budget \821\ in the emission guidelines during the interim and final
plan performance periods.
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    \821\ A state's EPA-specified mass CO2 emission
budget is the state's mass-based CO2 goal for affected
EGUs plus the EPA-specified new source CO2 emission
complement. See section VIII.J.2.b.

    All other state plan designs must include a projection of
CO2 emission performance by affected EGUs under the state
plan.
    For example, if a state chooses to apply rate-based CO2
emission standards to individual affected EGUs, or to subcategories of
affected EGUs (such as fossil fuel-fired electric utility steam
generating units and stationary combustion turbines), at a lb
CO2/MWh rate that differs from the CO2 emission
performance rates or the state's rate-based CO2 goal in the
emission guidelines, then a projection is required. Also, if a state
chooses to implement a mass-based program including both affected EGUs
and new EGUs, but with total allowable emissions in excess of the
presumptively approvable EPA-specified mass CO2 emission
budget for that state, the state must provide a projection of
CO2 emission performance. Likewise, if a state chooses a
state measures state plan approach, a projection of CO2
emission performance is required.
    (b) Methods and tools. A satisfactory demonstration of the future
CO2 emission performance of affected EGUs must use
technically sound methods that are reliable and replicable. A state
plan submittal must explain how the projection method and/or tool works
and why the method and/or tool chosen is appropriate considering the
type of emission standards and/or state measures included (or relied
upon, in the case of state measures) in a state plan. The results of
the demonstration must be reproducible using the documented assumptions
described in the state plan submittal. The method and projection of EGU
generation and CO2 emissions can differ from the EPA's
forecast in the RIA. The EPA received comments on whether it would
require specific modeling tools and input assumptions. Commenters
raised concerns that the EPA may require states to use proprietary
models, and that states do not have the financial resources to use such
models. The EPA is not requiring a specific type of method or model, as
long as the one chosen uses technically sound methods and tools that
establish a clear relationship between electricity grid interactions
and the range of factors that impact future EGU economic behavior,
generation, and CO2 emissions. The EPA will assess whether a
method or tool is technically sound based on its capability to
represent changes in the electric system commensurate to the set of
emission standards and state measures in a state plan while accounting
for the key parameters specified in section VIII.D.2.a.(3)(c) below.
Including a base case CO2 emission projection in the state
plan submittal (i.e., one that does not include any federally
enforceable CO2 emission standards included in a plan or
state-enforceable measures referenced in a plan submittal), will help
facilitate the EPA's assessment of the CO2 emission
performance projection. Methods and tools could range from applying
future growth rates to historical generation and emissions data, using
statistical analysis, or electric sector energy modeling.
    (c) Required documentation of projections. When required to provide
a CO2 emission performance projection, the state must also
provide comprehensive documentation of analytic parameters for the EPA
to assess the reasonableness of the projection. The analytic
parameters, when considered as a whole, should reflect a logically
consistent future outlook of the electric system. Refer to the
Incorporating RE and Demand-side EE Impacts into State Plan
Demonstrations TSD of the final rule for further details on quantifying
impacts of eligible RE and demand-side EE measures.
    The CO2 emission performance projection documentation
must include:

     Geographic representation, which must be appropriate
for capturing impacts and/or changes in the electric system
     Time period of analysis, which must extend through 2031
     Electricity demand forecast (MWh load and MW peak
demand) at the state and regional level. If the demand forecast is
not from NERC, an ISO or RTO, EIA, or other publicly available
source, then the projection must include justification and
documentation of underlying assumptions that inform the development
of the demand forecast, such as annual economic and demand growth
rate, population growth rate.
     Planning reserve margins
     Planned new electric generating capacity
     Analytic treatment of the potential for building
unplanned new electric generating capacity
     Wholesale electricity prices
     Fuel prices, when applicable;
     Fuel carbon content
     Unit-level fixed operations and maintenance costs, when
applicable;
     Unit-level variable operations and maintenance costs,
when applicable;
     Unit-level capacity
     Unit-level heat rate
     If applicable, EGU-specific actions in the state plan
designed to meet the required CO2 emission performance,
including their timeline for implementation
     If applicable, state-enforceable measures, with
electricity savings and renewable electricity generation (MWhs)
expected for individual and collective measures, as applicable.
Quantification of MWhs expected from EE and RE measures will involve
assumptions that states must document, as described in the
Incorporating RE and Demand-side EE Impacts into State Plan
Demonstrations TSD.
     Annual electricity generation (MWh) by fuel type and
CO2 emission levels, for each affected EGU
     ERC or emission allowance prices, when applicable

    The state must also provide a clear demonstration that the state
measures and/or federally enforceable emission standards informing the
projected achievement of the emission performance requirements will be
permanent and remain in place.
    The EPA encourages participation in regional modeling efforts which
are designed to allow sharing of data and help promote consistent
approaches across state boundaries. A state that submits a single-state
plan must consider interstate transfer of electricity across state
boundaries, taking into account other states' plan types reflecting the
best available information at the time of the CO2 emission
performance projection. Projections of CO2 emission
performance for multi-state plans and single-state plans that include
multi-state coordination must either use a single (regional)
electricity demand forecast or must document the use of electricity
demand forecasts from different information sources and demonstrate how
any inconsistencies between the individual electricity demand forecasts
have been reconciled.
    (d) Additional projection requirements under a rate-based emission
standards plan. For an emission standards plan that applies rate-based
CO2 emission standards to individual affected EGUs, or to
subcategories of affected EGUs, at a lb CO2/MWh rate that
differs from the CO2 emission performance rates or the
state's rate-based CO2 goal in the emission guidelines, a
projection of affected EGU CO2 emission performance is
required. The state must demonstrate that the weighted average
CO2 emission rate of affected EGUs, when weighted by
generation (in MWh) from affected EGUs subject to the different rate-
based emission standards, will be equal to or less than the
CO2 emission performance rates or the state's rate-based
CO2 emission goal during the interim and final plan
performance periods.
    The projection will involve an analysis of the change in generation
of affected EGUs given the compliance costs and incentives under the
application of different emission rate standards across affected EGUs
in a state. It must accurately represent the emission standards in the
plan, including the use of market-based aspects of the emission
standards (if applicable), such as use of ERCs or emission allowances
as compliance instruments.
    In addition to the elements described in the previous section (c),
the projection under this plan design must include:

     The assignment of federally enforceable emission
standards for each affected EGUs;
     A projection showing how generation is expected to
shift between affected EGUs and across affected EGUs and non-
affected EGUs over time;
     Underlying assumptions regarding the availability and
anticipated use of the MWh of electricity generation or electricity
savings from eligible measures that can be issued ERCs;
     The specific calculation (or assumption) of how
eligible MWh of electricity generation or savings that can be issued
ERCs are being used in the projection to adjust the reported
CO2 emission rate of affected EGUs, consistent with the
accounting methods for adjusting the CO2 emission rate of
an affected EGU specified in section VIII.K.1 of the emission
guidelines, if applicable;
     ERC prices, if applicable;
     If a state plan provides for the ability of RE
resources located in states with mass-based plans to be issued ERCs
for use in adjusting the reported CO2 emission rates of
affected EGUs, consideration in the projection that such resources
must meet geographic eligibility requirements, based on power
purchase agreements or related documentation, consistent with the
requirements at section VIII.K.1 and section VIII.L; and
     Any other applicable assumptions used in the
projection.

    (e) Additional projections requirements for a state measures plan.
For a state measures plan, a projection of affected EGU CO2
emission performance must demonstrate that the state measures, whether
alone or in conjunction with any federally enforceable CO2
emission standards for affected EGUs, will achieve the state's mass-
based CO2 goals in the emission guidelines for the interim
and final periods. The projection must accurately represent individual
state-enforceable measures (or bundled measures) and timing for
implementation of these state measures.
    A state must demonstrate that its state-enforceable measures, along
with any federally enforceable CO2 emission standards for
affected EGUs included in a state plan, will achieve the state mass-
based CO2 goal. In addition to the elements described in
section VIII.D.2.a.(3).(c), the state must clearly document, at a
minimum:

     The assignment of federally enforceable emission
standards for each affected EGUs, if applicable; and
     the individual state measures, including their
projected impacts over time.

    Because different types of state measures could have varying
degrees of impact on reducing or avoiding CO2 emissions from
affected EGUs, and different state measures may interact with one
another in terms of CO2 emission reduction impacts, the
method and tools a state uses to project CO2 emissions
impacts must have the capability to project how the combined set of
state-enforceable measures are likely to impact CO2
emissions at affected EGUs. If a state chooses to use an emission
budget trading program as a mass-based state measure, for example, the
state must choose an analytic method or tool that can account for and
properly represent any program flexibilities that impact CO2
emissions from affected EGUs, such as use of out-of-sector GHG offsets
and cost-containment provisions. The state would show that the
emissions budget trading program relied upon for the state measures
plan, as well as any other state measures, ensure that the sum of
emissions at all affected EGUs will be lower than or equal to the
state's CO2 emission goal in the time periods specified in
these guidelines. All flexibilities must be clearly documented in the
demonstration.

    (4) Monitoring, reporting and recordkeeping requirements for
affected EGUs.
    The state plan submittal must specify how each emission standard is
quantifiable and verifiable by describing the CO2 emission
monitoring, reporting and recordkeeping requirements for affected EGUs.
The applicable monitoring, recordkeeping and reporting requirements for
affected EGUs are outlined in section VIII.F.
    In the June 2014 proposal, the EPA proposed that states must
include in their state plans a record retention requirement for
affected EGUs to maintain records for at least 10 years following the
date of each occurrence, measurement, maintenance, corrective action,
report or record. Commenters requested clarification of the record
retention requirements for states as compared to for affected EGUs and
also requested that the EPA clarify onsite versus offsite record
maintenance requirements for affected EGUs. The EPA is finalizing that
states must include in their plans a record retention requirement for
affected EGUs of not less than 5 years following the date of each
compliance period, compliance true-up period, occurrence, measurement,
maintenance, corrective action, report, or record, whichever is latest.
Affected EGUs must maintain each record onsite for at least 2 years
after the date of the occurrence of each record and may maintain
records offsite and electronically for the remaining years. Each record
must be in a form suitable and readily available for expeditious
review. The EPA finds that these final recordkeeping requirements are
appropriate and consistent with the requirements for other CAA section
111(d) emission guidelines.
    (5) State reporting and recordkeeping requirements.
    A state plan submittal must contain the process, content and
schedule for state reporting to the EPA on plan implementation and
progress toward meeting the CO2 emission performance rates
or state CO2 emission goal.
    The EPA requested comments on whether full reports containing all
of the report elements should only be required every 2 years and on the
appropriate frequency of reporting of the different proposed elements,
considering both the goals of minimizing unnecessary burdens on states
and ensuring program transparency and effectiveness. Commenters
recognized that different reporting frequencies may be appropriate for
different types of state plans. The EPA agrees with the commenters and
is finalizing state reporting requirements based on the type of plan
the state chooses to adopt and implement. These state reporting
requirements and reporting periods are discussed in section VIII.D.2.b
(for emission standards plan types) and VIII.D.2.c (for state measures
plan types). The EPA finalizes that each state report is due to the EPA
no later than the July 1 following the end of each reporting period.
The EPA recognizes the multiple comments received recommending
extending the state report due date from July 1 to a later date or to
allow the states the flexibility to propose an alternative report
submittal date. The EPA is not pursuing these recommendations due to
the implications of the state reports' due date and the trigger and
schedule for implementation of corrective measures (for the emission
standards approach) or the backstop federally enforceable emission
standards (for the state measures approach). The EPA believes the July
1 deadline for states to submit reports to the EPA on plan
implementation is feasible given that the information required to be
included in the reports will be available per the reporting
requirements for affected EGUs in state plans.
    In addition to the state reporting requirements discussed in
section VIII.D.2.b (for emission standards approach) and VIII.D.2.c
(for state measures approach) and as discussed below, states must
include in the supporting material of a final state plan submittal a
timeline with all the programmatic plan milestone steps the state will
take between the time of the final state plan submittal and 2022 to
ensure the plan is effective as of 2022. The EPA is also finalizing a
requirement that states must submit a report to the EPA in 2021 that
demonstrates that the state has met the programmatic plan milestone
steps that the state indicated it would take from the submittal of the
final plan through the end of 2020, and that the state is on track to
implement the approved state plan as of January 1, 2022. A final state
plan submission must include a requirement for the state to submit this
report to the EPA no later than July 1, 2021. This report will help the
EPA further assist and facilitate plan implementation with states as
part of an ongoing joint effort to ensure the necessary reductions are
achieved.
    The EPA is finalizing the requirement that submissions related to
this program be submitted electronically. Specifically, this includes
negative declarations, state plan submittals (including any supporting
materials that are part of a state plan submittal), any plan revisions,
and all reports required by the state plan. The EPA is developing an
electronic system to support this requirement that can be accessed at
the EPA's Central Data Exchange (CDX) (http://www.epa.gov/cdx/). See
section VIII.E.8 for additional information on electronic submittal
requirements.
    In the June 2014 proposal, the EPA proposed that states must keep
records, for a minimum of 20 years, of all plan components, plan
requirements, plan supporting documentation and status of meeting the
plan requirements, including records of all data submitted by each
affected EGU used to determine compliance with its emission standards.
The EPA received multiple comments recommending that the EPA reduce
recordkeeping requirements due to the burden in expenditure of
resources and manpower to maintain records for at least 20 years.
Commenters recommended that recordkeeping requirements be reduced to 5
years consistent with emission guidelines for other existing sources.
    After considering the comments received, this final rule requires
that a state must keep records of all plan components, plan
requirements, supporting documentation, and the status of meeting the
plan requirements defined in the plan for the interim plan period from
2022-2029 (including interim steps 1, 2 and 3). After 2029, states must
keep records of all information relied upon in support of any continued
demonstration that the final CO2 emission performance rates
or goals are being achieved. The EPA agrees with comments that a 20-
year record retention requirement could be unduly burdensome, and has
reduced the length of the record retention requirement for the final
rule. During the interim period, states must keep records for 10 years
from the date the record is used to determine compliance with an
emission standard, plan requirement, CO2 emission
performance rate or CO2 emission goal. During the final
period, states must keep records for 5 years from the date the record
is used to determine compliance with an emission standard, plan
requirement, CO2 emission performance rate or CO2
emissions goal. All records must be in a form suitable and readily
available for expeditious review. States must also keep records of all
data submitted by each affected EGU that was used to determine
compliance with each affected EGU's emission standard, and such data
must meet the requirements of the emission guidelines, except for any
information that is submitted to the EPA electronically pursuant to
requirements in 40 CFR part 75. If the state is adopting and
implementing the state measures approach, the state must also

maintain records of all data regarding implementation of each state
measure and all data used to demonstrate achievement of the mass
CO2 emission goal and such data must meet the requirements
of the emission guidelines. The EPA finds that these final
recordkeeping requirements balance the need to maintain records while
reducing the strain on state resources.
    (6) Public participation and certification of hearing on state
plan.
    A robust and meaningful public participation process during state
plan development is critical. For the final plan submittal, states must
meaningfully engage with members of the public, including vulnerable
communities, during the plan development process. This section
describes how the EPA will evaluate a state plan for compliance with
the minimum required elements for public participation provided in the
existing implementing regulations as well as recommendations for other
steps the state can take to assure robust and inclusive public
participation.
    The existing implementing regulations regarding public
participation requirements are in 40 CFR 60.23(c)-(f). Per the
implementing regulations, states must conduct a public hearing on a
final state plan before such plan is adopted and submitted. State plan
development can be enhanced by tapping the expertise and program
experience of several state government agencies. The EPA encourages
states to include utility regulators (e.g. the PUCs) and state energy
offices as appropriate early on and throughout in the development of
the state plan.\822\ The EPA notes that utility regulators and state
energy offices have the opportunity during the public participation
processes required for state plans to provide input as well. The EPA
also encourages states to conduct outreach meetings (that could include
public hearings or meetings) with vulnerable communities on its initial
submittal before the plan is submitted. In its final plan submittal, a
state must provide certification that the state made the plan submittal
available to the public and gave reasonable notice and opportunity for
public comment on the state plan submittal. The state must demonstrate
that the public hearing on the state plan was held only after
reasonable notice, which will be considered to include, at least 30
days prior to the date of such hearing, notice given to the public by
prominent advertisement announcing the date(s), time(s) and place(s) of
such hearing(s). For each hearing held, a state plan submittal must
include in the supporting documentation the list of witnesses and their
organizational affiliations, if any, appearing at the hearing, and a
brief written summary of each presentation or written submission
pursuant to the requirements of the implementing regulations at 40 CFR
60.23. Additionally, the EPA recommends that states work with local
municipalities, community-based organizations and the press to
advertise their state public hearing(s). The EPA also encourages states
to provide background information about their proposed final state plan
or their initial submittal in the appropriate languages in advance of
their public hearing and at their public hearing. Additionally, the EPA
recommends that states provide translators and other resources at their
public hearings, to ensure that all members of the public can provide
oral feedback.
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    \822\ While we specifically encourage state environmental
agencies and utility regulators to consult here, we note that, under
CAA programs, state agencies have a history of consultation with one
another as appropriate.
---------------------------------------------------------------------------

    As previously discussed in this rule, recent studies also find that
certain communities, including low-income communities and some
communities of color (more specifically, populations defined jointly by
ethnic/racial characteristics and geographic location) are
disproportionately affected by certain climate change related
impacts.\823\ Also as discussed in this rule, effects from this rule
can be anticipated to affect vulnerable communities in various ways.
Because certain communities have a potential likelihood to be impacted
by state plans, the EPA believes that the existing public participation
requirements under 40 CFR 60.23 are effectuated for the purposes of
this final rule by states engaging in meaningful, active ways with such
communities.
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    \823\ USGCRP 2014: Melillo, Jerry M., Terese (T.C.) Richmond,
and Gary W. Yohe, Eds., 2014: Climate Change Impacts in the United
States: The Third National Climate Assessment. U.S. Global Change
Research Program, 841 pp.
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    In addition, certain communities whose economies are significantly
dependent on coal, or whose economies may be affected by ongoing
changes in the utility power and related sectors, may be particularly
concerned about the final rule. The EPA encourages states to make an
effort to provide background information about their proposed initial
submittal and final state plans to these communities in advance of
their public hearing. In particular, the EPA encourages states to
engage with workers and their representatives in the utility and
related sectors, including the EE sector.
    The EPA notes that meaningful public involvement goes beyond the
holding of a public hearing. The EPA envisions meaningful engagement to
include outreach to vulnerable communities, sharing information and
soliciting input on state plan development and on any accompanying
assessments, such as those described in section IX. The agency uses the
terms ``vulnerable'' and ``overburdened'' in referring to low-income
communities, communities of color, and indigenous populations that are
most affected by, and least resilient to, the impacts of climate
change, and are central to our community and environmental justice
considerations. In section VIII.E, the EPA provides states with
examples of resources on how they can engage with vulnerable
communities in a meaningful way. With respect specifically to ensuring
meaningful community involvement in their public hearing(s), however,
the EPA recommends that states have both a Web site and toll-free
number that all stakeholders, including overburdened communities, labor
unions, and others can access to get more information regarding the
upcoming hearing(s) and to get their questions related to upcoming
hearings answered. Furthermore, the EPA recommends that states work
with their local government partners to help them in reaching out to
all stakeholders, including vulnerable communities, about the upcoming
public hearing(s).
    (7) Supporting documentation.
    The state plan submittal must provide supporting material and
technical documentation related to applicable components of the plan
submittal.
    (a) Legal authority.
    In its submittal, a state must adequately demonstrate that it has
the legal authority (regulations/legislation) and funding to implement
and enforce each component of the state plan submittal, including
federally enforceable emission standards for affected EGUs and state
measures. A state can make such a demonstration by providing supporting
material related to the state's legal authority used to implement and
enforce each component of the plan, such as copies of statutes,
regulations, PUC orders, and any other applicable legal instruments.
For states participating in a multi-state plan, the submittal(s) must
also include as supporting documentation each state's necessary legal
authority to implement the portion of the plan that applies within the
particular state, such as copies of state regulations and statutes,
including a showing that the states have

the necessary authority to enter into a multi-state agreement.
    (b) Technical documentation.
    As applicable, the state submittal must include materials necessary
to support the EPA's evaluation of the submittal including analytical
materials used in the calculation of interim goal steps (if
applicable), analytical materials used in the multi-state goal
calculation (if multi-state plan), analytical materials used in
projecting CO2 emission performance that will be achieved
through the plan, relevant implementation materials and any additional
technical requirements and guidance the state proposes to use to
implement elements of the plan.
    (c) Programmatic plan milestones and timeline.
    As part of the state plan supporting documentation, the state must
include in its submittal a timeline with all the programmatic plan
milestone steps the state will take between the time of the state plan
submittal and 2022 to ensure the plan is effective as of January 1,
2022. The programmatic plan milestones and timeline should be
appropriate to the overall state plan approach included in the state
plan submittal.
    (d) Reliability.
    As discussed in more detail in section VIII.G.2, each state must
demonstrate as part of its state plan submission that it has considered
reliability issues while developing its plan.
    b. Additional components required for the emission standards plan
type. The EPA is finalizing requirements that a final plan submittal
using the emission standards plan type must contain the following
components, in addition to the components discussed in the preceding
section VIII.D.2.a.
    (1) Identification of interim period emission performance rates or
state goal (for 2022-2029), interim step performance rates or interim
state goals (2022-2024; 2025-2027; 2028-2029) and final emission
performance rates or state goal (2030 and beyond).
    The state plan submittal must indicate whether the plan is designed
to meet the CO2 emission performance rates or the state
rate-based or mass-based CO2 emission goal. As noted in the
emission guidelines, the EPA is finalizing CO2 emission
performance rates for fossil fuel-fired steam generating units and for
stationary combustion turbines. The EPA has translated the source
category-specific CO2 emission performance rates into
equivalent state-level rate-based and mass-based CO2 goals
in order to maximize the range of choices that states will have in
developing their plans. The state may choose to develop a state plan
that meets the CO2 performance rates for the two
subcategories of affected EGUs or develop a plan that adopts either the
rate-based or the mass-based state CO2 emission goal
provided in the emission guidelines.
    Each state plan submittal must identify the emission performance
rates or rate-based or mass-based CO2 emission goal that
must be achieved through the plan (expressed in numeric values,
including the units of measurement, such as pounds of CO2
per net MWh of useful energy output or tons of CO2). The
plan submittal must identify the CO2 interim period
performance rates or state goal (for 2022-2029), interim step
performance rates or state goals (interim step performance rates or
state goal 1 for 2022-2024; interim step performance rates or state
goal 2 for 2025-2027; interim step performance rates or state goal 3
for 2028-2029) and final CO2 emission performance rates or
state goal of 2030 and beyond.
    The EPA has finalized an interim performance rates or state goal
for the interim period of 2022-2029 and a final performance rates or
state goal to be met by 2030. For the interim period, the EPA has also
finalized three interim step performance rates or state goals: interim
step 1 performance rates or state goal for 2022-2024, interim step 2
performance rates or state goal for 2025-2027 and interim step 3
performance rates or state goal for 2028-2029.\824\ States are free to
establish different interim step performance rates or interim step
state goals than those the EPA has specified in this final rule. If
states choose to determine their own interim step performance rates or
state goals, the state must demonstrate that the plan will still meet
the interim performance rates or state goal for 2022-2029 finalized in
the emission guidelines and the plan submittal must include in its
supporting documentation a description of the analytic process, tools,
methods, and assumptions used to make this demonstration.
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    \824\ In this action, the EPA is providing interim state goals
in the form of a CO2 emission rate (emission rate-based
goal) and in the form of tonnage CO2 emissions (mass-
based goal).
---------------------------------------------------------------------------

    For states participating in a multi-state plan with a joint goal
(for interim and final periods), the individual state goals in the
emission guidelines would be replaced with an equivalent multi-state
goal for each period (interim and final). For a rate-based multi-state
plan this would be a weighted average rate-based emission goal, derived
by the participating states, by calculating a weighted average
CO2 emission rate based on the individual rate-based goals
for each of the participating states and 2012 generation from affected
EGUs. For a mass-based multi-state plan, the joint goal would be a sum
of the individual mass-based goals of the participating states, in tons
of CO2. The plan submittal must include in its supporting
documentation a description of the analytic process, tools, methods,
and assumptions used to calculate the joint multi-state goal.
    (2) Identification of federally enforceable emission standards for
affected EGUs.
    The state plan submittal for an emission standards plan type must
include federally enforceable emission standards that apply to affected
EGUs. The emission standards must meet the requirement of component (3)
of this section, ``Demonstrations that each emission standard is
quantifiable, non-duplicative, permanent, verifiable, and
enforceable.'' The plan must identify the affected EGUs to which these
standards apply. The compliance periods for each emission standard for
affected EGUs, on a calendar year basis, must be as follows for the
interim period: January 1, 2022-December 31, 2024; January 1, 2025-
December 31, 2027; and January 1, 2028-December 31, 2029. Starting on
January 1, 2030, the compliance period for each emission standard is
every 2 calendar years. States can choose to set shorter compliance
periods for the emission standards than the compliance periods the EPA
is finalizing in this rulemaking, but cannot set longer periods. As
discussed in more detail in section VIII.F, the EPA recognizes that the
compliance periods provided for in this rulemaking are longer than
those historically and typically specified in CAA rulemakings. The EPA
determined that the longer compliance periods provided for in this
rulemaking are acceptable in the context of this specific rulemaking
because of the unique characteristics of this rulemaking, including
that CO2 is long-lived in the atmosphere, and this
rulemaking is focused on performance standards related to those long-
term impacts.
    For state plans in which affected EGUs may rely upon the use of
ERCs for meeting a rate-based federally enforceable emission standard,
the state plan must include requirements addressing the issuance,
tracking and use for compliance of ERCs consistent with the
requirements in the emission guidelines. These requirements are
discussed in sections VIII.K.1-2. The state plan must also demonstrate
that the appropriate ERC tracking infrastructure that meets the

requirements of the emission guidelines will be in place to administer
the state plan requirements regarding ERCs and document the
functionality of the tracking system. State plan requirements must
include provisions to ensure that ERCs are properly tracked from
issuance to submission for compliance. The state plan must also
demonstrate that the MWh for which ERCs are issued are properly
quantified and verified, through plan requirements for EM&V and
verification that meet the requirements in the emission guidelines.
EM&V requirements are discussed in section VIII.K.3. Rate-based
emission standards must also include monitoring, reporting, and
recordkeeping requirements for CO2 emissions and useful
energy output for affected EGUs; and related compliance demonstration
requirements and mechanisms. These requirements are discussed in more
detail in sections VIII.F and VIII.K.
    For state plans using a mass-based emission trading program
approach, the state plan must include implementation requirements that
specify the emission budget and related compliance requirements and
mechanisms. These requirements must include: CO2 emission
monitoring, reporting, and recordkeeping requirements for affected
EGUs; provisions for state allocation of allowances; provisions for
tracking of allowances, from issuance through submission for
compliance; and the process for affected EGUs to demonstrate compliance
(allowance ``true-up'' with reported CO2 emissions).
    (3) Demonstration that each emission standard is quantifiable, non-
duplicative, permanent, verifiable and enforceable.
    The plan submittal must demonstrate that each emission standard is
quantifiable, non-duplicative, permanent, verifiable and enforceable
with respect to an affected EGU, as outlined below.
    An emission standard is quantifiable if it can be reliably
measured, using technically sound methods, in a manner that can be
replicated.\825\
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    \825\ A CO2 continuous emissions monitoring system
(CEMS) is the most technically reliable method of emission
measurement for EGUs. A CEMS provides a measurement method that is
performance based rather than equipment specific and is verified
based on NIST traceable standards. A CEMS provides a continuous
measurement stream that can account for variability in the fuels and
the combustion process. Reference methods have been developed to
ensure that all CEMS meet the same performance criteria, which helps
to ensure a level playing field and consistent, accurate data.
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    An emission standard is non-duplicative with respect to an affected
EGU if it is not already incorporated in another state plan, except in
instances where incorporated as part of a multi-state plan. An example
of a duplicative emission standard would occur, for example, where a
quantified and verified MWh from a wind turbine could be applied in
more than one state's CAA section 111(d) plan to adjust the reported
CO2 emission rate of an affected EGU (e.g., through issuance
and use of an ERC), except in the case of a multi-state plan where
CO2 emission performance is demonstrated jointly for all
affected EGUs subject to the multi-state plan or where states are
implementing coordinated individual plans that allow for the interstate
transfer of ERCs.\826\ This does not mean that measures used to comply
with an emission standard cannot also be used for other purposes. For
example, a MWh of electric generation from a wind turbine could be used
by an electric distribution utility to comply with state RPS
requirements and also be used by an affected EGU to comply with
emission standard requirements under a state plan. Another example is
when actions taken pursuant to CAA section 111(d) requirements can
satisfy other CAA program requirements (e.g., Regional Haze
requirements, MATS).
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    \826\ For example, an ERC that is issued by a state under its
rate-based emission standards may be used only once by an affected
EGU to adjust its reported CO2 emission rate when
demonstrating compliance with the emission standards. However, an
ERC issued in one state could be used by an affected EGU to
demonstrate compliance with its emission standard in another state,
where states are collaborating in the implementation of their
individual emission trading programs through interstate transfer of
ERCs, or participating in a multi-state plan with a rate-based
emission trading program. These coordinated multi-state approaches
are addressed in sections VIII.C.5, VIII.J.3, and VIII.K.4.
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    An emission standard is permanent if the emission standard must be
met for each applicable compliance period.
    An emission standard is verifiable if adequate monitoring,
recordkeeping and reporting requirements are in place to enable the
state and the Administrator to independently evaluate, measure, and
verify compliance with it.
    An emission standard is enforceable if: (1) It represents a
technically accurate limitation or requirement and the time period for
the limitation or requirement is specified; (2) compliance requirements
are clearly defined; (3) the entities responsible for compliance and
liable for violations can be identified; and (4) each compliance
activity or measure is enforceable as a practical matter in accordance
with EPA guidance on practical enforceability,\827\ and the
Administrator, the state, and third parties maintain the ability to
enforce against affected EGUs for violations and secure appropriate
corrective actions, in the case of the Administrator pursuant to CAA
sections 113(a)-(h), in the case of a state, pursuant to its state
plan, state law or CAA section 304, as applicable, and in the case of
third parties, pursuant to CAA section 304.
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    \827\ The EPA guidance on enforceability includes: (1) September
23, 1987, memorandum and accompanying implementing guidance,
``Review of State Implementation Plans and Revisions for
Enforceability and Legal Sufficiency,'' (2) August 5, 2004,
``Guidance on SIP Credits for Emission Reductions from Electric-
Sector Energy Efficiency and Renewable Energy Measures,'' and (3)
July 2012 ``Roadmap for Incorporating Energy Efficiency/Renewable
Energy Policies and Programs into State and Tribal Implementation
Plans, Appendix F.''
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    In developing its CAA section 111(d) plan, to ensure that the plan
submittal is enforceable and in conformance with the CAA, a state
should follow the EPA's prior guidance on enforceability.\828\ These
guidance documents serve as the foundation for the types of monitoring,
reporting, and emission standards that the EPA has found can be, as a
practical matter, enforced.
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    \828\ See prior footnote.
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    In the proposed regulatory text describing the enforcing measures
that states must include in state plans, the EPA inadvertently excluded
a required demonstration that states and other third parties can
enforce against affected EGUs for violations of an emission standard
included in a state plan via civil action pursuant to CAA section 304.
Commenters noted the EPA's intent to require this demonstration based
on statements in both the proposal preamble text and ``State Plan
Considerations'' TSD \829\ and based on the requirements of CAA section
304. We are finalizing a requirement for a demonstration that states
and other third parties can enforce against affected EGUs for
violations of an emission standard included in a state plan via civil
action as part of the required plan component demonstrating
enforceability. We are finalizing this requirement as a logical
outgrowth of proposal preamble text, the proposal preamble citation to
existing enforceability guidance documents that discuss this
requirement, comments received, and the clear statutory foundation.
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    \829\ State Plan Considerations technical support document for
the Clean Power Plan Proposed Rule: http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-state-plan-considerations.
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    (4) State reporting requirements.
    After consideration of the comments received regarding state
reporting

requirements, the EPA is finalizing for state plans using the emission
standards approach that a state report is due to the EPA no later than
the July 1 following the end of each reporting period. Within the
interim period (2022-2029) the EPA is finalizing the following interim
reporting periods: Interim step 1 covers the three calendar years 2022-
2024, interim step 2 covers the three calendar years 2025-2027, and
interim step 3 covers the two calendar years 2028-2029. A biennial
state report is required starting in 2030 and beyond covering the two
calendar years of each reporting period. This final reporting schedule
reduces the reporting frequency for states implementing the emission
standards approach and is responsive to comments received that
different reporting frequencies may be appropriate for different type
of state plans. The EPA believes that because of the federally
enforceable emission standards that apply to affected EGUs and their
corresponding monitoring, reporting and recordkeeping requirements
under the emission standards plan type, a lesser frequency of reporting
by the state is warranted.
    The state must include in each report to the EPA the status of
implementation of emission standards for affected EGUs under the state
plan, including current aggregate and individual CO2
emission performance by affected EGUs during the reporting period. The
state report must include compliance demonstrations for affected EGUs
and identify whether affected EGUs are on schedule to meet the
applicable CO2 emission performance rate or emission goal
during the performance periods and compliance periods, as specified in
the state plan. For rate-based emission trading programs, the report
must also include for EPA review the state's review of the
administration of their state rate-based emission trading program, as
discussed in section VIII.K.2.g.
    As discussed in more detail in section VIII.F, the state must
include an interim performance check in the report submitted after each
of the first two interim step periods. The interim performance check
will compare the CO2 emission performance level identified
in the state plan for the applicable interim step period with the
actual CO2 emission performance achieved by affected EGUs
during the period. In the report due to the EPA on July 1, 2030, the
state must include a comparison of the actual CO2 emission
performance achieved by affected EGUs for the interim period (2022-
2029) with the interim CO2 emission performance rates or
state rate-based or mass-based CO2 interim goal, as
applicable. The report due on July 1, 2030, must also include the
actual CO2 emission performance achieved by affected EGUs
during the interim step 3 period (2028-2029). Starting in 2032, the
biennial state report must include a final performance check to
demonstrate that the affected EGUs continue to meet the final
CO2 emission performance rates or state rate-based or mass-
based CO2 goal.
    For state plans that use the emission standards approach and are
subject to the corrective measures provisions in the emission
guidelines, if actual CO2 emission performance (i.e., the
emissions or emission rate) of affected EGUs exceeds the specified
level of CO2 emission performance in the state plan by 10
percent or more during the interim step 1 or step 2 reporting periods,
the state report must include a notification to the EPA that corrective
measures have been triggered. The same notification is required if
actual CO2 emission performance fails to meet the specified
level of emission performance in the state plan for the 8-year interim
performance period or any final plan reporting period. Corrective
measures are discussed in detail in section VIII.F.
    c. Additional components required for the state measures approach.
    The EPA is finalizing requirements that a final plan submittal
using the state measures approach must contain the following
components, in addition to the components discussed in section
VIII.D.2.a. We note again that states choosing the state measures plan
type must use a mass-based state goal for the state measures and any
emission standards on the affected EGUs prior to the triggering of the
backstop.
    (1) Identification of interim state mass goal (for 2022-2029),
interim step state mass goals (2022-2024; 2025-2027; 2028-2029) and
final state mass goal (2030 and beyond).
    The state plan submittal must identify the mass-based
CO2 emission goal that must be achieved through the plan
(expressed in tons of CO2). The plan submittal must identify
the state CO2 interim period goal (for 2022-2029), interim
step goals (interim step goal 1 for 2022-2024; interim step goal 2 for
2025-2027; interim step goal 3 for 2028-2029) and final CO2
emission goal of 2030 and beyond.
    For each state, the EPA has finalized an interim goal for the
interim period of 2022-2029 and a final goal to be met by 2030. For the
interim period, the EPA has also finalized three interim step goals:
Interim step 1 goal for 2022-2024, interim step 2 goal for 2025-2027
and interim step 3 goal for 2028-2029.\830\ States are free to
establish different interim step goals than those the EPA has specified
in this final rule. If states choose to determine their own interim
step goals, the state must demonstrate that it will still meet the
interim goal for 2022-2029 finalized in this action and the plan
submittal must include in its supporting documentation a description of
the analytic process, tools, methods, and assumptions used to make this
demonstration.
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    \830\ In this action, the EPA is providing interim state goals
in the form of a CO2 emission rate (emission rate-based
goal) and in the form of tonnage CO2 emissions (mass-
based goal).
---------------------------------------------------------------------------

    For states participating in a multi-state plan with a joint goal
(for interim and final periods), the individual state goals in the
emission guidelines would be replaced with an equivalent multi-state
goal for each period (interim and final). The joint goal would be a sum
of the individual mass-based goals of the participating states, in tons
of CO2. The plan submittal must include in its supporting
documentation a description of the analytic process, tools, methods,
and assumptions used to calculate the joint multi-state goal.
    (2) Identification of federally enforceable emission standards for
affected EGUs (if applicable).
    If applicable, the state plan submittal must include any federally
enforceable CO2 emission standards that apply to affected
EGUs, and demonstrate that those emission standards meet the
requirements that apply in the context of an emission standards
approach, discussed in the preceding section VIII.D.2.b. Specifically,
the state plan submittal must demonstrate that each federally
enforceable emission standard is quantifiable, non-duplicative,
permanent verifiable, and enforceable. If a state measures plan type
includes CO2 emission standards that apply to affected EGUs,
these emission standards must be federally enforceable.
    (3) Identification of backstop of federally enforceable emission
standards.
    A state measures plan must include a backstop of federally
enforceable emission standards for affected EGUs that fully achieve the
interim and final CO2 emission performance rates or the
state's interim and final CO2 emission goal if the state
plan fails to achieve the intended level of CO2 emission
performance. The backstop emission standards could be based on the
finalized model rule that the EPA is proposing in a separate action.
For the federally enforceable backstop, the state plan submittal must
identify the

federally enforceable emission standards for affected EGUs, demonstrate
that those emission standards meet the requirements that apply in the
context of an emission standards approach, discussed in the preceding
section, identify a schedule and trigger for implementation of the
backstop that is consistent with the requirements in the emission
guidelines as discussed in section VIII.C.3.b and identify all
necessary state administrative and technical procedures for
implementing the backstop (e.g. how and when the state would notify
affected EGUs that the backstop has been triggered). Aspects of the
backstop are discussed in detail in section VIII.C.3.b.
    (4) Identification of state measures.
    A state adopting a state measures plan type must provide as a part
of the supporting documentation of its plan submittal, a description of
all the state enforceable measures the state will rely upon to achieve
the requisite state mass-based goal, the applicable state laws or
regulations related to such measures, and identification of parties or
entities implementing or complying with such state measures. The state
must also include in its supporting documentation the schedule and
milestones for the implementation of the state measures, showing that
the measures are expected to achieve the mass-based CO2
emission goal for the interim period (including the interim step
periods) and meet the final goal by 2030. A state measures plan
submittal that relies upon state measures that include RE and demand-
side EE programs and projects must also demonstrate in its supporting
documentation that the minimum EM&V requirements in the emission
guidelines apply to those programs and projects as a matter of state
law.
    (5) State reporting requirements.
    After consideration of the comments received regarding state
reporting requirements, the EPA is requiring in this final rule for
states using the state measures approach that an annual state report is
due to the EPA no later than July 1 following the end of each calendar
year during the interim period. This annual state report must include
the status of implementation of federally enforceable emission
standards (if applicable) and state measures, and must include a report
of the periodic programmatic state measures milestones to show progress
in program implementation. The programmatic state measures milestones
with specific dates for achievement should be appropriate to the state
measures described in the supporting documentation of the state plan
submittal. The EPA believes that annual state reporting is appropriate
for state measures approach due to the flexibility inherent to the
approach described in section VIII.C.3 including the potential use by
the state of a wider variety of state measures, responsible parties,
etc. This reporting frequency will also increase the degree of
certainty on plan performance for states pursuing the state measures
approach.
    As discussed in section VIII.F, for states using the state measures
approach, the EPA is finalizing that at the end of the first two
interim step periods, the state must also include in their annual
report to the EPA the corresponding emission performance checks. The
interim performance checks will compare the CO2 emission
performance level identified in the state plan for the applicable
interim step period versus the actual CO2 emission
performance achieved by the aggregate of affected EGUs. In the report
submitted to the EPA on July 1, 2030, the state must also report the
actual CO2 performance check for the interim period (2022-
2029) with the interim mass-based CO2 goal, as well as the
actual CO2 emission performance achieved by affected EGUs
during the interim step 3 period (2028-2029).
    Beginning with the final period, the state must submit biennial
reports no later than July 1 after the end of each reporting period
that includes an actual performance check to demonstrate that the state
continues to meet the final state CO2 goal.
    If, at the time of the state report to the EPA, the state has not
met the programmatic state measures milestones for the reporting
period, or the performance check shows that the actual CO2
emission performance of affected EGUs warrants implementation of
backstop requirements,\831\ the state must include in the state report
a notification to the EPA that the backstop has been triggered and
describe the steps taken by the state to inform the affected EGUs that
the backstop has been triggered. In the event of such an exceedance
under the state measures approach, the backstop federally enforceable
emission standards for the affected EGUs must be effective within 18
months of the deadline for the state reporting to the EPA on plan
implementation and progress toward meeting the emission performance
rates or mass-based or rate-based state CO2 emission goal.
For example, if a state report due on July 1, 2025, shows that actual
CO2 emission performance of affected EGUs is deficient by 10
percent or more relative to the specified level of emission performance
for 2022-2024 in the state plan, the backstop federally enforceable
emission standards for affected EGUs must be effective as of January 1,
2027.
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    \831\ As explained in section VIII.C.3.b, state plans subject to
the backstop requirement must require the backstop to take effect if
actual CO2 emission performance by affected EGUs fails to
meet the level of emission performance specified in the plan over
the 8-year interim performance period (2022-2029), or for any 2-year
final goal performance period. The plan also must require the
backstop to take effect if actual emission performance is deficient
by 10 percent or more relative to the performance levels that the
state has chosen to specify in its plan for the interim step 1
period (2022-2024) or the interim step 2 period (2025-2027).
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    (6) Supporting documentation.
    (a) Demonstration that each state measure is quantifiable, non-
duplicative, permanent, verifiable and enforceable.
    A state using the state measures approach, in support of its plan,
must also include in the supporting documentation of the state plan
submittal the state measures that are not federally enforceable
emission standards, and describe how each state measure is
quantifiable, non-duplicative, permanent, verifiable, and enforceable
with respect to an affected entity.
    A state measure is quantifiable if it can be reliably measured,
using technically sound methods, in a manner that can be replicated.
    A state measure is non-duplicative with respect to an affected
entity if it is not already incorporated as a state measure or an
emission standard in another state plan or state plan supporting
material, except in instances where incorporated in another state as
part of a multi-state plan. This does not mean that measures in a state
measure cannot also be used for other purposes. For example actions
taken pursuant to CAA section 111(d) requirements can satisfy other CAA
program requirements (e.g., Regional Haze requirements, MATS) and state
requirements (e.g., RPS).
    A state measure is permanent if the state measure must be met for
each applicable compliance period.
    A state measure is verifiable if adequate monitoring, recordkeeping
and reporting requirements are in place to enable the state to
independently evaluate, measure and verify compliance with it.
    A state measure is enforceable \832\ if: (1) It represents a
technically accurate limitation or requirement and the time period for
the limitation or requirement

is specified; (2) compliance requirements are clearly defined; (3) the
affected entities responsible for compliance and liable for violations
can be identified; and (4) each compliance activity or measure is
practically enforceable in accordance with EPA guidance on practical
enforceability,\833\ and the state maintains the ability to enforce
against affected EGUs for violations and secure appropriate corrective
actions pursuant to its plan or state law.
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    \832\ Under the state measures approach, state measures are
enforceable only per applicable state law.
    \833\ The EPA's prior guidance on enforceability serves as the
foundation for the types of measures that the EPA has found can be,
as a practical matter, enforced. The EPA's guidance on
enforceability includes: (1) September 23, 1987, memorandum and
accompanying implementing guidance, ``Review of State Implementation
Plans and Revisions for Enforceability and Legal Sufficiency,'' (2)
August 5, 2004, ``Guidance on SIP Credits for Emission Reductions
from Electric-Sector Energy Efficiency and Renewable Energy
Measures,'' and (3) July 2012 ``Roadmap for Incorporating Energy
Efficiency/Renewable Energy Policies and Programs into State and
Tribal Implementation Plans,'' Appendix F.
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    The EPA will disapprove a state plan if the documentation is not
sufficient for the EPA to be able to determine whether the state
measures are expected to yield CO2 emission reductions
sufficient to result in the necessary CO2 emission
performance from affected EGUs for the mass-based state CO2
emission goal to be achieved.
    d. Legal basis for the components.
    (1) General legal basis.
    Under section 111(d), state plans must ``provide for the
implementation and enforcement of [the] standards of performance.''
Similar language occurs elsewhere in the CAA. First, for SIPs, section
110(a)(1) requires SIPs to ``provide for implementation, maintenance,
and enforcement'' of the NAAQS. However, section 110(a)(2), unlike
111(d), details a number of specific requirements for SIPs that, in
part, speak exactly to how a SIP should ``provide for implementation,
maintenance, and enforcement'' of the NAAQS. We note that section
111(d) provides explicitly only that the ``procedures,'' and not the
substantive requirements, for section 111(d) state plans should be
``similar'' to those in section 110, and thus a substantive requirement
in section 110(a)(2) is not an independent source of authority for the
EPA to require the same for section 111(d) plans. However, when there
is a gap for the EPA to fill in interpreting how a section 111(d) plan
should ``provide for implementation and enforcement of [the] standards
of performance,'' and Congress explicitly addressed a similar gap in
section 110, then it may be reasonable for the EPA to fill the gap in
section 111(d) using an analogous mechanism to that in section
110(a)(2), to the extent that the section 110(a)(2) requirement makes
sense and is reasonable in the context of section 111(d). On the other
hand, that Congress did not explicitly provide such details as are
found in section 110(a)(2) indicates that Congress intended to give the
EPA considerable leeway in interpreting the ambiguous phrase ``provides
for implementation and enforcement of [the] standards of performance.''
    For example, section 110(a)(2)(E)(i) explicitly requires states to
provide necessary assurances that they have adequate personnel, funding
and authority to carry out the SIP. Section 111(d), on the other hand,
does not explicitly contain this requirement. Thus, there is a gap to
fill with respect to this issue when the EPA interprets section
111(d)'s requirement that plans ``provide for implementation and
enforcement'' of the standards of performance, and it is reasonable for
the EPA to fill the gap by requiring adequate funding and authority,
both because adequate funding and authority are fundamental
prerequisites to adequate implementation and enforcement of any
program, and because Congress has explicitly recognized this
fundamental nature in the section 110 context.\834\
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    \834\ On the other hand, there are specific requirements in
110(a)(2) that are fundamental for SIPs, but would not make sense in
the 111(d) context. For example, the specific requirement for an
ambient air quality monitoring network in 110(a)(2)(B) is irrelevant
in the 111(d) context.
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    We note two other places where the CAA requires a state program to
satisfy similar language regarding implementation and enforcement.
First, section 112(l)(1) allows states to adopt and submit a program
for ``implementation and enforcement'' of section 112 standards.
Section 112(l)(5) further provides that the program must (among other
things) have adequate authority to enforce against sources, and
adequate authority and resources to implement the program. Second,
section 111(c) provides that, if a state develops and submits
``adequate procedures'' for ``implementing and enforcing'' section
111(b) standards of performance for new sources in that state, the
Administrator shall delegate to the state the Administrator's authority
to ``implement and enforce'' those standards. The EPA has interpreted
these ambiguous provisions in the EPA's ``Good Practices Manual for
Delegation of NSPS and NESHAPS'' and recommended (in the context of
guidance) that state programs have a number of components, such as
source monitoring, recordkeeping, and reporting, in order to adequately
implement and enforce section 111(b) or 112 standards. This again
indicates it is reasonable for the EPA to fill a gap in section
111(d)'s language and similarly require source monitoring,
recordkeeping, and reporting, as these are fundamental to implementing
and enforcing standards of performance that achieve the state
performance rates or goals.
    Some commenters argued that states have primary authority over the
content of state plans and that the EPA lacks authority to disapprove a
state plan as unsatisfactory simply because it lacks one or more of
these components. We disagree. The EPA has the authority to interpret
the statutory language of section 111(d) and to make rules that
effectuate that interpretation. With respect to the components of an
approvable plan, we are interpreting the statutory phrase ``provide for
implementation and enforcement'' and making rules that set out the
minimum elements that are necessary for a state plan to be
``satisfactory'' in meeting this statutory requirement. This does not
in any way intrude on the state's ability to decide what mix of
measures should be used to achieve the necessary emission reductions.
Nor does it intrude in any way on the state's ability to decide how to
satisfy a component. For example, for legal authority, we are not
dictating which state agencies or officials must specifically have the
necessary legal authority; that is entirely up to the state so long as
the fundamental requirement to have adequate legal authority to
implement and enforce the plan is met.
    In addition, the EPA has already determined in the 1975
implementing regulations that certain components, such as monitoring,
recordkeeping, and reporting, are necessary for implementation and
enforcement of section 111(d) standards of performance. 40 FR 53340,
53348/1 (Nov. 17, 1975). Thus, EPA's position here is hardly novel. The
EPA notes in discussing the implementing regulations, nothing in this
final rule reopens provisions or issues that were previously decided in
the original promulgation of the regulations unless otherwise
explicitly reopened for this rule.
    (2) Legal considerations with changes to affected EGUs.
    In the proposed rulemaking, the EPA proposed the interpretation
that if an existing source is subject to a section 111(d) state plan,
and then undertakes a modification or reconstruction, the source
remains subject to the state plan, while also becoming subject to the
modification or reconstruction

requirements. 79 FR 34830, 34903-4. The EPA is not finalizing a
position on this issue in this final rule, and is re-proposing and
taking comment on this issue through the federal plan rulemaking being
proposed concurrently with this action. The EPA's deferral of action on
this issue does not impact states' and affected EGUs' pending
obligations under this final rule relating to plan submission
deadlines, as this issue concerns potential obligations or impacts
after an existing source is subject to the requirements of a state
plan. The EPA will propose and finalize its position on this issue
through the federal plan rulemaking, which will be well in advance of
the plan performance period beginning in 2022, at which point state
plan obligations on existing sources are effectuated.
    (3) Legal considerations regarding design, equipment, work practice
or operational standards.
    In the proposal, the EPA asked for comment on three approaches to
inclusion of design, equipment, work practice and operational standards
in section 111(d) plans. 79 FR 34830, 34926/3 (June 18, 2014). Under
the first approach, states would be precluded from including these
standards in section 111(d) plans unless the design, equipment, work
practice or operational standard could be understood as a ``standard of
performance'' or could be understood to ``provide for implementation
and enforcement'' of standards of performance. We also asked, for the
first approach, whether it was even possible, given the statutory
language of 111(h), to consider a design, equipment, work practice or
operational standard as a ``standard of performance.'' Under the second
approach, states could include design, equipment, work practice or
operational standards in the event that it could be shown a ``standard
of performance'' was not feasible, as set out in section 111(h). Under
the third approach, a state could include design, equipment, work
practice and operational standards in a 111(d) plan without any
constraints. We also asked whether, if there was legal uncertainty as
to the status of these standards, the EPA should authorize states to
include them in their 111(d) plans with the understanding that if the
EPA's authorization were invalidated by a court, states would have to
revise their plans accordingly.
    The EPA is finalizing the first approach. Specifically, a state's
standards of performance (in other words, either the federally
enforceable backstop under the state measures approach or the emission
standards under the emission standards approach) cannot consist of (in
whole or part) design, equipment, work practice or operational
standards. A state may include such standards in a 111(d) plan in order
to implement the standards of performance. For example, a state taking
a mass-based approach may include in its 111(d) plan a limit on hours
of operation on a particular affected EGU, but that operational
standard itself cannot substitute for a mass-based emission standard on
the affected EGU.\835\
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    \835\ In particular, a state may include in its 111(d) state
plan an emission standard that is reflective of the CO2
performance resulting from operational standards the state imposes
on an affected EGU.
---------------------------------------------------------------------------

    This follows from the statute. First, section 111(h)(1) authorizes
the Administrator, when it is not feasible for certain reasons
(specified in 111(h)(2)) to prescribe or enforce a standard of
performance, to instead promulgate a design, equipment, work practice
or operational standard. If a standard of performance could include
design, equipment, work practice or operational standards, such
authority would be unnecessary. Second, 111(h)(5) states that design,
equipment, work practice or operational standards ``described in''
111(h) shall be treated as standards of performance for the purposes of
the CAA. This creates a strong inference that standards of performance
otherwise should not include design, equipment, work practice, or
operational standards. Finally, the general definition of ``standard of
performance'' in section 302(l) is similar to the definition of
``emission limitation'' (or ``emission standard'') in section 302(k),
with the exception that the definition of ``emission limitation''
explicitly includes design, equipment, work practice and operational
standards, but the definition of ``standard of performance'' omits
them. Thus, as with our discussion of the term ``standard of
performance'' above in VIII.C.6.b, even if the general definition of
``standard of performance'' in 302(l) applies to 111(d), the omission
of design, equipment, work practice, and operational standards in
302(l) confirms our interpretation that they cannot be a 111 ``standard
of performance'' (except under the limited circumstances in 111(h)). We
conclude that it is reasonable, and perhaps compelled, to interpret the
term ``standards of performance'' in 111(d) to not include design,
equipment, work practice and operational standards.
    However, section 111(d) requires plans to ``provide for
implementation and enforcement of [the] standards of performance.''
This language does not explicitly prohibit a plan from including
design, equipment, work practice and operational standards, and allows
for them to be included so long as they are understood to provide for
implementation of the standards of performance. If they are included,
the 111(d) plan must still be ``satisfactory'' in other respects, in
particular in establishing standards of performance that are not in
whole or in part design, equipment, work practice, and operational
standards.
    (4) Legal basis for engagement with communities.
    As previously discussed, section 111(d)(1) requires the EPA to
promulgate procedures ``similar'' to those in section 110 under which
states adopt and submit 111(d) plans. Section 110(a)(1) requires states
to adopt and submit implementation plans ``after reasonable notice and
public hearings.'' The implementing regulations under 40 CFR 60.27
reflect similar public participation requirements with respect to
section 111(d) state plans. The EPA is sensitive to the legal
importance of adequate public participation in the state plan process,
including public participation by affected communities. As previously
discussed in this rule, recent studies also find that certain
communities, including low-income communities and some communities of
color, are disproportionately affected by certain climate change-
related impacts. Because certain communities have a potential
likelihood to be impacted by state plans for this rule, the EPA
believes that the existing public participation requirements under 40
CFR 60.23 are effectuated for the purposes of this final rule by states
engaging in meaningful, active ways with such communities. By requiring
states to demonstrate how they have meaningfully engaged with
vulnerable communities potentially impacted by state plans as part of
the state plan development process, states meeting this requirement
will satisfy the applicable statutory and regulatory requirements
regarding public participation.
3. Components of the Federally Approved State Plan
    In this action the EPA finalizes that, to be fully approved, a
state plan submittal must meet the criteria and include the required
components described above. The EPA will propose and take final action
on each state plan submittal in the Federal Register and provide an
opportunity for notice and comment. When a state plan submittal

is approved by the EPA, the EPA will codify the approved 111(d) state
plan in 40 CFR part 62. The following components of the state plan
submittal will become the federally enforceable state 111(d) plan:

 Federally enforceable emission standards for affected EGUs
 Federally enforceable backstop of emission standards for
affected EGUs
 Implementing and enforcing measures for federally
enforceable emission standards including EGU monitoring,
recordkeeping and reporting requirements
 State recordkeeping and reporting requirements

E. State Plan Submittal and Approval Process and Timing

1. Overview
    In this action the EPA is finalizing that state plan submittals are
due on September 6, 2016, with the option of an extension to submit
final state plans by September 6, 2018, which is 3 years after
finalization of this rule. The compelling nature of the climate change
challenge, and the need to begin promptly what will be a lengthy effort
to implement the requirements of these guidelines, warrant this
schedule. The EPA also believes, for reasons further described in the
next section, why this schedule is achievable for states to submit
final plans. We discuss the timing of state plans in more detail in
this section below.
    Discussed in the following sections are state plan submittal and
timing, required components for initial submittals and the 2017 update,
multi-state plan submissions, process for EPA review of state plans,
failure to submit a plan, state plan modifications (including
modifications to interim and final CO2 emission goals), plan
templates and electronic submittal, and legal bases regarding state
plan process.
2. State Plan Submittal and Timing
    The implementing regulations (40 CFR 60.23) require that state
plans be submitted to the EPA within 9 months of promulgation of the
emission guidelines, unless the EPA specifies otherwise.\836\ For these
111(d) guidelines, the EPA is finalizing that each state must by
September 6, 2016, either submit a final plan submittal or seek an
extension to submit a final plan by September 6, 2018. In the case of a
state electing to participate in the CEIP, this 2016 submittal must
include a non-binding statement of intent to participate in the
program. To seek an extension of the September 6, 2016 deadline until
no later than September 6, 2018, a state must submit an initial
submittal by September 6, 2016, that addresses three required
components sufficiently to demonstrate that a state is able to
undertake steps and processes necessary to timely submit a final plan
by the extended date of September 6, 2018. If an extension is requested
and granted, states must also submit a 2017 update by September 6,
2017, that documents the state's continued progress towards meeting the
September 6, 2018 final plan submittal deadline.
---------------------------------------------------------------------------

    \836\ 40 CFR 60.23(a)(1).
---------------------------------------------------------------------------

    In the proposal, EPA proposed a 13 month final state plan submittal
deadline, with a 1 year possible extension for states submitting
individual state plans and a 2 year possible extension for states
submitting multi-state plans as part of a multi-state region. The EPA
received substantive comment on the achievability of these proposed
deadlines for state plan submittals. Multiple commenters expressed
concern that due to timing of legislative cycles (some of which are
every 2 years), regulatory processes, and other necessary tasks, states
would find it extremely difficult to submit plans in 1 or 2 years,
whether or not they were planning to submit as part of a multi-state
region. The EPA agrees based on this input that a schedule shorter than
3 years will be challenging for many--though not all--states. In light
of the comments received and in order to provide maximum flexibility to
states while still taking timely action to reduce CO2
emissions, in this final rule the EPA is allowing for a 2 year
extension until September 6, 2018, for both individual and multi-state
plans, to provide a total of 3 years for states to submit a final plan
if an extension is received. Based on comments received, information
the EPA has regarding steps states have already begun taking towards
plan development, and extensive experience with similar state plan
submission deadlines under CAA section 110 SIPs, the EPA believes
states will be able to submit final plans within 3 years by September
6, 2018, in the event states are not required to submit a final plan by
September 6, 2016. We address the substantive requirements of initial
submittals and the 2017 update in the next section. States that receive
2-year extensions may submit the final plan earlier than September 6,
2018, if they so choose.
    The EPA highlights that one purpose of the initial submittal is to
encourage and potentially facilitate states to do necessary planning
and engagement with stakeholders so states are able to submit an
approvable final state plan by the extended deadline of September 6,
2018. Some states have well-developed existing programs and the
attendant legal authority underpinning such programs to more easily
meet the September 6, 2016 deadline by submitting a final plan which
largely contains or relies upon such existing programs.\837\ Based on
comments and stakeholder feedback, however, the EPA anticipates that
many states intending to develop and submit a final plan will seek the
optional extension given the time it may take to undergo necessary
legislative, stakeholder, and planning processes. The EPA acknowledges
that the initial submittal of September 6, 2016, is not essential to
the ability of states to submit final plans by September 6, 2018, so
that even without this 2016 deadline, the EPA could require states to
meet the 2018 deadline. Even so, this earlier date in the 3 year
planning process serves as a useful ``check-in'' that provides several
significant advantages. First, this earlier date provides all states an
opportunity to understand what approaches other states are considering.
Because there are significant benefits to regional cooperation, the EPA
believes that a formal process to collect and then provide this
information will help all states develop better plans. Second, because
the guidelines provide significant flexibility, the ability for the EPA
to provide early input to states who may be pursuing more innovative
approaches will help ensure that all state plans are ultimately
approvable. The EPA therefore believes the initial submittal is an
appropriate means by which to offer the optional extension, and for
reasons further described in section VIII.E.3, that the requirements of
the initial submittal are achievable by September 6, 2016, so states
will be able to develop and submit a plan that meets the requirements
of the final emission guidelines and section 111(d) of the CAA by the
extended date.
---------------------------------------------------------------------------

    \837\ Based on comments received, we understand that the
Northeast and Mid-Atlantic states that participate in RGGI may be in
this position.
---------------------------------------------------------------------------

    Additionally, some states may not submit a state plan as required
by the final emission guidelines and section 111(d) of the CAA. For
states that do not submit a state plan, the CAA gives the EPA express
authority to implement a federal plan for sources in that state upon
determination by the EPA that a state has failed to submit a state plan
by the required date. For states that do not intend to submit a state
plan to meet the obligations of this final rule, by promulgating a
federal plan for affected EGUs in states that do not submit a plan by
September 6, 2016, such affected EGUs would have a maximum of an

additional 2 years to plan for and determine compliance strategies than
had promulgation of a federal plan been predicated on states failing to
submit a plan by September 6, 2018. The EPA also notes that this final
rule affords states and affected EGUs with many implementation
flexibilities and approaches for state plans that the EPA itself may
not have the authority to implement through a federal plan. Therefore,
affected EGUs subject to a federal plan promulgated for a state that
refuses to submit a state plan may benefit from an additional 2 years
to plan for compliance with a federal plan with potentially fewer
flexibilities.
    If no affected EGU is located within a state, the state must submit
a letter to the EPA certifying that no such facilities exist by
September 6, 2016.\838\ The EPA will publish a notice in the Federal
Register to notify the public of receipt of such letters. If an
affected EGU is later found to be located in that state, the state must
submit a final plan addressing such affected EGU or the EPA will
determine the state has failed to submit a plan as required by the
emission guidelines and CAA section 111(d), and begin the process of
implementing a federal plan for that affected EGU.
---------------------------------------------------------------------------

    \838\ 40 CFR 60.23(b).
---------------------------------------------------------------------------

    In the case of a tribe that has one or more affected EGUs located
in its area of Indian country, if the tribe either does not submit a
CAA section 111(d) plan or does not receive EPA approval of a submitted
plan, the EPA has the responsibility to establish a CAA section 111(d)
plan for that area if it determines that such a plan is necessary or
appropriate to protect air quality.\839\ See the proposed federal plan
rulemaking for further information.
---------------------------------------------------------------------------

    \839\ See 40 CFR 49.1 to 49.11.
---------------------------------------------------------------------------

    The EPA notes that the current implementing regulations at 40 CFR
part 60 do not specify who has the authority to make a formal
submission of the state plan to the EPA for review. In order to clarify
who on behalf of a state is authorized to submit an initial submittal,
2017 update, final state plan (or negative declaration, if applicable),
and any revisions to an approved plan, the EPA has included a
requirement in this final rule mirroring that of the requirement in 40
CFR part 51 App. V.2.1.(a) with respect to SIPs that identifies the
Governor of a state as the authorized official for submitting the state
plan to the EPA. If the Governor wishes to designate another
responsible official the authority to submit a state plan, the EPA must
be notified via letter from the Governor prior to the 2016 deadline for
plan submittal so that they have the ability to submit the initial
submittal or final plan in the State Plan Electronic Collection System
(SPeCS). If the Governor has previously delegated authority to make CAA
submittals on the Governor's behalf, a state may submit documentation
of the delegation in lieu of a letter from the Governor. The letter or
documentation must identify the designee to whom authority is being
designated and must include the name and contact information for the
designee and also identify the state plan preparers who will need
access to SPeCS discussed in section VIII.E.8. A state may also submit
the names of the state plan preparers via a separate letter prior to
the designation letter from the Governor in order to expedite the state
plan administrative process. Required contact information for the
designee and preparers includes the person's title, organization and
email address. The EPA recommends this information be submitted early
in the state planning process to allow sufficient time for completion
of SPeCS registration so that those authorized to use the system are
provided access.
3. Components of an Initial Submittal and 2017 Update
    As noted, states may request a 2-year extension to submit a final
plan through making an initial submittal by September 6, 2016. For the
extension to be granted, the EPA is finalizing that the initial
submittal must address three required components sufficiently to
demonstrate that a state is able to undertake steps and processes
necessary to timely submit a final plan by the extended date of
September 6, 2018: \840\
---------------------------------------------------------------------------

    \840\ As stated previously, in the case of a state electing to
participate in the CEIP, this 2016 submittal must include a non-
binding statement of intent to participate in the program.

     An identification of final plan approach or approaches
under consideration, including a description of progress made to
date.
     An appropriate explanation for why the state requires
additional time to submit a final plan by September 6, 2018.
     Demonstration or description of opportunity for public
comment on the initial submittal and meaningful engagement with
stakeholders,\841\ including vulnerable communities, during the time
in preparation of the initial submittal and plans for engagement
during development of the final plan.
---------------------------------------------------------------------------

    \841\ Such stakeholders may include labor unions and workers
that have an interest in the state plan, and communities whose
economies are dependent on coal.

    During the public comment period, multiple commenters stated that
the proposed timeframe for states to submit an initial submittal was
not achievable, citing, among other things, the number of decisions
needed to be made by a state or states, and that the EPA needed to
clarify the requirements for an initial submittal. Multiple commenters
also expressed concern that the requirements for an initial submittal
required final decisions to be made by states, and that the initial
submittal deadline was not enough time for states to make these
decisions.
    It is important to note that the EPA is not requiring the adoption
of any enforceable measures or final decisions in order for the state
to address any of the initial submittal components by September 6,
2016. The EPA believes the absence of requiring enforceable measures to
be included with the initial submittal greatly supports the ability of
states intending to develop a final state plan to submit an initial
submittal by September 6, 2016. States are required to submit
enforceable measures supported by technically complex documentation,
such as modeling, and adopted through state public participation and
regulatory or legislative processes as part of SIPs under other parts
of the CAA within timeframes comparable to the time the EPA is
providing for initial submittals.\842\
---------------------------------------------------------------------------

    \842\ For example, 13 states were required to submit SIP
revisions sufficient to regulate GHGs under the Prevention of
Significant Deterioration (PSD) permitting requirements of the CAA
within either 3 weeks or 12 months in response to the EPA's SIP
call. See ``Action To Ensure Authority To Issue Permits Under the
Prevention of Significant Deterioration Program to Sources of
Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP
Call'', 75 FR 77698, (December 13, 2010).
---------------------------------------------------------------------------

    In order to further address the commenters' concerns regarding
possible ambiguity of the requirements for an initial submittal so that
an extension is granted, the EPA is providing clarity regarding the
required components for an initial submittal. Regarding the component
that states address an appropriate explanation for an extension, the
EPA proposed that appropriate explanations for seeking an extension
beyond 2016 for submitting a final plan include: A state's required
schedule for legislative approval and administrative rulemaking, the
need for multi-state coordination in the development of an individual
state plan, or the process and coordination necessary to develop a
multi-state plan. In this final rule, the EPA is finalizing these as
appropriate explanations for seeking an extension beyond 2016, but
makes clear--as explained further below--that other appropriate
explanations will be acceptable as well. It is important to note that
the initial submittal does not require legislation

and/or regulations to be passed prior in order for the state to be
granted an extension, but the initial submittal should describe any
concrete steps the state has already taken on legislation and/or
administrative rulemaking and detail what the remaining steps are in
those processes before a final plan can be submitted. The EPA also
sought comment on other circumstances for which an extension of time
would be appropriate, and also whether some explanations for extensions
should not be permitted. Commenters stated that states should be able
to seek extensions whenever an extension can be reasonably justified,
and that the EPA should take at face value states' good faith efforts
by accepting any state assertion that more time is needed to develop a
plan unless there is clear evidence to the contrary. The EPA believes
there may be appropriate explanations states may submit in addition to
the ones described in this final rule sufficient to demonstrate that a
state is able to undertake steps and processes necessary to timely
submit a final plan by the extended date of September 6, 2018. Given
the opportunity for states to submit appropriate explanations other
than the ones detailed here, the EPA believes addressing this component
requiring an appropriate explanation for an extension is easily
achievable by September 6, 2016.
    In order to additionally clarify the required components of the
initial submittal, the following are types of explanations of
information states may provide as part of the initial submittal to
sufficiently address each of the three required components for getting
an extension:

     Details on whether a state is considering a single or
multi-state plan, a plan that meets the CO2 emission
performance rates or state CO2 rate or mass emission
goal, and/or an emission standards or state measures plan type.
     A description of how the state intends to address
development of the required components of the final state plan,
including describing what actions have already been taken, what
steps remain, and the schedule for completing those steps.
     A commitment to maintain any existing measures the
state intends to rely upon for its final plan in order to achieve
the necessary reductions once the performance period begins.
     Describing public participation opportunities such as
stakeholder and community meetings, or public hearings, throughout
the 3 year plan development process. This could also include
leverage of public participation approaches that states already use
to identify and engage potentially affected communities.

    The EPA emphasizes the required initial submittal components are
intended to provide a reasonable pathway for states to demonstrate
whether they will be able to submit an approvable plan by the extended
date of September 6, 2018. The EPA also anticipates that through the
requirement to address these components, the initial submittal will
also facilitate state planning and stakeholder engagement, particularly
as one component requires the public and stakeholders to have an
opportunity to comment on the initial submittal. As previously
described, these components do not require final decisions to be made
by states, and this is further illustrated by the clarifications on how
states may meet each of the three required components. Accordingly, the
EPA believes none of these components is onerous for states to address
in an initial submittal by the September 6, 2016 deadline. To further
underscore this point, the EPA is further explaining the clarifying
examples listed above of how states may address the three required
components, and highlighting the achievability of these examples for
states to address through the initial submittal by September 6, 2016.
    For identification of the final plan approach or approaches the
state is considering, and description of progress made to date, states
could identify whether the state is considering the option of the
CO2 emission performance rates, a rate-based CO2
goal, or a mass-based CO2 goal, and whether the state is
intending to pursue a single-state or multi-state plan. Stakeholders
commented that states will not be far enough along in the rule
development process to have made these decisions. Commenters also
stated that many state legislatures would need to pass legislation
giving state environmental agencies legal authority and direction
before they could begin to make decisions such as rate or mass-based
approach or single or multi-state plan submittal. In order to address
the commenters' concerns, the EPA wishes to clarify that state
approaches identified in the initial submittal do not need to be final
and/or formalized through a state legislature, and that states may opt
to identify pursuit of more than one approach at the same time, or to
indicate the status of the deliberation of this issue within the state.
    The EPA received substantive comment regarding the potential
adverse consequences for states pursuing a multi-state approach and
receiving an extension until 2018, where, for various reasons, a state
or states then decide(s) to pursue the single state approach.
Commenters viewed this as being potentially problematic since, as
proposed, a single state could only receive an extension until 2017,
and if a multi-state plan effort does not work out the deadline for
seeking the extension until 2017 would have passed. The EPA notes
finalizing a 2 year extension that is available for any state, whether
they are pursuing an individual state plan or a multi-state plan
resolves the commenters' concern about conflicting extension deadlines
if states involved in a multi-state effort decide not to pursue the
multi-state approach. Importantly, such identification in an initial
submittal does not obligate the state to then actually adopt that
approach in their final plan as the EPA acknowledges that based on
state processes and public input through plan development during the
extended submission period, a state may end up adopting a state plan
approach more suitable to the needs of that state and its affected EGUs
than previously identified in the initial submittal.
    States can also describe progress made to date by identifying steps
already taken to address development of the final state plan, as the
EPA recognizes that states in general have already taken a number of
steps to prepare for state plan development to meet the obligations of
this rule. For example, since proposal, states have: Begun exploring
tradeoffs among various state plan approaches such as individual versus
multistate coordination, increased utilization of demand-side EE and RE
programs, and implementing rate-based versus mass-based programs;
increased their understanding of existing state programs and policies
that reduce carbon emissions; built relationships and communications
between key state institutions such as environmental agencies, PUCs,
governors' offices, and energy regulators; hosted public stakeholder
meetings to educate and solicit input from the public; and begun
discussing state processes for developing potential state plans. States
may meet the first required component by describing steps such as these
already undertaken.
    The EPA underscores that states may easily address the first
component of the initial submittal by describing such steps, and also
address the second required component by identifying next steps (which
may be a natural extension of these already implemented activities),
and laying out a schedule for development of a final plan. States that
have taken these steps would especially

be able to address the component regarding an appropriate explanation
for an extension as the EPA recognizes the substantial work such states
have begun to put towards development of state plans, and the
continuation of this work justifies additional time to complete
necessary steps to result in an approvable state plan. The EPA
emphasizes that for states who intend to submit a final plan and need
an extension, the components of the initial submittal are not intended
to require burdensome final action by states by September 6, 2016, but
to identify a viable path to completing a final plan by September 6,
2018.
    An initial submittal that contains a commitment to maintain any
existing measures the state intends to rely upon for its final plan in
order to get the necessary reductions once the performance period
begins (e.g. RE standards and demand-side EE programs the state intends
to rely upon through a state measures plan type), at least until the
final plan is approved, also addresses the requirement that states
provide an appropriate explanation for an extension. Given the state's
request for additional time prior to putting in place enforceable
measures to reduce CO2, it would be reasonable and
appropriate, and in keeping with the goals of 111(d) to ensure that any
existing CO2 reduction measures that the state intends to
rely upon remain in place while the state is developing a final plan.
Such commitment would demonstrate that the state is taking substantive
steps towards successful development of a final plan within 3 years.
    Regarding the required public participation component of the
initial submittal, the EPA believes this requirement is both achievable
for states to submit an initial submittal by the September 6, 2016
deadline, and provides a benefit in facilitating state plan development
so that states are more likely to be able to submit a final plan within
3 years if the extension is granted. The EPA can use a comment
opportunity on the initial submittal to advise the state whether
aspects of the draft initial submittal and overall plan development are
appropriate for purposes of meeting the requirements of the final rule
so that the state will be able to procure the extension through an
acceptable initial submittal and submit a final plan by the extended
deadline. The EPA notes the comment period on the initial submittal is
only one opportunity the EPA has to assist a state in the state plan
development process. The EPA has historically worked with states
throughout the state plan development process to help ensure that the
state plan is approvable once submitted to the EPA, and expects this
level of engagement with states to continue throughout the plan
development process. This requirement will also facilitate early
identification of concerns stakeholders and the public may have with
aspects of a final plan the state is considering. As states have
longtime and extensive experience with responding to public comments in
numerous contexts, including in the context of other CAA programs such
as section 110 SIP development and in permit issuance under NSR and
Title V, the EPA anticipates states will be able to timely address the
initial submittal public participation.
    As previously discussed, because certain communities have a
potential likelihood to be impacted by state plans, the EPA believes
that the existing public participation requirements under 40 CFR 60.23
are effectuated for the purposes of this final rule by states engaging
in meaningful, active ways with such communities. Therefore, the public
participation component of the initial submittal includes meaningful
engagement with vulnerable communities, throughout the state plan
development process and including through the initial submittal. In
order to demonstrate to the EPA that states are actively engaging with
communities, states could provide in their initial submittal a summary
of steps they have already taken to engage the public and how they
intend to continue meaningful engagement, including with vulnerable
communities, during the additional time (if an extension is granted)
for development of the final plan. In addition to approaches that
states already use to identify and engage potentially affected
communities, the EPA encourages states to use the proximity analysis
conducted for this rulemaking (which is described in section IX.A) as a
tool to help them identify overburdened communities that could be
potentially impacted by their plans. Other tools, such as EJ screen,
can also be helpful. The EPA in its continued outreach with states
during the implementation phase will also provide resources to assist
them in engaging with communities. The EPA believes that through the
provision of these resources states will also more easily be able to
address this required component of the initial submittal regarding
public engagement, including with vulnerable communities, by September
6, 2016.
    In addition to the resources the EPA intends to provide to states,
there are existing resources states can take advantage of to address
this component as well. On the steps that states could take to engage
vulnerable communities in a meaningful way, the Agency recommends that
states consult the EPA's May 2015 Guidance on Considering Environmental
Justice During the Development of Regulatory Actions. In this document,
the EPA defines meaningful involvement as ensuring that ``potentially
affected community members have an appropriate opportunity to
participate in decisions about a proposed activity (i.e., rulemaking)
that may affect their environment and/or health; the population's
contribution can influence the EPA's [regulatory authority's]
rulemaking decisions; the concerns of all participants involved will be
considered in the decision-making process; and the EPA [decision-
makers] will seek out and facilitate the involvement of those
potentially affected by the EPA's [or other regulatory authority's]
rulemaking process.'' \843\ Additionally, this guidance document also
encourages those writing rules to consider the positive impacts that a
rulemaking will have on communities).\844\ Another resource that the
EPA recommends that states consult when devising their state plans is
the document ``Considering Environmental Justice in Permitting''
available on the agency's Web site.\845\ Both of the resources
discussed above can add to what states may already have in place to
effectively engage vulnerable communities in the rulemaking process.
---------------------------------------------------------------------------

    \843\ Guidance on Considering Environmental Justice During the
Development of Regulatory Actions. http://epa.gov/environmentaljustice/resources/policy/considering-ej-in-rulemaking-guide-final.pdf. May 2015.
    \844\ Ibid.
    \845\ Considering Environmental Justice in Permitting. http://www.epa.gov/environmentaljustice/plan-ej/permitting.html#actions.
---------------------------------------------------------------------------

    The EPA recommends that as part of their meaningful engagement with
vulnerable communities, states work with communities to ensure that
they have a clear understanding of the benefits and any potential
adverse impacts that a state plan might have on their overburdened
communities and that there is a clear process for states to respond to
input from communities.
    If a state seeks an extension by submitting an appropriate initial
submittal addressing the three required components as described above
by September 6, 2016, the EPA will review the submittal. If the state
does not submit an initial submittal by September 6, 2016, that
contains the three required components, the EPA

will notify the state by letter, within 90 days, that the agency cannot
grant the extension request based the state's initial submittal. The
EPA will notify a state by letter only if the initial submittal does
not address the three required components. An extension for submitting
a final plan will be deemed granted if the EPA does not deny the
extension request based on the initial submittal. The EPA has
determined this approach is authorized by, and consistent with, 40 CFR
60.27(a) of the implementing regulations.
    For states that request and receive a 2-year extension, the state
must submit an update halfway through that extension, by September 6,
2017. In the proposal the EPA included a requirement regarding a 2017
check in. Because the EPA is finalizing that states are able to get a
2-year extension regardless of whether they are submitting an
individual or multi state final plan, the EPA believes it appropriate
to ensure through the 2017 update that the state is making continuous
progress on its initial submittal and that it is on track to meet the
final plan submittal deadline of September 6, 2018. The EPA will also
be able to use the information provided through the 2017 update to
further assist states in plan development.
    The final rule requires that states address in the 2017 update the
following components:

     A summary of the status with respect to required
components of the final plan, including a list of which components
are not yet complete.
     A commitment to a plan approach (e.g., single or multi-
state, rate or mass emission performance level), including draft or
proposed legislation and/or regulations.
     An updated comprehensive roadmap with a schedule and
milestones for completing the plan, including progress to date in
developing a final plan and steps taken in furtherance of actions
needed to finalize a final plan.

    In order to assess whether a state is on track to submit a final
plan by the 2018 extension deadline, the EPA is requiring that the 2017
update must contain a progress update on components from the initial
submittal and a list of which final plan components are still not
complete.
    The EPA is also requiring that the 2017 update include a commitment
to the type of plan approach the state will take in the final plan
submittal. During the public comment period, many commenters stated
that legislative action would be required to enact this final rule at
the state level, and that the proposal did not provide enough time for
legislative action or other regulatory actions needed for a state to be
granted an extension. In order to respond to these comments, the EPA is
clarifying that proposed or passed legislation or regulations are not
required in the initial submittal due by September 6, 2016. While a
state may indicate consideration of multiple state plan approaches in
the initial submittal, the EPA is requiring that the state commit to
one approach in the 2017 update. This commitment must include draft or
proposed legislation or regulations that must become final at the state
level prior to submitting a final plan submittal to the EPA. While
commenters expressed concern with not being able to have legislation
enacted in time to receive an extension until 2018, the EPA has
determined that 2 years is a reasonable timeframe for a state to decide
on the type of approach it will take in the final plan submittal and to
draft legislation or regulations for this approach in order to timely
meet the extended September 6, 2018 deadline.
4. Multi-State Plan Submittals
    For states wishing to participate in a multi-state plan, the EPA is
finalizing three forms of submittal that states may choose for the
submittal of a multi-state plan.
    First, the EPA is finalizing its proposed approach where one multi-
state plan submittal is made on behalf of all participating states. The
joint submittal must be signed by authorized officials for each of the
states participating in the multi-state plan and would have the same
legal effect as an individual submittal for each participating state.
The joint submittal must adequately address plan components that apply
jointly for all participating states and for each individual state in
the multi-state plan, including necessary state legal authority to
implement the plan, such as state regulations and statutes. Because the
multi-state plan functions as a single plan, each of the required plan
components (e.g., plan emission goals, program implementation
milestones, emission performance checks, and reporting) would be
designed and implemented by the participating states on a multi-state
basis.
    The EPA received comments from states requesting flexibility for
multi-state plan submittals. In response to these comments, the EPA is
also finalizing two additional options on which it solicited comment.
First, states participating in a multi-state plan can provide a single
submittal--signed by authorized officials from each participating
state--that addresses common plan elements. This option requires
individual participating states to provide supplemental individual
submittals that provide state-specific elements of the multi-state
plan. The common multi-state submittal must address all relevant common
plan elements and each individual participating state submittal must
address all required plan components (including common plan elements,
even if only through cross reference to the common plan submittal).
Under this approach, the combined common submittal and each of the
individual participating state submittals would constitute the multi-
state plan submitted for EPA review. The joint common submittal must be
signed by authorized officials for each of the states participating in
the multi-state plan and would have the same legal effect as an
individual submittal for each participating state.
    Second, the EPA is finalizing an approach where all states
participating in a multi-state plan separately make individual
submittals that address all elements of the multi-state plan. These
submittals would need to be materially consistent for all common plan
elements that apply to all participating states, and would also address
individual state-specific aspects of the multi-state plan. Each
individual state plan submittal would need to address all required plan
components. The EPA encourages states participating in this type of
multi-state plan to use as much common material as possible to ease
review of the state plans.
    These approaches will provide states with flexibility in addressing
contingencies where one or more states submit plan components that are
not approvable. In such instances, these options simplify the EPA's
approval of remaining common or individual portions of a multi-state
plan and help address contingencies during plan development where a
state fails to finalize its participation in a multi-state plan, with
minimal disruption to the submittals of the remaining participating
states. These additional submittal approaches also facilitate multi-
state plans where the participating states are coordinating the
implementation of their plans but are not taking on a joint multi-state
emission goal for affected EGUs. For example, states may seek to engage
in a multi-state approach that links rate-based or mass-based emission
trading programs through appropriate authorizations (e.g. reciprocity
agreements, or state regulations) that allow affected EGUs to use
emission allowances or RE/EE credits issued in

one state for compliance with an emission standard in another state.
    In order to avoid a multi-state plan becoming unapprovable due to
one state submitting an unapprovable portion of a multi-state plan,
withdrawing from the multi-state plan, or failing to implement the
multi-state plan, states may include express severability clauses if
their multi-state plan is able to stand without further revision if one
of the situations described above occurs. The severability clause must
specify how the remainder of the multi-state plan or individual state
plan would continue to function with the withdrawal of a state or
states, and may also include pre-specified revisions. The EPA will
evaluate the appropriateness of such a clause as part of its review of
the multi-state plan submittal.
5. Process for EPA Review of State Plans
    Our proposal laid out the basic steps for the EPA's review and
action on submitted state plans and, at some length, discussed the
required components of state plans, as further described in the
preceding sections. We received a number of thoughtful and helpful
comments on these issues. We are finalizing the basic requirements in
this rule and are proposing, in the companion proposed federal plan
under section 111(d), some additional procedural elements we believe
will be helpful to states, stakeholders and the EPA moving forward.
    Following the September 6, 2016 deadline for state plan submittals,
the EPA will review plan submittals. For a state that submits an
initial submittal by September 6, 2016, and requests an extension of
the deadline for the submission of a final state plan submittal, the
EPA will determine if the initial submittal meets the minimum
requirements for an initial submittal. If the state does not submit an
initial submittal by September 6, 2016, that contains the three
required components, the EPA will notify the state by letter, within 90
days, that the agency cannot grant the extension request based the
state's initial submittal. If the initial submittal meets the minimum
requirements specified in the emission guidelines, the state's request
for a deadline extension to submit a final plan submittal will be
deemed granted, and the final plan submittal must be submitted to the
EPA by no later than September 6, 2018.
    After receipt of a final plan submittal, the EPA will review the
plan submittal and, within 12 months, approve or disapprove the plan
through a notice-and-comment rulemaking process publicized in the
Federal Register, similar to that used for acting upon SIP submittals
under section 110 of the CAA. The implementing regulations currently
provide for the EPA to act on a final plan within 4 months after the
deadline for submission, which is consistent with versions of section
110 prior to the 1990 Amendments to the CAA. 40 CFR 60.27(b). To be
consistent with the current version of section 110, the EPA intends to
adopt a timeline of 12 months to review final plan submittals upon
receipt of complete submittals, as is generally consistent with the
timing requirements of section 110 with respect to complete SIP
submittals. Such a timeline would also provide the EPA with adequate
time for review and rulemaking procedures, and ensuring an opportunity
for public notice and opportunity for comment. We note, however, that
we proposed this timeline for review and action on state plans in our
proposal, but our proposal was specific to the timeline for state plans
submitted pursuant to this rule rather than for state plans submitted
under 111(d) generally.\846\ We are finalizing as part of this rule
that state plans submitted to meet the requirements of this rule will
be reviewed and acted upon by the EPA within 12 months of submission.
Because such timeline would be appropriate to be made to 111(d) state
plans more generally, we are also proposing the appropriate revisions
to the implementing regulations as part of the federal plan proposal
for section 111(d).
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    \846\ The EPA proposed 12 months after the date required for
submission of a plan or plan revision to approve or disapprove such
plan or revision or each portion thereof.
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    In addition, while the proposal and this final rule lay out in
considerable detail the required components of a state plan, the EPA
believes that it would also be helpful to include in the rule a
completeness determination process, similar to that used for SIP
submittals under section 110, which will allow the EPA to determine
whether a final plan submittal contains the components necessary to
enable the EPA to determine through notice and comment rulemaking
whether such submittal complies with the requirements of section
111(d). This is a procedural requirement under CAA section 110(k)(1)
for SIPs, and the EPA believes this requirement is appropriate to
establish under section 111(d)'s direction to the EPA to prescribe
through regulations a procedure similar to that provided by section
110. However, because the EPA did not propose such regulations as part
of the proposal for this action, the EPA is proposing such regulations
as part of the federal plan proposal for section 111(d). The EPA notes
that this preamble (in section VIII.D) and final rule lay out required
components of state plans and all the requirements for a state plan
submittal, and therefore states have the necessary information at this
time to develop state plans. The upcoming completeness criteria will
not add to or change these required components, but only add a
procedural step that allows the EPA to identify whether there are
absent or insufficient components in the plan submittal that would
render the EPA unable to act on such submittal because it is
incomplete. As we further explain in the federal plan proposal, a
determination by the EPA that a plan submittal is incomplete has the
effect of a state having a still-pending statutory obligation to submit
a plan that meets the requirements of section 111(d).
    The EPA is planning to propose an amendment to the section 111(d)
implementing regulations that will add the partial approval/disapproval
and conditional approval mechanisms in section 110(k)(3) and (4) to the
procedure for acting on section 111(d) plans. The input the agency
received in response to the proposal for these guidelines indicated
that the flexibility provided by these mechanisms could be useful
getting state plans in place. The EPA agrees, and is proposing to amend
the implementing regulations as part of the rulemaking for the federal
111(d) plan. The EPA is not taking final action on these changes in
this action.
    The later timing for our action on partial approval/disapproval and
conditional procedures does not create any issue with finalizing this
rule. These procedural adjustments will only come into play after
states have submitted their plans and the EPA is required to act on
them, and we intend to finalize these procedural changes prior to
September 6, 2016, when the first plan submittals would occur. Until
then, the EPA believes that every plan is submitted with the intent to
be fully approvable and there is no need for states to rely on the
possibility of these procedures when developing their plans.
Conditional approval and partial approval/disapproval should be used to
deal with approvability issues that arise despite the best efforts of
states and the EPA to work together to make sure a submittal in the
first instance is fully approvable. The EPA plans to finalize any
changes in the implementing regulations before the EPA is required to
act on state submittals, so that the EPA and states will have
appropriate flexibility in the plan approval process.

6. Failure To Submit a Plan
    If a state does not submit a final plan submittal by the applicable
deadline, or submits a final plan the EPA determines to be incomplete,
the EPA will notify the state by letter of its failure to submit. The
EPA will publish a Federal Register notice informing the public of its
finding of failure to submit. Upon a finding of failure to submit for a
state, a regulatory clock will run requiring the EPA to promulgate a
federal plan for such state no later than 1 year after the EPA makes
the finding unless the state submits, and the EPA approves, a state
plan during this time. Refer to the federal plan proposal for more
details on how and when a federal plan would be triggered.
7. State Plan Modifications
    a. Modifications to an approved state plan.
    During the course of implementation of an approved state plan, a
state may wish to update or alter one or more of the enforceable
measures in the state plan, or replace certain existing enforceable
measures with new measures. The EPA received broad support for allowing
states to submit modifications to approved state plans, and we agree
that this is an important aspect of this program. In this rulemaking,
therefore, the EPA is finalizing that a state may revise its state
plan, and states in a multi-state plan may revise their joint plan.
Consistent with the timing for final plan submittals originally
submitted by states, the EPA will act on state plan revisions within 12
months of a complete submittal. The EPA expects that the long plan
performance timeframes in this final rule and flexibility provided to
states in developing state plans will lessen the need for modifications
to approved state plans.
    A state may enter or exit a multi-state plan through a plan
modification, with certain limitations. Multiple commenters stated that
the EPA should clarify the plan modification process in such instances.
    Where a state with a single-state approved plan seeks to join a
multi-state plan, the state may submit a modification of its plan
indicating that it is joining the multi-state plan and including the
necessary plan components under the multi-state plan. The current
participants of the multi-state plan will also need to submit a plan
modification, to acknowledge the new state participant and to
recalculate the multi-state rate-based or mass-based CO2
goal. Functionally, both the modification of the single-state plan of
the new participant and the multi-state plan of the current plan
participants could be addressed through the same plan modification
submittal or addressed under a plan modification submittal comparable
to the alternate formats for multi-state plan submittals addressed in
section VIII.E.4.
    The entry or exit of a state to/from a multi-state plan involves
the recalculation of the multi-state rate-based or mass-based
CO2 goal for affected EGUs in the participating states. The
recalculated multi-state rate-based or mass-based CO2 goal
must take into account and ensure achievement of the individual state
rate-based or mass-based CO2 goal for any state that is
joining the multi-state plan. If implementation of the individual state
plan has triggered corrective measures or backstop emission standards
prior to the plan modification, as described in section VIII.F.3, the
modification must take into account the need to make up for any
shortfall in CO2 emission performance in the individual
state plan prior to joining the multi-state plan. Where one or more
states are leaving a multi-state plan through a plan modification, the
process is similar and the same considerations must be taken into
account in connection with the states that are leaving the multi-state
plan.