not allow sufficient participation by the state of Florida to promulgate a state-specific solution
Contrary to those previous interstate emission provisions of CAIR, the proposed Transport Rule would impose a FIP approximately six to nine months after promulgation - providing no meaningful opportunity to the states to first address their interstate emissions through the SIP process. As EPA acknowledges in the preamble to the Transport Rule, SIP revisions typically take on the order of three years to prepare and approximately six months to approve. Since the Transport Rule is likely to be finalized in mid-2011 and FIPs would take effect in 2012, there is almost no chance that states subject to the Transport Rule could revise and approve their SIPs in time to avoid the imposition of the FIP. EPA must respect the rights of individual states to develop and implement their own SIPs if they so choose. EPA does not have the authority to promulgate a FIP without first giving the states this opportunity. The ability to replace federal requirements at some point in the future does not satisfy the requirement that EPA allow states the opportunity to craft their own plans, at the outset of the program, to address interstate transport. [EPA-HQ-OAR-2009-0491-2713.1, pp.3-4]
EPA's Proposal, if Finalized, Would Violate N.C. v EPA, Constitute a Taking and Violate Due Process [EPA-HQ-OAR-2009-0491-2713.1, p.5]
Response:
For the reasons explained in this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD discussing the status of CAA 110(a)(2)(D)(i)(I) SIPs, EPA has a legal obligation to promulgate all of the FIPs in this final rule.  This rule was developed to address the issues raised by the court in North Carolina v. EPA and is consistent with that opinion in all respects.  In no way does the rule constitute a taking.  The Clean Air Act and EPA's regulations explicitly provide that no allowance created by the Acid Rain Program or the Clean Air Interstate Rule constitute a property right.  The value of allowances issued under both programs are affected by the numerous factors including market expectations, cost of controlling emissions, and subsequently issued rules.  EPA is taking no action in this rule to terminate or limit allowances issued under Title IV.  Further, EPA is taking no action to limit the use of CAIR allowances for use in the CAIR trading programs which continue in force through the 2011 control periods.  EPA's responses to comments regarding whether it should permit banked CAIR allowances to be used for compliance with the new Transport Rule trading programs is addressed in section IV.C.2 of the preamble to the final rule and this RTC.
 Organization: Kansas City Board of Public Utilities (BPU)
Comment:
Kansas City Board of Public Utilities (BPU)
THE RULE AS APPLIED TO KANSAS EXCEEDS EPA'S STATUTORY AUTHORITY
The CAA provides the authority for each state to have 'the primary responsibility for assuring air quality' within its borders. 42 U.S.C. § 7410(a). Individual states exercise this responsibility by adopting SIPs providing for the 'implementation, maintenance, and enforcement of' the NAAQS. 42 U.S.C. § 7410. See, e.g., Train v. Natural Resources Defense Council. 421 U.S. 60, 79 (1975) and Natural Resources Defense Council v. Browner, 57 F.3d 1122, 1123-24 (D.C. Cir. 1995)(explaining federal-state partnership under CAA). As the Rule recognizes, 'EPA has approved the 110(a)(2)(D)(i) submission [SIP] from the State of Kansas for the 1997 ozone and PM25 NAAQS.' 75 FR at 45342/1. To date Kansas has been expressly excluded from the NOx SIP Call and CAIR on the basis that Kansas does 'not significantly contribute to downwind nonattainment under the 1-hour or 8-hour ozone NAAQS, or interfere with maintenance under the 8-hour NAAQS.' NO, SIP Call at 63 Fed. Reg. 57398/3. Thus, Kansas has never been required to submit a revised SIP in response to the CAIR rule. 70 Fed. Reg. 25171/2 ('The final CAIR does not cover Kansas based on new analyses of its contribution to downwind PM25 nonattainment.'); see 72 Fed. Reg. 10608 (March 9, 2007) (order approving Kansas SIP on same basis). [EPA-HQ-OAR-2009-0491-2740.1, pp.8-9]
EPA may promulgate a FIP to replace the SIP in whole or in part only after finding that a SIP fails to meet minimum criteria established by regulation or by finding that a SIP is inadequate to attain or maintain the NAAQS at issue. Neither finding has been made with respect to the Kansas SIP. CAA § 7410(c)(l)(A) states:(c)(1) The Administrator shall promulgate a Federal implementation plan at anytime within 2 years after the Administrator-(A) finds that a State has failed to make a required submission or finds that the plan or plan revision submitted by the State does not satisfy the minimum criteria established under subsection (k)(1 )(A) of this section 2 [EPA-HQ-OAR-2009-0491-2740.1, p.9]
Alternatively, EPA may require a State to revise its currently effective SIP '[w]henever the Administrator finds that the applicable implementation plan for any area is substantially inadequate to attain or maintain the relevant national ambient air quality standard ... or to otherwise comply with any requirement of' the Clean Air Act. 42 U.S.C. § 7410(k)(5). However, such revision can occur only after the Administrator first publicly notifies the state of the SIP's inadequacies and sets a deadline (not to exceed 18 months) for the state to revise the SIP. Id. [EPA-HQ-OAR-2009-0491-2740.1, pp.9-10]
While the Rule states that the approved Kansas SIP is inadequate and must be replaced based on 'updated modeling done for this proposed rule,' 75 FR at 45342/1, this is not the requisite finding and does not follow the requisite procedure. EPA further states that it 'is proposing to finalize the FIP for Kansas for ozone only if the state fails to submit a complete and approvable SIP by the deadline established in any final SIP Call.' Id But in order to avoid subjecting Kansas EGUs to enforcement action and Kansas to adverse findings under any FIP that will result from the Rule, Kansas must immediately begin implementing the Rule and the EGUs subject to the Rule must commit many millions of dollars to attain compliance with the Kansas state air emission budget and individual EGU emissions allowances set forth in the Rule. In other words, the Rule's preemptive finding outside the requisite procedures does not give Kansas sufficient time to respond to a SIP disapproval and submit a revised SIP before the new emissions restrictions proposed in the Rule take effect. See 75 FR at 454286/3 ('a single SCR unit on average takes 21 months to install'). This presents the very real possibility that penalties could be assessed against the State of Kansas or any in-state EGU even though EPA's preemptive approach does not comport with the processes that Congress mandated for EPA SIP disapproval.[EPA-HQ-OAR-2009-0491-2740.1, p.10]
The CAA language allows EPA to replace a SIP only on the basis and after promulgation of final regulations establishing the applicable minimum criteria to be met by a SIP. Subsection 7410(c)(1)(A). EPA is in the process of promulgating, but has not yet finalized, the instant proposed rules. 75 FR at 45342/1. Consequently, the proposed rules do not yet constitute 'minimum criteria' with which Kansas' SIP must comply. [EPA-HQ-OAR-2009-0491-2740.1, p.10]
Quite the opposite, EPA has already determined under the currently effective minimum criteria that Kansas does 'not significantly contribute to downwind nonattainment under the 1-hour or 8-hour ozone NAAQS, or interfere with maintenance under the 8-hour NAAQS.' NOx SIP Call at 63 Fed. Reg. 57398/3; 72 Fed. Reg. 10608 (March 9, 2007)(same). Until the proposed rules are implemented as final regulations with the force of law, the already approved Kansas SIP will continue to meet the currently effective minimum criteria, and thus is not subject to replacement. [EPA-HQ-OAR-2009-0491-2740.1, p.11]
As the conditional language in the Rule acknowledges, the same result is reached by following the SIP Call process of § 7410(k)(5): 'That SIP Call, if finalized, would' find that Kansas' existing SIP is substantially inadequate and would 'establish a deadline for submission' of a new SIP. 75 FR at 45342/1 (emphasis added). The prerequisite for taking such action - a finalized SIP Call - has not yet happened, and therefore Kansas (and in-state EGU sources) cannot not yet be subjected to the proposed FIP as outlined in the Rule. By determining Kansas state air emission budgets and allowances for Kansas EGUs and including them in the Rule, EPA treats Kansas and its EGU sources as if they would be subject to and required to meet the 2012 emissions levels--this exceeds EPA's statutory authority. [EPA-HQ-OAR-2009-0491-2740.1, p.11]
For the reasons stated herein, BPU requests alternative modifications to the proposed Rule by:
1. eliminating Kansas from the list of States identified as significantly contributing to or interfering with maintenance of 8-hour ozone levels; [EPA-HQ-OAR-2009-0491-2740.1, p.23]
3. reversing its ruling that Kansas' current SIP is not in compliance with the currently effective minimum criteria for significant contribution and interference with maintenance;  [EPA-HQ-OAR-2009-0491-2740.1, p.23]

2 Section 7410(k)(1)(A) provides that '[w]ithin 9 months after November 15, 1990, the Administrator shall promulgate minimum criteria that any plan submission must meet before the Administrator is required to act on such submission under this subsection. The criteria shall be limited to the information necessary to enable the Administrator to determine whether the plan submission complies with the provisions of this chapter.'
Response:
For the reasons explained in this section of the RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," because EPA disapproved the SIP revision submitted by the state of Kansas to address the requirements of 110(a)(2)(D)(i)(I) with respect to 2006 PM2.5 NAAQS, EPA has a legal obligation to promulgate a FIP for the state of Kansas addressing the requirements of section 110(a)(2)(D)(i)(I) with respect to the 2006 PM2.5 NAAQS.  Further, the commenter mischaracterizes the requirements of subsection 7410(c)(1)(A).  This subsection does not, as the commenter asserts "allow EPA to replace a SIP only on the basis and after promulgation of final regulations establishing the applicable minimum criteria to be met by a SIP."  Section 110(c)(1) provides that the Administrator shall promulgate a Federal implementation plan at any time with two years after the Administrator takes one of three actions: (1) "finds that a State has failed to make a required submission"; (2) "finds that the plan or plan revision submitted by the State does not satisfy the minimum criteria established under subsection (k)(1)(A) of this section, or (3) "disapproves a State implementation plan submission in whole or in part."  42 U.S.C. § 7410(c)(1).
Section 110(k)(1)(A), which is entitled "completeness criteria" only discusses the issuance of criteria that a plan submission must meet "before the Administrator is required to act on such submission,"  in other words, criteria for determining whether a submission is complete, and not criteria for determining whether a submission is approvable.  Nothing in section 110(k)(1)(A) requires EPA to quantify the specific reductions a state must make for a particular 110(a)(2)(D)(i)(I) SIP submission to be approved as satisfying the requirements of that section.  EPA promulgated SIP completeness criteria in 1991.  See 56 FR 23826, 56 FR 42216.  EPA has no obligation to act on SIP submissions that do not satisfy the 110(k)(1)(A) completeness criteria.  A finding of completeness, however, is not a finding that the SIP submission satisfies any substantive statutory requirements. Section 110(k) explicitly provides that when EPA is obligated to act on a SIP submission it can approve, disapprove, or conditionally approve the submission.  EPA further notes that it can and has approved SIP submissions as meeting the requirements of section 110(a)(2)(D)(i)(I) of the Clean Air Act submitted by states prior to any determination by EPA quantifying or otherwise specifically identifying whether the state has emissions which significantly contribute to nonattainment or interfere with maintenance in another state.  See, e.g. 75 FR 33174, 75 FR 72688 (approving SIP submissions from New Mexico).  Finally, section 110(a)(1) explicitly requires the submission of 110(a) SIPs within 3 years of promulgation or revision of a NAAQS.  It does not suggest that the deadline for 110(a) SIP submissions for all NAAQS should be 3 years from the date EPA issues completeness criteria for plan submissions.
Organization: Kansas City Power and Light Company (KCP&L)
Comment:
Kansas City Power and Light Company (KCP&L)
5. Implementation of the Proposed Transport Rule pursuant to the schedule that EPA proposes would make it virtually impossible for states to implement SIPs prior to the first phase of the program. Issuing the PTR as a FIP would effectively bypass the states' rights to develop their own plans. This is contrary to the Act, in that the opportunity to replace federal requirements with a state plan at some time in the future does not satisfy the requirement that EPA allow the states an opportunity to develop their own plans at the outset of the program. [EPA-HQ-OAR-2009-0491-2709.1, p.4]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate each of the FIPs in this final rule.
Organization: Kentucky Division for Air Quality
Comment:
Kentucky Division for Air Quality
Authority must be maintained to allow for states to implement additional programs necessary to address attainment and maintenance issues within their borders. [EPA-HQ-OAR-2009-0491-2805.1, p.1] Given Adequate Time Prefer a SIP to a FIP
Pursuant to the proposed Transport Rule preamble Section III.A., Summary of Proposed Rule (75 FR 45214), the Division is concerned about the Federal Implementation Plan (FIP) proposal and the lack of specific State Implementation Plan guidance in the proposal. A FIP implies that a state has failed to meet its obligation and this is just not the case. The Kentucky CAIR SIP was approved in EPA in an October 4, 2007, Federal Register. The Division would prefer the opportunity to implement the proposed Transport Rule requirements through the SIP process; however, due to the lack of time this is not feasible. In addition, there is little specificity in this proposal on how states would develop an appropriate SIP to replace the Transport Rule FIP. EPA should provide additional SIP guidance to the states.  [EPA-HQ-OAR-2009-0491-2805.1, p.6]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.  This obligation arises from the Clean Air Act regardless of the reason for the deficiency in the state SIP.  Section X of the preamble to the final rule provides additional information regarding steps taken to make it easier for states to replace the FIPs, in whole or in part, with SIPs.  Finally, section 116 preserves the authority of states, in many circumstances, to promulgate emission limits at least as stringent as federal limits.
Organization: Lansing Board of Water & Light
Comment:
Lansing Board of Water & Light
States must be granted the opportunity to develop a SIP before proceeding to a FIP
The Clean Air Act established an order that has been followed roughly since its inception in 1970: Congress delegates to EPA the authority to set National Ambient Air Quality Standards (NAAQS), and requires states to develop State Implementation Plans (SIP) to attain those standards. As explained in Cases and Materials on Environmental Law, 7th Edition (Farber, et al)
This division of responsibility affords the states the flexibility to mete out the pain of emissions reductions in a way that is sensitive to local conditions. These conditions are not just political but also geographical and cultural. Because of the variability among states in terms of their industrial base, geography, climate, and tolerance for difference kinds of regulation, state governments are thought to be in the best position to determine how to meet federal standards. [EPA-HQ-OAR-2009-0491-2752.1,pp.7-8]
This is not just some subjective commentary found in a case law textbook, it's a discussion of the Clean Air Act as found in 42 U.S.C. § 7410. Specifically, subsection (a) establishes that states must develop and submit a SIP, "after reasonable notice and public hearings...within 3 years". While subsection (c) grants the EPA authority to develop a FIP, its only after the EPA "finds that a State has failed to make a required submission or finds that the plan or plan revision submitted by the State does not satisfy the minimum criteria". [EPA-HQ-OAR-2009-0491-2752.1,p.8]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate each of the FIPs in this final rule.
Organization: Large Public Power Council (LPPC)
Comment:
Large Public Power Council (LPPC)
Briefly stated, our principal recommendations to EPA are:
- Before imposing the proposed FIPs, allow states adequate time to prepare SIPs that are capable of addressing the interstate contributions of NOx and SO2 that are identified in the Transport Rule;[EPA-HQ-OAR-2009-0491-2667.1, p.2]
A. EPA Must Allow Sufficient Time for States to Prepare Adequate SIPs Before Proceeding to Implement FIPs Under the Transport Rule.
By almost immediately imposing Federal Implementation Plans (FIPs) before giving states an opportunity to craft SIPs that address interstate emissions of NOx and SO2, the proposed Transport Rule would usurp the responsibilities given to states under the Clean Air Act (CAA) and violate the "cooperative federalism" policy undergirding the statute. As EPA knows, Section 110 of the CAA gives states a default period of three years from the promulgation of a National Ambient Air Quality Standard (NAAQS) to submit a SIP that "provides for the implementation, maintenance, and enforcement" of the NAAQS, including "adequate provisions" to prohibit sources within the state from significantly contributing to nonattainment or interfering with the maintenance of attainment in any other state. 5 Only when EPA finds that a state has failed to submit an adequate SIP or disapproves a SIP may EPA impose a FIP that meets the requirements of the CAA. 6 [EPA-HQ-OAR-2009-0491-2667.1, p.3]
First, the proposal improperly circumvents the CAA-mandated, state-driven process for preparing and amending State Implementation Plans (SIPs). [EPA-HQ-OAR-2009-0491-2667.1, p.3]
LPPC believes that EPA has discretion under the CAA, and under the D.C. Circuit's opinion in North Carolina, to defer implementation of the Transport Rule for at least one to two years. Such a deferral would provide states adequate time to prepare SIPs that address the significant contributions and interference with maintenance identified in the Transport Rule.[EPA-HQ-OAR-2009-0491-2667.1, p.3] [[This comment can also be found in Section VII.C.]]
In decisions spanning over thirty years, the Federal courts of appeals have consistently recognized that this statutory scheme gives states primary responsibility for meeting air quality criteria under a policy of "cooperative federalism." 7 EPA itself acknowledged in the NOx SIP Call that "Congress' clear preference throughout Title I is that states are to decide and plan how they will control their sources of air pollution, and the mechanism for imposing those controls at the state level is SIPs." 8 Indeed, EPA relied on that principle in the NOx SIP Call when allowing states to first revise their SIPs to address interstate ozone transport before imposing direct federal emission controls under Section 126. 9 Similarly, EPA promulgated CAIR four years in advance of the starting date for emission reductions under the CAIR FIPs, a timeframe that gave each state ample notice as to the amount of interstate emissions it was required to abate under Section 110(a)(2)(D)(i)(I) and a fair opportunity to prepare a SIP achieving that reduction. 10 [EPA-HQ-OAR-2009-0491-2667.1, pp.3-4]
Unlike those previous interstate emission regulations, the proposed Transport Rule would impose a FIP approximately six to nine months after promulgation  -  providing no meaningful opportunity to the states to first address their interstate emissions through the SIP process. As EPA acknowledges in the preamble to the Transport Rule, SIP revisions typically take on the order of three years to prepare and approximately six months to approve. 11 Since EPA has stated that the Transport Rule is not planned to be finalized until mid-2011 and FIPs would take effect in 2012, there is almost no chance that states subject to the Transport Rule could revise and EPA could approve their SIPs in time to avoid the imposition of the FIP. 12 This result is inconsistent with past practice under the CAIR and the NOx SIP Call, and is also incompatible with EPA's recognition that it was the "clear preference" of Congress that states be given primary responsibility for crafting emission control requirements through the SIP process. LPPC notes that this concern has been expressed by state permitting authorities; the Director of the Ohio Environmental Protection Agency, for example, testified earlier this summer that that the "FIP first" approach of the Transport Rule is "not consistent with the spirit of cooperative federalism embedded in the essential structure of the Clean Air Act." 13  Similarly, the Chief of the Air Protection Branch of the Georgia Environmental Protection Division testified to EPA in September that "EPA's approach to establishing Federal Implementation Plans (FIPs) in every state is unjustified and undermines the Federal-State partnership the EPA administrator has said is important to successful implementation of the Clean Air Act." 14 [EPA-HQ-OAR-2009-0491-2667.1, p.4]
In defense of its legal authority to promulgate a FIP as part of the Transport Rule, EPA claims that many of the jurisdictions covered by the Transport Rule were already found in the CAIR to have deficient SIPs with respect to the 1997 NAAQS for ozone and PM2.5. For the 2006 NAAQS for PM2.5 (and for jurisdictions not covered by findings made in CAIR), EPA claims that the findings of inadequacy in the Transport Rule itself allow EPA to immediately proceed with implementation of a FIP. 15 EPA's reasoning overlooks the fact that the states have not submitted adequate SIPs because  -  unlike other aspects of a SIP  -  the CAA prohibition on significant interstate transport of emissions cannot be reasonably addressed in a SIP unless and until EPA undertakes the significant contribution and maintenance analysis that appears in the proposed Transport Rule. 16 Because EPA guidance is indispensable in order for states to comply with Section 110(a)(2)(D)(i)(I), the states must be afforded adequate time to craft responsive SIPs once EPA finally acts. [EPA-HQ-OAR-2009-0491-2667.1, p.5]
There are two reasons that states were powerless to act in the absence of EPA's latest analysis of significant contributions and interference with maintenance. First, the analysis of interstate emissions transport involves matters of technical judgment that fall to EPA to resolve. For the proposed Transport Rule, EPA substantially revised its methodology for determining which states contribute to downwind nonattainment and interference with maintenance  -  including the thresholds used to "screen out" states with minimal contributions to interstate transport of emissions, 17 the "relative contribution" technique used to project future ozone and PM2.5 concentrations, 18 and the modeling technique (source apportionment) used to determine the magnitude of upwind emissions on downwind air quality. 19 Once CAIR was remanded to EPA, no state was in a position to predict how EPA would exercise technical judgment on these issues. [EPA-HQ-OAR-2009-0491-2667.1, p.5]
Second, as EPA itself points out in the preamble to the Transport Rule, the prohibition against "significant contribution" to nonattainment and interference with maintenance in Section 110(a)(2)(D)(i)(I) requires a policy judgment as to how responsibility to abate emissions should be apportioned among downwind and upwind states. The preamble notes that regional air quality problems arise from a complex interaction of downwind and upwind sources. In some cases, a downwind jurisdiction has exhausted all cost-effective emission reduction opportunities and the burden of further air quality improvements must fall on the upwind state; conversely, it may be more reasonable for a downwind state to undertake additional measures in cases where an upwind state has already tightly controlled its emissions. Consequently, EPA notes that the interpretation of "significant contribution" and "interfere with maintenance" in the CAA "inherently involves a policy decision on how much emissions control responsibility should be assigned to upwind states, and how much responsibility should be left to downwind states." 20 Absent EPA's exercise of policy judgment on this issue, no state could determine how much it needs to revise its SIP. [EPA-HQ-OAR-2009-0491-2667.1, pp.5-6]
In order for the policy of "cooperative federalism" inherent in the CAA to have meaningful expression with respect to Section 110(a)(2)(D)(i)(I), states must be given adequate notice and opportunity to revise their SIPs after EPA has made the above technical and policy judgments. It is inconsistent with CAA requirements for EPA to deprive states of the opportunity to craft compliant SIPs when the agency has only now proposed definitive conclusions as to which states are responsible for abating upwind emissions, and how much each state needs to abate in order to address its significant contributions and interference with maintenance in downwind jurisdictions. For this reason, past decisions of the D.C. Circuit have held that EPA must "reset" CAA compliance deadlines where necessary EPA policy guidance is not released in a timely manner. In Natural Resources Defense Council v. EPA, for example, the D.C. Circuit determined that states should be allowed to submit enhanced vehicle inspection and maintenance standards after a deadline provided in the CAA, because delays in issuing necessary EPA guidance had prevented states from meeting the statutory deadline. 21 Here, it was impossible for any state to take meaningful action to craft a SIP that complies with Section 110(a)(2)(D)(i)(I) until EPA clarified the extent of significant contributions and interference with maintenance. Once EPA finalizes these determinations in the Transport Rule, it should therefore allow states at least eighteen months (the period provided in CAIR and the maximum period allowed under Section 110(k)(5)) to bring their SIPs into compliance before imposing a FIP. 22 This would necessitate deferring the proposed compliance deadlines for the Transport Rule by at least one year. [EPA-HQ-OAR-2009-0491-2667.1, pp.6-7]

7. See Virginia v. EPA, 108 F.3d 1397, 1409-10 (D.C. Cir. 1997) (affirming that states have primary responsibility for selecting the means of satisfying NAAQS under the CAA, and finding that EPA must defer to that prerogative when requiring SIPs to be revised to address interstate pollution); Bethlehem Steel v. Gorsuch, 742 F.2d 1028, 1036-37 (7th Cir. 1984) ("Congress has given the states the initiative and a broad responsibility regarding those means to achieve [NAAQS] through state implementation plans and timetables of compliance . . . . The Clean Air Act is an experiment in federalism, and the EPA may not run roughshod over the procedural prerogatives that the Act has reserved to the states."); Train v. Natural Resources Defense Council, 421 U.S. 60 (1975) (noting that states have primary responsibility for determining the means of meeting NAAQS under the CAA) [EPA-HQ-OAR-2009-0491-2667.1, p.4]
22. Indeed, the SIP Call is arguably the process intended by Congress in cases where EPA determines that an already-approved SIP is "substantially inadequate" because it fails to meet one of the requirements of the CAA. As EPA recently stated in a proposed SIP Call for Prevention of Significant Deterioration permitting of greenhouse gas sources, the CAA requires EPA to allow states to submit revised SIPs within a "reasonable deadline" before EPA can impose a FIP that addresses "substantial inadequacies" raised in a SIP Call. Action to Ensure Authority to Issue Permits under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP Call at 26- 27 (Aug. 12, 2010). [EPA-HQ-OAR-2009-0491-2667.1, p.6]
Response:
For the reasons explained in this section of the RTC, in section IV.C.2. of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs," EPA has a legal obligation to promulgate each FIP in this final rule.  The commenter does not identify any provision that would give EPA authority to alter the deadlines established in the statute or delay implementation of the Transport Rule as requested.  The commenter also incorrectly characterizes EPA's statements in the proposed Transport Rule regarding its authority to promulgate FIPs in this rule.  Further the statutory deadlines which the court found could be extended in the case cited by the commenter were deadlines that the court found were intended to run from the date on which EPA was required to issue guidance.  In contrast, in this case, the Act explicitly provides that the SIP submission deadline runs from the date of promulgation or revision of a NAAQS and the FIP clock starts when EPA finds that a state has failed to make a required SIP submission or EPA disapproves a SIP submission.
Finally, nothing in the Act requires EPA, where it has already made findings of failure to submit or disapproved SIP submissions, to promulgate a SIP Call to give the states another opportunity to promulgate a SIP before promulgating a FIP.  Section 110(a)(2)(D)(i)(I) SIP submittals are due 3 years after promulgation or revision of a NAAQS.  See 42 U.S.C. § 7410(a)(1).  Thus, 110(a)(2)(D)(i)(I) SIPs for the 1997 ozone and PM2.5 NAAQS were due in 2000 and 110(a)(2)(D)(i)(I) SIPs for the 2006 PM2.5 NAAQS were due in 2006.  While the statute gives EPA authority to prescribe a shorter period of time for states to make SIP submissions, it does not give EPA authority to extend the 3-year deadline established by statute.  See 42 U.S.C. § 7410(a)(1).  Moreover, there is no requirement that EPA promulgate a rule or issue guidance regarding the specific requirements of section 110(a)(2)(D)(i)(I) in advance of the SIP submittal deadline.  Thus, the cases cited by commenters for the proposition that EPA must establish a new SIP submittal deadline to give states time, following promulgation of the Transport Rule to submit SIP revisions, are inapposite.
Organization: Louisiana Chemical Association (LCA)
Comment:
Louisiana Chemical Association (LCA)
EPA's Attempt to Adopt FIP In Lieu of Allowing Louisiana to Revise It's SIPs Violates the Clean Air Act.
The Clean Air Act Mandates that EPA Allow Louisiana to Address Potential Transport from Louisiana Sources Through a SIP.
The Clean Air Act was intended by Congress to establish a model of cooperative federalism wherein states have the primary responsibility for air pollution control and EPA is to act only in the clear absence of state action. Under CAA § 107(a), 42 USC 7407(a), the Act provides that "[e]ach State shall have the primary responsibility for assuring air quality within the entire geographic area comprising such State by submitting an implementation plan for such State which will specify the manner in which national primary and secondary ambient air quality standards will be achieved and maintained..." Under CAA §110(a)(1), 42 USC 7410(a), the Act provides that "[e]ach State shall ... adopt and submit to the Administrator, within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard ... a plan which provides for implementation, maintenance, and enforcement of such primary standard in each air quality control region (or portion thereof) within such State." [EPA-HQ-OAR-2009-0491-3527.1, p. 37; see pp. 37-38 for further discussion of this issue.]
Louisiana Adopted and EPA Approved a SIP to Address the Good Neighbor Requirements of the CAA for the 1997 Ozone and PM2.5 Standards.
On September 27, 2006, LDEQ submitted a SIP revision to EPA adopting the CAIR SO2 Trading Program to address its "good neighbor" obligations under CAA Section 110(a)(2)(D) with respect to the potential impact of Louisiana emissions on downwind PM2.5 receptors in the State of Alabama. EPA approved this SIP revision on July 20, 2007 at 72 Fed.Reg. 39741.101 On July 12, 2007, LDEQ submitted a SIP revision to EPA adopting a SIP for a CAIR NOx Trading Program to address both the 1997 8-hour ozone standard and the 1997 annual PM2.5 standard. EPA approved this SIP revision on September 28, 2007 at 72 Fed. Reg. 55064.102 LDEQ submitted amendments to its NOx CAIR SIP on July 1, 2009, which are pending before EPA for decision.  [EPA-HQ-OAR-2009-0491-3527.1, p. 38]
EPA has indicated under the proposed Transport Rule and that a CAIR SIP submission is no longer considered an adequate Section 110(a)(2)(D)(i)(I) SIP submission. 75 Fed. Reg. 45,341. EPA stated: The promulgation of this rule does not affect the right of the states to submit, for review and approval, a SIP that replaces the federal requirements of the FIP with state requirements. To replace the FIP in a state, the state's SIP must provide adequate provisions to prohibit NOx and SO2 emissions that contribute significantly to nonattainment or interfere with maintenance in another state or states. Transport Rule FIP would be in place in each covered state until a state's SIP was submitted and approved by EPA to replace a FIP. Id. EPA taking comment on all aspects of how a state could replace the Transport Rule FIP with a SIP and on what the SIP approval criteria should be.[EPA-HQ-OAR-2009-0491-3527.1, pp. 38-39]
Thus, the proposed Transport Rule purports to be a finding of insufficiency of the state SIP to the extent it is based on CAIR. This finding of insufficiency will not be final until the Transport Rule is final. Despite this, EPA proposes to enact the FIP BEFORE giving the states the full CAA mandated ability to submit their own SIPs to address the 1997 8-hour ozone NAAQS. LCA believes this is contrary to the CAA and asserts that EPA cannot enact a FIP to address any alleged impacts of Louisiana sources on the 8-hour ozone NAAQS in Texas without giving Louisiana 18 months from the final date of the Transport Rule/finding of insufficiency of its existing CAIR SIP. Note that EPA found that there was no impact from Louisiana sources with respect to the old 1997 PM2.5 NAAQS.[EPA-HQ-OAR-2009-0491-3527.1, p. 39]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate each of the FIPs in this final rule, including the FIPs for the state of Louisiana.  EPA disagrees with the commenter's characterization of the proposed Transport Rule.  The original findings of failure to submit 110(a)(2)(D)(i)(I) SIPs were made in 2005.  As explained above, EPA's obligation to promulgate a FIP in response to those findings can only be discharged by issuing a FIP unless certain prior conditions, which have not been met here, have been met.
Organization: Louisiana Energy and Power Authority (LEPA)
Comment:
Louisiana Energy and Power Authority (LEPA)
In addition, the short time frame for compliance would make it impossible for states to develop, submit, and gain approval for SIPs before compliance with the FIP would be required. This violates the Clean Air Act's mandate that EPA allow Louisiana to address potential transport from Louisiana through a SIP. Section 107(a) of the Clean Air Act, 42 U.S.C. 2407(a) grants states a primary role in implementing the requirements of the law. The jurisprudence recognizes the states' primary role. See, e.g., Train v. Natural Resources Defense Council, Inc., 421 U.S. 60 (1975); Union Elec. Co. v. E.P.A., 427 U.S. 246 (1976). The EPA must allow Louisiana an adequate opportunity to adopt and submit a SIP. [EPA-HQ-OAR-2009-0491-2700.1, pp.18-19]
The state is in a better position to evaluate local electric power conditions and craft a remedy that would achieve the EPA's goals while protecting local interests. The EPA must and should extend the compliance deadline to permit Louisiana to develop a state implementation plan. [EPA-HQ-OAR-2009-0491-2700.1, p.19]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.
Organization: Mass Comment Campaign (221) (American Electric Power)
Comment:
Mass Comment Campaign (221) (American Electric Power)
It also doesn't allow the states enough time to develop and put in place their own regulatory plans. Given the improvements in air quality that are already occurring, I believe the EPA can delay this rule and achieve the same environmental benefit at a much lower cost for utility ratepayers. [EPA-HQ-OAR-2009-0491-3528_Mass, p.1]
Please delay the Transport Rule and modify it with longer deadlines that won't increase costs needlessly and that allow states enough time to put in place common sense regulations. [EPA-HQ-OAR-2009-0491-3528_Mass, p.1]
Response:
Sections VI and VII of the preamble to the final rule explain the rationale supporting EPA's decision to use the compliance deadlines in the final rule and the importance of aligning compliance dates with NAAQS attainment deadlines.  In addition, for the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.
Organization: Michigan Manufacturers Association (MMA)
Indiana Builders Association
Indiana Utility Shareholders Association
Four Flags Area Chamber of Commerce
Comment:
Four Flags Area Chamber of Commerce
There is not enough time to develop a state implementation plan, forcing us to rely on the federal implementation plan . This is counter to the spirit of the Clean Air Act and an unneeded and hasty short-circuit of an established regulatory process. [EPA-HQ-OAR-2009-0491-3807, p.1]
Whether intentional or not, you must understand that the proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes an historical state responsibility. This short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans. [EPA-HQ-OAR-2009-0491-3807, p.2]
Indiana Builders Association
The Indiana Builders Association strongly urges the EPA to delay implementation of the Transport Rule as it is proposed. [EPA-HQ-OAR-2009-0491-2871.1,p.1]
There is not enough time to develop a state implementation plan, forcing Indiana to rely on the federal implementation plan. This is counter to the spirit of the Clean Air Act and an unneeded and hasty short-circuit of an established regulatory process. [EPA-HQ-OAR-2009-0491-2871.1,p.1] [[These comments are also in Section VII.C.]]
Whether intentional or not, you must understand that the proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes an historical state responsibility. This short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans. [EPA-HQ-OAR-2009-0491-2871.1,p.2] [[These comments are also in Section VII.C.]]
We urge the EPA to delay the Transport Rule until there is a clear indication that comparable results cannot be achieved through CAIR. The EPA also should establish realistic deadlines that will not punish electricity consumers. [EPA-HQ-OAR-2009-0491-2871.1, p.3]
Indiana Utility Shareholders Association
Whether intentional or not, you must understand that the proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes an historical state responsibility. This short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans. [EPA-HQ-OAR-2009-0491-3845 p.2] [[These comments can also be found in Section VII.C.]]
Before the EPA imposes new reductions on sulfur dioxide and nitrogen oxide emissions, it should take into account the progress that the nation has made under CAIR. Though the Rule was remanded by the D.C. Circuit Court of Appeals in 2008, it remains in effect and generation companies have necessarily moved ahead with implementation of compliance measures. Before new rules are imposed on a still-weak economy, it makes more sense to determine what improvements in air quality have already occurred. To ignore the improvement the nation has made to date could impose needless substantial costs on my citizens with limited incremental environmental benefit. As we continue to climb out of recession, the last thing that government should do is create additional costs to the economy without substantiated reasons. [EPA-HQ-OAR-2009-0491-3845 p.3]
Michigan Manufacturers Association (MMA)
Whether intentional or not, the proposed Rule's deadlines virtually preclude the development of a state implementation plan. To formulate, post for comment, revise and finalize a credible implementation plan requires at least 12 months. The schedule EPA has proposed effectively federalizes a historical state responsibility. The Clean Air Act gives the states "authority to make the many sensitive technical and political choices that a pollution control regime demands." As the courts have upheld, it is the state that has primary responsibility for controlling pollution at the source. EPA's proposal short-circuits a long-standing compliance process for what appears to be little environmental benefit. The EPA should provide adequate time for affected states to create an implementation plan, post it for comment, review, and issue as final. Adequate time must then be given for power plant operators to develop plans to comply with the state rules and then implement those plans.
Michigan has used this process successfully to attain standard after standard. This is the long standing result of Michigan working to solve the problem in a way that makes both good scientific sense and sense for Michigan. [EPA-HQ-OAR-2009-0491-2762.1, p.2]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.  Further, sections VI and VII of the preamble to the final rule explain the rationale supporting EPA's decision to use the compliance deadlines in the final rule and the importance of aligning compliance dates with NAAQS attainment deadlines.  Also, EPA cannot leave CAIR in effect indefinitely.  It has an obligation pursuant to the D.C. Circuit opinions in the North Carolina case, to issue a rule to replace the CAIR.  This Transport Rule will replace the CAIR.  The requirements are necessary to ensure that the progress made under CAIR is sustained.
Organization: Midwest Ozone Group
Comment:
Midwest Ozone Group
There are many legal and technical defects in the transport rule proposed by the agency, including, but not limited to, concerns over matters such as (1) the overly aggressive schedule for implementation of the CATR which is insufficient for states to develop and submit SIPs, (2) the arbitrary and unreasonable nature of the 2012 and 2014 compliance deadlines, (3) unlawfully ignoring the primary role of states in developing state implementation plans (SIPs), (4) arbitrary rejection of the monitored-plus-modeled approach used to determine downwind nonattainment areas in the CAIR and the NOx SIP Call in favor of modeling only, (5) arbitrary classification of some states as "Group 1" states and other states as "Group 2" states, (6) unreasonably stringent variability limits and assurance provisions, and (7) numerous significant errors in allowance allocations. We defer to organizations such as the Utility Air Regulatory Group and others to address these and other concerns about the rule. [EPA-HQ-OAR-2009-0491-2809.1, p.2]
For all of the aforementioned reasons, MOG urges EPA not to finalize the proposed CATR rule and to reexamine the need for a new transport rule based on sound science. [EPA-HQ-OAR-2009-0491-2809.1, p.14]
Response:
EPA explains the rationale for the compliance deadlines used in the final rule in sections VI and VII of the preamble to this final rule and in this RTC.  We explain the approach used to identify downwind nonattainment and maintenance areas in sections V.C. of the preamble and in this RTC.  The development of state specific emission reduction requirements and the variability limits and assurance provisions is discussed in section VI of the preamble and in this RTC.  And the allowance allocation methodology is discussed in section VII.D. of the preamble.  In addition, for the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.
Organization: Missouri Public Utilities Alliance (MPUA)
Comment:
Missouri Public Utilities Alliance (MPUA)
6. EPA appears to be taking upon itself the authority to decide which local utilities will be winners and losers in the implementation of this rule by specifically identifying which units should be shut down.  For instance EPA has identified specific units owned by one of our member utilities, Independence Power and Light for zero emission allowances for a unit that is preparing to go back into service after significant refurbishment.  The legal role of EPA is to set the air pollution goals and allow the states working with local stakeholders to develop compliance plans.  The marketplace, not a governmental agency, should be making the decision based on business necessity to close down a unit. [EPA-HQ-OAR-2009-0491-2785.1, p.3]
Response:
EPA is not, contrary to the commenter's assertion, taking action to decide which utility units should be shut down.  As explained in response to other comments in this section, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.  The statute explicitly recognizes EPA's authority to include emission trading programs in a FIP and to establish enforceable emission limitations in a FIP.  Specifically, the term "Federal Implementation Plan" is defined in section 302 of the Clean Air Act as "a plan (or portion thereof) promulgated by the Administrator to fill all or a portion of a gap or otherwise correct all or a portion of an inadequacy in a State implementation plan, and which includes enforceable emission limitations or other control measures, means or techniques (including economic incentives, such as marketable permits or auctions of emissions allowances) and provides for attainment of the relevant national ambient air quality standard."  42 U.S.C. § 7602  (emphasis added).  Any FIP that includes an economic incentive program based on marketable permits or allowances must include a mechanism for distributing such allowances.  The grant of authority to EPA to include emission trading programs in a FIP thus necessarily includes the authority to distribute allowances for use in such programs.  To implement the emission trading programs established, EPA must select a methodology to be used for allocating allowances.  EPA must determine the units which will receive allocations and how much each will receive.  Such allocation determinations affect the initial distribution of allowances but do not restrict unit owners or operators in any way from determining each unit's operation (and thus emissions) under market-based programs such as those in the Transport Rule FIPs.  The Transport Rule imposes no emission limitation on any specific unit's level of emissions aside from the requirement that sufficient allowances are held at the end of the compliance period to cover the emissions from that unit.  These allowances may be acquired either via initial allocations or they may be acquired subsequently in the marketplace.  Therefore, there is no basis for the commenter's argument that initial allocations determine a unit's ability to operate under the Transport Rule.  Indeed, as the commenter appears to prefer, the market-based programs under the Transport Rule will allow the marketplace to inform unit-level operational decisions made by unit owners and operators, who may choose their preferred operational strategies factoring in the market price of the allowances necessary to cover emissions under various operational scenarios.  Even if a unit was initially allocated a certain amount of allowances, the Transport Rule does not require those allowances to be used for that particular unit, and that unit's owner or operator can determine whether to use those allowances or sell them at their market value.  A decision to give a unit allowances would not require that unit to run.  Similarly, a decision that a particular unit should not receive an allocation of allowances would not require that the unit be shut down.  EPA believes the methodology selected for allocation of allowances under the FIP is within EPA's authority and consistent with the statutory mandate of section 110(a)(2)(D)(i)(I) as interpreted by the courts.  Furthermore, EPA believes that based on prior experience with interstate trading programs, the Transport Rule programs will offer robust allowance markets allowing unit owners and operators to determine a unit-level cost-effective emission reduction strategy that is easily compatible (via the programs' allowance trading flexibilities) with whatever initial allocations any given unit receives under the final rule's allowance allocation methodology.
Organization: National Environmental Development Association
Comment:
National Environmental Development Association
2. EPA's Proposed CATR Rulemaking Raises Broad Administrative and Clean Air Act Procedural Concerns.
NEDA/CAP's members are concerned about the proposed CATR rulemaking and whether EPA has followed or will follow fair procedures that meet Section 307(d) of the Clean Air Act and the Administrative Procedures Act. 42 U.S.C.§7607(d), 5 U.S.C. §§551 et seq.. First EPA has presented the proposal in such a multi-part fashion (Federal Register NPRM, supplemental information via a NODA, plus MANY pieces and parts of the rulemaking background, including critical model runs that can only be found via extensive internet searches and docket searches) that many of us have concluded that it is impossible to discern whether our review of the proposal has been comprehensive. The law requires that the public have notice of and the opportunity to comment on rulemaking proposal and provide "the factual data on which the proposed rule is based" and the methodology used in obtaining the data and in analyzing the data." Id., at §§307(d)(3)(B),(C). However, none have us believe that we have been able to complete a comprehensive review of the docket, in the time allotted. EPA has not only made several docket dumps of information following the date of proposal of the CATR rule, but two weeks ago, the Agency issued a Notice of Data Availability, extending the comment period exclusively for review of that data to October 15, 2010. 75 Fed. Reg. 53613 (Sept. 1, 2010). While we are sympathetic to the constraints under which EPA has been placed by a consent decree and court order with a schedule for reissuance of this rulemaking, NEDA/CAP believes that the Agency should provide an additional comment period for review of its proposal in order to be able to defend this rulemaking. We submit that EPA is obligated by law to provide a more orderly production of all the information on which it relies for its proposal and the opportunity for the public to review that data.  [EPA-HQ-OAR-2009-0491-2744.1 p.2]
For these reasons, NEDA/CAP asks EPA to confirm that if and when it includes industrial sources of these pollutants in proposed FIPs, affected industrial sources will be provided an opportunity to comment on the proposed modeling and methodology on which such future proposal is based. Not only would it be grossly unfair for EPA to claim that industries that might be affected in the future would be precluded from having the opportunity to critique the technical basis for this rulemaking for utilities, but we would maintain that it would be a violation of the Clean Air Act and otherwise unlawful for EPA to fail to provide procedural opportunities to comment on these issues in a future rulemaking that directly affects them. [EPA-HQ-OAR-2009-0491-2744.1 p.3]
Response:
As explained in the preamble to the final rule, EPA has complied with the requirements of 307(d) including the applicable notice and comment requirements in that section.  EPA also made significant efforts to reach out to stakeholders both prior to and during the comment period on the proposal.  EPA placed all information and documents on which the proposed rule was based in the docket for this rulemaking prior to publication of the proposal.  Additional data and information was provided through three subsequent Notices of Data Availability.  All data and information related to the NODAs was placed in the docket prior to publication of the NODAs.  In addition to being available in the docket at www.regulations.gov, EPA placed many of the key documents on its website to make it easier for stakeholders to identify and find key documents.  EPA staff have been available to answer, and have answered numerous questions about the rulemaking.  EPA will also comply with all procedural requirements applicable to any future rulemakings relating to interstate transport issues.
Organization: National Mining Association (NMA)
Comment:
National Mining Association (NMA)
EPA's 2012 and 2014 Deadlines Result in the Usurpation of State Authority under the Clean Air Act
The federalist nature of the Clean Air Act is well-established. EPA sets standards, and states implement those standards through SIPs. Only if states do not submit an adequate SIP may EPA step in and impose a Federal Implementation Plan (FIP). [EPA-HQ-OAR-2009-0491-2868.1,p.17]
Under Section 110(c)(1), EPA may impose a FIP within two years after EPA (a) finds that a state has failed to make a required SIP submission or finds that the SIP does not satisfy the minimum criteria under section 110 or (b) disapproves a SIP, unless the State corrects the deficiency. Under Section 110(k)(5), if EPA finds that a SIP fails "to mitigate adequately pollution transport" as may be found by EPA under Sections 176A or 184, "[t]he Administrator shall require the State to revise the plan as necessary to correct such inadequacies." Further, "[t]he Administrator shall notify the State of the inadequacies, and may establish reasonable deadlines ... for the submission of such plan revisions." [EPA-HQ-OAR-2009-0491-2868.1,p.17]
Thus, where as here, EPA has made findings that states are significantly contributing to the interstate transport of pollution, the required procedure is for EPA to so notify the states and to give them an adequate opportunity to submit a SIP revision. If those SIP submissions are inadequate, EPA may impose a FIP. Here, EPA has improperly reversed the procedure and skipped directly to imposition of a FIP. [EPA-HQ-OAR-2009-0491-2868.1, p.18]
EPA's reason for doing so, again, is its rush to begin phase one as of 2012. But EPA's policy interest does not permit it to ignore plain statutory language. Moreover, EPA's statement that imposition of FIPs "would in no way affect the rights of states to submit ... a SIP that replaced the federal requirements of the FIP with a state requirement"42 has it exactly backwards. The opportunity for a SIP precedes the FIP; it doesn't follow it. [EPA-HQ-OAR-2009-0491-2868.1,p.18]
EPA seeks to justify immediate imposition of FIPs on the ground that EPA, as a part of CAIR, found that states were significantly contributing to downwind NAAQS nonattainment and therefore already had been given more than the required amount of time to submit conforming SIPs. But, as EPA recognizes, the states fully complied with the requirements that EPA imposed. As EPA states, following EPA's interstate transport findings, EPA in CAIR called for states to cure their SIP deficiencies by submitting SIP revisions that complied with the standards set forth in CAIR. The states did so, and EPA approved their SIPs. The only reason why states could be said to be in violation of CAA interstate transport requirements is because CAIR was overturned in Court. But that was not the state's fault; it was EPA's. Case law supports a "resetting of the deadline clock" where, as here, states cannot meet their statutory obligations because of EPA's failure to carry out its CAA responsibilities. NRDC v. EPA, 22 F.3d 1125 (D.C. Cir. 1994). [EPA-HQ-OAR-2009-0491-2868.1,p.18]
In short, EPA's imposition of FIPs is improper. EPA should extend the time for compliance with its phase one and two requirements and allow states adequate time to formulate conforming SIPs. [EPA-HQ-OAR-2009-0491-2868.1,p.18]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate each of the FIPs in this final rule.  Sections VI and VII of the preamble to the final rule explain EPA's decision to use the compliance dates in the final rule.  Among other things, EPA has an obligation to align the compliance dates with the attainment deadlines for the relevant NAAQS.
Organization: National Rural Electric Cooperative Association (NRECA)
Michigan Municipal Electric Association (MMEA)
Nelson Industrial Steam Company (NISCO)
Luminant
Comment:
Luminant
:: States will not be able to adequately prepare a State Implementation Plan for interstate transport based on the new timeline in the proposed rule, thus forcing them into accepting the Federal Implementation Plan program. That is an inappropriate outcome that usurps the states' role under the CAA. [EPA-HQ-OAR-2009-0491-2729.1, p.2]
V. The Timeline for Implementing CATR is Too Short for Any State.
EPA proposed to finalize the CATR Federal Implementation Plan (FIP) in mid-2011 with the program beginning in 2012. This schedule does not give states the opportunity to develop their own State Implementation Plan (SIP) for addressing significant contributions to nonattainment areas in downwind states. Luminant believes that EPA should give states the time to prepare SIP rules or rules to adopt the FIP by reference. [EPA-HQ-OAR-2009-0491-2729.1, p.7]
Michigan Municipal Electric Association (MMEA)
6.) Conform to the mandate and structure of the Clean Air Act by allowing meaningful time and opportunity for States to develop State Implementation Plans  -  and State administered unit-specific allowance allocation programs  -  to implement the Transport Rule. [EPA-HQ-OAR-2009-0491-2828.1, p.16]
National Rural Electric Cooperative Association (NRECA)
The Clean Air Act (CAA) mandates that states be given a reasonable opportunity to develop their own plans through the state implementation plan (SIP) process to address interstate transport. The proposal fails to do this and is, therefore, unlawful. [EPA-HQ-OAR-2009-0491-2723.1, p.1]
Nelson Industrial Steam Company (NISCO)
II. EPA Should Allow Louisiana Sufficient Time to Submit a SIP in Lieu of the Proposed FIP
The Clean Air Act was intended by Congress to establish a model of cooperative federalism wherein states have the primary responsibility for air pollution control and EPA is to act only in the clear absence of state action. This is not one of those cases. Louisiana has acted to prevent interstate transport of emissions that could affect attainment of NAAQS in downwind states and should be given a reasonable opportunity to submit any necessary SIP improvements. EPA's preemptive action of proposing this SIP does not provide Louisiana with the deference accorded to states under the Clean Air Act. [EPA-HQ-OAR-2009-0491-2813.1, pp.8-9]
[For additional comments pertaining to this topic, see pages 9-11 of this comment.]
Response:
As explained in this section of the RTC, in section IV of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)(i)(I) SIPs," EPA has a legal obligation to promulgate the FIPs in this final rule.  Further, in section VI of the preamble to the final rule, EPA explains the rationale behind the compliance dates in the final rule.  Section VII also explains the importance of aligning compliance dates with NAAQS attainment deadlines.
Organization: NextEra Energy, Inc.
Comment:
NextEra Energy, Inc.
The use of a Federal Implementation Plans (FIP) to implement the program is authorized under the Clean Air Act. While states have authority to, and may, submit State Implementation Plans (SIPs) to replace the FIP, we agree with EPA's assertion that due to time concerns, states are unlikely to be able to complete these plans before implementation of the Transport Rule on January 1, 2012. [EPA-HQ-OAR-2009-0491-2718.1, p.2]
Response:
EPA agrees with the commenter that EPA has authority, under the Clean Air Act, to promulgate the FIPs included in this final action.
Organization: North Carolina Department of Environment and Natural Resources
Comment:
North Carolina Department of Environment and Natural Resources
Further, NCDAQ appreciates EPA's attempts to expedite implementation of the FTR by proposing a Federal Implementation Plan (FlP), Due to the long delay since some of the interstate impacts to be addressed by the FIP were first identified, the needs of the impacted States are now uniquely pressing, But EPA must also recognize that under the Clean Air Act Congress has invested primary responsibility for air quality control with the States - both upwind and downwind States. Therefore, EPA should take care that the upwind States are permitted to exercise their right to tailor their own programs and should appropriate adequate resources to working constructively and expeditiously with States on their SIP submittals. While a FIP approach is satisfactory to NCDAQ for this FTR, it should not be construed as support for using this approach for the second FTR aimed at addressing the pending revision to the 8-hour ozone standard. NCDAQ suggests the simplest and most defensible way to effectuate the mandate in §110(a)(2)(D)(i)(I) is for EPA to determine each State's significant contribution level and then allow the State to determine how to reduce its emissions to a level below that. [EPA-HQ-OAR-2009-0491-2767.1, pp. 1-2]
Response:
EPA appreciates NCDAQ's support.  As explained in section X of the preamble to the final rule, EPA seeks to make it easier for states to submit SIPs to replace the FIPS in whole or in part, and EPA intends to work with States and provide assistance with SIP submittals.
Organization: Northwest Indiana Forum
Comment:
Northwest Indiana Forum
The long standing regulatory process whereby individual states have the authority and opportunity to develop implementation rules and regulations by which compliance with federal rules can occur has been undermined by this proposed rulemaking. Historically as states proceed with their regulatory development process, state agencies are required to obtain stakeholder input on a process or rule. With this opportunity, local stakeholders are presented a clear understanding of the issue, the desired outcome, the environmental and economic impact of proposed rules and regulations as well as a responsibility to participate in the implementation and compliance activities. Whether it is air, water or solid waste related, the general public not only has an interest in the outcome but a responsibility to be part of the solution via personal habit alterations. Northwest Indiana residents have been supportive of ozone action days and had to comply with enhanced vehicle inspection and maintenance program requirements for many years. In partnership with industrial air pollution control implementation, Northwest Indiana has seen significant air quality improvements which have resulted in an attainment status for our counties. Without the opportunity for our state regulatory agency, Indiana Department ,of Environmental Management (IDEM), to develop a state implementation plan, IDEM will be forced to utilize a one size fits all approach developed without a true stakeholder involvement process which in general is not a successful approach. [EPA-HQ-OAR-2009-0491-3650 p.1]
Response:
For the reasons explained in this section of this RTC, in section IV.C.2 of the preamble to the final rule and in the TSD entitled "Status of CAA 110(a)(2)(D)i)(I) SIPs," EPA has a legal obligation to promulgate all of the FIPs in this rule.  EPA has made a concerted effort to solicit input, both prior to proposal and during the comment period on the proposed rule, from stakeholders including states, regulated industry, tribes, environmental groups, and the general public.  Further section X of the preamble to the final rule explains the steps taken to make it easier for states to replace the FIPs, in whole or in part, with SIPs.
Organization: Ohio Utility Group (OUG)
Comment:
Ohio Utility Group (OUG)
The Proposed Transport Rule Unlawfully Expands EPA's Authority at the States' Expense
EPA's actions under the proposed Transport Rule are unlawful, arbitrary, and unreasonable. In its current form, the Transport Rule will have a negative impact on the electric utility industry in ways that are yet to be fully considered by EPA. [EPA-HQ-OAR-2009-0491-2679.1, p.1]
EPA overstepped its bounds with respect to transport obligations and has attempted to federalize a state responsibility. The Clean Air Act ('CAA') requires that all states achieve attainment status of the National Ambient Air Quality Standards ('NAAQS') for the six criteria pollutants. While EPA has been assigned the responsibility to determine appropriate air quality standards, the CAA gives each state the primary authority to determine how it will meet the standards, and requires states to submit implementation plans detailing a particular state's approach. The Supreme Court addressed the federal-state relationship under the CAA and held that, in the context of implementing emissions limitations to achieve air quality standards, EPA's role is 'secondary' to that of the states. EPA's breach of this partnership is twofold. First, the timing requirements under the proposed Transport Rule effectively deny the states the opportunity to develop and submit a SIP for final approval. Second, the substance of the proposed rule impermissibly allows EPA to impose source-specific emissions controls. [EPA-HQ-OAR-2009-0491-2679.1, pp.1-2]
The Transport Rule impermissibly requires unit-specific emissions controls [EPA-HQ-OAR-2009-0491-2679.1, p.2]
Due to state-specific concerns and specialized knowledge required to impose emissions limitations at the source level, the CAA gives states the 'power to [initially] determine which sources would be burdened by regulation and to what extent.,,6 Again, EPA is limited to a secondary role in determining source-specific emissions limitations.7 EPA simply does not have the capabilities to acquire the amount of information necessary to make unit-by-unit emissions limitation decisions. Although the Utilities' objections to EPA's flawed methodology and inadequate data are analyzed in a subsequent section of the comments, a learned understanding of those issues is not necessary at this point. By merely conceptualizing the magnitude of the task, the pitfalls of EPA engaging in implementing emissions limitations at the source level  -  a responsibility appropriately delegated to the states - are readily apparent. [EPA-HQ-OAR-2009-0491-2679.1, pp.2-3]