EPA's determinations in an EG has a long history. The EPA's description
of how it develops EGs in the preamble to the 1975 subpart B
implementing regulations stated that ``emission guidelines will reflect
subcategorization within source categories where appropriate, taking
into account differences in sizes and types of facilities and similar
con- . . . siderations [sic], including differences in control costs
that may be involved for sources located in different parts of the
country.'' \85\ As a result, emission guidelines ``will in effect be
tailored to what is reasonably achievable by particular classes of
existing sources, and States will be free to vary from the levels of
control represented by the emission guidelines in the ways mentioned
above.'' \86\ The ``ways mentioned above'' included establishing more
stringent standards under CAA section 116 where states believe
additional control is necessary or desirable, as well as setting more
lenient standards, subject to EPA review, in cases of economic
hardship.\87\ The EPA subsequently explained that such cases could
arise because controls were not included in the design of existing
sources or because physical limitations may make installation of
particular control systems impossible or unreasonably expensive in some
cases.\88\
---------------------------------------------------------------------------

    \85\ 40 FR 53343.
    \86\ Id.
    \87\ See id.
    \88\ Id. at 53344. Similarly, in the 1974 notice of proposed
rulemaking for the subpart B regulations, the EPA explained that
``it is the Administrator's judgment that section 111(d) permits him
to approve State emission standards only if they reflect application
of the best systems of emission reduction (considering the cost of
such reduction) that are available.'' The EPA further stated: ``It
is recognized, however, that application of such standards may be
unreasonable in some situations. For example, to require that
existing controls be upgraded by a small margin at a relatively high
cost may be unreasonable in some cases. The proposed regulations,
therefore, provide that States may establish less stringent emission
standards on a case-by-case basis provided that sufficient
justification is demonstrated in each case.'' 39 FR 36102, 36102
(Oct. 7, 1974).
---------------------------------------------------------------------------

    Thus, the EPA's long-standing interpretation is that the standards
of performance established by states must generally reflect the degree
of emission limitation determined by the Agency, except where, based on
RULOF, states provide ``sufficient justification'' that the EPA's
determination is ``unreasonable'' for a particular source.\89\ Although
the EPA endeavors to address the circumstances of all designated
facilities in its EG, there may remain instances in which the
circumstances of a particular facility justify application of a less
stringent standard of performance.
---------------------------------------------------------------------------

    \89\ 39 FR 36102; see also 40 CFR 60.24(c), (f) (EPA's
longstanding regulations in subpart B require standards of
performance in state plans to be no less stringent than the
corresponding EG except where a state has satisfied the regulatory
requirements for invoking RULOF).

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

    Finally, and relatedly, to be consistent with the statutory purpose
of reducing dangerous air pollution under CAA section 111; the
statutory framework under which to achieve that purpose the EPA is
directed to set the degree of emission limitation achievable through
application of the best system of emission reduction; and the history
of the statutory RULOF provision as a limited variance from that degree
of emission limitation to address unusual circumstances at particular
facilities, the EPA's regulations must ensure that application of less
stringent standards of performance pursuant to consideration of RULOF
does not undermine the degree of emission limitation achievable through
application of the BSER.
    Thus, for the reasons explained above, the EPA has the authority to
promulgate the regulatory updates included in this final rule, which
flow from the statute's direction for the Agency to ``establish
procedures'' that, among other things, ``permit'' states to consider
RULOF. The EPA believes these updates are warranted to provide
additional clarity to the states (when developing state plans) and the
EPA (when issuing Federal plans and reviewing state plans) regarding
the appropriate procedures for considering RULOF and to ensure the
predictable and equitable treatment of states and sources in
implementing EGs under CAA section 111(d). Furthermore, the updates to
the framework are needed to ensure that consideration of RULOF adheres
to statutory purpose, structure, and historical context discussed
above.
    Critically, the regulatory revisions also provide a framework for
how states and the EPA calculate and apply less-stringent standards of
performance. Neither the RULOF provision in subpart B nor the 2019
update to that provision in subpart Ba clearly delineate the process
for states or the EPA after they have determined that a source cannot
reasonably achieve the degree of emission limitation in the applicable
emission guideline. As such, the existing regulations are not adequate
to ensure that standards of performance pursuant to RULOF are no less
stringent than required to address the basis for providing a variance
from the EPA's degree of emission limitation in the first instance.
    Consistent with the long-held interpretation of the RULOF provision
as a limited variance, the EPA is aware of only a small handful of
instances in which a state has used this provision to apply a less-
stringent standard of performance to a designated facility in a state
plan. In three of these instances, the Agency approved less stringent
standards of performance for welfare-related designated pollutants for
which, under subpart B (40 CFR 60.24(d)), there was a lower bar for
doing so.\90\ In the fourth instance, the state invoked RULOF to apply
a less-stringent standard for a health-related designated pollutant and
the EPA disapproved the less-stringent standard for failing to satisfy
the requirements of 40 CFR 60.24(f).\91\ At the time of this
rulemaking, however, there are two new EGs for which rulemaking is
ongoing; each of these EGs would address large, complex, and highly
diverse source categories.\92\ Commenters on these proposed EGs have
suggested that there may be more of a role for RULOF than in past
EGs.\93\ The revisions to the RULOF provisions are thus timely to give
states greater clarity on and predictability for applying less
stringent standards of performance consistent with CAA section 111.
---------------------------------------------------------------------------

    \90\ 49 FR 35771 (Sept. 12, 1984), 47 FR 50868 (Nov. 10, 1982),
47 FR 28099 (June 29, 1982). See, e.g., Emission Guideline Document
for Kraft Pulping: Control of TRS Emissions from Existing Mills,
EPA-450/2-78-003b (March 1979) at 1-3 (``For Welfare-related
pollutants, states may balance the emission guidelines, times for
compliance, and other information in a guideline document against
other factors of public concern in establishing emission standards,
compliance schedules, and variances provided that appropriate
consideration is given to the information presented in the guideline
document and at public hearing(s) required by Subpart B and that all
other requirements of Subpart B are met. . . . Thus, states will
have substantial flexibility to consider factors other than
technology and costs in establishing plans for the control of
welfare-related pollutants if they wish.'').
    \91\ See 40 CFR 62.8860(a) (``The requirements of Sec.  60.24(f)
of this chapter are not met because the State failed to justify the
application of emission standards less stringent than the Federal
emission standards.''); see also 55 FR 19883, 19884 (May 14, 1990)
(explaining the proposed less-stringent limits were not approvable
because the state had not demonstrated sufficient justification).
The RULOF provision that governed that action in subpart B was
substantively identical to the version promulgated in 2019 in
subpart Ba.
    \92\ Proposed Rule: ``Standards of Performance for New,
Reconstructed, and Modified Sources and Emissions Guidelines for
Existing Sources: Oil and Natural Gas Sector Climate Review,'' 86 FR
63110 (Nov. 15, 2021); Supplemental Proposal: Standards of
Performance for New, Reconstructed, and Modified Sources and
Emissions Guidelines for Existing Sources: Oil and Natural Gas
Sector Climate Review,'' 87 FR 74702 (Dec. 6, 2022); Proposed Rule:
New Source Performance Standards for Greenhouse Gas Emissions From
New, Modified, and Reconstructed Fossil Fuel-Fired Electric
Generating Units; Emission Guidelines for Greenhouse Gas Emissions
From Existing Fossil Fuel-Fired Electric Generating Units; and
Repeal of the Affordable Clean Energy Rule,'' 88 FR 33240 (May 23,
2023).
    \93\ See, e.g., Comment Letter of Pioneer Natural Resources USA,
Inc. on Supplemental Notice of Proposed Rulemaking for Standards of
Performance for New, Reconstructed, and Modified Sources and
Emissions Guidelines for Existing Sources: Oil and Natural Gas
Sector (``Oil and Gas Proposed Rule''), EPA-HQ-OAR-2021-0317-2298 at
20-21; Comment Letter of American Petroleum Institute on Oil and Gas
Proposed Rule, EPA-HQ-OAR-2021-0317-2428 at 93-95, 102-104; Comment
Letter of Power Generators Air Coalition on New Source Performance
Standards for Greenhouse Gas Emissions from New, Modified, and
Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission
Guidelines for Greenhouse Gas Emissions from Existing Fossil Fuel
Fired Electric Generating Units; and Repeal of the Affordable Clean
Energy Rule (``EGU Proposed Rule''), EPA-HQ-OAR-2023-0072-0710 at
75-78; Comment Letter of Wisconsin Department of Natural Resources
and Public Service Commission of Wisconsin on EGU Proposed Rule,
EPA-HQ-OAR-2023-0072-0538 at 1-2, 10-11.
---------------------------------------------------------------------------

    Note that the RULOF provisions are distinct from the flexible
compliance mechanisms such as trading and averaging, discussed in
section III.G.1. of this preamble. The RULOF provisions apply where a
state intends to depart from the degree of emission limitation in the
EG and propose a less stringent standard for a designated facility (or
class of facilities). That is, the RULOF provisions are relevant to a
state's process of applying a standard of performance to a designated
facility in the first instance. In contrast, trading and averaging are
mechanisms that, when permitted in an EG, states may use to demonstrate
compliance with the standards of performance that are contained within
their state plans.
3. Proposed and Finalized RULOF Provisions
    The EPA proposed revisions to the existing RULOF provision at 40
CFR 60.24a(e), which details the circumstances under which states or
the EPA may apply a less stringent standard of performance. The EPA
also proposed to add new provisions: a procedure for determining less
stringent standards when a state has properly invoked RULOF (proposed
and finalized at 40 CFR 60.24a(f)); a clarification that state plans
may not apply less stringent standards if a designated facility can
reasonably achieve the presumptive standard of performance using a
technology other than the BSER (proposed at 40 CFR 60.24a(g)); a
clarification that any less stringent standards must meet all other
applicable requirements (proposed at 40 CFR 60.24a(l), finalized at
60.24a(h)); requirements related to when operating conditions that are
relied on for a less stringent standard must be included as enforceable
requirements in state plans (proposed at 40 CFR 60.24a(h), finalized at
40 CFR 60.24a(g)); requirements related to the consideration of
remaining useful life (proposed 40 CFR 60.24a(i)); a clarification
regarding the burden of proof and information on which RULOF
demonstrations are based (proposed 40 CFR 60.24a(j));

requirements to consider potential impacts and benefits of control to
communities most affected by and vulnerable to emissions from a
designated facility for which a state is proposed a less stringent
standard (proposed 40 CFR 60.24a(k)); and a clarification that states
may account for other factors in applying a more stringent standard of
performance (proposed 40 CFR 60.24a(m)). In addition, the EPA proposed
changes to the existing 40 CFR 60.24a(f) (proposed at 40 CFR 60.24a(n),
finalized at Sec.  60.24(i)) reflecting the Agency's revised
interpretation that CAA sections 111(d) and 116 authorize states to
include standards of performance more stringent than the EPA's
presumptive standards in their state plans as enforceable requirements.
    The EPA received a wide range of comments on its proposed RULOF
provisions. Some commenters expressed support for the proposed
revisions, noting that the EPA has the authority to specify how RULOF
is implemented and the obligation to ensure that its use does not
undermine the emission reductions that are achievable through
application of the BSER. Supportive commenters also noted that
providing a regulatory structure is important to ensure that RULOF is
applied in a reliable, consistent, and appropriate manner. Commenters
opposed to the proposed RULOF revisions stated that there is no basis
in the statute for the EPA to restrict states' authority to consider
RULOF and apply less-stringent standards of performance. Some
commenters also argued that the EPA's proposed regulations were too
prescriptive and burdensome. Other commenters generally supported the
EPA's proposed revisions but had questions or concerns regarding
specific provisions, including the requirements around source-specific
standards of performance and consideration of impacted communities. One
commenter requested that the EPA clarify that the revised RULOF
provisions would apply to design, equipment, work practice, or
operational standards issued under CAA sections 111(d) and 111(h)(1).
    After consideration of these comments, the EPA is finalizing a
subset of the requirements that it proposed. As a general matter, the
EPA is finalizing as requirements the provisions that must apply under
any EG to provide necessary clarity to both the states and the EPA in
applying or approving less stringent standards of performance. This
clarity and predictability with regard to what constitutes a
satisfactory, and therefore approvable, less stringent standard is
crucial to ensuring the equitable treatment of states and sources that
are considering RULOF in state plans. The requirements the EPA is
finalizing are additionally necessary to ensure that use of RULOF is
consistent with the statutory purpose of reducing emissions of
dangerous air pollutants, the framework under which the EPA is directed
to achieve that purpose through determining the degree of emission
limitation, and history of RULOF as a limited variance to address
unusual circumstances when it is not possible for a particular facility
to achieve the EPA's degree of emission limitation. The proposed RULOF
provisions that are not being included as regulatory requirements
remain important considerations when applying RULOF; however, the EPA
is not finalizing them in these general implementing regulations.
    The EPA recognizes that in finalizing these updates it is imposing
certain requirements on states' use of RULOF. Consistent with the
framework of cooperative federalism under which CAA section 111(d)
operates, states apply standards of performance pursuant to
consideration of RULOF, as well as provide the compliance measures for
implementing such standards, subject to the applicable statutory
requirements. The Agency again notes that it has placed requirements on
states' ability to apply less stringent standards of performance since
it first created a variance provision in subpart B in 1975. See 40 CFR
60.24(c) through (e). When Congress later adopted the RULOF provision
into the statute, it directed the EPA in CAA section 111(d)(1) to
establish a procedure permitting states to consider RULOF. Moreover, as
discussed further in section III.E.3.b, these updates are consistent
with the historical interpretation of RULOF as a variance from the
EPA's degree of emission limitation. The EPA also notes that the
requirements being finalized in this action establish a process for
states in applying less stringent standards of performance. These final
regulations ensure, consistent with the statutory purpose, that any
less stringent standards are no less stringent than necessary to
address the reason that the variance is needed in the first place.
    Finally, the EPA confirms that the RULOF provisions, including
those being finalized in this action, apply to standards of performance
promulgated pursuant to CAA sections 111(d) and 111(h)(1). The existing
definition of ``standard of performance'' in 40 CFR 60.21a(f) includes
``a legally enforceable regulation . . . prescribing a design,
equipment, work practice, or operational standard, or combination
thereof.'' Therefore, the RULOF provisions in 40 CFR 60.24a, which may
be invoked to apply a ``standard of performance'' to a particular
designated facility, also apply to standards of performance applied
under CAA section 111(h)(1).\94\
---------------------------------------------------------------------------

    \94\ See also 40 CFR 60.24a(b).
---------------------------------------------------------------------------

a. Threshold Requirements for Considering Remaining Useful Life and
Other Factors
    The existing RULOF provision at 40 CFR 60.24a(e) addresses the
circumstances in which states may invoke RULOF to deviate from the BSER
and degree of emission limitation determinations the EPA has made
pursuant to CAA section 111(a)(1). It allows states to consider RULOF
to apply a less stringent standard of performance for a designated
facility or class of facilities if they demonstrate one of the three
following circumstances: (1) unreasonable cost of control resulting
from plant age, location, or basic process design; (2) physical
impossibility of installing necessary control equipment; or (3) other
factors specific to the facility (or class of facilities) that make
application of a less stringent standard or final compliance time
significantly more reasonable.
    As discussed in the notice of proposed rulemaking, the proposed
amendments largely retained this provision, including the three
circumstances under which a less stringent standard of performance may
be applied, and provided further clarification of what a state must
demonstrate in order to invoke RULOF in a state plan. Specifically, the
proposed amendments required the state to demonstrate that a particular
facility cannot reasonably apply the BSER to achieve the degree of
emission limitation determined by the EPA, based on one or more of the
three circumstances. The EPA's proposal retained the first circumstance
in whole and revised the second circumstance to add the ``technical
infeasibility'' of installing a control as another situation in which
application of RULOF may be appropriate. The proposal further clarified
the third circumstance for invoking RULOF, the existing version of
which provides that states may invoke RULOF when other factors specific
to the facility make a less stringent standard of performance
``significantly more reasonable.'' The EPA proposed to revise this
circumstance, under which the first two circumstances also fall, to
specify that states may consider RULOF

to apply a less stringent standard if circumstances specific to a
facility are fundamentally different from the information the EPA
considered in determining the BSER. This proposed clarification was
intended to provide clear parameters for developing and assessing state
plans, as the existing third circumstance is vague and potentially
open-ended.
    The EPA explained at proposal that the revisions clarified the
RULOF provision by tethering a state's RULOF demonstration to the
statutory factors the EPA considered in the BSER determination. As
discussed in section III.E.1. of this preamble, CAA section 111(a)(1)
gives the EPA the responsibility of determining the BSER and degree of
emission limitation that is required of designated facilities in the
source category; the EPA endeavors, to the extent reasonably
practicable based on the information before it, to promulgate
determinations that are achievable for every designated facility
covered by an EG. Per the statutory requirements, the EPA determines
the BSER by first identifying control methods that it considers to be
adequately demonstrated and then determining which is the best system
of emission reduction by evaluating the statutory factors: (1) the cost
of achieving such reduction, (2) nonair quality health and
environmental impacts, (3) energy requirements, and (4) the amount of
emission reductions.\95\ The EPA's BSER determination thus represents a
system that is ``adequately demonstrated'' and reasonable for sources
broadly within the source category; CAA section 111(a)(1) requires that
standards of performance must reflect the degree of emission limitation
that is achievable through application of the BSER.
---------------------------------------------------------------------------

    \95\ Although CAA section 111(a)(1) may be read to state that
the factors enumerated in the parenthetical are part of the
``adequately demonstrated'' determination, the D.C. Circuit's case
law may be read to treat them as part of the ``best'' determination.
See Sierra Club v. Costle, 657 F.2d 298, 330 (D.C. Cir. 1981). Under
either approach, the EPA's analysis and ultimate determination as to
the BSER would be the same. In determining the ``best'' system of
emission reduction, the EPA also considers the advancement of
technology, consistent with D.C. Circuit caselaw. See id. at 347.
---------------------------------------------------------------------------

    In considering the BSER, the D.C. Circuit has stated that to be
``adequately demonstrated,'' the system must be ``reasonably reliable,
reasonably efficient, and . . . reasonably expected to serve the
interests of pollution control without becoming exorbitantly costly in
an economic or environmental way.'' Essex Chem. Corp. v. Ruckelshaus,
486 F.2d 427, 433 (D.C. Cir. 1973). Thus, in making the BSER
determination, the EPA must evaluate whether a system of emission
reduction is ``adequately demonstrated'' for the source category or
sub-category based on the physical possibility and technical
feasibility of control. Similarly, the court has interpreted CAA
section 111(a)(1) as using reasonableness in light of the statutory
factors as the standard in evaluating cost, so that a control
technology may be considered the ``best system of emission reduction .
. . adequately demonstrated'' if its costs are reasonable (i.e., not
exorbitant, excessive, or greater than the industry can bear), but
cannot be considered the BSER if its costs are unreasonable.\96\ In
light of the statutory factors the EPA is required to consider, it
follows that most designated facilities within the source category or
subcategory should be able to implement the BSER at a reasonable cost
to achieve the degree of emission limitation determined by the EPA.
Consideration of RULOF is appropriate only for particular sources for
which implementing the BSER to achieve that degree of emission
limitation would impose unreasonable costs or would otherwise not be
feasible due to facility-specific circumstances that are not applicable
to the broader source category (or subcategories) and that the EPA did
not consider in determining the BSER.
---------------------------------------------------------------------------

    \96\ See Lignite Energy Council v. EPA, 198 F.3d 930, 933 (D.C.
Cir. 1999), Sierra Club v. Costle, 657 F.2d 298, 343 (D.C. Cir.
1981), Portland Cement Ass'n v. EPA, 513 F.2d 506, 508 (D.C. Cir.
1975).
---------------------------------------------------------------------------

    For example, if the EPA applied a specific cost threshold in
determining the BSER, application of RULOF based on cost would only be
appropriate where the cost of achieving the associated degree of
emission limitation at a particular designated facility is unreasonably
high relative to the costs the EPA considered for the BSER. Or, by way
of further example, if the EPA were to determine that a specific back-
end control technology is adequately demonstrated and the BSER for a
source category, a state may need to evaluate whether it would be
physically possible to install that control technology at a designated
facility given the particular size and physical constraints of that
facility. Application of RULOF to deviate from the EPA's determinations
pursuant to CAA section 111(a)(1) may be appropriate, e.g., where the
state could show that the cost of achieving the degree of emission
limitation would be significantly higher at a specific designated
facility than the cost-per-ton EPA considered in setting the BSER, or
that a specific designated facility does not have adequate space to
reasonably accommodate the installation of the BSER and the facility
cannot reasonably achieve the degree of emission limitation using a
different control technology. The EPA proposed to require states to hew
to the same types of factors and analyses the EPA's considered in its
BSER determination when demonstrating that the EPA's determinations are
not reasonable for a particular designated facility; the Agency
explained that this would be consistent with the statutory framework
under which RULOF is a limited exception to the level of stringency
otherwise required by the BSER.\97\
---------------------------------------------------------------------------

    \97\ 87 FR 79199.
---------------------------------------------------------------------------

    Related to the proposed revisions at 40 CFR 60.24a(e), the EPA also
proposed to add new Sec.  60.24a(g) to the regulations, which would
explicitly provide that a state plan may not apply a less stringent
standard of performance in cases where a designated facility cannot
reasonably apply the BSER to achieve the degree of emission limitation
determined by the EPA, but can reasonably implement a different
technology or other system to achieve that same degree of emission
limitation. This is consistent with the statutory framework, which does
not require sources to implement the EPA's BSER but rather permits
states to allow their sources to comply with their standards of
performance using systems of their choosing.
    The EPA received a range of comments on the proposed revisions to
the threshold circumstances for invoking RULOF to apply a less-
stringent standard of performance. Some commenters agreed with the EPA
that the existing criteria are not specific or clear enough to ensure
that RULOF is invoked only when a designated facility cannot achieve
the degree of emission limitation that the EPA has determined pursuant
to section 111(a)(1). Several commenters supported the EPA's proposal
that application of RULOF is only appropriate where a facility cannot
reasonably apply the BSER to achieve the degree of emission limitation
determined by the EPA based on fundamental differences between that
facility and the factors the EPA considered in the BSER determination.
Some commenters also urged the EPA to explicitly apply the
``fundamentally different'' standard to all three circumstances under
40 CFR 60.24a(e).
    However, other commenters argued that the EPA cannot preclude
states from considering factors specific to particular facilities on
the basis that the EPA did not consider those factors in

determining the BSER, and that the ``fundamentally different'' standard
unlawfully narrows states' consideration of site-specific factors under
the third RULOF criterion. Some commenters further contended that
states should have wide latitude and flexibility to consider RULOF and
that the EPA lacks authority to restrict states' abilities to apply
RULOF in circumstances they deem appropriate. The EPA also received a
request from one commenter asking the Agency to clarify how the
proposed provisions at 40 CFR 60.24a(e) and (g) interact with each
other.
    The EPA is finalizing the provisions for invoking RULOF at 40 CFR
60.24a(e) with clarifying revisions relative to proposal. Based on
these changes, the proposed addition of 40 CFR 60.24a(g) is redundant;
the EPA is therefore not finalizing this provision.
    These revisions to 40 CFR 60.24a(e) are necessary to ensure that
state plans comply with CAA section 111(d). As explained above, the
EPA's determination of the degree of emission limitation achievable
through application of the BSER is the level of stringency required by
CAA section 111(d), unless it can be demonstrated that something about
the EPA's determination does not hold true for a particular designated
facility. The enumerated circumstances for invoking RULOF in 40 CFR
60.24a(e) mirror the information the EPA considers in making its BSER
and degree of emission limitation determination pursuant to CAA section
111(a)(1): information related to determining that a system is
adequately demonstrated (including physical possibility and technical
feasibility), the cost of achieving emission reductions, and other
factors, which include nonair quality health and environmental impacts
and energy requirements. Thus, the long-standing RULOF provision \98\
is formulated for states to examine, at a minimum, the same factors the
EPA considered in determining the BSER in order to determine the
reasonableness of the EPA's BSER and degree of emission limitation as
it applies to a particular designated facility. In this action, the EPA
is clarifying the circumstances in 40 CFR 60.24a(e) for invoking RULOF
in order to provide more objective and consistent criteria that will
aid both states and the EPA in developing and reviewing standards of
performance consistent with CAA section 111(d), as well as ensure the
equitable treatment of states and sources that avail themselves of the
RULOF provision.
---------------------------------------------------------------------------

    \98\ The circumstances for invoking RULOF in the existing
subpart Ba provision at 40 CFR 60.24a(e) are identical to those in
the original variance provision of subpart B at 40 CFR 60.24(f).
---------------------------------------------------------------------------

    The EPA disagrees with commenters who argued that the proposed
revisions to the third circumstance unlawfully constrain states'
authority to invoke RULOF. On the contrary, the EPA believes these
revisions provide necessary clarity to ensure that states invoke RULOF
in appropriate circumstances. First, as discussed more fully in section
III.E.2. of this preamble, Congress directed the EPA to promulgate
regulations for the submission of state plans that ``permit'' states to
consider RULOF. Rather than granting states unfettered discretion to
consider RULOF in applying standards of performance, the statute
directs the EPA to establish regulations describing the ``permissible''
use of such consideration. Thus, the EPA has the authority and
obligation to guide states' consideration of RULOF.
    Second, the revisions to 40 CFR 60.24a(e) provide a clear and
easily replicable standard for when it is appropriate to apply a less
stringent standard of performance: when there are fundamental
differences between the information the EPA considered in determining
the degree of emission limitation and the information specific to a
facility that make the EPA's degree of emission limitation unreasonable
for the facility. In addition to clarifying the circumstances under
which consideration of RULOF is appropriate, this standard also
provides greater specificity that will aid both states and the EPA in
implementing the provision. This standard is further consistent with
statutory purpose, structure, and history of CAA section 111(d), under
which the generally applicable requirement is the degree of emission
limitation determined by the EPA and RULOF serves as a variance to that
requirement.\99\ Moreover, the revisions to 40 CFR 60.24a(e) will
provide a framework for the EPA to use when considering any requests
for less stringent standards of performance when the Agency is
promulgating a Federal plan, which is again critical to ensuring both
the equitable treatment of states and sources and the integrity of an
EG's emission reduction purpose.
---------------------------------------------------------------------------

    \99\ See the discussion in section III.E.3.b. of this preamble.
---------------------------------------------------------------------------

    This revision will additionally provide the EPA with clear criteria
to use when evaluating any invocation of RULOF in state plans to
determine whether providing a less-stringent standard of performance is
consistent with the statutory framework and therefore approvable as
``satisfactory.'' As noted above, it provides an objective, replicable
benchmark against which to assess states' plans, which can be further
elaborated on in individual EGs.
    The ``fundamentally different'' standard ensures that RULOF is
invoked for circumstances where application of the statutory factors
would lead to a result that is outside the realm of what the EPA
considered reasonable in determining the BSER. The EPA makes BSER
determinations on a source category, or sub-category, basis.
Necessarily, therefore, the Agency considers information relevant to
potential BSERs for representative, average units or as average values
for the set of designated facilities. Implicit in an EPA determination
that a system is the BSER based on average, representative information
is a determination that values around those average representative
values are also reasonable, including some portion of unit-specific
values that will deviate from but are not significantly different than
the average representative values. Therefore, in order to justify
deviating from the EPA-determined degree of emission limitation, the
circumstances of a particular source must be not just different but
fundamentally different from those the Agency considered in determining
the BSER.
    Furthermore, as explained at proposal, the ``fundamentally
different'' standard is also consistent with other variance provisions
that courts have upheld for environmental statutes. For example, in
Weyerhaeuser Co. v. Costle,\100\ the court considered a regulatory
provision promulgated under the Clean Water Act (CWA) that permitted
owners to seek a variance from the EPA's national effluent limitation
guidelines under CWA sections 301(b)(1)(A) and 304(b)(1). The EPA's
regulation permitted a variance where an individual operator
demonstrates a ``fundamental difference'' between a CWA section
304(b)(1)(B) factor at its facility and the EPA's regulatory findings
about the factor ``on a national basis.'' \101\ The court upheld this
standard as ensuring a meaningful opportunity for an operator to seek
dispensation from a limitation that would demand more of the individual
facility than of the industry generally, but also noted that such a
provision is not a license for avoidance of the Act's strict pollution
control requirements.\102\
---------------------------------------------------------------------------

    \100\ 590 F.2d 1011 (D.C. Cir. 1978).
    \101\ Id. at 1039.
    \102\ Id. at 1035.

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

    The EPA is revising the regulatory text of 40 CFR 60.24a(e)
relative to proposal to explicitly provide that the ``fundamentally
different'' standard applies to all three categories of circumstances
for invoking RULOF. This change is consistent with the stated intent at
proposal; for example, the EPA proposed ``to require that, in order to
demonstrate that a designated facility cannot reasonably meet the
presumptive level of stringency based on one of these three criteria,
the state must show that implementing the BSER is not reasonable for
the designated facility due to fundamental differences between the
factors the EPA considered in determining the BSER, such as cost and
technical feasibility of control and circumstances at the designated
facility.'' \103\ As explained above, in order to be consistent with
the statutory framework, the fundamentally different standard
necessarily applies to any consideration that may be cause to invoke
RULOF to provide a less-stringent standard of performance.
---------------------------------------------------------------------------

    \103\ 87 FR 79199.
---------------------------------------------------------------------------

    There may be instances in which the EPA has not considered, in
making its BSER determination, a circumstance that makes the BSER
unreasonable for a particular facility because that circumstance is not
applicable to the average or typical designated facility in the source
category. Where the EPA did not consider a circumstance that is
relevant to a particular designated facility and that circumstance
causes the BSER to be unreasonable for that facility due to one or more
of the reasons enumerated in 40 CFR 60.24a(e), a state may find there
is a fundamental difference from the information the EPA considered in
determining the degree of emission limitation achievable through
application of the BSER. That is, if the EPA did not consider any
information pertaining to a certain circumstance in making its
determination, facility-specific information relevant to that
circumstance that demonstrates that achieving the degree of emission
limitation is unreasonable pursuant to 40 CFR 60.24a(e) may be
``fundamentally different'' from the information the EPA considered.
The EPA notes that, in many cases, facility-specific circumstances can
be considered in terms of differences in cost. For example, an issue of
the technical feasibility of implementing a control to achieve a
certain degree of emission limitation may, at its root, be an issue of
being able to achieve that degree of emission limitation at a
reasonable cost. Because cost is generally a more quantifiable and
replicable metric, where possible the EPA expects states to include the
impacts of any facility-specific circumstances in the cost calculation,
rather than evaluating those circumstances under a different factor or
consideration.
    The EPA is also finalizing its proposed clarifying revisions to 40
CFR 60.24a(e) with further updates. The existing provision in subpart
Ba was not clear, unless it was read directly in conjunction with 40
CFR 60.24a(c), that its specific purpose is application of less
stringent standards of performance pursuant to consideration of RULOF;
it did not mention less stringent standards until 40 CFR
60.24a(e)(3).\104\ The EPA therefore proposed and is finalizing
revisions so that the provision's purpose is now clearly stated at the
outset. The EPA is also making two further revisions relative to the
proposed 40 CFR 60.24a(e). First, it is adding back in language
allowing the RULOF provision to be used to provide a compliance
schedule longer than otherwise required by an applicable emission
guideline. In proposing to revise 40 CFR 60.24a(e), the EPA
inadvertently deleted the phrase ``that make application of a less
stringent . . . final compliance time significantly more reasonable''
in the document containing redline/strikeout of the subpart Ba
regulations.\105\ It was not the EPA's intent to preclude the use of
RULOF to provide a longer compliance schedule; this has been part of
the provision since the original variance in 1975.\106\ However, as the
language pertinent to providing a longer compliance time no longer fits
in its original sub-paragraph, the EPA is adding this allowance back
elsewhere in 40 CFR 60.24a(e).
---------------------------------------------------------------------------

    \104\ 84 FR 32520, 32577 (July 8, 2019).
    \105\ Memorandum, ``Redline/Strikeout for proposed amendments to
40 CFR 60 Subpart Ba: Adoption and Submittal of State Plans for
Designated Facilities,'' Docket ID No, EPA-HQ-OAR-2021-0527-0035.
    \106\ See 40 CFR 60.24(f).
---------------------------------------------------------------------------

    Second, the EPA is revising this provision relative to proposal to
change the circumstances under which invoking RULOF is appropriate from
the state demonstrating that ``the facility cannot reasonably apply the
best system of emission reduction to achieve the degree of emission
limitation determined by the EPA . . .'' to the state demonstrating
that ``the facility cannot reasonably achieve the degree of emission
limitation determined by the EPA. . . .'' At proposal, the EPA
explained that ``the state must show that implementing the BSER is not
reasonable for the designated facility due to fundamental differences
between the factors the EPA considered in determining the BSER, such as
cost and technical feasibility of control and circumstances at the
designated facility.'' \107\ However, it is not sufficient that a
facility not be able to implement the BSER; the state must demonstrate
that the facility cannot otherwise reasonably achieve the EPA's degree
of emission limitation (for example, through a different system of
emission reduction) in order for a facility to be eligible for a less
stringent standard of performance. This is consistent with the
definition of ``standard of performance'' in CAA section 111(a)(1),
which is a ``standard for emissions of air pollutants'' that ``reflects
the degree of emission limitation achievable through application of the
[BSER],'' as opposed to a standard requiring the application of the
BSER. That is, the statute requires a certain degree of emission
limitation, not the use of a particular technology. Therefore, the fact
that a facility cannot apply the BSER on its own is not sufficient to
invoke RULOF.
---------------------------------------------------------------------------

    \107\ 87 FR 79199.
---------------------------------------------------------------------------

    The EPA believes that simplifying the language in 40 CFR 60.24a(e)
will reduce confusion about the ultimate circumstances under which
invoking RULOF is appropriate: where a particular facility cannot meet
the degree of emission limitation determined by the EPA. Because the
degree of emission limitation is based on the EPA's BSER determination,
the information the EPA considered in determining the BSER remains the
touchstone for determining when a particular facility cannot reasonably
achieve the degree of emission limitation in the applicable emission
guideline. Furthermore, given that the BSER presumptively reflects a
system that is adequately demonstrated and reasonable for all
designated facilities within a source category or subcategory, the EPA
anticipates that in many if not most instances a state considering
RULOF will in fact be evaluating the reasonableness of applying the
BSER to achieve the degree of emission limitation. However, even if the
state is evaluating the use of a different system to achieve the degree
of emission limitation determined by the EPA, the factors and
information the EPA considered in the EG, e.g., cost effectiveness,
will remain relevant to this inquiry.
    As a corollary to this change, the EPA is not finalizing the
provision proposed at 40 CFR 60.24a(g), which would have provided that
a state could not apply a less stringent standard of performance where
a facility could reasonably

implement a system of emission reduction other than the BSER to achieve
the degree of emission reduction determined by the EPA. This provision
is redundant now that the EPA is clarifying in 40 CFR 60.24a(e) that
states may apply less stringent standards of performance only when they
demonstrate that a facility cannot reasonably achieve the degree of
emission limitation determined by the EPA.
    Both subpart B at 40 CFR 60.24(f) and the existing regulations of
subpart Ba at 40 CFR 60.24a(e) provide that use of RULOF is appropriate
if a state demonstrates that one of the three circumstances is met
``with respect to each facility (or class of such facilities).'' In the
notice of proposed rulemaking for this action, the EPA stated that,
``[t]o the extent that a state seeks to apply RULOF to a class of
facilities that the state can demonstrate are similarly situated in all
meaningful ways, the EPA proposes to permit the state to conduct an
aggregate analysis of [the five BSER factors] for the entire class.''
\108\ The EPA is reiterating in this final rule that invoking RULOF and
providing a less-stringent standard or performance or longer compliance
schedule for a class of facilities is only appropriate where all the
facilities in that class are similarly situated in all meaningful ways.
That is, they must not only share the circumstance that is the basis
for invoking RULOF, they must also share all other characteristics that
are relevant to determining whether they can reasonably achieve the
degree of emission limitation determined by the EPA in the applicable
EG. For example, it would not be reasonable to create a class of
facilities for the purpose of RULOF on the basis that the facilities do
not have space to install the EPA's BSER control technology if some of
them are able to install a different control technology to achieve the
degree of emission limitation in the EG. Similarly, it would not be
appropriate for a state to conduct a single evaluation pursuant to 40
CFR 60.24a(f) to apply the same less stringent standard of performance
to a class of facilities if individual facilities within that class
have different characteristics that could result in different standards
of performance. The evaluation of when it is appropriate to create a
class of facilities is extremely source-sector and EG-specific; the EPA
will address circumstances in which it may or may not be permissible to
group facilities for purposes of RULOF in individual EGs.
---------------------------------------------------------------------------

    \108\ 87 FR 79200 n.46.
---------------------------------------------------------------------------

    In summary, the EPA is finalizing its proposed revisions to 40 CFR
60.24a(e) with additional clarifications. The first is to reflect that
the ``fundamentally different'' standard applies to all three
circumstances for invoking RULOF. This clarification reinforces that
invocation of RULOF is appropriate when the circumstances of a
particular designated facility are fundamentally different from those
the EPA considered such that the facility cannot reasonably achieve the
degree of emission limitation the EPA determined pursuant to CAA
section 111(a)(1). Second, the EPA is revising the circumstances under
which invoking RULOF is appropriate from a demonstration that a
facility cannot reasonably apply the BSER to achieve the degree of
emission limitation determined by the EPA to a demonstration that the
facility cannot reasonably achieve the degree of emission limitation
determined by the EPA. This change is intended to simplify and clarify
the provision as it is the degree of emission limitation determined by
the EPA, not the system used to achieve it, that has always been the
relevant consideration under CAA sections 111(d) and 111(a)(1). Third,
the EPA is clarifying the provision that states may use RULOF to
provide for a longer compliance timeline as well as less-stringent
standards of performance, which was inadvertently omitted from the
proposed regulatory text. In general, the EPA is revising 40 CFR
60.24a(e) to provide more objective and consistent criteria for when it
is appropriate to invoke RULOF in order to guide states in applying
standards of performance to particular designated facilities and the
EPA in evaluating state plans. The EPA is not finalizing proposed 40
CFR 60.24a(g), as this provision is now superfluous given the updates
to 40 CFR 60.24a(e).
    The EPA acknowledges that what is considered reasonable in light of
the statutory factors is a fact-specific inquiry based on the source
category and pollutant that is being regulated pursuant to a particular
EG, and that the EPA cannot anticipate and address all circumstances
that may arise in these general implementing regulations. Thus, the EPA
may consider additional factors and establish additional parameters
governing the consideration of RULOF, including what deviations from
the EPA's determinations may be within the range of reasonable versus
deviations that constitute fundamental differences between facility-
specific circumstances and the EPA's degree of emission limitation
determination, in a particular EG.
b. Calculation of a Standard Which Accounts for Remaining Useful Life
and Other Factors
    If a state has demonstrated, pursuant to 40 CFR 60.24a(e), that
there is a fundamental difference between the information the EPA
considered in the applicable EG and the information specific to a
particular source that makes it unreasonable for that source to achieve
the degree of emission limitation, the state may then apply a less
stringent standard of performance.\109\ The current RULOF provision, 40
CFR 60.24a(e), does not specify how a less stringent standard is to be
calculated and applied. While this provision stands on its own and
permits states to consider RULOF to apply a less stringent standard of
performance, the lack of a process for determining any such standards
makes it difficult for states to know whether the result will be
approvable and additionally makes it difficult for the EPA to review
less stringent standards in a consistent and equitable manner. In order
to provide clarity and ensure the integrity of the emission reduction
purpose of CAA section 111(d), as well as to ensure the equitable
treatment of designated facilities across states, the EPA is
promulgating a framework in 40 CFR 60.24a(f) for the calculation of a
standard of performance that accounts for RULOF. As explained in this
section of the preamble, the process the EPA is finalizing differs from
the proposed framework, but the material components of calculating and
applying a less stringent standard of performance, and the underlying
purpose and direction of the EPA's framework, remain the same.
---------------------------------------------------------------------------

    \109\ States intending to apply a less-stringent standard of
performance pursuant to RULOF would include all information,
demonstrations, etc. necessary to satisfy 40 CFR 60.24a(e) through
(h) in their state plan submissions. The EPA will first review a
state's demonstration that invocation of RULOF pursuant to 40 CFR
60.24a(e) is appropriate for a particular designated facility
against the applicable requirements. If the EPA finds that
demonstration satisfactory, it will proceed to evaluate the standard
of performance for that facility applied pursuant to 40 CFR
60.24a(f).
---------------------------------------------------------------------------

    The EPA proposed to require that states determine a source-specific
BSER for each designated facility for which RULOF has been invoked
pursuant to 40 CFR 60.24a(e) and include a standard of performance that
reflects the degree of emission limitation achievable through
application of that BSER in their state plans. The notice of proposed
rulemaking explained that the statute requires the EPA to determine the
BSER by considering emission control methods that it finds to be
adequately demonstrated, and then determining which is the best system
of emission

reduction by evaluating (1) the cost of achieving such reduction, (2)
nonair quality health and environmental impacts, (3) energy
requirements, and (4) the amount of reductions.\110\ To be consistent
with this statutory construct, the EPA proposed to require that in
determining a source specific BSER for a designated facility (or class
of such facilities \111\), a state must also consider all these factors
in applying RULOF for that source.
---------------------------------------------------------------------------

    \110\ The D.C. Circuit has stated that in determining the
``best'' system, the EPA must take into account ``the amount of air
pollution'' reduced, see Sierra Club v. Costle, 657 F.2d 298, 326
(D.C. Cir. 1981), and the role of ``technological innovation.'' Id.
at 347.
    \111\ See section III.E.3.a. of this preamble. The EPA expects
to address the appropriateness of invoking RULOF and applying less-
stringent standards to a class of facilities in individual EGs.
---------------------------------------------------------------------------

    Specifically, the EPA proposed that a state in its plan submission
would identify all control technologies available for the source and
evaluate the BSER factors for each technology, using the same factors
and evaluation metrics as the EPA did in developing the EG. For
example, if the EPA evaluated the cost factor using the evaluation
metric of capital costs in determining the BSER, the EPA proposed that
the state must do the same in evaluating a control technology for an
individual designated facility, rather than selecting a different
evaluation metric for cost. The state would then calculate the emission
reductions that applying the source-specific BSER would achieve and
select the standard of performance which reflects this degree of
emission limitation. This standard would be in the form or forms (e.g.,
numerical rate-based emission standard) as required by the specific EG.
    While the EPA proposed to require that states identify all control
technologies or other systems of emission reduction available for the
source and evaluate each system using the same factors and evaluation
metrics as the EPA did in determining the BSER, it also solicited
comment on whether there are additional factors, not already accounted
for in the BSER analysis, that the EPA should permit states to consider
in determining a less stringent standard of performance. The EPA
further solicited comment on whether it should provide that the manner
in which the EPA conducted the BSER analysis would be a presumptively
approvable framework for applying a less-stringent standard rather than
requirements and, if so, what different approaches states might use to
evaluate and identify less stringent standards of performance.
    The EPA also noted at proposal that CAA section 111(d) requires
that state plans include measures that provide for the implementation
and enforcement of a standard of performance. This requirement applies
to any standard of performance established by a state, including one
that accounts for RULOF. Such measures include monitoring, reporting,
and recordkeeping requirements, as required by 40 CFR 60.25a, as well
as any additional measures specified under an applicable EG. In
particular, any standard of performance that accounts for RULOF is also
subject to the requirement under subpart Ba that the state plan
submission include a demonstration that each standard is quantifiable,
non-duplicative, permanent, verifiable, and enforceable. 40 CFR
60.27a(g)(3)(vi). The EPA did not reopen these existing requirements of
subpart Ba in this rulemaking.
    The EPA received both comments in support of and comments opposed
to the proposed requirements for calculating facility-specific
standards of performance under RULOF. Some commenters supported the
addition of a regulatory framework for facility-specific BSER analysis
and stated that the BSER factors encompass all relevant information to
a state's determination of an appropriate standard for a facility.
Other commenters opposed the proposed framework. Comments in opposition
largely fell into two categories: Some commenters asserted there is no
basis in the statute for requiring states to conduct facility-specific
BSER analyses pursuant to RULOF and, relatedly, that the EPA should not
put restrictions on what states may consider in applying a less
stringent standard of performance for a particular source but should
rather maintain the wide latitude afforded to states under CAA section
111. Others stated that the EPA's proposed requirements would
constitute a heavy lift for state agencies and would require
substantial work for states to implement. In this vein, one commenter
requested that the EPA not require states to evaluate, as part of their
facility-specific BSER analyses, control technologies that the Agency
has previously excluded from the BSER on the basis of technological or
economic feasibility. Rather, the only control technologies that states
should be required to evaluate are technologies that result in less
emission reduction than the technology the EPA determined to be the
BSER.
    As explained below, the EPA disagrees with comments that there is
no basis for putting a framework in place for states and the Agency to
use in applying and evaluating less stringent standards of performance.
The EPA believes that such a framework is well supported by the
statutory purpose, text, and context of the RULOF provision. In
particular, after considering the comments, the EPA believes that the
purpose, text, and context support a requirement that states (or the
EPA in the case of a Federal plan) calculate and apply a standard of
performance that varies from the EPA's degree of emission limitation in
the applicable emission guideline only to the extent necessary to
address the fundamental difference that is the basis for invoking
RULOF.
    First, providing a framework for calculating less stringent
standards of performance is consistent with the text of CAA section
111(d) and is responsive to Congress's directive in that provision that
the Agency prescribe regulations establishing a procedure for state
plans, including regulations that ``permit'' states ``in applying'' a
standard of performance to a particular source to ``take into
consideration'' RULOF. The provisions the EPA is promulgating in this
action set out a procedure--the series of steps and considerations
states must undertake to apply a less stringent standard of
performance. As described in section III.E.2. of this preamble, to
``permit'' something means to allow or give consent for that thing to
occur. In this case, the EPA is prescribing the procedures that allow
for states to apply less stringent standards of performance. To
``apply'' means ``to put to a special use or purpose'' or ``put into
practical operation,'' \112\ and ``consideration'' means ``the action
of taking into account.'' \113\ Thus, the state's authorization to
``apply[]'' a standard of performance to any particular source,
``tak[ing] into consideration'' RULOF, means the state may
particularize a standard of performance for a given source by
accounting for remaining useful life and other factors where there are
fundamental differences between the information specific to a facility
and the information the EPA considered in determining the degree of
emission limitation achievable through application of the BSER. In
doing so, the state must remain as consistent as possible with that
degree of emission limitation in light of what the Supreme

Court has recognized as the EPA's ``primary regulatory role in section
111(d)'' \114\ and the emission reduction purpose of CAA section 111.
---------------------------------------------------------------------------

    \112\ Oxford English Dictionary, https://www.oed.com/search/advanced/Meanings?textTermText0=apply&textTermOpt0=WordPhrase, last
accessed Nov. 1, 2023.
    \113\ Id., https://www.oed.com/search/advanced/Meanings?textTermText0=consideration&textTermOpt0=WordPhrase, last
accessed Nov. 1, 2023.
    \114\ West Virginia v. EPA, 142 S. Ct. at 2601.
---------------------------------------------------------------------------

    Second, the history and context of CAA section 111(d) supports the
EPA's authority to provide a framework for states' consideration of
RULOF. As explained in section III.E.2. of this preamble, the standards
of performance that states establish in state plans must generally be
no less stringent than the degree of emission limitation that Congress
required, which is the degree of emission limitation that EPA
determines in the applicable EG.\115\ However, in the original 1975
subpart B implementing regulations, the EPA allowed states to grant
variances from this degree of emission limitation in cases of economic
hardship based on the age of the plant and other factors, as long as
the states could justify the variances.\116\ Congress then, in the 1977
CAA Amendments, included the RULOF provision in CAA section 111(d)(1),
which similarly allows states to deviate from the EPA's degree of
emission limitation based on consideration of an existing source's age
(i.e., remaining useful life) and other factors.
---------------------------------------------------------------------------

    \115\ 40 CFR 60.24(c); 40 CFR 60.24a(c); see 39 FR 36102.
    \116\ 40 CFR 60.24(f); 40 FR 53344.
---------------------------------------------------------------------------

    Congress's inclusion of the RULOF provision in CAA section
111(d)(1) should be interpreted as expressing its intent to confirm
that the EPA has authority to promulgate a regulatory variance
provision, including the provision the EPA had, at that time, recently
promulgated. The EPA, following its 1974 proposal of the subpart B
implementing regulations, had received a comment arguing that it did
not have authority to promulgate such a variance provision, to which it
responded by asserting that it did have the authority and explaining
that such a provision is consistent with CAA section 111(d).\117\ The
Courts have held that Congress is presumed to be aware of an
administrative interpretation under certain circumstances.\118\
Accordingly, Congress's adoption of the RULOF provision in the 1977 CAA
Amendments should be interpreted as expressing its intent to make
explicit under CAA section 111(d) the EPA's authority to promulgate
regulations that include a variance provision.\119\
---------------------------------------------------------------------------

    \117\ 40 FR 53344.
    \118\ See Lorillard v. Pons, 434 U.S. 575, 580 (1978)
(``Congress is presumed to be aware of an administrative or judicial
interpretation of a statute and to adopt that interpretation when in
re-enacts a statute without change.'').
    \119\ In the notice of proposed rulemaking for this rule, the
EPA stated that ``[t]here are noticeable differences between the
subpart B variance provision and the CAA section 111(d) RULOF
provision that indicate Congress did not intend to incorporate and
ratify all aspects of the EPA's regulatory approach when amending
CAA section 111(d) in 1977.'' The EPA thus proposed to conclude that
it could not ``clearly ascertain whether the statutory RULOF
provision ratified the variance provision under subpart B . . . .''
87 FR 79176, 79205 (Dec. 23, 2022). Upon further consideration,
however, the EPA believes the most reasonable interpretation of the
statutory RULOF provision, given its history and context, is that
Congress intended it to authorize the EPA to provide variances from
the required degree of emission limitation on a case-by-case basis.
However, the EPA agrees with its assessment at proposal that
Congress did not necessarily incorporate or ratify specific aspects
of the Agency's 1975 variance provision; it is reasonable that
Congress would not have codified the precise regulations that the
EPA promulgated in 1975 and instead leave the Agency space to revise
those regulations as needed, as it is did in 2019 and is doing in
the present rule.
---------------------------------------------------------------------------

    It is also clear that the EPA understood the RULOF provision in CAA
section 111(d)(1) to be a variance in the same way it had provided a
variance in subpart B. This is evidenced by the fact that following the
1977 CAA Amendments the EPA did not revise its 1975 regulations, which
were premised on this understanding, for over forty more years.\120\
This indicates that the EPA viewed its 1975 regulations granting a
variance as authorized under the RULOF provision enacted in 1977.
---------------------------------------------------------------------------

    \120\ The ACE rule, in which the EPA promulgated subpart Ba in
2019, declined to refer to the RULOF provision as a ``variance,''
apparently because the term conflicted with that rule's view that
RULOF would be used to establish standards of performance as a
general matter. 84 FR 32520,32570 n. 291 (July 8, 2019). The ACE
rule misunderstood the RULOF provision. As explained throughout
section III.E. of this preamble, this provision authorizes a state
to depart from the degree of emission limitation the EPA determines
under CAA section 111(a)(1) when applying a standard of performance
to a particular source pursuant to consideration of RULOF. As the
1975 regulations indicated, 40 FR 53332, 53344 (Nov. 17, 1975), it
is appropriate to call this type of departure or exception a
``variance.''
    \121\ The EPA explains the reasons it believes it is now
necessary to provide the second part of the process for this
variance--how to calculate a less stringent standard of
performance--in section III.E.2. of this preamble.
---------------------------------------------------------------------------

    The regulations the EPA is promulgating at 40 CFR 60.24a(f) are
consistent with the long-held view that the Agency's implementing
regulations provide a variance. While 40 CFR 60.24a(e) provides the
process for invoking this variance, to date the regulations have not
included the second part: how to address a source that has qualified
for the variance.\121\ Although variances may operate in different ways
in the context of different statutory and regulatory schemes, it is
clear from both the language and the context of the RULOF provision
that Congress intended it to provide for alternative compliance with
CAA section 111(d), i.e., a less stringent standard of performance, to
the extent necessary to address the fundamental differences between the
EPA's EG and the circumstances of a particular facility. Such variances
are common throughout environmental statutes and, for the environmental
protection aim to be achieved, must be crafted so that the alternative
is as close as possible to the statutory standard, even as it departs
from the generally applicable requirement.
    For example, Clean Water Act (CWA) section 301(b)(2) requires, in
part, certain sources to achieve effluent limitations consistent with
application of the best available technology economically achievable,
which will result in reasonable further progress toward eliminating the
discharge of all pollutants. These limitations must be determined in
accordance with factors specified in the statute and are provided by
either effluent limitation guidelines issued by the EPA or the
permitting authority on a best professional judgment basis where no
such national effluent limitation guidelines exist. CWA section 301(n)
authorizes the EPA to grant variances for existing sources from the
best available technology requirements of its effluent limitation
guidelines where a facility can demonstrate that it is fundamentally
different with respect to the factors (other than cost) specified in
the statute and considered by the EPA in establishing those
requirements. CWA section 301(n) further requires that, where a
variance is warranted, the EPA must provide an alternative requirement
that (1) is no less stringent than justified by the fundamental
difference, and (2) will not result in a non-water quality
environmental impact which is markedly more adverse than the impact
considered in establishing the rule.\122\
---------------------------------------------------------------------------

    \122\ As another example, CWA section 301(c) provides that the
EPA may modify the best available technology requirements for
particular sources if a facility can demonstrate that a modified
standard will (1) represent the maximum use of technology within the
economic capability of the owner or operator and (2) will result in
reasonable further progress toward the elimination of the discharge
pollutants.
---------------------------------------------------------------------------

    Similarly, section 3004(m)(1) of the Resource Conservation and
Recovery Act (RCRA) requires the EPA to promulgate regulations
specifying the levels or methods of treatment of hazardous waste, if
any, that ``substantially diminish the toxicity of the waste or
substantially reduce the

likelihood of migration of hazardous constituents from the waste so
that short-term and long-term threats to human health and the
environment are minimized.'' The EPA has set generally applicable
regulatory standards for the treatment of hazardous waste under RCRA
section 3004(m)(1). The Agency has also has provided regulatorily for
waste-specific variances in instances in which it is not physically
possible, or it is inappropriate, to treat waste to the level specified
in the Agency's treatment standard or to treat waste using the method
the Agency specified as the treatment standard.\123\ In order for the
EPA to grant a variance, the party requesting it must provide an
alternative waste treatment requirement that is sufficient to minimize
threats to human health and the environment posed by disposal of the
waste, i.e., that is sufficient to satisfy the underlying statutory
requirement, even though it differs from the generally applicable
treatment standard prescribed by the EPA.
---------------------------------------------------------------------------

    \123\ 40 CFR 268.44.
---------------------------------------------------------------------------

    The discussion above highlights examples of environmental statutes
that require adherence to a generally applicable standard, but under
which either Congress or the EPA has authorized variances when it is
impossible or unreasonable for a particular regulated entity to achieve
that standard. For a general statutory standard requiring the ``best''
technology or ``substantial'' progress, the variances are an
alternative way of achieving the statutory standard, as opposed to an
exemption from that standard. In the case of the CWA variances, in
particular, this means that the alternative requirement pursuant to the
variance constitutes a degree of pollutant limitation that deviates as
little as possible from the EPA's regulation pursuant to that statutory
standard. That is, the alternative requirement constitutes a particular
regulated entity's best effort to achieve the generally applicable
standard.
    The EPA has crafted 40 CFR 60.24a(e) and (f) to be a variance in
the same vein as the CWA and RCRA statutory and regulatory provisions
discussed above. It is clear from both the history and plain language
of CAA section 111(d)(1) that Congress did not provide an exemption
from regulation, but rather a method for providing alternative
compliance with the general statutory requirement of that section.\124\
CAA section 111(d) provides that states must submit plans that include
``standards of performance,'' and CAA section 111(a)(1) defines
``standard of performance'' as ``a standard for emissions of air
pollutants which reflects the degree of emission limitation achievable
through the application of the best system of emission reduction which
. . . the Administrator determines has been adequately demonstrated.''
Thus, the underlying statutory standard is the degree of emission
limitation determined by the EPA in the applicable EG. A variance from
this statutory standard is not available if a source can reasonably
achieve the EPA's degree of emission limitation. If a variance is
warranted, the alternative requirement, i.e., a standard of performance
pursuant to consideration of RULOF, must be a standard for emissions of
air pollutants that is no less stringent than necessary to address the
fundamental differences identified under 40 CFR 60.24a(e). That is, the
degree of emission limitation of a standard of performance pursuant to
RULOF must deviate as little as possible from the degree of emission
limitation in the applicable EG.\125\ Consistent with the structure of
CAA section 111(d) generally, the RULOF provision does not prescribe
the use of any particular system of emission reduction in conjunction
with a less stringent standard of performance but instead focuses on
ensuring that the degree of emission limitation deviates no more than
necessary; anything less would be inconsistent with the general
statutory framework.
---------------------------------------------------------------------------

    \124\ See CAA section 111(d)(1) (requiring that states
considering RULOF for a particular source nonetheless apply a
standard of performance to that source); 39 FR 36102, 36102 (Oct. 7,
1974) (proposed regulations ``provide that States may establish less
stringent emission standards on a case-by-case basis provided that
sufficient justification is demonstrated in each case'').
    \125\ Cf. Weyerhauser Co. v. Costle, F.2d 1011, 1035 (D.C. Cir.
1978) (Clean Water Act variance provision ``authorizes the Agency to
relieve a particular point source operator from any demands that the
Act does not allow the Agency to make of the industry generally.''
However, the point source operator must still, consistent with the
general statutory requirement for the industry, use the best
available technology economically available and ``the variance may
not halt progress toward eliminating pollution.'').
---------------------------------------------------------------------------

    Thus, 40 CFR 60.24a(f)(1) requires that a less stringent standard
of performance be no less stringent (or have a compliance schedule no
longer) than necessary to address the fundamental differences
identified under 40 CFR 60.24a(e). It also contains a framework that
states must use, to the extent necessary to satisfy that criterion, to
determine the less stringent standard of performance. In some
instances, determining the standard of performance that is no less
stringent than necessary to address the fundamental differences will be
straightforward and the state will not need to undertake the analysis
of additional systems of emission reduction that is laid out in the
second and third sentences of 40 CFR 60.24a(f)(1). For example, where
the BSER the EPA has identified in the applicable EG may be implemented
at the source at either a lower stringency or with a longer compliance
schedule and it is clear that no other system of emission reduction
will result in greater stringency or a shorter schedule, it is
unnecessary for a state to evaluate other systems in order to satisfy
the first sentence of paragraph (f)(1). In this case, the state would
simply justify the degree of emission limitation or compliance schedule
as the most stringent or shortest reasonably possible.
    However, where a particular source cannot implement the types of
controls that comprise the BSER or where it is not apparent that
implementation of the BSER at lower stringency or with a longer
compliance schedule will result in a standard of performance that is no
less stringent than necessary, evaluation of additional systems of
emission reduction will be necessary under 40 CFR 60.24a(f)(1). In this
situation, the EPA does not believe it is reasonably possible to
determine a standard of performance that satisfies the criterion of
Sec.  60.24a(f)(1) without considering the systems of emission
reduction that the EPA determined, in the applicable EG, have been
adequately demonstrated.\126\ As discussed below, however, it may not
be necessary for a state to evaluate every system of emission reduction
that the EPA considered. Thus, the EPA is requiring that, to the extent
necessary to determine a standard of performance that is no less
stringent than necessary, states must evaluate the systems of emission
reduction in the applicable EG. As further discussed below, the EPA
expects states will leverage the information and analysis the Agency
has provided in that EG for their evaluations, particularizing that
information to the circumstances of the particular facility as needed.
---------------------------------------------------------------------------

    \126\ See 40 CFR 60.22a(b)(2).
---------------------------------------------------------------------------

    Similarly, it is not reasonably possible to craft a standard of
performance that is no less stringent than necessary to address a
fundamental difference between a particular facility's circumstances
and the information the EPA considered in determining the degree of
emission limitation without engaging with that information.\127\ In

determining the degree of emission limitation in an EG, the EPA
considers whether available systems of emission reduction have been
adequately demonstrated, the amount of emissions they reduce, the cost
of achieving such reduction, any nonair quality health and
environmental impacts, and energy requirements.\128\ To evaluate
whether a state's less stringent standard of performance is no less
stringent than necessary, both states and the EPA need to be able to
compare the information relevant to the source category (or
subcategory) with the facility-specific information. Additionally, to
ensure equitable consideration and treatment of sources in different
states that have invoked RULOF to apply less stringent standards of
performance, it is necessary that each state is using a common set of
factors and metrics as the bases for their decisions. Using the factors
\129\ and evaluation metrics \130\ that the EPA considered in
determining the degree of emission limitation ensures ``apples-to-
apples'' comparisons, both between the EPA's degree of emission
limitation and a state's less stringent standard of performance and
between different sources in different states. Thus, to the extent that
states are evaluating systems of emission reduction to determine a less
stringent standard of performance under 40 CFR 60.24a(f)(1), they must
use the same factors the EPA considered, and the evaluation metrics the
EPA used to consider the factors, in doing so.
---------------------------------------------------------------------------

    \127\ Cf. Weyerhauser Co. v. Costle, F.2d 1011, 1035 (D.C. Cir.
1978) (CWA section 304(b)(2)(B) lays out the minimum factors the EPA
must consider in determining the best available technology
economically achievable on a source-category basis. In deciding
whether a variance sought by a particular point source owner
represents the ``maximum use of technology within the economic
capability of (that) owner, the permit-granting agency, and the EPA
in supervising that agency, must consider the factors laid out in
section 304(b)(2)(B).'').
    \128\ The D.C. Circuit has stated that in determining the
``best'' system of emission reduction, the EPA must also take into
account the role of ``technological innovation.'' See Sierra Club v.
Costle, 657 F.2d 298, 347 (D.C. Cir. 1981). However, because
technological innovation is less likely to be relevant at the scale
of a single facility than it is on a source-category basis, the EPA
is not explicitly requiring states to consider it under 40 CFR
60.24a(f)(1).
    \129\ Under 40 CFR 60.24a(f)(1), as finalized in this action,
states must evaluate the systems of emission reduction identified in
the applicable EG. The EPA's EGs include systems of emission
reduction that have been ``adequately demonstrated.'' There is
therefore no need for states to revisit the ``adequately
demonstrated'' consideration. However, ``adequately demonstrated''
includes ``technical feasibility'' and the EPA acknowledges that
systems of emission reduction that are adequately demonstrated for
the source category may not be technically feasible for a particular
source. The EPA is thus adding ``technical feasibility'' to the list
of factors states must consider in determining a less stringent
standard of performance.
    \130\ An ``evaluation metric'' includes both the form of the
EPA's consideration of a factor and any threshold or level of
reasonableness the EPA considered in the applicable EG.
---------------------------------------------------------------------------

    For example, assume the EPA considered cost using the evaluation
metric dollars per ton of pollutant reduced and concluded that costs of
up to $500/ton of pollutant reduced are reasonable. A state has invoked
RULOF for a particular source under 40 CFR 60.24a(e) because, based on
that source's shortened remaining useful life, the cost, in dollars per
ton of pollutant reduced, of achieving the degree of emission
limitation in the applicable EG is fundamentally different from $500/
ton. The state, in determining a less stringent standard of performance
pursuant to 40 CFR 60.24a(f), must evaluate the systems of emission
reduction in the EG using the cost evaluation metric dollars per ton of
pollutant reduced. In doing so, the state would consider the
reasonableness of the costs of those systems against the benchmark of
$500/ton.
    The regulations at 40 CFR 60.24a(e) also allow states to invoke
RULOF based on a fundamental difference unrelated to cost, e.g.,
physical impossibility of implementing control equipment necessary to
achieve the EPA's degree of emission limitation. In this instance, a
state may find that a particular facility's footprint is such that
there are no systems of emission reduction that could be installed at
the facility to achieve the degree of emission limitation in the
applicable EG. Under 40 CFR 60.24a(f)(1), the state would evaluate the
systems of emission reduction in the EG using the factors--technical
feasibility, amount of emission reductions, cost of achieving such
reductions, nonair quality health and environmental impacts, and energy
requirements--and evaluation metrics the EPA considered in order to
determine the standard of performance that is both physically possible
for the source to achieve and that is no less stringent than necessary.
    As explained in section III.E.3.a., there may be facility-specific
circumstances and factors that the EPA did not anticipate and consider
in the applicable EG that make achieving the EPA's degree of emission
limitation unreasonable for that facility. Such facility-specific
information may constitute an ``other factor specific to the facility''
under 40 CFR 60.24a(e) and could potentially represent a fundamental
difference between the information the EPA considered in determining
the degree of emission limitation and the information specific to a
facility. Such facility-specific ``other factors'' may also be relevant
in determining and applying a less stringent standard of performance.
Thus, pursuant to the process the EPA is finalizing in 40 CFR
60.24a(f)(1), states may consider ``other factors specific to the
facility'' that were the basis of the demonstration under paragraph (e)
in determining and applying a less stringent standard of performance.
    In some instances, the fundamental difference between the
information the EPA considered in the applicable EG and the information
specific to a facility will manifest as a difference in whether or how
an enumerated factor applies to a particular facility. For example,
parasitic load may be an appropriate evaluation metric for considering
energy requirements for some systems of emission reduction but not for
others, or water availability may not have been important to the EPA's
consideration of nonair quality environmental impacts but may be
relevant for a source located in a particularly water-scarce region. If
such information represents a fundamental difference that make the
EPA's degree of emission limitation determination unreasonable for a
particular facility pursuant to 40 CFR 60.24a(e), it would be
reasonable and permissible for a state to consider such information in
applying a less stringent standard of performance under 40 CFR
60.24a(f)(1).
    In addition to ``other factors'' that the EPA did not necessarily
consider, there may be circumstances in which a system of emission
reduction that the EPA did not consider in the applicable EG or that
the EPA concluded was not adequately demonstrated because, e.g., it is
not available on a source-category wide basis, is available,
technically feasible, and potentially reasonable for a particular
facility.
    The EPA is therefore providing in 40 CFR 60.24a(f)(1) that states
may consider, in determining a less stringent standard of performance,
``other factors specific to a facility'' that were the basis for the
fundamental difference and invoking RULOF under 40 CFR 60.24a(e), as
well as systems of emission reduction in addition to those the EPA
considered in the applicable EG. At the same time, however, the EPA in
a particular EG makes certain judgments about which systems are
available and adequately demonstrated, as well as how the factors are
reasonably considered when evaluating those systems for designated
facilities within the source category. To ensure that any additional
considerations do not result in a standard of performance that deviates
more than necessary from the

EPA's degree of emission limitation, the state must justify how any
additional consideration results in a standard of performance that is
no less stringent than necessary to address the fundamental differences
identified under paragraph (e).
    In addition to being consistent with statutory and regulatory
precedent on variances, the procedure the EPA is promulgating in 40 CFR
60.24a(f)(1) for determining standards of performance that are no less
stringent than necessary is also consistent with CAA section 111. As
explained throughout this section of the preamble, CAA section
111(a)(1) defines a standard of performance as a standard for emissions
of air pollutants that reflects a certain degree of emission limitation
and gives the EPA the ``primary regulatory role'' \131\ of determining
that degree of emission limitation. Congress required that, in doing
so, the EPA evaluate systems of emission reduction that have been
adequately demonstrated and determine which is best based on the amount
of emission reductions, cost of achieving such reduction, nonair
quality health and environmental impacts, and energy requirements. As
also explained in this section of the preamble, CAA section 111(d)
directs the EPA to prescribe regulations that ``permit'' states ``in
applying'' a standard of performance to a particular source to ``take
into consideration'' RULOF. The requirements the EPA is promulgating in
40 CFR 60.24a(f)(1) ``permit'' a state to particularize a standard of
performance for any given source by accounting for RULOF where there
are fundamental differences between the information specific to a
facility and the information the EPA considered in determining the
degree of emission limitation in the applicable EG. In doing so, the
state must remain as consistent as possible with that degree of
emission limitation in light of what the Supreme Court has recognized
as the EPA's primary regulatory role in CAA section 111(d) and the
emission reduction purpose of CAA section 111. Because Congress has
identified the factors noted above as relevant considerations for the
EPA in determining a standard of performance, the Agency believes it is
also reasonable to require states to consider these systems, factors,
and evaluation metrics in the manner that the EPA did in applying
standards of performance pursuant to 40 CFR 60.24a(f).
---------------------------------------------------------------------------

    \131\ West Virginia v. EPA, 142 S. Ct. at 2601.
---------------------------------------------------------------------------

    Furthermore, the EPA's authority to promulgate 40 CFR 60.24a(f) is
buttressed by CAA section 111(d)(2). As discussed in sections III.E.1.
and 2. of this preamble, CAA section 111(d)(2) provides that the EPA
shall have the same authority as under CAA section 110(c) to prescribe
a Federal plan where a state fails to submit a satisfactory plan. The
EPA's long-standing interpretation of this subsection is that it
provides the Agency authority to substantively review states' standards
of performance.\132\ The existing regulations of subpart Ba and the
EPA's emission guidelines provide the substantive criteria for the
Agency's evaluation of standards of performance generally; \133\ the
regulations the EPA is promulgating at 40 CFR 60.24a(f) constitute the
substantive criteria for evaluating standards of performance states
have applied pursuant to RULOF.
---------------------------------------------------------------------------

    \132\ See 40 FR 53342 (CAA section 111(d)'s references to CAA
section 110 suggest that Congress intended the Administrator to
apply some substantive criterion to his review of State plans).
    \133\ See 40 CFR 60.24a(c).
---------------------------------------------------------------------------

    Some commenters on proposed 40 CFR 60.24a(f) dislike the EPA's
approach to determining what constitutes a ``satisfactory'' less
stringent standard of performance but offer no alternatives, other than
states should have complete discretion to apply standards pursuant to
RULOF. This cannot be correct. If this was the case, the EPA would have
no choice but to approve plans in which states have applied business-
as-usual standards, or standards that allows designated facilities'
emissions to increase, even if more stringent standards of performance
are reasonable for that facility. Such an outcome would be inconsistent
with the text, context, and purpose of CAA section 111. The EPA
believes the criteria it is providing for the Agency's substantive
review of less stringent standards of performance are a reasonable
approach to fulfilling its statutory obligation under CAA section
111(d)(2) to substantively review standards of performance in state
plans.
    Moreover, it is not uncommon for the EPA to promulgate regulatory
frameworks to guide states in areas in which Congress has granted them
discretion. For example, under the visibility protection provisions of
CAA section 169A, Congress directed the EPA to promulgate regulations
to assure that reasonable progress towards meeting the national goal
for visibility improvement in mandatory class I Federal areas, as well
as to assure compliance with the requirements of CAA section 169A.
Section 169A further provides that states implement the visibility
protection requirements through state implementation plans, in which
they must include emission limitations for sources of visibility
impairing pollutants. The statute provides two types of control
analyses for states to use in determining the applicable emission
limitations: reasonable progress and best available retrofit
technology.\134\ Although Congress directed states to determine the
best available retrofit technology for their existing sources, the EPA,
in promulgating its implementing regulations, provided a detailed
methodology and requirements for doing so in 40 CFR 51.308(e) and 40
CFR part 51, appendix Y. The EPA has similarly prescribed requirements
for states to determine the emission reduction measures that are
necessary to make reasonable progress in 40 CFR 51.308(f).\135\ These
requirements create procedural and substantive frameworks within which
states exercise their discretion in order to ensure the outcomes of
their control analyses are consistent with the statutory requirements
and purpose. The regulatory framework and associated guidance also
provide states useful clarity as to how the EPA will fulfill its
statutory obligation to review and approve or disapprove state plans,
and how the EPA will promulgate Federal plans.
---------------------------------------------------------------------------

    \134\ CAA section 169A(g)(1) and (2). The statutory factors that
states must use to determine reasonable progress are ``costs of
compliance, the time necessary for compliance, and the energy and
nonair quality environmental impacts of compliance, and the
remaining useful life of any existing source subject to such
requirements.'' The statutory factors for best available retrofit
technology analysis are: ``costs of compliance, the energy and
nonair quality environmental impacts of compliance, any existing
pollution control technology in use at the source, the remaining
useful life of the source, and the degree of improvement in
visibility which may reasonably be anticipated to result from the
use of such technology.''
    \135\ The EPA has also issued extensive and detailed guidance
for states in conducting reasonable progress analyses for sources of
visibility impairing pollutants. See Guidance on Regional Haze State
Implementation Plans for the Second Implementation Period (2019),
available at https://www.epa.gov/visibility/guidance-regional-haze-state-implementation-plans-second-implementation-period;
Clarifications Regarding Regional Haze State Implementation Plans
for the Second Implementation Period (2021), available at https://www.epa.gov/visibility/clarifications-regarding-regional-haze-state-implementation-plans-second-implementation.
---------------------------------------------------------------------------

    The EPA is not providing that states can forgo analyzing control
technologies or other systems of emission reduction that the EPA has
excluded from being the BSER on the basis of technological or economic
feasibility, as suggested by commenters. The EPA conducts BSER analyses
on a source-category basis. It may be that a system of emission

reduction is generally adequately demonstrated but is not the BSER
because it cannot be applied to designated facilities across the
category at a reasonable cost or because it is technically infeasible
for a certain portion of the category. However, designated facilities
that are eligible to receive a less-stringent standard of performance
are in demonstrably different circumstances than facilities in the
source category generally. Therefore, control technologies or other
systems that may not be the BSER for the source category may be
reasonable for a source that has invoked RULOF. Similarly, to avoid
inadvertently precluding consideration of a system that could allow a
state to apply a standard of performance that is no less stringent than
necessary, the EPA is not providing that states must consider only
control technologies or systems that result in less emission reductions
than the EPA's BSER. While it is true that states should only be in the
position of applying less stringent standards of performance if they
have demonstrated that a designated facility cannot achieve the degree
of emission limitation, there may be situations in which it is not
practical or feasible to ascertain a priori what degree of emission
limitation a technology or system could achieve when applied to a
particular source. Thus, the EPA does not believe it is reasonable to
narrow the scope of control technologies or other systems of emission
reduction that states must consider under these general implementing
regulations. The Agency may find it appropriate to do so in the context
of an individual EG.
    Some commenters noted the resources and potential burden associated
with conducting the proposed source-specific BSER analyses. While the
EPA is not finalizing a requirement for states to conduct source-
specific BSER analyses, it acknowledges that stakeholders could have
similar concerns in the context of the provision being promulgated at
40 CFR 60.24a(f). However, the EPA does not believe the RULOF
provisions will significantly add to states' planning processes. First,
as explained in section III.E.2. of this preamble, consistent with the
statutory framework the EPA believes that use of RULOF should be an
exception to the general rule that the EPA's degree of emission
limitation is reasonable for designated facilities within the
applicable source category. Given the EPA's ability to subcategorize
source categories and to tailor its EG to the circumstances of each
subcategory, using RULOF to apply a less stringent standard of
performance should be appropriate in only very limited circumstances.
    Second, as explained above, the EPA is providing in 40 CFR
60.24a(f)(1) that states must evaluate the systems of emission
reduction in the applicable EG using the factors and evaluation metrics
the EPA considered ``[t]o the extent necessary to determine a standard
of performance'' that is no less stringent than necessary to address
the fundamental differences identified under paragraph (e). As noted
above, the EPA anticipates that in some if not many cases, states will
be able to demonstrate that the less stringent standard of performance
they are applying is no less stringent than necessary without
evaluating all of the systems of emission reduction in the applicable
EG. For example, if the EPA's degree of emission limitation is 95%
reduction in emissions and a state applies a less stringent standard of
performance that results in 90% reduction, the state may reasonably
forgo evaluating additional systems of emission reduction if, based on
the information in the EG, it is clear that none is able to achieve
comparable reductions. Similarly, a state may not need to consider
every system of emission reduction in an applicable EG if it starts by
evaluating the system or systems that achieve the greatest emission
reductions and applies a standard of performance corresponding to one
of those systems.
    Third, the EPA anticipates states applying less stringent standards
of performance would leverage the information and analyses the Agency
has provided in the applicable EG. In promulgating an EG, the EPA is
required to provide the elements listed in 40 CFR 60.22a(b), which
include ``[a] description of systems of emission reduction which, in
the judgment of the Administrator, have been adequately demonstrated,''
and ``[i]nformation on the degree of emission limitation which is
achievable with each system, together with information on the costs,
nonair quality health environmental [sic] effects, and energy
requirements of applying each system to designated facilities,'' as
well as ``[s]uch other available information as the Administrator
determines may contribute to the formulation of State plans.'' In many
cases, the EPA provides extensive technical support documents including
feasibility and cost analyses. The Agency also typically discusses the
types of nonair quality health and environmental effects and energy
requirements that might be expected in conjunction with various systems
of emission reduction applicable to the source category. Although
designated facilities for which RULOF has been invoked are in
fundamentally different circumstances that the average or typical
facilities that EPA considers in the context of its own analysis, the
information provided in an EG will provide a starting point and, in at
least some cases, much of the analytical basis for states' evaluations.
    Fourth, in the event the state needs to analyze different systems
of emission reduction to determine a less stringent standard of
performance, the EPA believes it would be in this position regardless
of any requirements the Agency does or does not provide. That is,
because CAA section 111(d)(1) requires a standard of performance for
each existing source, the EPA does not believe the framework being
provided in 40 CFR 60.24a(f) will significantly alter states' workload
if and when invoking RULOF. Rather, it is intended to provide clarity
for states in developing standards of performance consistent with the
statutory requirements. The EPA intends for these requirements to in
fact reduce planning burdens overall, as they provide a framework for
states to submit approvable standards of performance for sources
invoking RULOF, thereby obviating the need for subsequent plan
revisions to address any disapproved standards.
    As noted above, the EPA requested comment on whether to provide
consideration of the five BSER factors as part of a source-specific
BSER analysis as a presumptively approvable framework for applying a
less stringent standard of performance, as opposed to requirements. The
framework the EPA is finalizing in this action differs from the
proposed approach under which states would conduct source-specific BSER
analyses; the process the EPA is finalizing at 40 CFR 60.24a(f) is
premised on determining the appropriate variance from the EPA's degree
of emission limitation. The EPA is providing this framework as
requirements for states applying a less stringent standard of
performance. As explained elsewhere in this section of the preamble,
the EPA does not believe it is possible, as a practical matter, to
determine a standard of performance that is no less stringent than
necessary without evaluating the systems of emission reduction that the
EPA determined are adequately demonstrated and engaging with the
factors and evaluation metrics that the EPA used to evaluate those
systems in the applicable EG. Therefore, the EPA believes that states
must use the framework laid out in 40 CFR 60.24a(f) in order for the
resulting variance to be

consistent with CAA section 111(d). As laid out in the Sec.
60.24a(f)(1), states may also consider additional systems and other
factors specific to the facility that were the basis of the fundamental
difference identified under 40 CFR 60.24a(e), so long as they justify
that any such consideration is consistent with applying a standard of
performance that is no less stringent than necessary.
    In sum, the EPA is not finalizing its proposed requirement under 40
CFR 60.24a(f)(1) that states that have invoked RULOF for a particular
facility determine a source-specific BSER. As a result, it is also not
finalizing the provision proposed at 40 CFR 60.24a(f)(2) that would
have required states to calculate the emission reductions a source-
specific BSER would achieve and apply the standard of performance that
reflects this degree of emission reduction. However, consistent with
its proposal, the EPA continues to believe it is necessary for the
Agency to provide a process for states that have invoked RULOF for a
particular facility to follow in applying a less stringent standard of
performance. The EPA is therefore promulgating requirements at 40 CFR
60.24a(f) to ensure that states that have invoked RULOF for a
particular designated facility apply a standard of performance that is
no less stringent than necessary to address the fundamental differences
identified under 40 CFR 60.24a(e). These provisions are necessary to
ensure consistency with the purpose, text, and context of CAA section
111(d), including an understanding of RULOF as a limited variance from
the degree of emission limitation in the applicable EG. The provisions
at 40 CFR 60.24a(f)(1) as finalized will require states to determine a
less stringent standard of performance that is no less stringent than
necessary. In doing so, states must, to the extent necessary, evaluate
the systems of emission reduction in that EPA using the factors and
evaluation metrics that the EPA considered. States may also consider,
as justified, other factors specific to the facility that were the
basis for invoking RULOF under 40 CFR 60.24a(e), as well as additional
systems of emission reduction. The EPA is finalizing the provision
proposed at 40 CFR 60.24a(f)(3), requiring that a less stringent
standard of performance pursuant to RULOF be in the form \136\ required
by the applicable EG, at paragraph (f)(2).
---------------------------------------------------------------------------

    \136\ ``Form'' of the less stringent standard of performance
refers to a numerical emissions standard versus a work practice
standard, the units in which a standard is expressed, or both.
---------------------------------------------------------------------------

c. Contingency Requirements
    The EPA recognizes that a source's operations may change over time
in ways that cannot always be anticipated or foreseen by the EPA,
state, or designated facility. This is particularly true where the
basis of the application of RULOF is a designated facility's
operational conditions, such as the source's remaining useful life or
restricted capacity. If the designated facility subsequently changes
its operating conditions after the state or EPA applies a less
stringent standard of performance, the basis for the variance may be
abrogated and the standard of performance may no longer be no less
stringent than necessary. For example, a state may seek to invoke RULOF
for an EGU on the basis that it is running at lower utilization than
the EPA considered in determining the degree of emission limitation and
intends to do so for the duration of the compliance period required by
an EG. Under this scenario, the state may be able to demonstrate that
it is not reasonably cost-effective for the designated facility to
achieve the degree of emission limitation and the state could set a
less stringent standard of performance for this EGU. However, because
reduced utilization is not a physical constraint on the designated
facility's operations, it is possible that the source's utilization
could increase in the future without any other legal constraint.
    The EPA proposed to address this potential scenario by adding a
contingency requirement to the RULOF provision at 40 CFR 60.24a(h) that
would require a state to include in its state plan an instrument making
a source's operating condition, such as remaining useful life or
restricted capacity, enforceable whenever the state seeks to rely on
that operating condition as the basis for a less stringent standard.
This requirement would not extend to instances where a state applies a
less stringent standard on the basis of an unalterable condition that
is not within the designated source's control, such as technical
infeasibility, space limitations, water access, or geologic
sequestration access. Rather, this requirement addresses operating
conditions such as operation times, operational frequency, process
temperature and/or pressure, fuel parameters, and other conditions that
are subject to the discretion and control of the designated facility.
    Many commenters on this subject supported the EPA's proposed
approach to operating conditions that are within a designated
facility's control. They noted that, in the absence of an enforceable
requirement, a designated facility could change its operations with the
result being foregone emission reductions and undermining of the level
of stringency in the EG. One commenter stated that the EPA should not
permit a source that has legally committed to a retirement date as a
condition of invoking RULOF to receive a less-stringent standard to
postpone that date because, even if it committed to meet the emission
limitation in the EG from that point forward, it could not make up for
its excess emissions before that time. Other commenters opposed the
EPA's proposed requirement and asserted that the EPA had cited no legal
authority or record basis for a need to require states to make
operational conditions that are the basis of less stringent standards
into enforceable requirements in state plans. One commenter noted that
states should have latitude in their regulatory and permit processes to
determine what additional restrictions or contingencies are necessary
to ensure that the less stringent standard remains appropriate over
time.
    The EPA continues to believe the requirement proposed at 40 CFR
60.24a(h) is a necessary and reasonable safeguard to ensure that
designated facilities' standards of performance are consistent with the
level of stringency Congress required. Where are particular facility's
operating conditions are the basis for a variance from the EPA's degree
of emission limitation, that variance is warranted only so long as the
operating condition remains a fundamental difference between that
facility's circumstances and the information the EPA considered in the
applicable EG. Therefore, in order for a state plan to include
satisfactory standards of performance as well as measures for the
implementation and enforcement of those standards pursuant to CAA
section 111(d)(1), the contingency must be an enforceable requirement
in that plan; upon EPA approval of the plan the contingency becomes a
federally enforceable requirement (in addition to being enforceable
through the state-law instrument that was included in the plan).
Inclusion in a state permit, rule, or other instrument alone is not
sufficient to satisfy CAA section 111(d)(1). A state-only instrument
can additionally be changed outside the state plan revision process,
which could result in the lifting of the operational condition without
a corresponding adjustment to the designated facility's less stringent
standard of performance.
    The EPA notes that it has a practice of requiring operational
conditions that

are the basis of less stringent emission limitations to be included in
state plans or state implementation plans under CAA section 111 or 110,
respectively, including in the Affordable Clean Energy Rule \137\ and
under the CAA's regional haze program.\138\
---------------------------------------------------------------------------

    \137\ 84 FR 32520, 32558 (July 8, 2019). The EPA has proposed to
repeal the ACE Rule on other grounds. See 88 FR 33240 (May 23,
2023).
    \138\ See, e.g., 76 FR 12651, 12660-63 (March 8, 2011) (best
available retrofit technology requirements for Oregon source based
on enforceable retirement that were to be made federally enforceable
in state implementation plan); Guidance on Regional Haze State
Implementation Plans for the Second Implementation Period at 34,
EPA-457/B-19-003, August 2019 (to the extent a state relies on an
enforceable shutdown date for a reasonable progress determination,
that measure would need to be included in the SIP and/or be
federally enforceable).
---------------------------------------------------------------------------

    States may revise their state plans to allow a designated facility
that has committed to retiring as the basis for invoking RULOF to
postpone its retirement date. There could be many reasons a designated
facility that previously agreed to a federally enforceable commitment
to cease operations by a certain date might need to extend that date.
The EPA is unable to assess, in the context of these general
implementing regulations, an appropriate approach for all possible
circumstances to ensure that the level of stringency of the EG is not
undermined. The EPA anticipates addressing this consideration in
individual EGs.
    As previously discussed, the state plan submission must also
include measures for the implementation and enforcement of a standard
that accounts for RULOF. For standards that are based on operating
conditions that a facility has discretion over and can control, the
operating condition and any other measure that provides for the
implementation and enforcement of the less stringent standard must be
included in the plan submission and as a component of the standard of
performance. For example, if a state applies a less stringent standard
for a designated facility on the basis of a lower capacity factor, the
plan submission must include an enforceable requirement for the source
to operate at or below that capacity factor, and include monitoring,
reporting, and recordkeeping requirements that will allow the state,
the EPA, and the public to ensure that the source is in fact operating
at that lower capacity. A specific EG may detail supplemental or
different requirements on implementing the proposed general requirement
that a state plan submission include both the operating condition that
is the basis for a less stringent standard, and measures to provide for
the implementation and enforcement of such standard.
    The EPA notes there may be circumstances under which a designated
facility's operating conditions change permanently so that there may be
a potential violation of the contingency requirements approved as
federally enforceable components of the state plan. For example, a
designated facility that was previously running at lower capacity now
plans to run at a higher capacity full time, which conflicts with the
federally enforceable state plan requirement that the facility operate
at the lower capacity. To address this concern, a state may submit a
plan revision to reflect the change in operating conditions. Such a
plan revision must include a new standard of performance that accounts
for the change in operating conditions. The plan revision would need to
include a standard of performance that reflects the degree of emision
limitation required by the EG and meet all applicable requirements, or
if a less stringent standard is still warranted for other reasons, the
plan revision would need to meet all of the applicable requirements for
considering RULOF. The new standard of performance would only become
effective upon the EPA's determination that the plan revision is
satisfactory.
    The EPA is finalizing as proposed the requirement that, where a
plan applies a less stringent standard of performance on the basis of
an operating condition within the designated facility's control, such
as remaining useful life or restricted capacity, the plan must also
include such operation condition or conditions as an enforceable
requirement (this requirement was proposed at 40 CFR 60.24a(h) and is
being finalized at 40 CFR 60.24a(g)). The plan must also include
requirements to provide for the implementation and enforcement of the
operating condition, such as monitoring, reporting, and recordkeeping
requirements.
d. Requirements Specific to Remaining Useful Life
    CAA section 111(d) explicitly requires that the EPA permit states
to consider remaining useful life in applying a standard of
performance. While the EPA may consider the age of designated
facilities within a source category as a general matter in determining
the BSER, it is a factor that can have considerable variability from
facility to facility. The annualized costs can change considerably
based on the applied technology at any particular designated facility
given the amortization period. When the EPA determines a BSER, it
considers cost and, in many instances, specifically considers
annualized costs associated with payment of the technology associated
with the BSER. The shorter that payback period is (i.e., shorter
remaining useful life), the less cost-effective that BSER may become.
The current RULOF provision in subpart Ba generally allows for a state
to account for remaining useful life to set a less stringent standard.
However, the provision does not provide guidance or parameters on when
and how a state may do so.
    Consistent with the principles described previously in section
III.E., the EPA proposed requirements for when a state seeks to apply a
less stringent standard on grounds that a designated facility will
retire in the near future. Specifically, the EPA proposed that the
Agency would be required to identify in an EG the outermost retirement
date for designated facilities that could qualify for consideration of
remaining useful life, or a methodology and considerations for states
to use in determining such an outermost date. The proposed regulations
would have also allowed states to apply a routine maintenance standard
of performance to designated facilities with ``imminent'' retirement
dates and additionally provided that the EPA may define the timeframe
for imminent retirements in an EG. Finally, consistent with the
proposed provisions regarding contingency requirements, the EPA
proposed that any state plan that applies a standard of performance
that is based on a particular designated facility's remaining useful
life must include the retirement date as an enforceable commitment and
provide measures for its implementation and enforcement.
    Several commenters supported the EPA's proposal to identify in an
EG an outermost and imminent retirement date to guide states'
consideration of remaining useful life in setting less stringent
standards. Some supportive commenters also urged the EPA to prescribe
further requirements for designated facilities that rely on a shorter
remaining useful life, including prohibiting them from extending their
retirement dates and defining an imminent retirement as one that occurs
within two years of state plan submission. Other commenters opposed the
EPA's proposed requirements around the consideration of remaining
useful life. Some argued that the requirements would foreclose states
from considering remaining useful life when a designated facility's
retirement date falls outside the prescribed range and that, although
states must reasonably exercise their discretion, the

CAA puts no limits on their consideration of this factor. Adverse
commenters also noted that the remaining useful life consideration is
very source-specific and that there may be relevant factors that the
EPA would not necessarily take into account when determining the
outermost and imminent dates in an EG.
    After consideration of the comments received, the EPA has decided
not to finalize the provisions proposed at 40 CFR 60.24a(i) regarding
remaining useful life. As a general matter, the proposed requirement
for the EPA to identify an outermost and imminent retirement date for
the consideration of remaining useful life was intended to assist
states in developing their state plans and to provide transparency and
consistency in states' application of, and the EPA's review of,
standards of performance based on this factor. As explained in the
preamble to the proposed rule, a designated facility's remaining useful
life generally impacts a cost analysis by changing the amortization
period, or the period of time over which a facility pays the capital
costs for a system of emission reduction. The shorter the period, the
higher the annualized costs. The EPA generally assumes a certain
amortization period in its BSER determination based on, e.g., the
lifespan of the system under consideration and the characteristics of
facilities within the source category. A designated facility that has a
shorter remaining useful life than the amortization period the EPA
assumed in its BSER determination will likely find that achieving the
degree of emission based on application of the BSER has higher
annualized costs; the larger the difference between a particular
facility's remaining useful life and the EPA's assumed amortization
period, the larger the difference in annualized costs. However, as a
factual matter, there is a point at which a designated facility's
remaining useful life is long enough so that the difference in
annualized costs for that facility and the costs the EPA considered
reasonable in the applicable EG are not fundamentally different. At
this point, it would be unreasonable for a state to use remaining
useful life as the basis for a less-stringent standard for that
facility because it could achieve the EPA's degree of emission
limitation at a reasonable cost.
    Similarly, an imminent retirement date could serve to streamline
states' planning for sources with remaining useful lives that are so
short that, as a factual matter, no available system of emission
reduction could have reasonable costs. What constitutes a reasonable
cost in the context of a specific EG could depend on, inter alia, the
source category, the emission reductions available, and the designated
pollutant.
    However, the EPA agrees with commenters that states' consideration
of remaining useful life and what constitutes reasonable consideration
of this factor will necessarily depend on the source category, the
variability of the individual designated facilities within the source
category, and the structure of the applicable EG. In some instances,
the nature of the designated facilities and structure of the EG may
render a designated facility's remaining useful life of little
relevance. For example, where a BSER is based on operational changes or
activities that entail little to no capital cost, the remaining useful
life of a designated facility should not change the reasonableness of
the system and there would be no need for the EPA to prescribe imminent
and outermost retirement dates in an EG. Alternatively, designated
facilities within the source category may, by virtue of how an industry
developed, fall into discrete age classes based on their remaining
useful lives such that the EPA considers this characteristic in
creating subcategories and determining appropriate BSERs for each
subcategory. In this case, too, there might be little utility in the
EPA defining imminent and outermost dates for consideration of
remaining useful life in an EG.
    The EPA is therefore choosing not to finalize the provisions
proposed at 40 CFR 60.24a(i), although it may be appropriate to include
outermost and imminent retirement dates for the consideration of
remaining useful life in individual EGs. The proposed provisions
included a requirement that any plan that applies a less-stringent
standard based on remaining useful life must include the retirement
date for the designated facility as an enforceable commitment,
including any measures that provide for the implementation and
enforcement of such a commitment. The EPA notes that although it is not
finalizing the proposed 40 CFR 60.24a(i)(3), as discussed in section
III.E.3.c. of this preamble plans that include less-stringent standards
based on remaining useful life will still be required to include the
relevant designated facilities' retirement dates as enforceable
commitments and include any measures necessary to provide for the
implementation and enforcement of those commitments pursuant to the
requirement being finalized at 40 CFR 60.24a(g).
    The EPA also reiterates that the obligation to include a standard
of performance in a state plan applies to any designated facility that
meets the applicability requirements of an EG as of that EG's
compliance date. That is, a state plan must include a standard of
performance for a designated facility that is retiring after the
compliance date, even if the facility has an enforceable commitment to
retire imminently following that date. In the case of an imminently
retiring designated facility, it may be reasonable for a state to apply
a standard reflecting that facility's business as usual; the EPA will
address this and other potential considerations, including how such a
standard would be calculated, in individual EGs.
e. Reasoned Decision Making and the EPA's Review of State Plans
Invoking RULOF
    As discussed previously in section III.E. of this preamble, under
CAA section 111(d)(2), the EPA has the obligation to determine whether
a state plan submission is ``satisfactory.'' This obligation extends to
all aspects of a state plan, including the application of a less
stringent standard of performance that accounts for RULOF. States carry
the primary responsibility to develop plans that meet the requirements
of CAA section 111(d) and therefore have the obligation to justify any
consideration of RULOF in applying standards less stringent than the
degree of emission limitation provided by the EG. That states must
provide a reasoned basis including, where applicable, technical
analyses and other documentation to support the decisions they make in
their plans is fundamental to the structure of CAA section 111(d).\139\
As explained in section III.E.3.a. of this preamble, consistent with
the statutory framework of CAA section 111(d), state plans must ensure
that designated facilities achieve the degree of emission limitation
achievable through application of the BSER as determined by the EPA
unless doing so would be unreasonable for a particular facility. The
fundamental tenet has been reflected in the EPA's regulations since
1975.\140\ Thus, a ``satisfactory'' plan is one that, inter alia,
applies less-stringent standards only where the state has demonstrated
that achieving the EPA's degree of emission limitation would be
unreasonable pursuant to 40 CFR 60.24a(e). A demonstration that a
particular designated facility cannot

reasonably achieve the degree of emission limitation determined by the
EPA will, in most cases, necessarily be supported by technical analysis
that assesses a particular designated facility and compares its
circumstances to those the EPA considered in its EG.
---------------------------------------------------------------------------

    \139\ See, e.g., 84 FR 32558 (ACE Rule explained that state
plans must adequately document and demonstrate the process and
underlying data used to establish standards of performance so that
EPA can adequately and appropriately review the plan to determine
whether it is satisfactory).
    \140\ See 40 CFR 60.24(c), 60.24a(c).
---------------------------------------------------------------------------

    While it is within states' discretion to apply a less stringent
standard of performance where the state has identified fundamental
differences for a particular facility (or class of facilities), the
state must support its decision making and demonstrate that it results