chemical composition, and source. The PM2.5 includes both " primary" particles that are emitted directly to the atmosphere as particles, and " secondary" particles that form in the atmosphere through chemical reactions from gaseous precursors. The major components of fine particles in the Eastern US can be grouped into five categories: carbonaceous material ( including both primary and secondary organic carbon and black carbon), sulfates, nitrates, ammonium, and crustal material, which includes suspended dust as well as some other directly emitted materials. The major gaseous precursors of PM2.5 include SO2, NOx, ammonia ( NH3), and certain volatile organic compounds. 94 ( 2) Examination of urban and rural monitors indicate that in the Eastern U. S., sulfates, carbonaceous material,

nitrates, and ammonium associated with sulfates and nitrates are typically the largest components of transported PM2.5,

while crustal material tends to be only a small fraction.

( 3) Atmospheric interactions among particulate ammonium sulfates and nitrates and gas phase nitric acid and ammonia vary with temperature, humidity, and location. Both ambient observations and modeling simulations suggest that regional SO2 reductions are effective at reducing sulfate and associated ammonium, and, therefore, PM2.5. Under certain conditions reductions in particulate ammonium sulfates can release ammonia as a gas, which then reacts with gaseous nitric acid to form nitrate particles, a phenomenon called " nitrate replacement." In such conditions SO2 reductions would be less effective in reducing PM2.5, unless accompanied by reductions in NOx emissions to address the potential increase in nitrates.

( 4) Reductions in ammonia can reduce the ammonium, but not the sulfate portion of sulfate particles. The relative efficacy of reducing nitrates through NOx or ammonia control varies with atmospheric conditions; the highest particulate nitrate concentrations in the East tend to occur in cooler months and regions. At present, our knowledge about 95 sources, emissions, control approaches, and costs is greater for NOx than for ammonia. Existing programs to reduce NOx from stationary and mobile sources are well underway. From a chemical perspective, as NOx reductions accumulate relative to ammonia, the atmospheric chemical system would move towards an equilibrium in which ammonium nitrate reductions become more responsive to further NOx reductions relative to ammonia reductions.

( 5) Much less is known about the sources of regional transport of carbonaceous material. Key uncertainties include how much of this material is due to biogenic as compared to anthropogenic sources, and how much is directly emitted as compared to formed in the atmosphere.

( 6) Observational evidence suggests that the substantial reductions in SO2 emissions in the eastern U. S. since 1990 have indeed caused observed reductions in PM2.5 sulfate.

The relatively small historical reductions in NOx emissions do not allow observations to be used similarly to test the effectiveness of NOx reductions.

Based on the understanding of current scientific and technical information, as well as EPA's air quality modeling, as summarized in the January 30 proposal, EPA concluded that it was both appropriate and necessary to focus on control of SO2 and NOx emissions as the most 96 effective approach to reducing the contribution of interstate transport to PM2.5.

EPA proposed not to control emissions that affect other components of PM2.5, noting that " current information relating to sources and controls for other components identified in transported PM2.5 ( carbonaceous particles,

ammonium, and crustal materials) does not, at this time,

provide an adequate basis for regulating the regional transport of emissions responsible for these PM2.5 components." ( 69 FR 4582). For all of these components, the lack of knowledge of and ability to quantify accurately the interstate transport of these components limited EPA's ability to include these components in this rule.

b. How does EPA address public comments on its proposal to address SO2 and NOx emissions and not other pollutants?

i. Overview of comments on this issue A large number of commenters including states, affected industries, environmental groups, academics, and other members of the public agreed with EPA's proposal to require cost effective multipollutant reductions of SO2 and NOx to address interstate transport contributions to PM2.5 problems. Fewer commenters who supported controlling SO2 and NOx commented on inclusion of additional pollutants, but several also agreed that it would be premature at this time 97 to require control of emissions of other chemical components and precursors to address such transport. These commenters suggested that SO2 and NOx emissions from EGUs and other sources indeed contribute significantly to downwind PM2.5.

They argued that control of other components is premature because of a lack of knowledge, either about the interstate contributions of other components or of control measures for these components. EPA generally accepts and agrees with these conclusions.

A number of commenters disagreed to varying degrees with part or all of EPA's proposed focus on SO2 and NOx.

The main points raised by these commenters can be grouped as follows:

( 1) The focus on SO2 and NOx is not appropriate because sulfates and nitrates may not be ( or are not) the most important determinants of the health effects of PM2.5.

( 2) EPA should mandate, or at least permit, states to control other precursors and particle emissions in addition to, or instead of, SO2 and NOx. Commenters sometimes made specific recommendations with respect to additional pollutants, including carbonaceous ( including organic)

particles and precursors, ammonia, and other direct emissions, including crustal material.

( 3) The focus on SO2 may be appropriate, but the basis for 98 18R. J. Klemm, et al.," Daily Mortality and Air Pollution in Atlanta: Two Year of Data from ARIES "( accepted, Inhalation Toxicology) requiring NOx control is not clear.

ii) Summary of EPA's response to the major comments on this issue The following subsections summarize both key comments and EPA's responses organized by the major categories outlined above. As noted in Section I, EPA has developed and placed in the rulemaking docket a detailed response to these and other public comments.

( a) SO2 and NOx may be less important to health than other transport related components.

Comment: Several commenters argued that the proposed focus on SO2 and NOx was premature, citing the potential for differential toxicity of various PM2.5 components, and in some cases advancing evidence ( e. g. the Electric Power Research Institute Aerosol Research and Inhalation Studies [ ARIES]) 18 that other components such as organic particles appear to be more responsible for health effects of particles than sulfates and nitrates. Several argued that the relative contribution of components to health impacts is an important uncertainty that should be researched more carefully before proposing to control only SO2 and NOx.

Response: Today's rulemaking establishes requirements 99 for SIP submissions under section 110( a)( 2)( D). Those SIP submissions must prohibit emissions that contribute significantly to nonattainment of a NAAQS in a downwind State. EPA determined in the 1997 rulemaking promulgating the PM2.5 NAAQS that specified levels of PM2.5 adversely affect human health, and that sulfates and nitrates are components of PM2.5 ( 62 FR 38652, July 18, 1997). SO2 and NOx, in turn, are precursors to fine particulate sulfates and nitrates. Comments that sulfates and nitrates do not cause adverse health effects are more appropriately raised in the context of past or ongoing reviews of the PM NAAQS.

Because today's action forms part of implementing and not establishing the PM NAAQS, comments relating to the evidence supporting or not supporting health effects of all or portions of pollutants regulated by the PM2.5 NAAQS are not germane to this rulemaking.

Nevertheless, we discuss briefly EPA's current response regarding the contributions of different components of PM2.5 to health effects. In establishing the current PM2.5 NAAQS,

EPA found that there was ample evidence to associate various health effects with the measured mass concentration of particles smaller than a nominal 2.5 micrometers ( um),

termed PM2.5. EPA recognizes that the toxicity of different chemical components of PM2.5 may vary, and that the observed 100 19USEPA, National Center for Environmental Assessment, Air Quality Criteria for Particulate Matter, October 2004. effects may be the result of the mixture of particles and gases. While research is underway to better identify whether some chemical components are more responsible for health effects than others, results now available from such research are limited and inconclusive. A number of studies included in the recent EPA PM criteria document19 have found effects to be associated with one or more of the major components and sources of PM2.5, including sulfates,

nitrates, organic materials, PM2.5 mass, coal combustion,

and mobile sources. The criteria document concludes that these studies suggest that many different chemical components of fine particles and a variety of different types of source categories are all linked to premature mortality and other serious health effects, either independently or in combinations, but that it is not possible to reach clear conclusions about differential effects of PM components. Accordingly, individual studies or groups of studies such as ARIES cannot be used to single out any particular component of PM2.5 as wholly responsible ( or not at all responsible) for the array of health effects that have been found to be associated with various chemical and mass indicators of fine particles. EPA and other 101 federal agencies continue to promote and support the epidemiological and toxicological studies needed to better understand the effects of different chemical components and different size particles on health effects.

In the meantime, EPA believes that, given the substantial evidence of significant health effects of fine particles, it is important to move forward expeditiously to address both transported and local sources of all the major components of fine particles in an effort to implement and attain the PM2.5 standards. Today's rule is focused on the contribution of interstate transport of nitrate and sulfates to PM2.5 in nonattainment areas. EPA has, however, already adopted other rules that are reducing emissions and exposures to these and other major components of fine particles on a national, regional, and local basis.

Recent national mobile rules and programs, in particular,

have focused on carbonaceous materials emitted from gasoline and both highway and non road diesel powered mobile sources ( 65 FR 6698; 66 FR 5002; 69 FR 38958). States with nonattainment areas will also be required to address local sources of PM2.5 in order to meet progress and attainment requirements. Together, the collective effect of these programs ensures a balanced approach to reducing all of the major components of PM2.5 from transported and local 102 sources.

( b) Inclusion of other PM2.5 precursors and components Comment: A number of commenters recommended that EPA either mandate or at least permit controls on the emissions that cause interstate transport of other components of PM2.5, in addition to or as a substitute for, SO2 and NOx controls. Several commenters recommended that EPA include emissions reductions related to the components of PM2.5 other than sulfate and nitrate. While many commenters suggested addressing all of the important contributors to PM2.5, including those not regulated under this Rule, others highlighted only one or two additional components as most important to include. Of the PM2.5 components, direct emissions and precursors to carbonaceous PM2.5 and ammonia emissions were the omitted contributors most frequently discussed.

Some of these commenters argued that, by limiting the rule to SO2 and NOx and excluding other sources of ambient PM2.5, EPA would be limiting the choices that states have to address their downwind interstate transport contributions.

These commenters argued that this limitation is contrary to the Clean Air Act, which generally gives states the discretion to choose their own emission control strategies.

Commenters further asserted that the roles of other 103 components in PM2.5 are sufficiently well understood that they should be included in state SIPs for PM2.5 transport,

and could partially satisfy the PM2.5 reductions anticipated by this rule.

Response: The three main classes of PM2.5 precursors that are not included in this rulemaking are carbonaceous material ( including both primary emissions and VOC emissions that form secondary organic aerosol), ammonia, and crustal material. As noted in the proposal( 69 FR 4576) and as mentioned in several comments, these components comprise a measurable faction of PM2.5 throughout the Eastern U. S., and the contribution of carbonaceous material, in particular, is often substantial. In addition, emissions contributing to these components in one state likely do affect PM2.5 concentrations in other states to some extent. However, the extent of those downwind contributions to nonattainment has not been quantified adequately and current scientific understanding makes such a determination more uncertain than is the case for SO2 and NOx. Responses to recommendations for including each of these three classes in the transport rule are summarized below.

( i) Carbonaceous Material For carbonaceous material, uncertainties in both the quantity and origins of emissions contributing to both 104 20V. Rao, N. Frank, A. Rush, F. Dimmick. Chemical Speciation of PM2.5 in Urban and Rural Area, in The Proceedings of the Air & Waste Management Association Symposium on Air Quality Measurement Methods and Technology, San Francisco, November 13 1, 2002. primary and secondary carbonaceous material on regional scales ( including emissions from fires and from biogenic sources) limit the quality of regional scale modeling of carbonaceous PM2.5. This in turn causes substantial uncertainties in determining the amount of interstate transport from carbonaceous material and of the costs and effectiveness of emission controls. Modeling and monitoring the relative amount of organic particles that come from the formation of secondary organic particles, versus primary organic particles, is also highly uncertain.

In addition, comparison of urban and nearby rural PM composition monitors20 in the eastern US find a significantly larger amount of carbonaceous materials in urban areas as compared to rural areas, suggesting that a substantial fraction of carbonaceous particles in urban areas come from local sources. By contrast, urban and nonurban monitors in the East show greater homogeneity for regional sulfate concentrations as compared to carbonaceous materials, suggesting regional sources are most important for sulfates. Results for nitrates suggest both a mixture of regional and local sources. Furthermore, as noted above 105 21Jang, M; Czoschke, N. M.; Lee, S.: Kamens, R. M., Heterogeneous Atmospheric Aerosol Production by Acid Catalyzed Particle Phase Reactions, Science, 2002, 298: 814 817. and in the proposal ( 69 FR 4577 78), while the relative contributions of different sources to regional sulfate and nitrates can be quantified with certainty, the contributions of different sources to carbonaceous materials on a regional scale are less clear. Moreover, as noted in the NPR preamble, some research into mechanisms of formation of organic particles suggests that both NOx and SO2 reductions might be of some benefit in lowering the amount of secondary organic particles. 21 Current models are not, however,

capable of quantifying such potential benefits.

While EPA does not believe that enough is known about the relative effectiveness or costs of reducing anthropogenic sources of carbonaceous particles on transported PM2.5, EPA agrees that control of known source categories of these materials can have a significant benefit in reducing the significant local contribution. For this reason, EPA has already enacted other national rules that will reduce emissions of primary carbonaceous PM2.5 from mobile sources, the largest contributor to such emissions.

In addition to reducing PM2.5 in nonattainment areas, these regulations will also have the benefit of reducing a large 106 22Battye, W., V. P. Aneja, and P. A. Roelle, Evaluation and improvement of ammonia emissions inventories, Atmospheric Environment, 2003, 37: 3873 3883.

23As pointed out by one commenter, a hypothetical new program resulting in major regional reductions of ammonia would reduce the effectiveness of NOx controls. However, given the uncertainties in emissions, the dispersed nature of ammonia sources and the lack of present controls, an effort to develop a new regional ammonia program would likely take significantly longer than the additional NOx measure of whatever interstate transport of carbonaceous PM2.5 occurs.

( ii) Ammonia While current models are able to address the major chemical mechanisms involving particulate ammonium compounds, regional scale ammonia emissions, particularly from agricultural sources, are highly uncertain. 22 Given the relative lack of experience in controlling such sources,

the costs and effectiveness of actions to reduce regional ammonia emissions are not adequately quantified at present.

As noted above, ammonium would not exist in PM2.5 if not for the presence of sulfuric acid or nitric acid; hence,

decreases in SO2 and NOx can be expected ultimately to decrease the ammonium in PM2.5 as well. The additional regional limits on SO2 and NOx emissions outlined in today's notice added to those reductions provided under current programs would likewise be expected to reduce the PM2.5 effectiveness of any ammonia control initiative. 23 Unlike 107 reductions EPA is adopting today. ammonium, sulfuric acid has a very low vapor pressure and would exist in the particle with or without ammonia.

Therefore, while SO2 reductions would reduce particulate ammonium, changes in ammonia would be expected to have very little effect on the sulfate concentration.

In addition to the above considerations, because ammonium nitrates are highest in the winter, when ammonia emissions are lowest, reducing wintertime NOx emissions may represent a more certain path towards reducing this winter peak than ammonia reductions. Moreover, reductions in ammonia emissions alone would also tend to increase the acidity of PM2.5 and of precipitation. As noted in the proposal, this might have untoward environmental or health consequences.

Some commenters highlighted ammonia as an important pollutant with multiple effects on the environment,

including its contributions to PM2.5. These commenters highlighted that ammonia emissions are not currently regulated extensively, and suggested that EPA strengthen its efforts to better understand the many effects of ammonia emissions and better research options for controlling ammonia, so that it can be regulated where appropriate in the future programs. EPA generally agrees with these 108 commenters.

( iii) Crustal Material The contributions of crustal materials to PM2.5 nonattainment are usually small, and the interstate transport of crustal materials is even smaller. Emissions of crustal materials on regional scales are uncertain,

highly variable in space and time, and may not be easily controlled in some cases, suggesting significant uncertainties in quantifying emissions and the costs and effectiveness of control actions. Emissions reductions of SO2 and NOx will likely reduce some of the direct emissions of PM2.5 from EGUs and other industries, which are responsible for a portion of the " crustal material" measured downwind at receptors.

( c) Summary of response to requiring or allowing reductions in other pollutants.

After reviewing public comments in light of the current understanding of alternative pollutants as summarized above,

EPA diagrees with those commenters who suggested that the final Clean Air Interstate Rule should require states to address the interstate transport of carbonaceous material ( including VOCs), ammonia, and/ or crustal material in the present rulemaking.

At present, the sources and emissions contributing to 109 24EPA OAQPS CMAQ Evaluation for 2001" Docket # OAR 2003 0053 1716 these components on regional scales are not sufficiently quantified. In addition, the representation of atmospheric physics and chemistry for these components in air quality models is in some cases poor in comparison with current understanding of SO2 and NOx ( most notably for sources and amounts of secondary organic aerosol production. 24 Consequently, quantification of the interstate transport of these components is significantly more uncertain than for SO2 and NOx emissions. Given these uncertainties in regional emissions and interstate transport of these components, EPA has determined that it would be premature to quantify interstate impacts of these emissions through zeroout modeling, as was done for SO2 and NOx emissions.

In addition, the costs of control measures, their effectiveness at reducing emissions, as well as their ultimate effectiveness at reducing PM2.5 concentrations at downwind receptors are all uncertain. EPA does not believe it could reasonably evaluate whether such State emissions contributed significantly to transport, or what level of control would address the significant contribution.

Commenters have not provided us specific data and information to allow such assessments.

EPA also disagrees with commenters who argue that EPA 110 should, for the purposes of this rule, permit the States to substitute controls of sources of any of these other three components for the required limits on SO2 and NOx. Given the greater uncertainties in estimating the contribution of alternative source emissions, States would have difficulty developing, and EPA would have difficulty in approving, SIPs that, by controlling these components, purport to reduce an upwind State's impact on downwind PM2.5 nonattainment by an equivalent amount to that required in today's final rule.

As explained in the proposal, a decision not to regulate these components of PM2.5 in the present rulemaking does not preclude state or local PM2.5 implementation plans from reducing emissions of carbonaceous material, ammonia,

or crustal material, in order to achieve attainment with PM2.5 standards, in cases where there is evidence that such controls will be effective on a local basis. Although uncertainties exist in addressing long range transport of these pollutants, state and local air quality management agencies will need to evaluate reasonable control measures for sources of these pollutants in developing SIPs due in 2008. We expect continuous improvements will be made in our understanding of source emissions and PM2.5 components not addressed under CAIR. To assist future air quality management decisions, EPA is actively supporting research 111 into better understanding the emissions, atmospheric processes, long range transport, and opportunities for control of these PM2.5 components.

( d) Justification for Including NOx in Determining Significant Contributions and for Regulating NOx Emissions for PM2.5 Transport Some commenters questioned the EPA's basis for requiring emissions reductions of NOx, in addition to SO2,

for the purposes of controlling interstate transport of PM2.5. These comments, and EPA's response, are discussed below. Other comments addressing EPA's basis for requiring NOx for ozone are addressed in a subsequent section.

Like SO2, NOx emissions are understood to affect PM2.5 on regional scales, due in part to the time needed to convert NOx emissions to nitrate. Like SO2 but unlike precursors of other components of PM2.5, emissions of NOx are well quantified for EGUs and with reasonable accuracy for other urban and regional sources, and the transport of NOx and PM2.5 derived from NOx can also be quantified with a fair degree of certainty. In addition, SO2 and NOx interact as part of the same chemical system in the atmosphere.

Controlling SO2 emissions without concurrently controlling NOx emissions can lead to nitrate replacement whereby SO2 emissions reductions will be less effective than expected. 112 25NARSTO, Particulate Matter Science for Policy Makers  A NARSTO Assessment, February 2003. Finally, SO2 and NOx share common sources in fossil fuel combustion. As such, controlling emissions of both precursors in a coordinated way presents opportunities to reduce the overall cost of the control program. 25 Commenters questioned EPA's methodology of evaluating whether an upwind State contributes significantly to PM2.5 nonattainment by considering ( through the " zero out" air quality modeling technique) SO2 and NOx emissions simultaneously. These commenters argued that zeroing out SO2 and NOx emissions simultaneously precludes determining the contribution of each component to downwind nonattainment. Because sulfates generally comprise a greater fraction of PM2.5 than nitrates in the Eastern U. S.,

these commenters argued that the basis for requiring NOx controls is weaker than for SO2, and has not been determined directly by EPA.

EPA's multi pollutant approach of modeling SO2 and NOx contributions at the same time is consistent both with sound science and with the requirements of CAA section 110( a)( 2)( D), as EPA interpreted and applied them in the NOx SIP Call. This provision requires each State to submit a SIP to prohibit " any source or other type of emissions 113 activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to nonattainment" downwind. As discussed in Section II above,

in the NOx SIP Call, a rulemaking in which EPA regulated NOx emissions as precursors for ozone, EPA found that ozone resulted from the combined contributions of many emitters over a multistate region, a phenomenon that EPA termed " collective contribution" ( 63 FR 57356 86). As a result,

EPA evaluated each State's contribution to nonattainment downwind by considering the impact of the entirety of that State's NOx emissions on downwind nonattainment. Once EPA determined the State's entire NOx emissions inventory to have at least a minimum downwind impact, then EPA required the State to eliminate the portion of those emissions that could be reduced through highly cost effective controls.

EPA considered this approach to be consistent with the section 110( a)( 2)( D) requirements.

In a companion rulemaking, the Section 126 Rule, EPA found that certain, individual NOx emitters must be subject to Federal regulation due to their impact on downwind nonattainment ( 65 FR 2674). EPA based this finding on the same notion of " collective contribution," that is, NOx emissions from those individual sources were part of the upwind State's total NOx inventory, the total NOx inventory 114 had a sufficiently high impact on downwind nonattainment,

and therefore the individual NOx emitters should be subject to control without any separate determination as to their individual impacts on downwind nonattainment.

The D. C. Circuit accepted EPA's collective contribution approach upholding most of the NOx SIP Call regulation, in Michigan v. EPA, 213 F. 3d 663 ( D. C. Cir. 2000), cert. denied 532 U. S. 904 ( 2001). Similarly, the D. C. Circuit upheld most aspects of EPA's Section 126 Rule, including the collective contribution basis for finding that emissions from the individual sources should be subject to regulation.

Appalachian Power co. v. EPA, 249 F. 3d 1032 ( D. C. Cir. 2001)

( per curium).

As discussed elsewhere, PM2.5 is similar to ozone in that it is the result of emissions from many sources over a multi state region. Accordingly, EPA considers that the phenomenon of " collective contribution" is associated with PM2.5 as well.

In the CAIR NPR, EPA selected SO2 and NOx as the appropriate precursors to be controlled for PM2.5 transport,

for several reasons presented above. As in the NOx SIP Call, today's rulemaking, under CAA section 110( a)( 2)( D),

requires EPA to evaluate whether a particular upwind State must submit a SIP that prohibits " any source or other type 115 of emissions activity within the State from emitting any air pollutant in amounts which will ... contribute significantly to nonattainment" downwind. In making this determination,

EPA considers the effects of all of the appropriate precursors   here, both SO2 and NOx   from all of the State's sources on downwind PM2.5 nonattainment. If that collective contribution to downwind PM2.5 nonattainment is sufficiently high, then EPA requires the upwind State to eliminate those precursors to the extent of the availability of highly cost effective controls.

EPA's approach to evaluating a State's impact on downwind nonattainment by considering the entirety of the State's SO2 and NOx emissions is also consistent with the chemical interactions in the atmosphere of SO2 and NOx in forming PM2.5. The contributions of SO2 and NOx emissions are generally not additive, but rather are interrelated due to the nitrate replacement phenomenon, as well as other complex chemical reactions that can include organic compounds as well. As commenters point out, the nature of these reactions can vary with location and time. The nonlinear nature of some of these reactions can produce differing results depending on the relative amount of reductions and copollutants. Reductions in sulfates can increase nitrates and, in some conditions, modest reductions 116 26NARSTO, Particulate Matter Science for Policy Makers  A NARSTO Assessment, February 2003 27 " Regulatory Impact Analysis for the Final Clean Air Interstate Rule ( March 2005)." in nitrates can increase sulfates although through different mechanisms. Large regional reductions in both pollutants,

however, are more likely to result in a significant reductions in fine particles. 26 Based on its current understanding of regional air pollution and modeling results, EPA believes that adopting a broad new program of regional controls to continue the downward trajectory in both SOx and NOx begun in base programs such as the national mobile source rules and Title IV, as well as the NOx SIP call, will ultimately result in significant benefits not only in reducing PM2.5 nonattainment, but improving public health, reducing regional haze, and addressing multimedia environmental concerns including acid deposition and nutrient loadings in sensitive coastal estuaries in the East. 27 Some commenters argued that the benefits combining NOx with SO2 reductions, if any, would be small, and further argued that the effect of any nitrate reductions in the environment would be further diminished by measurement losses that can occur in the filter in the method used to measure PM2.5. In so doing, they questioned the scientific 117 28 Blanchard, C. L., and G. M. Hidy ( 2004) Effects of projected utility SO2 and NOx emission reductions on particulate nitrate and PM2.5 mass concentrations in the Southeastern United States, Report to Southern Company. See CAIR docket. basis for nitrate replacement, suggesting that this response to changes in SO2 emissions may not happen in all places and at all times. The commenters referenced a study in the Southeastern U. S. by Blanchard and Hidy28, which they claim calls into question whether nitrate replacement actually occurs. In fact, the study finds evidence that nitrate replacement occurs: " the sulfate decreases were an input to the model calculations, but their effect on fine PM mass was modified by concomitant decreases in ammonium and increases in nitrate." A second study by the same authors, using essentially the same dataset and methods, and referenced both by EPA in the NPR and by the commenters, gives very strong support for the existence of nitrate replacement, as well as for coordinating SO2 and NOx reductions, as indicated by the following conclusions: " reductions in sulfate through SO2 reduction at constant NOx levels would not result in proportional reduction in PM2.5 mass because particulate nitrate concentrations would increase. However,

if both NOx and SO2 emissions are reduced, then it may be possible to achieve sulfate reductions without concomitant 118 29Blanchard C. L., and G. M. Hidy ( 2003). Effects of changes in sulfate, ammonia, and nitric acid on pariculate nitrate concentrations in the Southeeastern United States, J. Air & Waste Manage. Assoc., 53: 283 290 30NARSTO, Particulate Matter Science for Policy Makers  A NARSTO Assessment, February 2003 nitrate increases..." 29 Nitrate replacement is well documented in the scientific literature as a possible response of PM2.5 to changes in SO2 emissions. 30 While these commenters are correct that nitrate replacement is not expected to occur at all places and at all times, even where average conditions are not favorable for nitrate replacement, hourly variability in those conditions can create conditions favorable for nitrate replacement at particular times.

Nitrate replacement theory predicts no conditions under which SO2 reductions would decrease nitrate, and suggests that nitrate may increase under fairly common conditions. 31 Consequently, the net effect of SO2 reductions can be only to increase nitrate or not to have any effect. The variability of conditions occurring over a year means that SO2 reductions would be expected to increase nitrate on balance.

Even if the studies referenced by these commenters showed that nitrate replacement does not occur in some 119 32 For example, West, J. J., A. S. Ansari, and S. N. Pandis ( 1999) Marginal PM2.5, nonlinear aerosol mass response to sulfate reductions in the Eastern U. S., J. Air & Waste Manage. Assoc., 49: 1415 1424. circumstances, other studies suggest that the conditions for nitrate replacement are common in the Eastern U. S. 32 Suggesting that nitrate replacement does not occur under some conditions does not imply that NOx should not be controlled, when it is known that nitrate replacement occurs under other common conditions.

EPA recognizes that the relative reductions in PM2.5 from implementation of the CAIR will be greater for SO2 than for NOx. Nevertheless, overall costs for reducing NOx in the CAIR region are much lower than SO2 because a large portion of the region has already installed NOx controls for ozone in the summer months. Our revised modeling approaches took into account the differences commenters note between actual nitrate concentrations in the atmosphere and what is measured as PM2.5. Nevertheless emissions of both pollutants clearly contribute to interstate transport of ambient fine particles, and EPA concludes that the best approach in this situation is to provide highly cost effective reductions for both pollutants. Moreover, in warmer conditions when apparent nitrate changes from NOx reductions as measured on PM2.5 monitors are small, the 120 actual reductions in particulate and gaseous nitrates in the ambient environment are larger; accordingly, NOx reductions combined with SO2 reductions can be expected to reduce health risk, visibility impairment, and other environmental damages.

After considering the public comments, EPA concludes that it should adopt the approach it proposed for addressing interstate transport of pollutants that affect PM2.5, for the reasons presented here and in the proposal. That is, in today's action, EPA is requiring states to take steps to control emissions of SO2 and NOx on the basis of their contributions to nonattainment of PM2.5 standards in downwind states. EPA concludes that we do not now have a sufficient basis for including emissions of other components ( carbonaceous material, ammonia, and crustal material) that contribute to PM2.5 in determining significant contributions and in requiring emission reductions of these components. 121 122 123 124 125 126 33Ozone Transport Assessment Group, OTAG Final Report, 1997.

34NARSTO, An Assessment of Tropospheric Ozone Pollution   A North American Perspective, July 2000.

35National Research Council, Rethinking the Ozone Problem in Urban and Regional Air Pollution, 1991.

36NARSTO, An Assessment of Tropospheric Ozone Pollution   A North American Perspective, July 2000. 127 37U. S. EPA, Latest Findings on National Air Quality, August 2003. In the notice of proposed rulemaking, EPA noted that we continue to rely on the assessment of ozone transport made in great depth by the OTAG in the mid 1990s. As indicated in the NOx SIP call proposal, the OTAG Regional and Urban Scale Modeling and Air Quality Analysis Work Groups reached the following conclusions:

Q. Regional NOx emissions reductions are effective in producing ozone benefits; the more NOx reduced, the 128 38 include VOC emissions in this rule. greater the benefit.

R. Controls for VOC are effective in reducing ozone locally and are most advantageous to urban nonattainment areas. ( 62 FR 60320, November 7, 1997).

EPA proposed to reaffirm this conclusion in this rulemaking, and proposed to address only NOx emissions for the purpose of reducing interstate ozone transport.

Some commenters suggested that in this rulemaking EPA should require regional reductions in VOC emissions as well as NOx emissions in this rulemaking. 38 129 EPA expects that States will need to examine the extent to which VOC emissions affect ozone pollution levels across state lines,

and identify areas where multi state VOC strategies might assist in meeting the 8 hour standard, in planning for attainment.

b. How Did EPA Determine That Reductions in Interstate Transport, as Well as Reductions in Local Emissions, Are Warranted to Help Ozone Nonattainment Areas to Meet the 8

hour Ozone Standard?

1. What Did EPA Say in its Proposal Notice?

In the NPR, EPA noted that the Agency promulgated the NOx SIP call in 1998 to address interstate ozone transport problems in the Eastern U. S. EPA noted that it made sense to re evaluate whether the NOx SIP call was adequate at the same time that the Agency was assessing the need for emissions reductions to address interstate PM2.5 problems because of overlap in the pollutants and relevant sources,

and the timetables for States to submit local attainment plans. EPA presented a new analysis of the extent of 130 residual 8 hour ozone attainment projected to remain in 2010, and the extent and severity of interstate pollution transport contributing to downwind nonattainment in that year.

The proposal notice said that based on a multi part assessment, EPA had concluded that:

° " Without adoption of additional emissions controls, a substantial number of urban areas in the central and eastern regions of the U. S. will continue to have levels of 8 hour ozone that do not meet the national air quality standards.

° ... EPA has concluded that small contributions of pollution transport to downwind nonattainment areas should be considered significant from an air quality standpoint, because these contributions could prevent or delay downwind areas from achieving the standards.

° ... EPA has concluded that interstate transport is a major contributor to the projected ( 8 hour ozone)

nonattainment problem in the eastern U. S. in 2010. ...

( T) he nonattainment areas analyzed receive a transport contribution of more than 20 percent of the ambient ozone concentrations, and 21 of 47 had a transport contribution of more than 50 percent.

° Typically, two or more States contribute transported 131 pollution to a single downwind area, so that the " collective contribution" is much larger than the contribution of any single State.

EPA also concluded that highly cost effective reductions in NOx emissions were available within the eastern region where it determined interstate transport was occurring, and that requiring those highly cost effective reductions would reduce ozone in downwind nonattainment areas.

In addition, the proposal examined the effect of hypothetical across the board emissions reductions in nonattainment areas. The notice stated that EPA had conducted a preliminary scoping analysis in which hypothetical total NOx and VOC emissions reductions of 25 percent were applied in all projected nonattainment areas east of the continental divide in 2010, yet approximately 8 areas were projected to have ozone levels exceeding the 8

hour standard. Based on experience with state plans for meeting the one hour ozone standard, EPA said this scenario was an indication that attaining the 8 hour standard will entail substantial cost in a number of nonattainment areas,

and that further regional reductions are warranted.

2. What Did Commenters Say?

a. The Need for Reductions in Interstate Ozone Transport 132 Some commenters argued that EPA should not conduct another rulemaking to control interstate contributions to ozone because local contributions in nonattainment regions appear, according to the commenters, to have larger impacts than regional NOx emissions. The commenters cited EPA's sensitivity modeling of hypothetical 25 percent reductions as supporting this view.

EPA disagrees that comparing the sensitivity modeling and the CAIR control modeling is a valid way to compare the effectiveness of local and regional controls. The two scenarios do not reduce emissions by equal tonnage amounts,

equal percentages of the inventory, or equal cost. These scenarios therefore do not support an assessment of the relative effectiveness of local and regional controls.

While EPA in general agrees that emissions reductions in a nonattainment area will have a greater effect on ozone levels in that area than similar reductions a long distance away, EPA does not agree that the modeling supports the conclusion that all additional controls to promote attainment with the 8 hour standard should be local. The level of reduction assumed was a hypothetical level, not a level determined to be reasonable cost nor a mandated level of reduction. The commenters provided no evidence that reasonable local controls alone would result in attainment 133 throughout the East. However, EPA did receive comments that such a level would result in costly controls and might not be feasible in some areas that have previously imposed substantial controls.

EPA believes it is clear that further reductions in emissions contributing to interstate ozone transport, beyond those required by the NOx SIP call, are warranted to promote attainment of the 8 hour ozone standard in the eastern U. S.

As explained elsewhere in this notice, EPA analyzed interstate transport remaining after the NOx SIP call, and determined   considering both the impact of interstate transport on downwind nonattainment, and the potential for highly cost effective reductions in upwind States   that 25 States significantly contribute to 8 hour ozone nonattainment downwind. The importance of transport is illustrated, as mentioned above, by EPA's findings for the final rule that ( 1) all the 2010 nonattainment counties analyzed were projected to receive a transport contribution of 24 percent or more of the ambient ozone concentrations,

and ( 2) that 16 of 38 counties are projected to have a transport contribution of more than 50 percent.

In addition, EPA received multiple comments from state associations and individual states strongly agreeing that further reductions in interstate ozone transport are 134 warranted to promote attainment with the 8 hour standard, to protect public health, and to address equity concerns of downwind states affected by transport. For example,

comments from the Maryland Department of the Environment stated, " Our 15 year partnership with researchers from the University of Maryland has produced data that shows on many summer days the ozone levels floating into Maryland area are already at 80 to 90 percent of the 1 hour ozone standard and actually exceed the new 8 hour ozone standard before any Maryland emissions are added. ... Serious help is needed from EPA and neighboring states to solve Maryland's air pollution problems. ... Local reductions alone will not clean up Maryland's air." The comments of the Ozone Transport Commission stated that even after levels of control envisioned by EPA in 2010 ( under the Clear Skies Act), interstate transport from other states would continue to affect the Ozone Transport Region created by the Clean Air Act ( Connecticut, Delaware, the District of Columbia,

Maine, Maryland, Massachusetts, New Hampshire, New Jersey,

New York, Pennsylvania, Rhode Island, Vermont, and Virginia). " Our modeling demonstrates that even in the extreme example of zero anthropogenic emissions within the OTR ( Ozone Transport Region), 145 of 146 monitors show a significant (> 25%) increment of the 8 hour standard taken up 135 by transport from outside the OTR." Comments from the North Carolina Department of Environment and Natural Resources stated, " The reductions proposed in [ EPA's rule] in the other states are needed to ensure that North Carolina can attain and maintain the health based air quality standards for ... 8 hour ozone."

b. Magnitude of Ozone Reductions Achieved Commenters stated that NOx reductions should not be pursued because the 8 hour ozone reductions in projected nonattainment counties resulting from the required NOx reductions are too small   1 2 ppb in only certain areas.

According to commenters, these benefits are smaller than the threshold for determining significant contribution.

EPA disagrees with the notion that if air quality improvements would be limited, then nothing further should be done to address interstate transport. Based on the difference between the base case and CAIR control case modeling results, EPA has concluded that interstate air quality impacts are significant from an air quality standpoint, and that highly cost effective reductions are available to reduce ozone transport. State comments have corroborated EPA's conclusion that a number of areas will face high local control costs, or even be unable to attain the 8 hour ozone standard, without further reductions in 136 interstate transport. Therefore, EPA believes it is important for upwind states to modify their SIPs so that they contain adequate provisions to prohibit significant contributions to downwind nonattainment or interference with maintenance as the statute requires. EPA has established an amount of required emissions reductions based on controls that are highly cost effective. The resulting improvements in downwind ozone levels are needed for attainment, public health and equity reasons.

The 2 ppb significance threshold that commenters cite is part of the test that EPA used to identify which States should be evaluated for inclusion in a rule requiring them to reduce emissions to reduce interstate transport. ( See section VI.) This 2 ppb threshold is based on the impact on a downwind area of eliminating all emissions in an upwind State. The ozone reductions from CAIR will improve public health and will decrease the extent and cost of local controls needed for attainment in some areas. In addition,

base case modeling for this rule shows that of the 40 counties projected in nonattainment in 2010, 16 counties are within 2 ppb of the standard, 6 counties are within 3 ppb,

and 3 counties are within 4 ppb. In 2015, projected base case ozone concentrations in over 70 percent of nonattaining counties ( i. e., 16 of 22 counties) are within 5 ppb of the 137 standard.

Reducing NOx emissions has multiple health and environmental benefits. Controlling NOx reduces interstate transport of fine particle levels as well as ozone levels,

as discussed elsewhere in this notice. Although EPA is not relying on other benefits for purposes for setting requirements in this rule, reducing NOx emissions also helps to reduce unhealthy ozone and PM levels within a State, as well as reduce acid deposition to soils and surface waters,

eutrophication of surface and coastal waters, visibility degradation, and impacts on terrestrial and wetland systems such as changes in species composition and diversity.

c. Why Is EPA Addressing Ozone Transport in this Rule,

Given That EPA Already Issued the NOx SIP Call?

1. EPA's Legal Authority to Require Controls Beyond the NOx SIP Call Commenters emphasized that in the NOx SIP call, EPA determined the States whose emissions contribute significantly to nonattainment, EPA mandated NOx emissions reductions that would eliminate those significant contributions, and EPA indicated that it would reconsider the matter in 2007. This commenter argued that for the States included in the NOx SIP call, EPA may not, as a legal matter, conduct further rulemaking at this time because the 138 affected States are no longer contributing significantly to nonattainment downwind. In any event, the commenters said,

EPA should abide by its statement that it would revisit the matter in 2007, and EPA should not do so earlier. 139 140 2. Authority to Revisit NOx SIP Call Requirements Commenters added that the purpose of the CAIR rulemaking seemed to be to account for the fact that control costs have changed since the date of the NOx SIP Call. The commenters said that control costs will frequently fluctuate, but that such fluctuations should not merit revised rulemaking.

In response, we would note that EPA conducted an updated analysis for air quality impacts, not only costs, in determining that further reductions in interstate ozone transport are warranted. That air quality analysis showed a substantial, continuing interstate transport problem for areas after implementation of the NOx SIP call. EPA does have the legal authority to reconsider the scope of the area that significantly contributes and the level of control determined to be " highly cost effective" based on new information. Updated information shows that lower NOx burners and SCR achieve better performance than previously 141 estimated and as a result are more cost effective than previously anticipated. This rule follows the NOx SIP Call by six years; EPA does not believe that this represents a too frequent re evaluation, particularly given the stay of the 8 hour basis for the NOx SIP call ( See, e, g, CAA section 109 ( d)( 1) requiring EPA to reevaluate the NAAQS themselves every five years.) So both updated air quality and cost information supports further NOx controls to reduce interstate transport.

Some commenters argued that EPA should delay imposing control obligations on upwind States for the 8 hour ozone NAAQS until after EPA has implemented local control requirements, and after all of the NOx SIP Call control requirements are implemented and evaluated. Others said EPA should not impose requirements on non SIP call States until after all 8 hour controls   NOx SIP Call and local   are implemented.

We agree that the NOx SIP call should be taken into account in evaluating the need for further interstate transport controls. We have taken the NOx SIP call into account by including the effect of the NOx SIP call in the base case used for the CAIR analysis, and by conducting analyses to confirm that CAIR will achieve greater ozoneseason reductions than the SIP call. EPA disagrees that the 142 Agency should wait for implementation of local controls before determining transport controls. There is no legal requirement that EPA wait to determine transport controls until after local controls are implemented. EPA's basis for this legal interpretation is explained in section II. A.

above. In addition, the Agency believes it is important to address interstate transport expeditiously for public health.

C. Comments on Excluding Future Case Measures from the Emissions Baselines Used to Estimate Downwind Ambient Contribution The EPA received comments that the 2010 analytical baseline for evaluating whether upwind emissions meet the air quality portion of the " contribute significantly"

standard should reflect local control measures that will be required in the downwind nonattainment areas, or broader statewide measures in downwind states, to attain the PM2.5 or 8 hour ozone NAAQS by the relevant attainment dates, many of which are ( or are anticipated to be) 2010 or earlier.

This single target year was chosen both to address analytical tool constraints and to reasonably reflect future conditions in or near the initial attainment years for both ozone and PM nonattainment areas. The EPA did include in the baseline most of the specifically required measures that 143 can be identified at this time, but did not include any further measures that would be needed for satisfying " rate of progress" requirements or for attainment of the PM2.5 and 8 hour ozone standards. If EPA had included further local controls, the commenters contend, fewer upwind States would have exceeded our significant contribution thresholds.

We reject any notion that in determining the need for transport controls in upwind states, EPA should assume that the affected downwind areas must " go all the way first"   that is, assume that downwind areas put on local in state controls sufficient to reach attainment, or assume that downwind states with nonattainment areas implement statewide control measures. EPA does not believe these are appropriate assumptions. The former assumption would eviscerate the meaning of CAA section 110( a)( 2)( D). The latter assumption would make the downwind state solely responsible for reductions in any case where a downwind state could attain through in state controls alone, even if the upwind state contribution was significantly contributing to nonattainment problems in the downwind state. We do not believe that this approach would be consistent with the intent of section 110( a)( 2)( D), which in part is to hold upwind states responsible for an appropriate share of downwind nonattainment and maintenance problems, and to 144 prevent scenarios in which downwind states must impose costly extra controls to compensate for significant pollution contributions from uncontrolled or poorly controlled sources in upwind states. In addition, this approach could raise costs of meeting air quality standards because highly cost effective controls in upwind states would be foregone.

Rather, in the particular circumstances presented here,

we think the adoption of regional controls at this time under section 110( a)( 2)( D) is consistent with sound policy and section 110. Based on our analysis, the states covered by CAIR make a significant contribution to downwind nonattainment and the required reductions are highly cost effective. The reductions will reduce regional pollution problems affecting multiple downwind areas, will make it possible for states to determine the extent of local control needed knowing the reductions in interstate pollution that are required, will address interstate equity issues that can hamper control efforts in downwind states, and reflect considerations discussed in detail in section VII.

Although some commenters advocated specifically including statutorily mandated future nonattainment area controls in the analytical baseline, it would be difficult as a practical matter to predict the extent of local 145 controls that will be required ( beyond controls previously required) in each area in advance of final implementation rules interpreting the Act's requirements for PM2.5 and 8

hour ozone, and before the state implementation plan process. Subpart 2 provisions that apply to certain ozone nonattainment areas are quite specific regarding some mandatory measures; we believe the CAIR baseline for the most part captures these measures. ( See Response to Comments.)

As noted above, the choice of a single analytical year of 2010 was made to reflect baseline conditions at a date at or near the attainment dates for different pollutants and classes of areas. Because the attainment date for many ozone areas is 2009 or earlier, it should be noted that the analyses in 2010 may slightly overestimate the benefits of a number of national rules for mobile sources that grow with time. As noted elsewhere, these differences are unlikely to be significant.

D. What Criteria Should Be Used to Determine Which States are Subject to this Rule Because They Contribute to PM2.5 Nonattainment?

1. What is the Appropriate Metric for Assessing Downwind PM2.5 Contribution?

a. Notice of Proposed Rulemaking 146 In the NPR, we proposed as the metric for identifying a State as significantly contributing ( depending upon further consideration of costs) to downwind nonattainment, the predicted change, due to the upwind State's emissions, in PM2.5 concentration in the downwind nonattainment area that receives the largest ambient impact. EPA proposed this metric in the form of a range of alternatives for a " bright line," that is, ambient impacts at or greater than the chosen threshold level indicated that the upwind State's emissions do contribute significantly ( depending on cost considerations), and that ambient impacts below the threshold mean that the upwind State's emissions do not contribute significantly to nonattainment. As detailed in section VI below, EPA conducted the analysis through air quality modeling that removed the upwind State's anthropogenic SO2 and NOx emissions, and determined the difference in downwind ambient PM2.5 levels before and after removal. The modeling results indicate a wide range of maximum downwind nonattainment impacts from the 37 States that we evaluated. The largest maximum contribution is 1.67 micrograms per cubic meter (

g/ m3), from Ohio to both Allegheny and Beaver counties in Pennsylvania.

b. Comments and EPA's Responses The EPA proposed to use the maximum contribution on any 147 downwind nonattainment area for assessing downwind PM2.5 contributions. Many commenters expressed agreement with our proposed metric, however, many others disagreed. One group of these commenters indicated that EPA should distinguish the relative contribution from States using two parameters:

( 1) how many downwind nonattainment receptors they contribute to, and ( 2) how much they contribute to each such receptor. The commenters indicated that this approach would avoid inequities created by the disproportionate impact of some upwind contributors on their downwind neighbors. EPA interprets these comments to suggest a metric that collectively includes both of these parameters, such as the sum of all downwind impacts on all affected receptors. This metric would result in higher values for States contributing to multiple receptors and at relatively high levels, and lower values for States contributing to fewer receptors and at relatively low levels.

The EPA's proposed metric does address how much each State contributes to a downwind neighbor; however, EPA does not believe that multiple downwind receptors need to be impacted in order for a particular state to be required to make emissions reductions under CAA section 110( a)( 2)( D).

Under this provision, an upwind State must include in the SIP adequate provisions that prohibit that State's emissions 148 that " contribute significantly to nonattainment in ... any other State...." ( Emphasis added.) Our interpretation of this provision is that the emphasized terms make clear that the upwind State's emissions must be controlled as long as they contribute significantly to a single nonattainment area.

One commenter agreed with EPA's use of maximum annual average downwind contribution, but suggested that EPA consider additional metrics such as: ( a) contributions to adverse health and welfare effects from short term PM2.5 concentrations; ( b) contributions to worst 20 percent haze levels in Class 1 areas; and ( c) contributions to adverse effects of sulfur and nitrogen deposition to acid sensitive surface waters and forest soils. The EPA appreciates that these metrics all have merit in their focus on the health and environmental consequences of emissions, however, in determining a metric for significant contributions, we must focus on implementation of CAA section 110( a)( 2)( D)

provisions regarding significant contribution to nonattainment of the PM2.5 NAAQS.

Another commenter suggested EPA use the maximum annual average impact, as we proposed, but add the maximum daily PM2.5 contribution. The commenter notes that this additional metric would indicate whether specific 149 meteorological events drive the concentration change or whether there is a consistent pattern of transport from one area to another. It is not clear to EPA how the single data point of the maximum daily contribution indicates a consistent pattern of transport from one area to another since it is a measure from only a single day. Further, EPA does not agree that multiple days of impact is a relevant criterion for evaluating whether a State contributes significantly to nonattainment, since in theory, a single high contribution event could be the cause or a substantial element of nonattainment of the annual average PM2.5 standard. Because we currently do not observe nonattainment of the daily average PM2.5 standard in Eastern areas,

nonattainment of the annual average PM2.5 standard is the relevant evaluative measure.

Some commenters suggested separately evaluating the NOx and SO2 related impacts ( i. e., particulate nitrate and particulate sulfate) on nonattainment. As discussed in section II of this notice, EPA's approach to evaluating a State's impact on downwind nonattainment by considering the entirety of the State's SO2 and NOx emissions is consistent with the chemical interactions in the atmosphere of SO2 and NOx in forming PM2.5. The contributions of SO2 and NOx emissions are generally not additive, but rather are 150 interrelated due to complex chemical reactions.

c. Today's Action The EPA continues to believe that for each upwind State analyzed, the change in the annual PM2.5 concentration level in the downwind nonattainment area that receives the largest impact is a reasonable metric for determining whether a State passes the " air quality" portion of the " contribute significantly" test, and therefore that State should be considered further for emissions reductions ( depending upon the cost of achieving those reductions). This single concentration based metric is adequate to capture the impact of SO2 and NOx emissions on downwind annual PM2.5 concentrations.

2. What is the Level of the PM2.5 Contribution Threshold?

a. Notice of Proposed Rulemaking In the NPR, the EPA proposed to establish a State level annual average PM2.5 contribution threshold from anthropogenic SO2 and NOx emissions that was a small percentage of the annual air quality standard of 15.0

g/ m3.

The EPA based this proposal on the general concept that an upwind State's contribution of a relatively low level of ambient impact should be regarded as significant ( depending on the further assessment of the control costs). We based our reasoning on several factors. EPA's modeling indicates 151 that at least some nonattainment areas will find it difficult or impossible to attain the standards without reductions in upwind emissions. In addition, our analysis of " base case" PM2.5 transport shows that, in general, PM2.5 nonattainment problems result from the combined impact of relatively small contributions from many upwind States,

along with contributions from in State sources and, in some cases, substantially larger contributions from a subset of particular upwind States. In the NOx SIP Call rulemaking,

we termed this pattern of contribution   which is also present for ozone nonattainment   " collective contribution."

In the case of PM2.5, we have found collective contribution to be a pronounced feature of the PM2.5 transport problem, in part because the annual nature of the PM2.5 NAAQS means that throughout the entire year and across a range of wind patterns   rather than during just one season of the year or on only the few worst days during the year which may share a prevailing wind direction   emissions from many upwind States affect the downwind nonattainment area.

As a result, to address the transport affecting a given nonattainment area, many upwind States must reduce their emissions, even though their individual contributions may be relatively small. Moreover, as noted above, the EPA's air 152 quality modeling indicates that at least some nonattainment areas will find it difficult or impossible to attain the standards without reductions in upwind emissions. In combination, these factors suggest a relatively low value for the PM2.5 transport contribution threshold is appropriate. For reasons specified in the NPR ( 69 FR 4584), EPA initially proposed a value of 0.15 ug/ m3 ( 1% of the annual standard) for the significance criterion, but also presented analyses based on an alternative of 0.10 ug/ m3 and called for comment on this alternative as well as on " the use of higher or lower thresholds for this purpose"

( 69 FR 4584).

The EPA adopted a conceptually similar approach to that outlined above for determining that the significance level for ozone transport in the NOx SIP Call rulemaking should be a small number relative to the NAAQS. The D. C. Circuit Court, in generally upholding the NOx SIP Call, viewed this approach as reasonable. Michigan v. EPA, 213 F. 3d 663, 674

80 ( D. C. Cir. 2000), cert. denied, 532 U. S. 904 ( 2001).

After describing EPA's overall approach of establishing a significance level and requiring States with impacts above the threshold to implement highly cost effective reductions,

the Court explained: " EPA's design was to have a lot of States make what it considered modest NOx reductions...." 153 Id. at 675. Indeed, the Court intimated that EPA could have established an even lower threshold for States to pass the air quality component:

EPA has determined that ozone has some adverse health effects   however slight   at every level [ citing National Ambient Air Quality Standards for Ozone, 62 FR 38856 ( 1997)]. Without consideration of cost it is hard to see why any ozone creating emissions should not be regarded as fatally " significant" under section 110( a)( 2)( D)( i)( I)."

213 F. 3d at 678 ( emphasis in original).

We believe the same approach applies in the case of PM2.5 transport.

b. Comments and EPA's Responses Many commenters indicated that EPA did not adequately justify the proposed annual average PM2.5 contribution threshold level of 0.15

g/ m3. Some commenters favor the alternative 0.10

g/ m3 proposed by EPA, citing their agreement with EPA's rationale for 0.10

g/ m3 while criticizing as arbitrary EPA's rationale for 0.15

g/ m3.

Some commenters argued that the public health impact portion of EPA's rationale for establishing a relatively low level threshold was not relevant. The commenters said 154 that EPA previously determined, in establishing the PM2.5 NAAQS, that ambient levels at or above 15.0

g/ m3 were of concern for protecting public health, not the much lower levels that EPA proposed as the thresholds. In the NPR, we stated that we considered that there are significant public health impacts associated with ambient PM2.5, even at relatively low levels. In generally upholding the NOx SIP Call, the D. C. Circuit noted a similar reason for establishing a relatively low threshold for ozone impacts.

Michigan v. EPA, 213 F. 3d 663, 678 ( D. C. Cir. 2000), cert.

denied, 532 U. S. 904 ( 2001). EPA notes that by using a metric that focuses on the contribution of upwind areas to downwind areas that are above 15.0

g/ m3, relatively low contributions to levels above the annual PM2.5 standard are highly relevant to public health protection.

Many commenters offered alternative thresholds higher than 0.15

g/ m3, citing previous EPA rules or policies as justification for the alternative level. Some suggested the PM2.5 threshold should be equivalent in percentage terms to the threshold employed for assessing maximum downwind 8 hour ozone contributions. The threshold for maximum downwind 8

hour ozone concentration impact used in the NOx SIP Call,

and proposed for use in the CAIR, is 2 parts per billion ( ppb), or about 2.5 percent of the standard level of 80 ppb. 155 Applying the 2.5 percent criterion to the 15.0

g/ m3 annual PM2.5 standard would yield a significance threshold of 0.35

g/ m3.

EPA disagrees with the comment that the thresholds for annual PM2.5 and 8 hour ozone should be an equivalent percentage of their respective NAAQS. Both the forms and averaging times of the two standards are substantially different, with 8 hour ozone based on the average of the 4th highest daily 8 hour maximum values from each of 3 years,

and PM2.5 based on the average of annual means from 3 successive years. These fundamental differences in time scales, and thus in the patterns of transport that are relevant to contributing to nonattainment, do not suggest a transparent reason for presuming that the contribution thresholds should be equivalent. As discussed above, when more States make smaller individual contributions because of the annual nature of the PM2.5 standard, it makes sense to have a threshold for PM2.5 that is a smaller percentage of its NAAQS.

Other commenters suggested that in setting the maximum downwind PM2.5 threshold, EPA should take into consideration the measurement precision of existing PM2.5 monitors. The commenters assert that such measurement carries " noise" in the range of 0.5  0.6

g/ m3. Because many daily average 156 monitor readings are averaged to calculate the annual average, the precision of the annual average concentration is better than the figures cited by the commenters. Indeed,

the annual standard is expressed as 15.0

g/ m3, rounded to the nearest 1/ 10th

g, because such small differences are meaningful on an annual basis. While disagreeing with the specific amounts suggested by commenters, EPA recognizes that the PM2.5 threshold specified in the proposal contains two digits beyond the decimal place, while the NAAQS specifies only one. EPA agrees that specification of a threshold value of 0.15 ug/ m3 does suggest an overly precise test that might need to take into account modeled difference in PM2.5 values as low as 0.001 ug/ m3.

Other commenters indicated that modeling " noise"   that is, imprecision   is a relevant consideration for establishing a threshold whose evaluation depends on air quality modeling analysis. These commenters indicated that a threshold of 5 percent of the NAAQS ( i. e., 0.75

g/ m3) is more reasonable considering modeling sensitivity. The commenters were not clear about what they mean by modeling " noise" and did not explain how it relates to the use of a threshold metric in the context of the CAIR.

In responding to the comment, we have considered some possible contributors to what the commenter describes as 157 " noise." There is the possibility that the air quality model has a systematic bias in predicting concentrations resulting from a given set of emissions sources. The EPA uses the model outputs in a relative, rather than an absolute, sense so that any modeling bias is constrained by real world results. As described further in section VI, EPA conducts a relative comparison of the results of a base case and a control case to estimate the percentage change in ambient PM2.5 from the current year base case, holding meteorology, other source emissions, and other factors contributing to uncertainty constant. With this technique,

any absolute modeling bias is cancelled out because the same model limitations and uncertainties are present in each set of runs.

Another possible source of noise is in the relative comparison of two model runs conducted on different computers. Since the computers used by EPA to run air quality models do not have any significant variability in their numerical processes, two model runs with identical inputs result in outputs that are identical to many significant digits. On the other hand, EPA believes it is not appropriate or necessary to carry such results to a level of precision that is beyond that required by the PM2.5 158 39In attainment modeling for the annual PM2.5 NAAQS, results are carried to the second place beyond the decimal, in contrast to the three places beyond decimal noted above for the proposed threshold.

40See 40 CFR 51.165( b)( 2). New or modified major sources in attainment or unclassifiable areas must undergo preconstruction permit review, adopt best available control technology, and obtain emissions offsets if they are determined to " cause or contribute" to a violation of the NAAQS. " Cause or contribute" is defined as an impact that exceeds 5

g/ m3 ( 3.3 percent) of the 150

g/ m3 24 hour average PM10 NAAQS , or 1

g/ m3 ( 2 percent) of the annual average PM10 NAAQS.

41See 40 CF R 51.166( i)( 5)( i). Proposed new sources or existing source modifications that would contribute less than 10

g/ m3 ( or 5.3%) of the 150

g/ m3 PM10 24 hour average NAAQS, estimated using on a screening model, may avoid the requirement of collecting and submitting ambient air quality data. NAAQS itself39.

Many commenters noted that EPA's proposed threshold of 0.15

g/ m3, or one percent of the annual PM2.5 NAAQS of 15.0

g/ m3, is lower than the single source contribution thresholds employed for PM10 in certain other regulatory contexts. Commenters cited several different thresholds,

including thresholds governing the applicability of the preconstruction review permit program and the emissions reduction requirement for certain major new or modified stationary sources located in attainment or unclassified areas; 40 and thresholds in the PSD rules that may relieve proposed sources from performing comprehensive ambient air quality analyses. 41 159 Since the thresholds referred to by the commenters serve different purposes than the CAIR threshold for significant contribution, it does not follow that they should be made equivalent. The implication of the thresholds cited by the commenters is not that single source contributions below these levels indicate the absence of a contribution. Rather, these thresholds address whether further more comprehensive, multi source review or analysis of appropriate control technology and emissions offsets are required of the source. A source with estimated impacts below these levels is recognized as still affecting the airshed and is subject to meeting applicable control requirements, including best available control technology,

designed to moderate the source's impact on air quality.

The purpose of the CAIR threshold for PM2.5 is to determine whether the annual average contribution from a collection of sources in a State is small enough not to warrant any additional control for the purpose of mitigating interstate transport, even if that control were highly cost effective.

One commenter suggested that EPA also establish and evaluate a threshold for a potential new tighter 24 hour PM2.5 standard ( e. g., 1 percent of 30

g/ m3). EPA must base its criteria on evaluation of the current PM2.5 standards and not standards that may be considered in the future. 160 42This truncation convention for PM2.5 is similar to that used in evaluating modeling results in applying the ozone significance screening criterion of 2 ppb in the NOx SIP call and the CAIR proposal ( Technical Support Document fo the Interstate Air Quality Rule Air Quality Modeling Analyses", January 2004. Docket # OAR 2003 0053 0162), as well as today's final action. c. Today's Action EPA continues to believe that the threshold for evaluating the air quality component of determining whether an individual State's emissions " contribute significantly"

to downwind nonattainment of the annual PM2.5 standard,

under CAA section 110( a)( 2)( D) should be very small compared to the NAAQS. We are, however, persuaded by commenters arguments on monitoring and modeling that the precision of the threshold should not exceed that of the NAAQS. Rounding the proposal value of 0.15, the nearest single digit corresponding to about 1% of the PM2.5 annual NAAQS is 0.2 ug/ m3. The final rule is based on this threshold. EPA has decided to apply this threshold such that any model result that is below this value ( 0.19 or less) indicates a lack of significant contribution, while values of 0.20 or higher exceed the threshold. 42 Using this metric for determining whether a State " contributes significantly" ( before considering cost) to PM2.5 nonattainment, our updated modeling shows that Kansas,

Massachusetts, New Jersey, Delaware, and Arkansas ( all 161 43Today's action, including the updated modeling, fulfills EPA's commitment in the NOx SIP Call ( which EPA finalized in 1998) to reevaluate interstate ozone contributions by 2007. See 63 FR 57399; October 27, 1998. included in the original proposal) no longer exceed the 0.2

g/ m3 annual average PM2.5 contribution threshold. Of these states, only Arkansas would exceed the threshold of 0.15 ug/ m3 that was included in the proposal.

E. What Criteria Should be Used to Determine Which States are Subject to this Rule Because They Contribute to Ozone Nonattainment?

1. Notice of Proposed Rulemaking In assessing the contribution of upwind States to downwind 8 hour ozone nonattainment, EPA proposed to follow the approach used in the NOx SIP Call and to employ the same contribution metrics, but with an updated model and updated inputs that reflect current requirements ( including the NOx SIP Call itself). 43 The air quality modeling approach we proposed to quantify the impact of upwind emissions includes two different methodologies: zero out and source apportionment.

As described in section VI, EPA applied each methodology to estimate the impact of all of the upwind State's NOx emissions on each downwind nonattainment areas.

The EPA's first step in evaluating the results of 162 44See the CAIR Air Quality Modeling TSD for description of the methodology used to calculate these metrics. these methodologies was to remove from consideration those States whose upwind contributions were very low.

Specifically, EPA considered an upwind State not to contribute significantly to a downwind nonattainment area if the State's maximum contribution to the area was either ( 1)

less than 2 ppb, as indicated by either of the two modeling techniques; or ( 2) less than one percent of total nonattainment in the downwind area. 44 If the upwind State's impact exceeded these thresholds,

then EPA conducted a further evaluation to determine if the impact was high enough to meet the air quality portion of the " contribute significantly" standard. In doing so, the EPA organized the outputs of the two modeling techniques into a set of " metrics." The metrics reflect three key contribution factors:

! the magnitude of the contribution ( actual amount of ozone contributed by emissions in the upwind State to nonattainment in the downwind area);

! the frequency of the contribution ( how often contributions above certain thresholds occur); and ! the relative amount of the contribution ( the total ozone contributed by the upwind State compared to the total amount of nonattainment ozone in the downwind 163 area).

The specific metrics on which EPA proposed to rely are the same as those used in the NOx SIP Call. Table III 1 lists them for each of the two modeling techniques, and identifies their relationship to the three key contribution factors.

Table III 1. Ozone Contribution Factors and Metrics Factor: Modeling Technique Zero out Source Apportionment Magnitude of Contribution Maximum contribution Maximum contribution; and Highest daily average contribution ( ppb and percent)

Frequency of Contribution Number and percent of exceedances with contributions in various concentration ranges Number and percent of exceedances with contributions in various concentration ranges Relative Amount of Contribution Total contribution relative to the total exceedance ozone in the downwind area; and Population weighted total contribution relative to the total populationweighted exceedance ozone in the downwind area Total average contribution to exceedance hours in the downwind area 164 In the NPR, EPA proposed threshold values for the metrics. An upwind State whose contribution to a downwind area exceeded the threshold values for at least one metric in each of at least two of the three sets of metrics was considered to contribute significantly ( before considering cost) to that downwind area. To reiterate, the three sets of metrics reflect the factors of magnitude of contribution,

frequency of contribution, and relative percentage on nonattainment.

In fact, EPA noted in the NPR that for each upwind State, the modeling disclosed at least one linkage with a downwind nonattainment area in which all factors ( magnitude,

frequency, and relative amount) were found to indicate large and frequent contributions. In addition, EPA noted in the NPR that each upwind State contributed to nonattainment problems in at least two downwind States ( except for Louisiana and Arkansas which contributed to nonattainment in only 1 downwind State).

In addition, EPA noted in the NPR that for most of the individual linkages, the factors yield a consistent result across all three sets of metrics ( i. e., either ( i) large and frequent contributions and high relative contributions or ( ii) small and infrequent contributions and low relative 165 contributions). In some linkages, however, not all of the factors are consistent. The EPA believes that each of the factors provides an independent, legitimate measure of contribution.

In the NPR, the EPA applied the evaluation methodology described above to each upwind downwind linkage to determine which States contribute significantly ( before considering cost) to nonattainment in the 40 downwind counties in nonattainment for ozone in the East. The analysis of the metrics for each linkage was presented in the AQMTSD for the NPR. The modeling analysis supporting the final rule is an update to the NPR modeling, and is described in more detail in section VI below.

2. Comments and EPA Responses Some commenters submitted comments specifically on the 8 hour ozone metrics. One commenter asserted that in calculating the " Relative Amount of Contribution" metric,

EPA treats the modeled reductions from zeroing out a State's emissions as impacting only the portion of the downwind receptor's ambient ozone level that exceeds the 8 hour average 84 ppb level. The commenter asserted that this approach falsely treats the upwind state's emissions as contributing to the amount of ozone that exceeds the NAAQS,

and thus inflates the ambient impact of those emissions. 166 The commenter concluded that it would be more appropriate to treat the upwind emissions as impacting all of the downwind ozone level ( not just the portion greater than 84 ppb). We interpret this comment to mean that in expressing an upwind State's contribution as a percentage, the denominator of the percentage should be the downwind area's total ozone contribution, rather than the downwind area's ozone excess above the NAAQS, but that the same threshold should be used to evaluate contribution. This would tend to result in fewer upwind States being found to be significant with respect to this metric.

We believe that it is important to examine the ozone contribution relative to the amount of ozone above the NAAQS as well as the amount relative to total nonattainment ozone.

Both approaches have merit. The intent of the relative contribution metric, as calculated for the zero out modeling, is to view the contribution of the upwind State relative to the amount that the downwind area is in nonattainment; that is, the amount of ozone above the NAAQS.

However, our relative amount metric for the source apportionment modeling does treat the amount of contribution relative to the total amount of ozone when ozone concentrations are predicted to be above the NAAQS. To be found a significant contributor, an upwind State must be 167 above the threshold for both the zero out based metric and the source apportionment based metric. Thus, our approach to considering the significance of interstate ozone transport captures both approaches for examining the relative amount of contribution and does not favor one approach over the other, as discussed above.

3. Today's Action EPA is finalizing the methodology proposed in the NPR,

and discussed above, for evaluating the air quality portion of the " contribute significantly" standard for ozone.

F. Issues Related to Timing of the CAIR Controls 1. Overview A number of commenters questioned the need for CAIR requirements considering that cap dates of 2010 and 2015 are later than the attainment dates that, in the absence of extensions, would apply to certain downwind PM2.5 areas and ozone nonattainment areas. Other commenters, noting that states will be required to adopt controls in local attainment plans, questioned whether CAIR controls would still be needed to avoid significant contribution to downwind nonattainment, or whether the controls would still be needed to the extent required by the rule.

Of course, CAIR will achieve substantial reductions in time to help many nonattainment areas attain the standards 168 45 As in the NOx SIP Call rulemaking, EPA interprets the " interfere with maintenance" statutory requirement " much the same as the term ` contribute significantly'", that is, " through the same weight of evidence approach." 63 FR at 57379. Furthermore, we believe the " interfere with maintenance" prong may come into play only in circumstances where EPA or the state can reasonably determine or project, based on available data, that an area in a downwind state will achieve attainment, but due to emissions growth or other relevant factors is likely to fall back into nonattainment. Id. by the applicable attainment dates. The design of the SO2 program, including the declining caps in 2010 and 2015 and the banking provisions, will steadily reduce SO2 emissions over time, achieving reductions in advance of the cap dates;

and the 2009 and 2015 NOx reductions will be timely for many downwind nonattainment areas.

Although many of today's nonattainment areas will attain before all the reductions required by CAIR will be achieved, it is clear that CAIR's reductions will still be needed through 2015 and beyond. EPA's air quality modeling has demonstrated that upwind States have a sufficiently large impact on downwind areas to require reductions in 2010 and 2015 under CAA section 110( a)( 2)( D). Under this provision, SIPs must prohibit emissions from sources in amounts that " will contribute significantly to ...

nonattainment" or " will interfere with maintenance". 45 EPA has evaluated the attainment status of the downwind receptors in 2010 and 2015, and has determined that each 169 upwind State's 2010 and 2015 emissions reductions are necessary to the extent required by the rule because a downwind receptor linked to that upwind State will either ( i) remain in nonattainment and continue to experience significant contribution to nonattainment from the upwind State's emissions; or ( ii) attain the relevant NAAQS but later revert to nonattainment due, for example, to continued growth of the emissions inventory.

The argument that the CAIR reductions are justified, in part, by the need to prevent interference with maintenance,

is a limited one. EPA does not believe that the " interfere with maintenance" language in section 110( a)( 2)( D) requires an upwind state to eliminate all emissions that may have some impact on an area in a downwind state that is ( or once was) in nonattainment and that, therefore, will need ( or now needs) to maintain its attainment status. Instead, we believe that CAIR emission reductions are needed beyond 2010 and 2015, in part, to prevent upwind states from significantly interfering with maintenance in other states because our analysis shows it is likely that, in the absence of the CAIR, a current or projected attainment area will revert to nonattainment due to continued emissions growth or other relevant factors. We are not taking the position that CAIR controls are automatically justified to prevent 170 interference with maintenance in every area initially modeled to be in nonattainment.

We also note that considering the emission controls needed for maintenance, along with the controls needed to reach attainment in the first place, is consistent with the goal of promoting a reasonable balance between upwind state controls and local ( including all in state) controls to attain and maintain the NAAQS. As discussed in section IV of this notice, in the ideal world, the states and EPA would have enough information ( and powerful enough analytical tools) to allow us to identify a mix of control strategies that would bring every area of the country into attainment at the lowest overall cost to society. Under such an approach, we would evaluate the impact of every emissions source on air quality in all nonattainment areas, the cost of different options for controlling those sources, and the cost effectiveness of those controls in terms of cost per increment of air quality improvement. Such an approach would obviously make it easier for a state to develop an appropriate set of control requirements for sources located in that state based on ( 1) the need to bring its own nonattainment areas into attainment and ( 2) its responsibility under section 110( a)( 2)( D) to prevent significant contribution to nonattainment in downwind states 171 46 This does not mean that the upwind state would be responsible for making all the reductions necessary to bring the downwind state's nonattainment area into attainment; how much would be required of each state is a separate question. Again in the ideal world, we would be able to find the right mix of controls in both states so that attainment would be and interference with maintenance in those states.

Such an approach would also make it much easier for the Agency to decide on efficiency grounds whether to take action under section 126 ( or under section 110( a)( 2)( D) if a state failed to meet its obligations under that section) for purposes of either attainment or maintenance of a NAAQS in another state. In the simplest example, we might need to consider a case in which a downwind state with a nonattainment area is seeking reductions from an upwind state based on the claim that emissions from the upwind state are contributing significantly to the nonattainment problem in the downwind state. In such a case, the first question is whether the upwind state should be required to take any action at all, and in the ideal world, it would be simple to answer this question. If emission reductions from sources in the upwind state are more cost effective than emission reductions in the downwind state  in terms of cost per increment of improvement in air quality in the downwind nonattainment area  then the upwind state would need to take some action to control emissions from sources in that state. 46 On the other hand, if controls on sources in the 172 achieved at the lowest total cost. upwind state are not more cost effective in terms of cost per increment of improvement in air quality, then the Agency would not take action under sections 126 or 110( a)( 2)( D);

rather, the downwind state would need to meets its attainment and maintenance needs by controlling sources within its own jurisdiction. Of course, factors other than efficiency, such as equity or practicality, also might affect the decision.

Unfortunately, we do not have adequate information or analytical tools ( ideally a detailed linear programming model that fully integrates both control costs and ambient impacts of sources in each State on each of the downwind receptors) to allow us to undertake the analysis described above at this time. However, the Agency believes that CAIR is consistent with this basic approach and will result in upwind states and downwind states sharing appropriate responsibility for attainment and maintenance of the relevant NAAQS, considering efficiency, equity and practical considerations. Under CAIR, the required reductions in upwind states ( including those projected to occur after 2015) are highly cost effective, measured in cost per ton of emissions reduction, as documented in section IV. This suggests that, regardless of whether the CAIR reductions 173 47 Tables describing cost effectiveness of various control measures and programs are provided in section IV. These show that the cost per ton of non power sector control options that states might consider for attainment purposes typically is higher than for CAIR controls. assist downwind areas in achieving attainment or in subsequently maintaining the relevant NAAQS, the upwind controls will be reasonable in cost relative to a further increment of local controls that, in most cases, will have a substantially higher cost per ton  particularly in areas that need greater local reductions and require reductions from a variety of source types. 47 Thus, we believe that CAIR is consistent with the goal of attaining and maintaining air quality standards in an efficient, as well as equitable, manner.

Another reason for considering both attainment and maintenance needs at this time is EPA's expectation that most nonattainment areas will be able to attain the PM2.5 and 8 hour ozone standards within the time periods provided under the statute. Considering both types of downwind needs shows that there is a strong basis for CAIR's requirements despite the potential for most receptor areas to attain before all the emission reductions required by CAIR are achieved.

2. By Design, the CAIR Cap and Trade Program Will Achieve Significant Emissions Reductions Prior to the Cap 174 48 A similar glide path will occur prior to the effective date of the Phase I SO2 cap because this cap will complement and extend the cap the currently exists under the Acid Rain program. Deadlines EPA notes that Phase I of CAIR is the initial step on the slope of emissions reduction ( i. e., the " glide path")

leading to the final control levels. Because of the incentive to make early emission reductions that the cap and trade program provides, reductions will begin early and will continue to increase through Phases I and II. Therefore,

all the required Phase II emission reductions will not take place on January 1, 2015, the effective date of the second phase cap. Rather, these reductions will accrue throughout the implementation period, as the sources install controls and start to test and operate them. The resulting glide path of reductions with CAIR Phase II will provide important reductions to areas coming into attainment over the 2010 to 2014 period. 48 3. Additional Justification for the SO2 and NOx Annual Controls Our modeling indicates that it is very plausible that a significant number of downwind PM2.5 receptors are likely to remain in nonattainment in 2010 and beyond. As noted above ( Preamble Table VI 10), the Agency has evaluated a wide 175 range of emission control options and found that the average ambient reduction in PM2.5 concentrations achievable through aggressive but feasible local controls is 1.26 ug/ m3. In the 2010 base case ( which does not consider potential local controls or 2010 CAIR controls, but does consider all other emission controls required to be in effect as of that date),

nearly half the receptor counties would be in nonattainment by more than this amount. This indicates that nonattainment is of sufficient severity to make it likely that, in the absence of CAIR, many of these areas would need an attainment date extension of at least one year.

Our base case modeling further shows that every upwind state is linked to at least one receptor area projected to have nonattainment of this severity. Tables VI 10 and VI 11. Thus, there is a reasonable likelihood that CAIR controls will be needed from all of the upwind states to prevent significant contribution to these downwind receptors' nonattainment.

Nor is the amount of reduction in excess of what is needed for attainment. We project that even with CAIR controls, almost all of the upwind states in 2010 remain linked with at least one downwind receptor that would not attain by the same substantial margin exceeding the average of aggressive local controls. Tables VI 10 and VI 8. This 176 not only indicates that the 2010 CAIR controls are not excessive, but that local controls will still be necessary for attainment.

In addition, there is potential for residual nonattainment in 2015 in view of the severity of PM2.5 levels in some areas, uncertainties about the levels of reductions in PM2.5 and precursors that will prove reasonable over the next decade, the potential for up to two 1 year extensions for areas that meet certain air quality levels in the year preceding their attainment date, and historical examples in which areas did not meet their statutory attainment dates for other NAAQS.

With respect to the argument that phase II emission reductions that will be achieved after 2015 are not needed because all receptors will have attained before 2015, we think it likely that some PM2.5 nonattainment areas may qualify for 2014 attainment dates and eventually, one year attainment date extensions, and that there may be residual nonattainment in 2015. We continue to project that nearly half the downwind receptors in the 2015 base case will be in nonattainment by amounts exceeding the average ambient reduction ( again, 1.26 ug/ m3) attributable to local controls we believe would be aggressive but feasible for 2010. Table VI 11. The history of progress in development of emission 177 reduction strategies and technologies indicates that greater local reductions could be achieved by 2015 than in 2010;

nonetheless, this potential nonattainment is of sufficient severity to make it plausible that at least some of these areas will need an extension. In such cases, this would eliminate the issue of timing raised by commenters, since CAIR controls would no longer be following attainment dates.

Our modeling further shows that, in the 2015 base case ( which does not include CAIR controls), all the upwind states in the CAIR region are linked to areas projected to exceed the standard by at least 2 ug/ m3. Tables VI 11 and VI 8. Given the reasonable potential for continued nonattainment, it is reasonable to require 2015 CAIR controls from each upwind state to prevent significant contribution to nonattainment.

Moreover, even with 2015 CAIR controls ( but not attainment SIP controls), almost all of the upwind states remain linked with at least one downwind receptor that would not attain by at least this same substantial margin ( at least 1.26 ug/ m3). Id. This shows that the 2015 CAIR controls are not more than are necessary to attain the NAAQS ( and also shows the necessity for local controls in order to attain). Thus, we conclude that the further PM2.5 reductions achieved by the second phase cap will likely be 178 needed to assure all relevant areas reach attainment by applicable deadlines.

Even if some of these areas make more progress than we predict, many downwind receptor areas would be likely in 2010 and 2015 to continue to have air quality only marginally better than the standard, and be at risk of returning to nonattainment. Air quality is unlikely to be appreciably cleaner than the standard because many areas will need steep reductions merely to attain, given that we project nonattainment by wide margins ( as explained above).

Moreover, we project that without CAIR, PM2.5 levels would worsen in 19 downwind receptor counties between 2010 and 2015, reflecting changes in local and upwind emissions.

Air Quality Modeling Technical Support Document, November,

2004. This suggests a reasonable likelihood that, without CAIR, these areas would return to nonattainment. See 63 FR at 57379 80 ( finding in NOX SIP Call that upwind emissions interfere with maintenance of 8 hour ozone standard under section 110( a)( 2)( D)( i) where increases in emissions of ozone precursors are projected due to growth in emissions generating activity, resulting in receptors no longer attaining the standard). These downwind receptors link to all but two of the upwind states, and the remaining two upwind states are linked to receptors where projected PM2.5 179 levels between 2010 and 2015 improve only slightly, leaving their air quality only marginally in attainment. Response to Comments, section III. C. In light of documented year to year variations in PM2.5 levels, these receptors would have a reasonable probability of returning to nonattainment in the absence of CAIR.

Emissions trends after 2015 give rise to further maintenance concerns. Between 2015 and 2020, emissions of PM2.5 and certain precursors are projected to rise. We do not have air quality modeling for 2020. However, for PM2.5 and every precursor, the 2015 2020 emission trend is less favorable than the 2010 2015 emission trend. Given the PM2.5 increases our air quality modeling found for 19 counties between 2010 and 2015, the emission trends suggest greater maintenance concerns in the 2015 2020 period than during the 2010 2015 period. See Response to Comments section III. C.

Accordingly, we believe that given these projected trends, and the likelihood of only borderline attainment,

CAIR controls from every upwind state in the CAIR region are needed to prevent interference with maintenance of the PM2.5 standard. The projected upwards pressure on PM2.5 concentrations in most receptor areas indicates that the amount of upwind reductions is not more than necessary to 180 prevent interference with maintenance of the standards,

again given the likelihood of initial attainment by narrow margins.

4. Additional Justification for Ozone NOx Requirements We believe that most 8 hour ozone areas will be able to attain by their attainment deadlines through existing measures, 2009 CAIR NOx reductions, and additional local measures. However, we also believe that a limited number of downwind receptor areas will remain in nonattainment with the ozone standard after 2010. This is due to the severity of projected ozone levels in certain areas, uncertainties about the levels of emissions reductions in that will prove reasonable over the next decade, and historical difficulties with attaining the 1 hour ozone standard.

For ozone, the historic difficulties that many areas,

particularly large urban areas, have experienced in attaining the ozone NAAQS raises the possibility that some areas may not attain by their attainment dates, and may request a voluntary bump up to a higher classification pursuant to section 181 ( b) ( 2) to gain an extension, or may fail to attain by the attainment date and be bumped up under section 181 ( b) ( 2). These authorities were used in the course of implementing the 1 hour ozone NAAQS.

Our base case modeling ( without CAIR, and without state 181 49 Attainment deadlines for moderate ozone areas are to be no later than June 2010; an approvable attainment plan must demonstrate the reductions needed for attainment will be achieved by the ozone season in the preceding year. controls implementing the 8 hour standard) projects geographically widespread nonattainment with the 8 hour ozone NAAQS in 2015. Tables VI 12 and VI 13. Five counties that link to 14 upwind states have projected ozone levels that exceed the 8 hour standard by 6 ppb or more, and 20 upwind states are linked to counties projected to exceed the 8 hour standard by more than 4 ppb. These two sets of linkages show that under a scenario in which several of the receptors with the highest ozone levels did not attain, CAIR reductions would be justified to prevent significant contributions from many of the upwind states in the CAIR ozone region.

The fact that receptors show significant nonattainment even after implementation of the phase II CAIR reductions,

as shown in Table VI 13, indicates that these reductions would not be more than necessary to prevent significant contribution to nonattainment in residual areas. Even if all ozone nonattainment areas in the CAIR region could achieve reductions sufficient to meet the level of the 8 hour ozone standard in 200949 based on local controls,

2009 CAIR NOx reductions, and existing programs, we believe that numerous downwind receptor areas would remain close 182 50 We recognize that in the absence of substantial evidence, variability alone would not be a sufficient basis for applying the " interfere with maintenance" prong of section 110( a)( 2)( D). Here, however, where there is a substantial enough to the standard to be at risk of falling back into nonattainment for the reasons discussed below. These receptor areas are linked to all states in the CAIR ozone region.

First, it is highly unlikely that the receptor areas will be able to attain by a wide margin. This is primarily because many of those areas will need substantial emissions reductions merely to attain. This is supported by modeling showing that in the 2010 base case, 30 percent of the receptors are projected to be in nonattainment by the wide margin of 6 ppb or more, indicating the steep emissions reductions necessary just to come into attainment. Table VI 12. We recognize that, unlike the trend in key PM receptor areas, our modeling projects that the ozone levels in ozone receptor areas will improve somewhat between 2010 and 2015 due chiefly to downward trends in NOx emissions projected under existing requirements. Nonetheless, as shown in detail in the Response to Comments, the projected improvements in ozone levels in the receptor areas are less ( often considerably less) than historic variability in monitored 8 hour ozone design values from one three year period to the next. 50 We believe this variability is mostly 183 body of historical data documenting the variability in ozone concentrations, we believe it is appropriate to consider variability in determining whether emission reductions from upwind states are necessary to prevent interference with maintenance of the ozone standard in downwind states. attributable to changing weather conditions ( which significantly affect the rate at which ozone is formed in the atmosphere and movement of ozone after it is formed),

rather than variability in the emissions inventory. Thus,

absent the second phase CAIR cap, these receptors remain vulnerable to falling back into nonattainment. The receptors for which this is the case link to each of the upwind states in the ozone CAIR region.

IV. What Amounts of SO2 and NOx Emissions Did EPA Determine Should Be Reduced?

In today's rule, EPA requires annual SO2 and NOx emissions reductions and ozone season NOx emissions reductions to eliminate the amount of emissions that contribute significantly to nonattainment of the NAAQS for PM2.5 and ozone. The NOx reductions are phased in beginning in 2009, the SO2 reductions beginning in 2010, and both are lowered in 2015. In this section of the preamble, EPA explains its analysis of the cost portion of the contribute 184 significantly test, which determines the amount of required emissions reductions. The cost portion requires analysis of whether the control program under review is highly cost effective, and other factors that are discussed below in section IV. A.

In section IV. A of today's preamble, EPA explains its methodology for determining the amounts of SO2 and NOx emissions that must be eliminated for compliance with the CAIR. Section IV. A is divided into IV. A. 1, IV. A. 2, IV. A. 3,

and IV. A. 4. In IV. A. 1, EPA explains the methodology that the Agency used to model control costs for evaluation of cost effectiveness. In IV. A. 2, EPA describes the methodology that was proposed in the NPR for determining the amounts of emissions that must be eliminated, including an overview of the proposed methodology, a description of the NOx SIP Call regulatory history in relation to the proposed methodology, and a description of EPA's proposed criteria for determining emission reduction requirements. Section IV. A. 3 summarizes some comments received regarding the proposed methodology. Section IV. A. 4 describes EPA's evaluation of highly cost effective SO2 and NOx emissions reductions based on controlling EGUs.

Section IV. A. 4 is further divided into IV. A. 4. a and IV. A. 4. b, which address SO2 and NOx emission reduction 185 requirements, respectively. Section IV. A. 4. a describes EPA's evaluation of highly cost effective SO2 reduction requirements, beginning with a summary of the proposal and then describing today's final determination. In IV. A. 4. b.,

EPA describes its evaluation of highly cost effective NOx reduction requirements, also beginning with a summary of the proposal and then describing today's final determination.

Section IV. A. 4. b first addresses annual NOx reductions, and then addresses ozone season NOx reductions. The final regionwide CAIR SO2 and NOx control levels are provided within section IV. A, while a more detailed description of today's final emission reduction requirements is presented in section IV. D.

In section IV. B of today's preamble, EPA discusses other ( non EGU) sources that the Agency considered in developing today's rule.

Section IV. C of today's preamble explains the schedule for implementing today's SO2 and NOx emissions reductions requirements. This section begins with an overview of the schedule ( see section IV. C. 1), then provides a detailed discussion of the engineering factors that affect timing for control retrofits ( section IV. C. 2). Within IV. C. 2, EPA first describes the NPR discussion of engineering factors including the availability of boilermaker labor as a 186 limitation ( IV. C. 2. a), then presents some comments received ( IV. C. 2. b) and EPA's responses ( IV. C. 2. c). In section IV. C. 3, EPA discusses the financial stability of the power sector in relation to the schedule for the CAIR.

Section IV. D of today's preamble provides a detailed description of the final CAIR emission reduction requirements. Regionwide SO2 and NOx control levels,

projected base case emissions and emissions after the CAIR,

and projected emissions reductions are presented. Section IV. D begins with a description of the criteria used to determine final control requirements and provides the details of the final requirements.

A. What Methodology Did EPA Use to Determine the Amounts of SO2 and NOx Emissions that Must Be Eliminated?

1. The EPA's Cost Modeling Methodology The EPA conducted analysis using the Integrated Planning Model ( IPM) that indicates that its CAIR SO2 and NOx reduction requirements are highly cost effective. Cost effectiveness is one portion of the contribute significantly test. The EPA uses the IPM to examine costs and, more broadly, analyze the projected impact of environmental policies on the electric power sector in the 48 contiguous States and the District of Columbia. The IPM is a multiregional dynamic, deterministic linear programming model of 187 the U. S. electric power sector. The EPA used the IPM to evaluate the cost and emissions impacts of the policies required by today's action to limit annual emissions of SO2 and NOx and ozone season emissions of NOx from the electric power sector ( on the assumption that all affected States choose to implement reductions by controlling EGUs using the model cap and trade rule).

The EPA conducted analyses for the final CAIR using the 2004 update of the IPM, version 2.1.9. Documentation describing the 2004 update is in the CAIR docket and on EPA's website. Some highlights of the 2004 update include:

updated inventory of electric generating units ( EGUs) and installed pollution control equipment; updated State emission regulations; updated coal choices available to generating units; updated natural gas supply curves; updated SCR and SNCR cost assumptions; updated assumptions on performance of NOx combustion controls; updated title IV SO2 bank assumptions; updated heat rates and SO2 and NOx emission rates; and, updated repowering costs.

The National Electric Energy Data System ( NEEDS)

contains the generation unit records used to construct model plants that represent existing and planned/ committed units in EPA modeling applications of the IPM. The NEEDS includes basic geographic, operating, air emissions, and other data 188 51 An exception was made to the run year mapping for an IPM sensitivity run that examined the impact of a NOx Compliance Supplement Pool ( CSP). In that run the years 2009 through 2012 were mapped to 2010 and 2008 was mapped to 2008. on all the generation units that are represented by model plants in EPA's v. 2.1.9 update of the IPM.

The IPM uses model run years to represent the full planning horizon being modeled. That is, several years in the planning horizon are mapped into a representative model run year, enabling the IPM to perform multiple year analyses while keeping the model size manageable. Although the IPM reports results only for model run years, it takes into account the costs in all years in the planning horizon. In EPA's v. 2.1.9 update of the IPM, the years 2008 through 2012 are mapped to run year 2010, and the years 2013 through 2017 are mapped to run year 2015.51 Model outputs for 2009 and 2010 are from the 2010 run year. Model outputs for 2015 are from the 2015 run year.

The EPA used the IPM to conduct the cost effectiveness analysis for the emissions control program required by today's action. The model was used to project the incremental electric generation production costs that result from the CAIR program. These estimates are used as the basis for EPA's estimate of average cost and marginal cost of emissions reductions on a per ton basis. The model was also used to project the marginal cost of several State 189 programs that EPA considers as part of its base case.

In modeling the CAIR with the IPM, EPA assumes interstate emissions trading. While EPA is not requiring States to participate in an interstate trading program for EGUs, we believe it is reasonable to evaluate control costs assuming States choose to participate in such a program since that will result in less expensive reductions. The EPA's IPM analyses for the CAIR includes all fossil fuelfired EGUs with generating capacity greater than 25 MW.

The EPA's IPM modeling accounts for the use of the existing title IV bank of SO2 allowances. The projected EGU SO2 emissions in 2010 and 2015 are above the cap levels,

because of the use of the title IV bank. The annual SO2 emissions reductions that are achieved in 2010 and 2015 are based on the caps that EPA determined to be highly cost effective, including the existence of the title IV bank.

The final CAIR requires annual SO2 and NOx reductions in 23 States and the District of Columbia, and also requires ozone season NOx reductions in 25 States and the District of Columbia. Many of the CAIR States are affected by both the annual SO2 and NOx reduction requirements and the ozone season NOx requirements.

The EPA initially conducted IPM modeling for today's final action using a control strategy that is similar but 190 52 The EPA began our emissions and economic analyses for the CAIR before the air quality analysis, which affects the States covered by the final rule, was completed. not identical to the final CAIR requirements. 52 Many of the analyses for the final CAIR are based on that initial modeling, as explained further below. The control strategy that EPA initially modeled included three additional States ( Arkansas, Delaware and New Jersey) within the region required to make annual SO2 and NOx reductions. However,

these three States are not required to make annual reductions under the final CAIR. ( In the " Proposed Rules"

section of today's Federal Register, EPA is publishing a proposal to include Delaware and New Jersey in the CAIR region for annual SO2 and NOx reductions.) The addition of these three States made a total of 26 States and the District of Columbia covered by annual SO2 and NOx caps for the initial model run. The initial model run also included individual State ozone season NOx caps for Connecticut and Massachusetts, and did not include ozone season NOx caps for any other States.

The Agency conducted revised final IPM modeling that reflects the final CAIR control strategy. The final IPM modeling includes regionwide annual SO2 and NOx caps on the 23 States and the District of Columbia that are required to make annual reductions, and includes a regionwide ozone 191 season NOx cap on the 25 States and the District of Columbia that are required to make ozone season reductions. The EPA modeled the final CAIR NOx strategy as an annual NOx cap with a nested, separate ozone season NOx cap.

In this section of today's preamble, the projected CAIR costs and emissions are generally derived from the final IPM run reflecting the final CAIR. However, some of EPA's analyses are based on the initial IPM run, described above,

which reflected a similar but not identical control strategy to the final CAIR. Analyses that are presented in this section of the preamble that are based on the initial IPM run include: IPM sensitivity runs that examine the effects of using the Energy Information Administration ( EIA) natural gas price and electricity growth assumptions; marginal cost effectiveness curves developed using the Technology Retrofitting Updating Model; estimates of average annual SO2 and NOx control costs and average non ozone season NOx control costs, and projected control retrofits used in the feasibility analysis. The air quality analysis in section VI of today's preamble and the benefits analysis in section X, as well as the analyses presented in the Regulatory Impact Analysis ( RIA), are based on emissions projections from the initial IPM run.

The EPA believes that the differences between the 192 initial IPM run that the Agency used for many of the analyses for the CAIR, and the final IPM run reflecting the final CAIR requirements, have very little impact on projected control costs and emissions. For the two IPM runs, projected marginal costs of CAIR annual NOx reductions in 2009 and 2015 are identical. In addition, for the two IPM runs, projected marginal costs of CAIR annual SO2 reductions in 2010 and 2015 are almost identical. Also, the 2009 and 2015 projected annual NOx emissions in the region encompassing the States that are affected by the final CAIR annual NOx requirements are virtually identical when compared between the two model runs ( difference between projected NOx emissions is less than 1 percent for 2009 and less than 2 percent for 2015). In addition, the 2010 and 2015 projected annual SO2 emissions in the region encompassing the States that are affected by the final CAIR annual SO2 requirements are virtually the same when compared between the two runs ( difference between projected SO2 emissions is less than 1 percent for 2010 and less than 2 percent for 2015). These comparisons confirm EPA's belief that the initial IPM run very closely represents the final CAIR program.

The IPM output files for the model runs used in CAIR analyses are available in the CAIR docket. A Technical 193 Support Document in the CAIR docket entitled " Modeling of Control Costs, Emissions, and Control Retrofits for Cost Effectiveness and Feasibility Analyses" further explains the IPM runs used in the analyses for section IV of the preamble.

2. EPA's Proposed Methodology to Determine Amounts of Emissions that Must be Eliminated a. Overview of EPA Proposal for the Levels of Reductions and Resulting Caps, and their Timing In the NPR, the amounts of SO2 and NOx emissions reductions that EPA proposed could be cost effectively eliminated in the CAIR region in 2010 and 2015, and the amount of the proposed EGU emissions caps for SO2 and NOx that would exist if all affected States achieved those reductions by capping EGU emissions, appear in Tables IV 1 and IV 2, respectively.

Table IV 1.  Projected SO2 and NOx Emission Reductions in the CAIR Region in 2010 and 2015 for the Proposed Rule ( Million Tons) 1 Pollutant 2010 2015 SO2 3.6 3.7 NOx 1.5 1.8 1 CAIR Notice of Proposed Rulemaking ( 69 FR 4618, January 30,

2004). The proposed annual SO2 and NOx caps covered a 28 State ( AL, 194 AR, DE, FL, GA, IL, IN, IA, KS, KY, LA, MD, MA, MI, MN, MI, MO, NJ, NY,

NC, OH, PA, SC, TN, TX, VA, WV, WI) plus the DC region. In addition, we proposed an ozone season only cap for Connecticut.

TABLE IV 2.  Proposed Annual Electric Generating Unit SO2 and NOx Emissions Caps in the CAIR Region ( Million Tons) 1 Pollutant 2010  2014 2015 and later SO2 3.9 2.7 NOx 1.6 1.3 1 CAIR Notice of Proposed Rulemaking ( 69 FR 4618, January 30,

2004). The proposed annual SO2 and NOx caps covered a 28 State ( AL, AR,

DE, FL, GA, IL, IN, IA, KS, KY, LA, MD, MA, MI, MN, MI, MO, NJ, NY, NC,

OH, PA, SC, TN, TX, VA, WV, WI) plus the DC region. In addition, we proposed an ozone season only cap for Connecticut.

In the NPR, EPA evaluated the amounts of SO2 and NOx emissions in upwind States that contribute significantly to downwind PM2.5 nonattainment and the amounts of NOx emissions in upwind States that contribute significantly to downwind ozone nonattainment. That is, EPA determined the amounts of emissions reductions that must be eliminated to help downwind States achieve attainment, by applying highly cost effective control measures to EGUs and determining the emissions reductions that would result. 195 From past experience in examining multi pollutant emissions trading programs for SO2 and NOx, EPA recognized that the air pollution control retrofits that result from a program to achieve highly cost effective reductions are quite significant and can not be immediately installed.

Such retrofits require a large pool of specialized labor resources, in particular, boilermakers, the availability of which will be a major limiting factor in the amount and timing of reductions.

Also, EPA recognized that the regulated industry will need to secure large amounts of capital to meet the control requirements while managing an already large debt load, and is facing other large capital requirements to improve the transmission system. Furthermore, allowing pollution control retrofits to be installed over time enables the industry to take advantage of planned outages at power plants ( unplanned outages can lead to lost revenue) and to enable project management to learn from early installations how to deal with some of the engineering challenges that will exist, especially for the smaller units that often present space limitations.

Based on these and other considerations, EPA determined in the NPR that the earliest reasonable deadline for compliance with the final highly cost effective control 196 levels for reducing emissions was 2015 ( taking into consideration the existing bank of title IV SO2 allowances).

First, the Agency confirmed that the levels of SO2 and NOx emissions it believed were reasonable to set as annual emissions caps for 2015 lead to highly cost effective controls for the CAIR region.

Once EPA determined the 2015 emissions reductions levels, the Agency determined a proposed first ( interim)

phase control level that would commence January 1, 2010, the earliest the Agency believed initial pollution controls could be fully operational ( in today's final action, the first NOx control phase commences in 2009 instead of in 2010, as explained in detail in section IV. C). The first phase would be the initial step on the slope of emissions reductions ( the glide path) leading to the final ( second)

control phase to commence in 2015. The EPA determined the first phase based on the feasibility of installing the necessary emission control retrofits, as described in section IV. C.

Although EPA's primary cost effectiveness determination is for the 2015 emissions reductions levels, the Agency also evaluated the cost effectiveness of the first phase control levels to ensure that they were also highly cost effective.

Throughout this preamble section, EPA reports both the 2015 197 and 2010 ( and 2009 for NOx) cost effectiveness results,

although the first phase levels were determined based on feasibility rather than cost effectiveness. The 2015 emissions reductions include the 2010 ( and 2009 for NOx)

emissions reductions as a subset of the more stringent requirements that EPA is imposing in the second phase.

b. Regulatory History: NOx SIP Call In the NPR, EPA generally followed the statutory interpretation and approach under CAA section 110( a)( 2)( D)

developed in the NOx SIP Call rulemaking. Under this interpretation, the emissions in each upwind State that contribute significantly to nonattainment are identified as being those emissions that can be eliminated through highly cost effective controls.

In the NOx SIP Call, EPA relied primarily on the application of highly cost effective controls in determining the amount of emissions that the affected States were required to eliminate. Specifically, EPA developed a reference list of the average cost effectiveness of recently promulgated or proposed controls, and compared the cost effectiveness of those controls to the cost effectiveness of the NOx SIP Call controls under consideration. In addition,

EPA considered several other factors, including the fact that downwind nonattainment areas had already implemented 198 ozone controls but upwind areas generally had not, the fact that some otherwise required local controls would be less cost effective than the regional controls, and the overall ambient effects of the reductions required in the NOx SIP Call ( 63 FR 57399 57403; October 27, 1998).

i. Highly Cost effective Controls In the NOx SIP Call, EPA presented control costs in 1990 dollars ( 1990$). For the electric power industry,

these expenditures were the increase in annual electric generation production costs in the control region that result from the rule. In the CAIR NPR, SNPR, and today's final action, EPA presents the same type of electric generation as well as other costs in 1999$, and rounds all values related to the cost per ton of air emissions controls to the nearest 100 dollars.

In the NOx SIP Call, EPA's decision on the amount of required NOx emissions reductions was that this amount must be computed on the assumption of implementing highly costeffective controls. The determination of what constituted highly cost effective controls was described as a two part process: ( 1) the setting of a dollar limit upper bound of highly cost effective emissions reductions; and ( 2) a determination of what level of control below this upperbound was appropriate based upon achievability and other 199 factors.