We also recognize that the test criteria leave some terms and conditions undefined, and we believe States and Tribes should retain the discretion to reasonably interpret and apply these terms as appropriate to the context of the particular program at issue. 191 First, in the proposed test we did not specify the time period which should serve as the starting point for comparison under the first prong. That is, we did not specify whether potential degradation should be determined in relation to visibility conditions existing at the time of the proposed program, or in relation to base case visibility projections for the time of program implementation. While either option is, we believe, reasonable, in this rulemaking we have usedthe future projected base case, for the following reasons.

The underlying purpose of both prongs of the test is to assess whether visibility conditions at Class I areas would be better with the alternative program in place than they would without it. The first prong ensures that the program does no harm not cause a decline in visibility at any particular Class I area.

It addresses the possibility that the alternative program might allow local increases in emissions which could result in localized degradation. The second prong assesses whether the alternative program produces greater visibility improvement in the aggregate than would source specific BART.

In both cases, the logical reference point is visibility conditions as they are expected to be at the time of program implementation but in the absence of the program. This insures that the visibility improvements or degradations determined are due to the programs being compared   source specific BART and the cap and trade alternative   and not to other extrinsic factors. 192 For example, if large increases in wild land fires are expected,

due to accumulation of fuel from past forest management practices,

a degradation of visibility from current conditions may be expected. It would be irrational to disapprove an alternative program because of a modeled degradation from current conditions,

where that degradation is actually anticipated because of smoke from such fires   sources which are not subject to the CAA BART provisions. By comparing the alternative to future projected baseline conditions, such extrinsic variables are accounted for.

We are thus able to ascertain ( to the extent possible where future projections are concerned) whether visibility under the alternative would be worsedecline at any Class I area, all other things being equal.

Therefore, in applying the test to the CAIR, we used the future ( 2015) projected baseline. We believe, however, that States should have discretion in determining the most appropriate baseline for this prong of the test, as long as the State's method is reasonable.

Second, although the proposed test indicated that dispersion modeling should be used to determine visibility differences for the worst and best 20% of days, the guideline did not specify the relationship between the worst and best days and the two prongs of the test. We believe that each prong of the test should ideally be based on an examination of both the worst and best 20% of days.

Thus, under the first prong, visibility must not degrade decline 73 The regional haze rule requires States to establish reasonable progress goals for each Class I area that provide for improvement in visibility for the most impaired days and ensure no degradation in visibility for the most impaired days. The reasonable progress test in the regional haze rule remains as a separate test from better than BART. The SIPs must contain measures to achieve the the reasonable progress goal; such measures could include not only stationary source programs such as BART but also programs to address emissions from other types of sources. The no degradation ( on the 20% best days) component of the reasonable progress test must still be applied to the final future year emissions control strategy. This does not directly impact the conclusions of the better than BART test.

193 at any one Class I area on either the best 20% or the worst 20%

days73 as a result of implementing the alternative program; and,

under the second prong both the best and worst days should be considered in determining whether the alternative program produces greater average improvement.

Third, the proposed guidelines did not define " affected"

Class I areas for purposes of the comparison. In applying the test to the CAIR, we considered all federal mandatory Class I areas in the contiguous 48 States for which data was available.

The principal Class I areas affected by the CAIR are those in the eastern U. S., therefore we calculated average improvement separately for the eastern areas, but also considered affects at all Class I areas nationally. We believe this was appropriate for a federally mandated program of the scope and magnitude of the CAIR. However, this may not be necessary for every BARTalternative program developed by States in the future, especially 194 if proposed programs are limited to smaller geographic areas or are limited to source categories having significantly less widespread impacts than EGUs. In such circumstances, it may be reasonable for the States and Tribes involved to develop criteria for " affected" Class I areas. For example, the affected region could be considered to be the States and Tribes involved in the trading program as well as immediately adjacent States, or Class I areas within adjacent States that are within some defined distance of participating States.

. With respect to comments on the degree of difference in the geographic distribution of emissions necessary to trigger application of the two prong test, we believe it is not necessary for EPA to define that in the rule. For our CAIR analysis, we explained in the SNPR that the fact that CAIR would produce greater emissions reductions than BART in most States, but less reductions than BART in a few States, was sufficient reason to employ the two pronged visibility test. 69 FR 32704. For other programs developed by States, a State would have the ability to make a reasonable decision as to whether there was a sufficient basis to make the demonstration that an alternative program would be better than BART based on modeling of the emissions distributions alone, or whether the State should proceed with the two pronged visibility test. The State's discretion is subject as always to the condition that it must be reasonably exercised, and must be supported by adequate documentation of the analyses. 195 Finally, on a related issue, we note that in a separate rule making to follow soon after today's action, we will be soliciting comments on whether there might be other means of demonstrating that an alternative program makes greater reasonable progress than BART, in addition to the two pronged visibility test we are finalizing in today's action. Such other means might take into account additional policy considerations, as well as the relative degree of visibility improvement of the two programs.

C. Final Determination That CAIR Makes Greater Reasonable Progress than BART Proposal As noted in the background section above, in both the CAIR SNPR, and NFR, we discussed the proposed approach of allowing States to treat CAIR as an in lieu of BART program for EGUs in CAIR affected States. In both actions, we presented analyses based on emission projections and air quality modeling showing that CAIR will achieve greater reasonable progress towards the national visibility goal than would BART for affected EGUs.

These analyses were conducted according to the criteria for making such " better than BART" determinations which had been proposed in the BART guidelines, and which have now been finalized in the regional haze rule at 40 CFR § 51.308( e)( 3), as discussed above in section IV. B. Below, we briefly recap these prior analyses. See 74 " Supplemental Air Quality Modeling Technical Support Document ( TSD) for the Clean Air Interstate Rule ( CAIR), May, 2004." http:// www. epa. gov/ cair/ pdfs/ saqmtsd. pdf; " Demonstration that CAIR Satisfies the ` Better than BART' Test As proposed in the Guidelines for Making BART Determinations" http:// www. epa. gov/ cair/ pdfs/ finaltech04. pdf.

196 69 FR 32684, 32702   707 and 70 FR 25162, 25299   304 and associated Technical Support Documents74 for full details.

Scenarios Examined The CAIR is applicable to 28 States and the District of Columbia and requires levels of SO2 and Nox emissions reductions based on those achievable on a highly cost effective basis from EGUs. BART, on the other hand, is applicable nationwide and covers 25 additional industrial categories, as well as EGUs, of a certain vintage. In our comparison, we sought to determine whether the CAIR cap and trade program for EGUs will achieve greater reasonable progress than would BART for EGUs only.

Therefore, the relevant scenarios to examine were ( 1) SO2 and NOX emissions from all EGUs nationwide after the application of BART controls to all BART eligible EGUs (" nationwide BART"), and ( 2) SO2 and NOX emissions from all EGUs nationwide after the emissions reductions attributable to CAIR in the CAIR region and application of BART controls to all BART eligible EGUS outside the CAIR region (" CAIR+ BART). The latter scenario reflects the fact that sourceby source BART would remain a federal requirement outside the CAIR region, unless and until it is replaced by some other state or 197 federally required program. Thus, in order to more accurately project CAIR emissions, it is necessary to impose BART controls outside the CAIR region, to account for potential load and emission shifting among EGUs.

In addition to these two scenarios, a third was used   the future base case in the absence of either program. This third scenario was used to ensure that CAIR would not cause degradation from otherwise existing conditions. See section IV. B above for a discussion of why the future baseline is an appropriate comparison point for the first prong of the " better than BART"

test.

At the SNPR stage, a " CAIR + BART" scenario was not available, as the only projections available at that time had been developed for other purposes. Thus, the " CAIR" scenario used then, which was based on the Clear Skies proposal, was imperfect for purposes of this analysis in that it assumed SO2 reductions on a nationwide basis ( rather than in the CAIR region only) and assumed NOx reductions requirements in a slightly different geographic region than covered by the proposed CAIR.

For the CAIR NFR, we redid the emissions projections for both the Nationwide BART and CAIR + BART in the West scenarios. For the former, we increased the number of BART eligible units included by lowering the assumed threshold for BART applicability from 250 MW capacity for both NOx and SO2 to 100 MW for SO2 and 25 MW for Nox, and by reviewing the list of potentially BART eligible 198 EGUs. For the latter scenario, we produced emissions projections based on application of CAIR level emission reductions in the States proposed for inclusion in the CAIR in the SNPR.

Emission Projections For the analyses in both the SNPR and NFR, we used the Integrated Planning Model ( IPM) to estimate emissions expected from the scenarios described above. Tables 1 and 2 present the results from the SNPR and NFR, respectively.

Table 1 . EGU SO2 and NOx Emissions as Projected in CAIR SNPR ( in thousands of tons per year)

2015 Base Case EGU Emissions 2015 " CAIR" 2015 Modeled Nationwid e BART Additional Reduction from " CAIR"

( Nationwide BART minus " CAIR")

Nationwide SO2 9,081 5,260 7,012 1,752 Nationwide NOx 3,950 2,248 2,781 533 199 Table 2. EGU SO2 and NOx Emissions as Projected in CAIR NFR ( in thousands of tons per year)

2015 Base Case EGU Emissions 2015 CAIR +

BART 2015 Nationwide BART Additional Reduction from CAIR + BART ( Nationwide BART minus CAIR+ BART)

Nationwide SO2 9,084 4,735 7,162 2,427 Nationwide NOx 3,721 1,816 2,454 638 As can be seen in the numbers in the right most column, CAIR produced far superior emission reductions to nationwide BART, and the superiority of CAIR over BART increased between the SNPR and NFR projections, when the scenarios were corrected to more accurately reflect the anticipated reality in 2015.

Air Quality Modeling Results.

The proposed " better than BART" test provided that if the distribution of emission reductions is substantially the same under the alternative program as under BART, then the demonstration can be made simply by comparing emission reductions.

If, however, the distribution is significantly different, then visibility modeling is required in order to apply the two pronged test previously described. As noted above, CAIR emission 200 reductions were vastly greater than those under BART. However,

because there were some differences in the geographic distribution of reductions on a state by state basis, in order to be conservative we conducted air quality modeling and evaluated CAIR under the two pronged test.

Specifically, Uusing the above emissions projections, we completed numerous air quality modeling runs and postprocessing calculations to determine the impacts of emissions and emissions control strategies on visibility in Class I areas. We quantified the impacts of the CAIR and BART controls on visibility impairment by comparing the results of the future year ( 2015) base case model runs with the results of the CAIR + BART and nationwide BART control strategy model runs. We quantified visibility impacts on the 20% best and 20% worst visibility days.

For the SNPR modeling, we used the Regional Modeling System for Aerosols and Deposition ( REMSAD) model to calculate these visibility impacts. This modeling used base year meteorology from 1996. Complete year ambient monitoring data, which is necessary to model future improvements in visibility, was available for 1996 from Inter agency Monitoring of Protected Visual Environments ( IMPROVE) monitors located at 44 Class I areas   13 within the CAIR region and 31 outside of it.

For the NFR modeling, we used the Community Multiscale Air Quality ( CMAQ) model. The base year meteorology used in the CMAQ modeling was 2001. This later base year enabled us to look at more 201 Class I areas, because there were more IMPROVE monitors which had complete year data for 2001 than there had been in 1996.

Specifically, 81 of the 110 IMPROVE sites have complete ambient air quality data for 2001. Moreover, because in some cases a given IMPROVE monitor is designated as representing more than one Class I area, these 81 sites are representative of 116 Class I areas. Twenty nine of the 116 are in the East ( east of 100 degrees longitude) and 87 are in the West.

Using the modeling results, we then applied the two prong better than BART test which had been defined in the proposed BART rule. As explained above, under the first prong, visibility must not decline at any Class I area, as determined by comparing the predicted visibility impacts at each affected Class I area under the ( CAIR) trading program with future base case visibility conditions. Under the second prong, overall visibility, as measured by the average improvement at all affected Class I areas,

must be better under the trading program than under sourcespecific BART. The future year air quality modeling results were used to make this demonstration.

The visibility impacts of the CAIR + BART scenario were compared to base case 2015 visibility conditions ( without CAIR or BART) to determine whether the CAIR resulted in a degradation of visibility at any Class I area. We also compared these visibility impacts with the visibility impacts of nationwide BART 75 See Footnote [ 5], Supra.

76 Eastern Class I areas are those in the CAIR affected states, except areas in west Texas which are considered western and therefore included in the national average, plus those in New England.

202 implementation, to assess whether the proposed CAIR would result in greater average visibility improvement than nationwide BART.

The CAIR passed the first prong by not causing a degradation of visibility at any Class I area, either in the West or nationally. This was true in both the SNPR and NFR modeling. The visibility projections for each Class I area are presented in the respective TSD's. 75 The overall results are presented in tables 3 and 4 below,

representing the SNPR and NFR modeling respectively.

Table 3 Average Visibility Improvement in 2015 vs. 2015 Base Case ( deciviews) as Modeled using REMSAD in CAIR SNPR " CAIR" Scenario Nationwide BART Class I Areas East76 National East National 20% Worst Days 2.0 0.7 1.0 0.4 20% Best Days 0.7 0.2 0.4 0.1 203 Table 4 Average Visibility Improvement in 2015 vs. 2015 Base Case ( deciviews) as Modeled using CMAQ in CAIR NFR CAIR + BART in West Nationwide BART Class I Areas East8 National East National 20% Worst Days 1.6 0.5 0.7 0.2 20% Best Days 0.4 0.1 0.2 0.1 As can be see from the tables, although the models produced different absolute values, in both cases CAIR produced significantly greater visibility improvement than nationwide BART.

For example, looking at the 20% worst days at Eastern Class I areas ( the areas most influenced by the CAIR, since it is an eastern program), in both cases the visibility improvements from CAIR were at least twice as great as under nationwide BART ( i. e.,

in the SNPR, 2.0 deciviews compared to 1.0 deciviews improvement,

and in the NFR, 1.6 deciviews compared to 0.7 deciviews improvement).

This historical overview is given in the interest of providing a more complete understanding of the analyses presented at various stages in the CAIR rule making progress. In the end,

however, it is the analyses presented in the CAIR NFR on which we are basing our determination that CAIR makes greater reasonable progress towards the national visibility goals than does nationwide BART. Therefore, these NFR results are examined more closely in the " Final Action" section below, in light of additional emissions projections we have conducted to insure that 204 changes to the CAIR and BART rules made subsequent to the CAIR NFR do not affect that determination.

Comments received and EPA's Responses Although many comments were received regarding our proposal to determine that CAIR makes greater reasonable progress than BART, nearly all of them related either to the terms of the test itself, or to policy and legal implications of allowing CAIR required reductions to substitute for source by source BART.

These are addressed in sections B ( above ) and D ( below)

respectively. One commenter asserted, with respect to modeling presented in the SNPR, that the improvement of CAIR compared to source specific BART is so slight it may be potentially within the margin of error, and therefore insufficient for the better than BART demonstration , or for assuring that no hot spots will occur.

The EPA disagrees that the difference between CAIR and BART in the SNPR visibility projections was not significant. The visibility results presented in the NFR continue to show that the CAIR cap and trade program with BART in the non CAIR region provides considerably more visibility improvement compared to nationwide BART ( for EGUs only). The NFR modeling results show that the average visibility improvement from CAIR on the 20% worst days at 29 Eastern Class I areas is 1.6 deciviews ( dv) compared to only a 0.7 dv improvement from nationwide BART controls. In the " better than BART" TSD we have provided modeling results for 116 individual Class I areas. The modeling shows that CAIR will not 205 create any " hot spots." On the 20% worst days, all of the Eastern Class I areas show more visibility improvement under CAIR+ BART than under BART alone. In many of the Western Class I areas,

nationwide BART and CAIR + BART in the West provide about the same visibility benefits. ( This is to be expected, since the CAIR is only applicable in the East.) While the visibility benefits are similar in the West ( outside of the CAIR region), they are clearly not similar in the East, where the CAIR is predicted to achieve twice as much visibility improvement compared to BART.

Final action The CAIR vs. BART comparison presented in the CAIR NFR was developed while both rules were under development and therefore subject to change. Since the emissions projections and air quality modeling presented in the CAIR NFR was completed,

several changes were, in fact, made to the CAIR region. In addition, since that time our assumptions regarding the likely maximum BART emission reductions from EGUs also changed.

Therefore, we recalculated the emission projections to see if the rule changes could possibly affect the determination that CAIR will achieve greater reasonable progress than BART.

Most significantly, the final CAIR included Arkansas,

Delaware, and New Jersey only for purposes of significant contribution to ozone non attainment by summertime NOx emissions,

whereas our modeling had been based on the assumption thatthese States would be included for contribution to PM2.5 non attainment 206 by SO2 and NOx emissions. The new emission projections are based on the application of CAIR only for ozone in these States.

With respect to the nationwide BART, for SO2 the NFR projections assumed the application of a 90% control or 0.10 lbs/ mmBtu at uncontrolled EGUs greater than 100 MW. In the new projections, the control assumptions were changed to 95% or 0.15 lbs/ mmbtu, to reflect the presumptive control levels in the final BART guidelines. For Nox, the NFR projections were based on an assumed emission rate of 0.2 lbs/ mmBTU at all BART eligible EGUs nationwide. The new projections are based on the assumption of combustion controls on all BART eligible units except cyclones which have SCR, and the operation of all existing SCR and SNCRs annually, instead of just in the ozone season. Finally for both pollutants, the threshold for application of controls was increased to 200 MW, to better reflect the presumptionsincluded in the final BART guidelines.

We used IPM to project 2015 emissions given these new parameters. The results are presented in Table 5 below, which also includes the CAIR NFR projections ( as reported in Table 2)

for the reader's convenience. 207 Table 5 . EGU SO2 and NOx Emissions as Projected in CAIR NFR and as projected in subsequent update ( in thousands of tons per year)

2015 CAIR + BART 2015 Nationwide BART Additional Reduction from CAIR + BART ( Nationwide BART minus CAIR+ BART)

CAIR NFR Nationwide SO2 4,735 7,162 2,427 Nationwide NOx 1,816 2,454 638 Updated Projections Nationwide SO2 5,042 7,953 2,911 Nationwide NOx 2,000 2,738 738 The updated emissions estimates for both the BART and CAIR with BART in the West scenarios are slightly higher than the NFR emissions estimates, but the difference between the CAIR + BART and nationwide BART scenarios are even larger compared to the NFR determination. For SO2, the updated CAIR + BART achieves about 2.9 million tons more reductions than updated nationwide BART in 2015.

For NOx, the updated CAIR + BART policy is projected to result in about 738,000 tons more emissions reductions than the updated BART nationwide policy in 2015. The difference between the updated CAIR + BART and nationwide BART scenarios is now larger by 484,000 tons of SO2 reduction ( i. e., 2,911,000   2,427,000) and l00,000 tons of NOx reduction ( i. e. 738,000   638,000).

Implications of New Emission Projections for the Two Pronged Test 77The 1,000 ton per year increase in NO x in Connecticut represents ~ 0.003% of the total EGU NO x in the 2015 base case and the 2,000 ton per year increase in SO 2 in New Jersey represents ~ 0.0005% of the total EGU SO 2 . Since the impacts on visibility from EGU SO2 and NOx are generally regional in nature, we would expect this small increase to have little or no impact on visibility in any Class I area.

208 The first prong of the better than BART test specifies that no degradation of visibility can occur at any Class I area. In order to be sure that Class I areas do not experience a degradation in visibility, we examined the updated State by State emissions estimates. Compared to the 2015 base case, in the updated CAIR + BART case, there are no individual Statewide increases in either SO2 or NOx ( except for a very small ~ 1,000 ton increase in NOx in Connecticut and 2,000 ton increase in SO2 in New Jersey). 77 That is consistent with the NFR CAIR + BART case in which no degradation was found. Consequently we have determined that no degradation would occur under the updated CAIR + BART emissions scenario.

The second prong of the better than BART test specifies a greater average visibility improvement from the CAIR trading program ( CAIR + BART). The average visibility improvement from the NFR CAIR + BART case was much greater ( on the 20% worst visibility days) than the nationwide BART case. In the scenario we modeled for the NFR, the larger visibility improvement from CAIR + BART was achieved by reducing SO2 emissions by an additional ~ 2.4 million tons per year compared to nationwide BART 78The difference between the updated CAIR + BART and nationwide BART scenarios is larger than the difference between the modeled CAIR + BART and nationwide BART scenarios. The " difference of the differences" is 485,000 tons of SO2 and 100,000 tons of NOx.

79 California, Delaware, Florida, Georgia, Iowa, Louisiana, Michigan, Mississippi, Missouri, North Carolina, Texas, and Wisconsin.

209 and NOx emissions by an additional 638,000 tons per year compared to natiowide BART.

In the updated scenario, the emissions difference between the CAIR + BART and nationwide BART cases are even larger ( 2.9 million tons of SO2 and 738,000 tons of NOX). 78 The distribution of emission reductions changed somewhat in the new projections   that is, some States saw a larger difference between CAIR and BART,

while in other States the difference was smaller. The largest change was in Kentucky, where the new projections showed that emission reductions from CAIR were even greater than those from BART by an additional 200,000 tons per year. Among States where the change between projections went the other direction   that is,

showing that BART reductions were closer to CAIR reductions than previously projected   the greatest changes were in Alabama and Pennsylvania, where the difference between the programs decreased by 46,000 and 45,000 tons, respectively.

Perhaps more importantly, in the new projections, there are fewer States in which BART reductions are greater than CAIR reductions. In the NFR projections, there were 12 States79 where 80 There were also four States where BART NOx emissions reductions were slightly higher than CAIR + BART ( a total of 4,000 tons per year). Those States are Connecticut, Delaware, New Jersey, and Oklahoma.

81 Alabama, Louisiana, Michigan, Mississippi, Missouri, New Jersey, North Carolina, Texas, Wisconsin 82 We performed a similar analysis using projections including the Clean Air Mercury Rule, CAMR, which was promulgated after the CAIR NFR. The CAMR emission projections show slight additional emission reductions of SO2 and NOx as compared to the projections CAIR+ BART without CAMR, and are nearly identical in terms of geographic distribution. Therefore CAIR+ BART+ CAMR, like CAIR+ BART,

210 nationwide BART SO2 reductions were greater than CAIR + BART reductions. 80 In those 12 States, BART emissions achieved ~ 686,000 more tons of SO2 reduction compared to CAIR + BART. In the rest of the States, CAIR + BART achieved an additional 3.1 million tons per year of SO2 reduction compared to BART. All told, the modeling showed that visibility improvement was greater under the CAIR than under BART on an overall average basis, both at eastern Class I areas and at all Class I areas nationally. In the new projections, CAIR + BART achieved an additional 3.4 million tons per year of SO2 reduction compared to BART in 39 of the 48 States.

there are only In the remaining 9 States81 in which BART reductions are greater under nationwide BART than CAIR + BART in the West.

In those 9 States, BART emissions achieved ~ 472,000 more tons of SO2 reduction compared to CAIR + BART in the west. In the rest of the States, CAIR + BART achieved an additional 3.4 million tons per year of SO2 reduction compared to BART. 82 passes the two pronged test for demonstrating greater reasonable progress than BART. This is discussed in more detail in the TSD accompanying today's action.

211 Due to the fact that the new projections show that the difference between CAIR and BART reductions is even greater than previously estimated, and the visibility improvements due to CAIR + BART were previously modeled to be much larger than BART, we can state with a high degree of confidence that the updated CAIR +

BART scenario passes the second prong of the better than BART test.

D. Revision to Regional Haze Rule to allow CAIR States to treat CAIR as a BART substitute for EGUs In the SNPR, we proposed that States which adopt the CAIR cap and trade program for SO2 and NOx would be allowed to treat the participation of EGUs in this program as a substitute for the application of BART controls for these pollutants at affected EGUs. To implement this, we proposed an amendment to the Regional Haze Rule which would add a subpart 40 CFR 51.308( e) to read as follows:

A State that opts to participate in the Clean Air Interstate Rule cap and trade program under part 96 AAAEEE need not require affected BART eligible EGUs to install, operate, and maintain BART. A State that chooses this option may also include provisions for a 83A Geographic enhancement is a method, procedure, or process to allow a broad regional strategy, such as the CAIR cap & trade program, to accommodate BART for reasonably attributable impairment. For example, it could consist of a methodology for adjusting allowance allocations at a source which is required to install BART controls.

212 geographic enhancement to the program to address the requirement under § 51.302( c) related to BART for reasonably attributable impairment from the pollutants covered by the CAIR cap and trade program. 83 We proposed that this would be codified at 40 CFR 51.308( e)( 3); however that section now incorporates the " better than BART" test as discussed above. In today's action, as described below we are finalizing this provision of the rule,

where it will be codified as section 308( e)( 4).

The EPA's authority to treat emissions reductions required by the CAIR as satisfying BART was not affected by CEED v. EPA. As noted, the D. C. Circuit in CEED upheld the proposition that EPA can approve implementation plans which rely on alternative strategies to BART, as long as greater reasonable progress is achieved. CEED v. EPA, Slip. Op. at 13. Moreover, the CAIR program is not infected in any way with the " group BART"

methodology held invalid by the court. That is because CAIR emission reductions levels were not based on the invalid " group

BART" approach or any other assumptions regarding BART, but were developed for other reasons. Specifically, the CAIR was developed 213 to assist with attainment of the NAAQS for PM2.5 and ozone. Had EPA not performed the comparison of CAIR to BART for visibility progress purposes, the CAIR emission reduction requirements would remain unchanged. Therefore, EPA is not imposing an invalid BART requirement on States, but rather allowing States, at their option, to utilize the CAIR cap and trade program as a means to satisfy BART for affected EGUs.

We received numerous comments on this proposal, which are summarized along with our responses in the CAIR NFR preamble at 70 FR 25300   25302 and in the Response to Comment document . To summarize our responses to some of the most important comments:

( 1) We note that we are not constraining the discretion of States to determine which sources are subject to BART and to make BART determinations. CAIR affected States are not required to accept our determination that CAIR may substitute for BART. Under the amended rule, States simply have the option of accepting this determination.

( 2) The EPA does not believe that anything in the CAA or relevant case law prohibits a State from considering emissions reductions required to meet other CAA requirements when determining whether source by source BART controls are necessary to make reasonable progress. Whatever the origin of the emission reduction requirement, the relevant question for BART purposes is whether the alternative program makes greater reasonable progress. 214 As discussed above, EPA has determined that CAIR does so with respect to SO2 and Nox from EGUs in the CAIR region.

Moreover, the fact that BART and CAIR originate from different provisions of the CAA does not mean that CAIR and BART emissions reductions would be additive if BART eligible EGUs in the CAIR program were required to install and operate BART. Such source specific control requirements would simply result in a redistribution of emission reductions, as other EGUs could buy the excess allowances generated by the installation of controls at BART units. The net result would be the same level of emission reductions, but at a higher total cost, because the ability of the market to find the most cost effective emission reductions would be constrained.

( 3) Although regional haze rule section 308( e)( 2) is not directly applicable, as the CAIR is covered by the special provision newly codified at 308( e)( 4), this determination is consistent with the policy contained in 308( e)( 2) requiring inlieu of BART programs be based on emissions reductions " surplus to reductions resulting from measures adopted to meet requirements as of the baseline date of the SIP." The baseline date for regional 84 See " 2002 Base Year Emission Inventory SIP Planning: 8 hr Ozone, PM2.5, and Regional Haze Programs," November 8, 2002, Guidance Memorandum, http:// www. epa. gov/ ttn/ oarpg/ t1/ memoranda/ 2002bye_ gm. pdf 215 haze SIPs is 200284; therefore CAIR reductions are surplus to requirements as of that year.

( 4) We agree with commenters that it was premature to make a final determination whether CAIR makes greater reasonable progress than BART in the final CAIR because at that time the BART guidelines and the criteria for making such determinations had not been finalized. In today's action, both those rule makings are complete and therefore such a determination is ripe.

( 5) We disagree with commenters who thought that CAIR should be considered " better than BART" regardless of whether a State participates in the cap and trade program. Our demonstration that CAIR makes greater reasonable progress than BART is based only on an examination of emissions reductions from EGUs under both programs. The CAIR emissions projections and modeling assumes that EGU emissions will be capped at the levels specified in the CAIR. Therefore, States that choose to meet their CAIR emission reduction requirements in a manner other than through the participation of EGUs in the CAIR cap and trade program would have to develop an appropriate demonstration that the measures they employ make greater reasonable progress than would BART for any 216 affected source categories, if the State wanted its CAIR required reductions to substitute for source by source BART.

( 6) We disagree with commenters who asserted that CAIR should satisfy BART for States that are subject to CAIR only for ozone season Nox. We explained in the final CAIR preamble that a State subject to CAIR for NOx purposes only would have to make a supplementary demonstration that BART has been satisfied for SO2,

as well as for Nox on an annual basis. We wish to clarify here that a State which is only subject to CAIR for Nox, but which also chooses to participate in the CAIR trading program for both SO2 and Nox, may consider BART to be satisfied for both SO2 and Nox from EGUs. Because we modeled these States as controlling for both SO2 and Nox in the CAIR NFR, our better than BART demonstration presented in that action would be valid in that scenario. Conversely, if such States choose to participate only in the ozone season Nox trading program, the updated projections presented in today's action demonstrate that BART would be satisfied for Nox, but such states would still need to address BART for SO2 emissions from EGUs.

( 7) We noted in the final CAIR preamble that although we believe it is unlikely that a State or FLM will find it necessary to certify reasonably attributable visibility impairment at any Class I area, as a legal matter that possibility exists. That is,

the determination that CAIR makes greater reasonable progress than BART is made in the context of BART for regional haze under CAA 85Similar to the BART factors, the reasonable progress factors are: the cost of compliance, the time necessary for compliance, the energy and nonair quality environmental 217 169B, and does not preclude a finding of reasonably attributable impairment under CAA 169A. The CAIR cap and trade program does not include geographic enhancements to accommodate the situation where BART is required based on reasonable attribution at a source which participates in the trading program, but States retain the discretion to include such enhancements in their SIPs.

( 8) Our determination that CAIR makes greater reasonable progress than BART for EGUs is not a determination that CAIR satisfies all reasonable progress requirements in CAIR affected States. Each State, whether in the CAIR region or not, is required to set reasonable progress goals for each Class I area within the State as required in regional haze rule § 308( d)( 1), and to develop long term strategies, considering all anthropogenic sources of visibility impairing pollutants, as required by § 308( d)( 3).

In setting the reasonable progress goals, the State is to consider the amount of visibility improvement needed to achieve a uniform rate of progress towards natural background conditions in the year 2064. ( This uniform rate of progress is sometimes referred to as the default glide path). The State is also to consider the statutory reasonable progress factors contained in CAA § 169A( g)( 1). 85 impacts of compliance, and the remaining useful life of any existing sources subject to such requirements.

218 In doing so, we anticipate that States will take into account the degree to which CAIR emissions reductions are projected to bring visibility conditions at its Class I areas in line with the default glide path. In some States, the improvements expected from CAIR, combined with the application of the reasonable progress factors to other source sectors, may result in a determination that few additional emissions reductions are reasonable for the first long term strategy period. Nonetheless,

each State is required to set its reasonable progress goals as provided by the regional haze rule and cannot assume that CAIR will satisfy all of its visibility related obligations.

V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 ( 58 FR 51735, October 4, 1993), EPA must determine whether the regulatory action is " significant" and, therefore, subject to Office of Management and Budget ( OMB) review and the requirements of the Executive Order.

The Order defines " significant regulatory action" as one that is likely to result in a rule that may:

( 1) Have an annual effect on the economy of $ 100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, 219 public health or safety, or State, local, or Tribal governments or communities;

( 2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

( 3) Materially alter the budgetary impacts of entitlements,

grants, user fees, or loan programs or the rights and obligations of recipients thereof; or ( 4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, it has been determined that this rule is a " significant regulatory action,"

thus EPA has submitted this rule to OMB for review. The drafts of the rules submitted to OMB, the documents accompanying such drafts, written comments thereon, written responses by EPA, and identification of the changes made in response to OMB suggestions or recommendations are available for public inspection at EPA's Air and Radiation Docket and Information Center ( Docket Number OAR 2002 0076). The EPA has prepared the document entitled " Regulatory Impact Analysis of the Final Clean Visibility Interstate Rule or Guidelines for Best Available Retrofit Technology Determinations Under the Regional Haze Regulations"

( RIA) to address the requirements of this executive order.

1. What Economic Analyses Were Conducted for the Rulemaking? 220 The analyses conducted for this final rule provide several important analyses of impacts on public welfare. These include an analysis of the social benefits, social costs, and net benefits of three possible regulatory scenarios that States may follow to implement the BART rule and guidelines. The economic analyses also address issues involving requirements of the Paperwork Reduction Act ( PRA), potential small business impacts, unfunded mandates ( including impacts for Tribal governments), environmental justice, children's health, energy impacts, and other statutory and executive order requirements.

2. What Are the Benefits and Costs of this Rule?

The benefit cost analysis shows that substantial net economic benefits to society are likely to be achieved due to reductions in emissions resulting from this rule. The results detailed below show that this rule would be beneficial to society, with annual net benefits ( benefits less costs) ranging from approximately $ 1.9 to $ 12.0 billion in 2015. These alternative net benefits estimates reflect differing assumptions about State actions taken to implement BART and about the social discount rate used to estimate the annual value of the benefits and costs of the rule.

All amounts are reflected in 1999 dollars. The range of benefits and costs reported for the BART represent estimates of EPA's 221 assessment of State actions that will likely be taken to comply with the BART rule and guidelines.

h. Control Scenarios Today's rule sets forth presumptive requirements for States to require EGUs to reduce SO2 and NOx emissions for units greater than 200 megawatts ( MW) in capacity at plants greater than 750 MW in capacity that significantly contribute to visibility impairment in Federal Class I areas ( national parks). The analysis conducted in the RIA presents alternative control scenarios of possible additional controls for EGUs located at plants less than 750 MW in capacity. The EPA also calculated the amount of SO2 and NOx emissions reductions for several illustrative scenarios that reflect alternative State actions regulating industries with non

EGU sources. The analyses conducted include three regulatory alternative scenarios that States may choose to follow to comply with BART. The alternatives include three scenarios of increasing stringency  Scenario 1, Scenario 2, and Scenario 3. A brief discussion of the these alternatives for the EGUs and all other sources follows. More details of the alternative control scenarios and associated control costs are discussed in the RIA.

i. Electric Generating Units In the revised BART guidelines, we have included presumptive control levels for SO2 and NOx emissions from coal fired electric generating units greater than 200 megawatts ( MW) in capacity at 86 These levels are commonly achievable by flue gas desulfurization controls (" scrubbers").

222 plants greater than 750 MW in capacity. Given the similarities of these units to other BART eligible coal fired units greater than 200 MW at plants 750 MW or less, EPA's guidance suggests that States control such units at similar levels for BART. The guidelines would require 750 MW power plants to meet specific control levels of either 95 percent control or controls of 0.15 lbs/ MMBtu, for each EGU greater than 200 MW, unless the State determines that an alternative control level is justified based on a careful consideration of the statutory factors. 86 Thus, for example, if the source convincingly demonstrates unique circumstances affecting its ability to cost effectively reduce its emissions, the State may take that into account in determining whether the presumptive levels of control are appropriate for the facility. For an EGU greater than 200 MW in size, but located at a power plant smaller than 750 MW in size, States may also find that such controls are cost effective when taking into consideration the costs of compliance in the BART analysis in applying the five factor test for the BART determination. In our analysis we have assumed that no additional controls will occur where units have existing scrubbers and that no controls will occur for oil fired units. While these levels may represent current control capabilities, we expect that scrubber technology 223 will continue to improve and control costs will continue to decline.

For NOx, for those large EGUs that have already installed selective catalytic reduction ( SCR) or selective non catalytic reduction ( SNCR) during the ozone season, States should require the same controls for BART. However, those controls should be required to operate year round for BART. For sources currently using SCR or SNCR for part of the year, states should presume that the use of those same controls year round is highly costeffective For other sources, the guidelines establish presumptive emission levels that vary depending largely upon boiler type and fuel burned. For coal fired cyclone units with a size greater than 200 MW, our analysis assumes these units will install SCR. For all other coal fired units, our analysis assumed these units will install current combustion control technology.

In addition, we assume no additional controls for oil and/ or gasfired steam units.

We present alternative regulatory scenarios. Scenario 2 represents our application of the presumptive limits described above to all BART eligibility EGUs greater than 200 MW. For Scenario 1, we assume that only 200 MW BART eligible EGUs located at facilities above 750 MW capacity will comply with the SO2 requirements and NOx controls. In this scenario, no facilities less than 750 MW capacity are assumed to install BART controls.

For Scenario 1, we assume that units with existing SCRs will 224 operate those SCR units year round annually. In contrast in Scenario 3, we analyzed SO2 controls equivalent to 95 percent reductions or 0.1 lbs per MMBtu on all previously uncontrolled units. NOx controls for this most stringent scenario presume SCRs will be installed on all units greater than 100 MW capacity and combustion controls will be installed on units greater than 25 MW but less than 100 MW capacity. The EPA analyzed the costs of each BART scenario using the Integrated Planning Model ( IPM). The EPA has used this model extensively in past rulemakings to analyze the impacts of regulations on the power sector.

The analysis presented assumes that BART eligible EGUs affected by the Clean Air Interstate Rule ( 70 FR 25162) have met the requirements of this rule. Thus, no additional controls for EGUs beyond CAIR are anticipated or modeled for the 28 State plus District of Columbia CAIR region. In addition, we are assuming no additional SO2 controls for sources located in States of Arizona,

Utah, Oregon, Wyoming, and New Mexico or Tribal lands located in these States due to agreements made with the Western Regional Air Partnership ( WRAP).

ii. Sources other than Electric Generating Units As previously discussed there are 25 source categories potentially subject to BART in addition to EGUs ( referred to as non EGU source categories) as defined by the CAA. The EPA evaluated a set of SO2 and NOx emission control technologies available for these source categories and estimated the associated 225 costs of control using AirControlNET. The control scenarios evaluated reflect control measure cost caps of up to $ 1,000 per ton ( Scenario 1), $ 4,000 per ton ( Scenario 2), and $ 10,000 per ton ( Scenario 3). The EPA also conducted a cost analysis for control costs of up to $ 2,000 per ton and $ 3,000 per ton, and the results of this analysis are presented in the RIA. The analysis consists of applying SO2 and NOx controls to each non EGU source category up to the specified cost per ton " cap" in each scenario. These cost per ton caps are specified in average cost terms. As control stringency is increased, the marginal costs are also estimated for each non EGU source category. The scenarios examined are based on the costs of technologies such as scrubbers for SO2 control, and varying types of technologies for NOx control. Scrubbers are the most common type of SO2 control for most non EGU sources for each scenario, while combustion controls such as low NOx burners ( LNB)

and post combustion controls such as selective noncatalytic reduction ( SNCR) and selective catalytic reduction ( SCR) are commonly applicable to most of the non EGU source categories.

Combustion controls are commonly applied as part of Scenario 1,

while SNCR and SCR are more commonly applied either by themselves or in combination with combustion controls as part of Scenarios 2 and 3. Analyses are not available for 8 of the 25 non EGU source categories, because there are no available control measures for these sources or there are no sources in these categories included in the non EGU emissions data utilized in these analyses. All of 226 these results are estimated using a nationwide database of BARTeligible non EGU sources that is based on information collected from Regional Planning Organizations ( RPOs) in the fall of 2004.

b. Baseline and Year of Analysis The final rule sets forth the guidelines for States and Tribes for meeting the BART requirements under the CAA and the Regional Haze Rule. The Agency considered all promulgated CAA requirements and known State actions in the baseline used to develop the estimates of benefits and costs for this rule including the recently promulgated Clean Air Interstate Rule ( 70 FR 25162) and the proposal to include New Jersey and Delaware in the final CAIR region for fine particulate matter ( 70 FR 25408).

However, EPA did not include within the baseline the actions States may take to implement the ozone and PM2.5 NAAQS standards nor the recently promulgated Clean Air Mercury Rule. No additional SO2 controls were assumed for any EGUs within the five WRAP States of Utah, Arizona, Wyoming, Oregon or New Mexico that have existing agreements to achieve reduction goals.

In the analysis, the controls and reductions are assumed to be required in 2015, a date that is generally consistent with the expected timing of the rule. States must submit SIPs relevant to the BART requirements in January 2008. After approval of the SIP,

there is a 5 year compliance date. Thus, controls are likely to be installed and in operation by the end of 2013 or the beginning 227 of 2014 to comply with the rule. In addition, EPA had existing inventories, modeling, and base case runs for 2015 to use for the analysis. The year 2015 is used in this analysis. All estimates presented in this report represent annualized estimates of the benefits and costs of BART in 2015 rather than the net present value of a stream of benefits and costs in these particular years of analysis.

c. Cost Analysis and Economic Impacts For the affected region, the projected annual private incremental costs of BART to the power industry ( EGU source category) range from $ 253 to $ 896 million in 2015 depending upon the scenario evaluated. These costs represent the private compliance cost to the electric generating industry of reducing NOx and SO2 emissions that EPA believes States may require to comply with BART.

In estimating the net benefits of regulation, the appropriate cost measure is " social costs." Social costs represent the welfare costs of the rule to society. These costs do not consider transfer payments ( such as taxes) that are simply redistributions of wealth. The social costs of this rule for the EGU sector only are estimated to range from approximately $ 119 to $ 567 million in 2015 assuming a 3 percent discount rate. These EGU sector costs become $ 141 to $ 688 million in 2015 assuming a 7 percent discount rate. 228 Overall, the impacts of the BART are modest, particularly in light of the large benefits we expect. Retail electricity prices are projected to increase roughly 0.1 percent with BART in the 2015 timeframe under Scenario 2. Coal fired generation, as well as coal production and natural gas fired generation are projected to remain essentially unchanged as a result of this rule. It is also not expected that BART will change the composition of new generation built to meet growth in electricity demand. BART is also not expected to impact coal or natural gas prices.

For today's rule, EPA analyzed the costs for the EGU source category using the Integrated Planning Model ( IPM). The IPM is a dynamic linear programming model that can be used to examine the economic impacts of air pollution control policies for SO2 and NOX throughout the contiguous U. S. for the entire power system.

Documentation for IPM can be found in the docket for this rulemaking or at www. epa. gov/ airmarkets/ epa ipm.

The EPA also conducted an analysis of State actions in requiring emission controls for BART eligible sources in the non

EGU source categories. For the nation, the projected annual private incremental costs range from $ 150 million to $ 2.24 billion for industries with affected non EGU sources. This cost range results from different assumptions about possible actions States may take to comply with BART and alternative discount rates of 3 and 7 percent. The non EGU private incremental control cost 229 estimates are assumed to approximate the social costs of the rule for the non EGU sector. The EPA analyzed the costs to non EGUs sources using AirControlNET. The AirControlNET is a software tool that can be used to estimate the private costs and emission reductions of air pollution control policies for SO2, NOx, and other criteria pollutants throughout the contiguous U. S. for all manufacturing industries and many other industries. Documentation for AirControlNET can be found in the docket for this rulemaking or at www. epa. gov/ ttn/ ecas/ AirControlNET. htm.

In summary, the EPA estimates that the annual social costs of this rule for the EGU and non EGU source categories range from approximately $ 0.3 to $ 2.9 billion annually, based on alternative scenarios of State actions in response to the BART rule and guidelines assuming 3 or 7 percent discount rates. Estimates are reflected in 1999 dollars.

d. Human Health Benefit Analysis Our analysis of the health and welfare benefits associated with this rule are presented in this section. Briefly, the analysis projects major benefits from implementation of the rule in 2015. As described below, thousands of deaths and other serious health effects would be prevented. We are able to monetize annual benefits ranging from approximately $ 2.2 to $ 14.3 billion in 2015. This range reflects different assumptions about 230 States actions in response to the BART rule and the applicable discount rate ( 3 percent or 7 percent).

Table IV 1 presents the primary estimates of reduced incidence of PM and visibility related health effects for 2015 for the regulatory control strategy the EPA expects States may follow to comply with BART. In 2015 for Scenario 2, we estimate that PM related annual benefits include approximately 1,600 fewer premature fatalities, 890 fewer cases of chronic bronchitis, 2,200 fewer non fatal heart attacks, 2300 fewer hospitalizations ( for respiratory and cardiovascular disease combined  admissions and emergency room visits) and result in significant reductions in days of restricted activity due to respiratory illness ( with an estimate of one million fewer cases) and approximately 170,000 fewer work loss days. We also estimate substantial health improvements for children from reduced upper and lower respiratory illness, acute bronchitis, and asthma attacks.

Ozone health related benefits are expected to occur during the summer ozone season ( usually ranging from May to September in the Eastern U. S.). Since we did not conduct ozone modeling for this rulemaking, we are unable to quantify or monetize the ozone related benefits that will likely result from BART.

Table IV 2 presents the estimated monetary value of reductions in the incidence of health and welfare effects. Annual PM related health benefits and visibility benefits are estimated to range from approximately $ 2.2 to $ 14.3 billion annually. This 231 range of estimates reflects different scenarios about States actions in response to the BART rule and the applicable discount rate ( 3 percent or 7 percent). Estimated annual visibility benefits in southeastern and southwestern Class I areas range from approximately $ 80 million to $ 420 million annually in 2015. All monetized estimates are stated in 1999$. These estimates account for growth in real gross domestic product ( GDP) per capita between the present and 2015. As the table indicates, total benefits are driven primarily by the reduction in premature fatalities each year. Reductions in premature mortality account for over 90 percent of total benefits.

Table IV 3 presents the total monetized net benefits for 2015. This table also indicates with a " B" those additional health and environmental benefits of the rule that we were unable to quantify or monetize. These effects are additive to the estimate of total benefits. A listing of the benefit categories that could not be quantified or monetized in our benefit estimates are provided in Table IV 4. We are not able to estimate the magnitude of these unquantified and unmonetized benefits. While EPA believes there is considerable value to the public for the PMrelated benefit categories that could not be monetized, we believe these benefits may be small relative to those categories we were able to quantify and monetize. In contrast, EPA believes the monetary value of the ozone related premature mortality benefits 232 could be substantial, but we were unable to estimate the benefits for this rulemaking.

e. Quantified and Monetized Welfare Benefits Only a subset of the expected visibility benefits  those for Class I areas in the southeastern and southwestern U. S. are included in the monetary benefits estimates we project for this rule. We believe the benefits associated with these non health benefit categories are likely significant. For example, we are able to quantify significant visibility improvements in Class I areas in the Northeast and Midwest, but are unable at present to place a monetary value on these improvements. Similarly, we anticipate improvement in visibility in residential areas where people live, work and recreate in the nation for which we are currently unable to monetize benefits. For the Class I areas in the southeastern and southwestern U. S., we estimate annual benefits ranging from $ 80 to $ 420 million beginning in 2015 for visibility improvements. The value of visibility benefits in areas where we were unable to monetize benefits could also be substantial.

Table IV 1. Clean Air Visibility Rule: Estimated Reduction in Incidence of Adverse Health Effects in 2015a, b Health Effect Incidence Reduction Scenario 1 Scenario 2 Scenario 3 PM Related Endpoints:

Premature mortalityc 233 Adult, age 30 and over Infant, age < 1 year 400 1 1,600 4 2300 5 Chronic bronchitis ( adult, age 26 and over) 230 890 1,300 Non fatal myocardial infarction ( adults, age 18 and older) 570 2,200 3,000 Hospital admissions   respiratory ( all ages) d 140 510 720 Hospital admissions   cardiovascular ( adults, age > 18) e 120 450 640 Emergency room visits for asthma ( age 18 years and younger) 370 1,300 1,800 Acute bronchitis ( children, age 8   12) 550 2,100 3,000 Lower respiratory symptoms ( children, age 7   14) 6,600 25,000 36,000 Upper respiratory symptoms ( asthmatic children, age 9   18) 5,000 19,000 27,000 Asthma exacerbation ( asthmatic children, age 6   18) 8,100 31,000 44,000 Work loss days ( adults, age 18   65) 44,000 170,000 240,000 Minor restricted activity days ( MRADs) ( adult age, 18 65) 260,000 1,000,000 1,400,000 a Incidences are rounded to two significant digits. These estimates represent benefits from BART nationwide. The modeling used to derive these incidence estimates assumes the final CAIR program in the baseline including the CAIR promulgated rule and the proposal to include SO2 and annual NOx controls for New Jersey and Delaware. Modeling used to develop these estimates assumes annual SO2 and NOx controls for Arkansas for CAIR resulting in a slight understatement of the reported benefits and costs for BART. The recently promulgated CAMR has not been considered in the baseline for BART. b Ozone benefits are expected for BART, but are not estimated for this analysis. c Adult premature mortality based upon studies by Pope et al., 2002. Infant premature mortality is based upon studies by Woodruff, Grillo, and Schoendorf, 1997. d Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary disease ( COPD), pneumonia, and asthma. e Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and heart failure.

Table IV 2. Estimated Monetary Value of Reductions in Incidence of Health and Welfare Effects for the Clean Air Visibility Rule in 2015 ( in millions of 1999$) a, b 234 Health Effects: Scenario 1 Scenario 2 Scenario 3 Premature mortalityc, d Adult > 30 years 3% discount rate 7% discount rate Infant < 1 year $ 2,330 $ 1,960 $ 6.12 $ 9,180 $ 7,730 $ 23.8 $ 13,000 $ 10,900 $ 34.2 Chronic bronchitis ( adults, 26 and over) $ 90.5 $ 353 $ 498 Nonfatal acute myocardial infarctions 3% discount rate 7% discount rate $ 49.3 $ 45.8 $ 189 $ 175 $ 264 $ 245 Hospital admissions for respiratory causes $ 1.07 $ 4.03 $ 5.65 Hospital admissions for cardiovascular causes $ 2.6 $ 10.0 $ 14.1 Acute bronchitis ( children, age 8   12) $ 0.207 $ 0.79 $ 1.12 Lower respiratory symptoms ( children, 7   14) $ 0.109 $ 0.415 $ 0.587 Upper respiratory symptoms ( asthma, 9   11) $ 0.137 $ 0.523 $ 0.74 Emergency Room Visits for Asthma ( age 18 years and younger) $ 0.106 $ 0.362 $ 0.51 Asthma exacerbations $ 0.367 $ 1.4 $ 1.98 Work loss days $ 5.56 $ 22.4 $ 31.5 Minor restricted activity days ( MRADs) $ 13.8 $ 54.1 $ 76.3 Welfare Effects:

Recreational visibility, 81 Class I areas $ 84 $ 239 $ 416 Monetized Totale Base Estimate: 3% discount rate 7% discount rate $ 2,600+ B $ 2,200+ B $ 10,100+ B $ 8,600+ B $ 14,300+ B $ 12,200+ B a Monetary benefits are rounded to three significant digits. These estimates are nationwide with the exception of visibility benefits. Visibility benefits relate to Class I areas in the southeastern and southwestern United States. Ozone benefits are expected for BART, but have not been estimated for this analysis. The benefit estimates assume the final CAIR program in the baseline that includes the CAIR promulgated rule and the proposal to include SO2 and annual NOX controls for New Jersey and Delaware. Modeling used to develop the CAIR baseline estimates assumes annual SO2 and NOX controls for Arkansas resulting in a slight understatement of the reported benefits and costs for BART. The recently promulgated CAMR is not considered in the baseline for BART. b Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year of 2015. c Valuation assumes discounting over the SAB recommended 20 year segmented lag structure described in Chapter 4. Results show 3 percent and 7 percent discount rates consistent with EPA and OMB guidelines for preparing economic analyses ( U. S. EPA, 2000; OMB, 2003). 235 d Adult premature mortality based upon studies by Pope et al., 2002. Infant premature mortality based upon studies by Woodruff, Grillo, and Schoendorf, 1997. e B represents the monetary value of health and welfare benefits not monetized. A detailed listing is provided in Table IV 4. Totals rounded to nearest $ 100 million, and totals may not sum due to rounding.

Table IV 3. Summary of Annual Benefits, Costs, and Net Benefits of the Clean Air Visibility Rule in 2015a ( billions of 1999$)

Description Scenario 1 Scenario 2 Scenario 3 Social costsb 3 percent discount rate $ 0.4 $ 1.4 $ 2.3 7 percent discount rate $ 0.3 $ 1.5 $ 2.9 Social benefitsc, d, e 3 percent discount rate $ 2.6 + B $ 10.1 + B $ 14.3 + B 7 percent discount rate $ 2.2 + B $ 8.6 + B $ 12.2 + B Health related benefits:

3 percent discount rate $ 2.5 $ 9.8 $ 13.9 7 percent discount rate $ 2.1 $ 8.4 $ 11.8 Visibility benefits $ 0.08 $ 0.24 $ 0.42 Net benefits ( benefits costs) e, f 3 percent discount rate $ 2.2 + B $ 8.7 + B $ 12.0 + B 7 percent discount rate $ 1.9 + B $ 7.1 + B $ 9.3 + B a All estimates are rounded to three significant digits and represent annualized benefits and costs anticipated for the year 2015. Estimates assume a complete CAIR program in the baseline including the CAIR promulgated rule and the proposal to include SO2 and annual NOX controls for New Jersey and Delaware. Modeling used to develop the CAIR baseline estimates assumes annual SO2 and NOX controls for Arkansas resulting in a slight understatement of the reported benefits and costs for BART. The recently promulgated CAMR is not considered in the baseline for BART. b Note that costs are the annualized total costs of reducing pollutants including NOX and SO2 for the EGU source category in areas outside the CAIR region and excluding additional SO2 controls for the WRAP 309 States of UT, AZ, WY, OR or NM and include costs for non EGU sources nationwide. The discount rate used to conduct the analysis impacts the control strategies chosen for the non EGU source category resulting in greater level of controls under the 3 percent discount rate for Scenario 1. c As this table indicates, total benefits are driven primarily by PM related health benefits. The reduction in premature fatalities each year accounts for over 90 percent of total monetized benefits in 2015. Benefit estimates in this table are nationwide ( with the exception of visibility) and reflect NOX and SO2 reductions. Ozone benefits are expected to occur for this rule, but are not estimated in this analysis. Visibility benefits represent benefits in Class I areas in the southeastern and southwestern United States. 236 d Not all possible benefits or disbenefits are quantified and monetized in this analysis. B is the sum of all unquantified benefits and disbenefits. Potential benefit categories that have not been quantified and monetized are listed in Table IV 4. e Valuation assumes discounting over the SAB recommended 20 year segmented lag structure described in Chapter 4. Results reflect 3 percent and 7 percent discount rates consistent with EPA and OMB guidelines for preparing economic analyses ( U. S. EPA, 2000; OMB, 2003). f Net benefits are rounded to the nearest $ 100 million. Columnar totals may not sum due to rounding.

Table IV 4. Unquantified and Nonmonetized Effects of the Clean Air Visibility Rule Pollutant/ Effect Effects Not Included in Primary Estimates   Changes in:

Ozone   Healtha ° Premature mortalityb ° Chronic respiratory damage ° Premature aging of the lungs ° Nonasthma respiratory emergency room visits ° Increased exposure to Uvb ° Hospital Admissions : respiratory ° Emergency room visits for asthma ° Minor restricted activity days ° School loss days ° Asthma attacks ° Cardiovascular emergency room visits ° Acute respiratory symptoms Ozone   Welfare ° Yields for:   commercial forests,   fruits and vegetables, and   commercial and noncommercial crops ° Damage to urban ornamental plants ° Recreational demand from damaged forest aesthetics ° Ecosystem functions ° Increased exposure to UVb PM   Healthc ° Premature mortality: short term exposuresd ° Low birth weight ° Pulmonary function ° Chronic respiratory diseases other than chronic bronchitis ° Nonasthma respiratory emergency room visits ° Exposure to UVb (+/) e PM   Welfare ° Visibility in many Class I areas ° Residential and recreational visibility in non Class I areas ° Soiling and materials damage ° Ecosystem functions ° Exposure to UVb (+/) e Pollutant/ Effect Effects Not Included in Primary Estimates   Changes in:

237 Nitrogen and Sulfate Deposition   Welfare ° Commercial forests due to acidic sulfate and nitrate deposition ° Commercial freshwater fishing due to acidic deposition ° Recreation in terrestrial ecosystems due to acidic deposition ° Existence values for currently healthy ecosystems ° Commercial fishing, agriculture, and forests due to nitrogen deposition ° Recreation in estuarine ecosystems due to nitrogen deposition ° Ecosystem functions ° Passive fertilization due to nitrogen deposition Mercury Healthg ° Incidence of neurological disorders ° Incidence of learning disabilities ° Incidence of developmental delays ° Potential reproductive effectsf ° Potential cardiovascular effectsf, including:   Altered blood pressure regulationf   Increased heart rate variabilityf   Incidence of myocardial infarctionf Mercury Deposition Welfareg ° Impacts on birds and mammals ( e. g., reproductive effects) ° Impacts to commercial, subsistence, and recreational fishing a In addition to primary economic endpoints, there are a number of biological responses that have been associated with ozone health effects including increased airway responsiveness to stimuli, inflammation in the lung, acute inflammation and respiratory cell damage, and increased susceptibility to respiratory infection. The public health impact of these biological responses may be partly represented by our quantified endpoints. b Premature mortality associated with ozone is not currently included in the primary analysis. Recent evidence suggests that short term exposures to ozone may have a significant effect on daily mortality rates, independent of exposure to PM. EPA is currently conducting a series of meta analyses of the ozone mortality epidemiology literature. EPA will consider including ozone mortality in primary benefits analyses once a peer reviewed methodology is available. c In addition to primary economic endpoints, there are a number of biological responses that have been associated with PM health effects including morphological changes and altered host defense mechanisms. The public health impact of these biological responses may be partly represented by our quantified endpoints. d While some of the effects of short term exposures are likely to be captured in the estimates, there may be premature mortality due to short term exposure to PM not captured in the cohort study upon which the primary analysis is based. e May result in benefits or disbenefits. See discussion in Section 5.3.4 for more details. f These are potential effects as the literature is insufficient. g Mercury emission reductions are not anticipated for BART for the EGU source category due to the cap and trade program promulgated for the Clean Air Mercury Rule ( March 2005); however, the geographic location of mercury reductions may change as a result of this rule. EPA believes any such effects for these sources would be minimal. Mercury reductions are expected for the non EGU source categories. The mercury reduction for BART from the non EGU source categories is expected to be small in comparison to reductions resulting from the recently promulgated Clean Air Interstate Rule and the Clean Air Mercury Rule ( March 2005). 238 3. How Do the Benefits Compare to the Costs of This Final Rule?

In estimating the net benefits of regulation, the appropriate cost measure is ` social costs.' Social costs represent the welfare costs of the rule to society. The social costs of this rule for the EGU and non EGU sector sources are estimated to range from approximately $ 0.3 to $ 2.9 billion in 2015. This range depends upon the control scenario assumed and applicable discount rates of 3 percent and 7 percent. The net benefits ( social benefits minus social costs) of the rule range from approximately $ 1.9 + B billion or $ 12.0 + B billion depending upon the scenario evaluated and the applicable discount rate ( 3 and 7 percent)

annually in 2015. Implementation of the rule is expected to provide society with a substantial net gain in social welfare based on economic efficiency criteria.

There is uncertainty surrounding the actions States are likely to take to comply with the BART guidelines. States will determine BART eligible sources based upon CAA criteria, determine those BART eligible sources reasonably anticipated to cause or contribute to visibility impairment in Class I areas and then apply a 5 factor test for BART determinations. The range of estimated benefits, costs, and resulting net benefits for BART reflects the uncertainty concerning States responses to BART and 239 represents EPA's best estimates of the benefit cost outcomes of alternative compliance scenarios.

The annualized cost of BART, as quantified here, is EPA's best assessment of the cost of actions States are likely to take to comply with the rule. The EGU portion of these costs are generated from rigorous economic modeling of changes in the power sector due to the BART rule and guidelines. This type of analysis using IPM has undergone peer review and been upheld in Federal courts. The direct cost includes, but is not limited to, capital investments in pollution controls, operating expenses of the pollution controls, investments in new generating sources, and additional fuel expenditures. The EPA believes that these costs reflect, as closely as possible, the additional costs of the BART rule and guidelines to industry. However, there may exist certain costs that EPA has not quantified in these estimates.

These costs may include costs of transitioning to the BART, such as the costs associated with the retirement of smaller or less efficient EGUs, employment shifts as workers are retrained at the same company or re employed elsewhere in the economy. Costs may be understated since an optimization model was employed that assumes cost minimization, and the regulated community may not react in the same manner to comply with the rule. Although EPA has not quantified these potential additional costs, the Agency believes that they are small compared to the quantified costs of the program on the power sector. The annualized cost estimates 240 presented are the best and most accurate based upon available information.

The non EGU portion of these costs are generated from extensive cost modeling based on applying illustrative regulatory scenarios to the non EGU source categories. These costs represent potential impacts to non EGU sources from State imposed BART requirements.

The direct cost includes, but is not limited to, capital investments in pollution controls, operating and maintenance expenses of the pollution controls, and additional fuel expenditures. The EPA believes that these costs reflect, as closely as possible, the potential additional costs of the BART rule and guidelines to industries with non EGU sources. However,

there may exist certain costs that EPA has not quantified in these estimates. These costs may include costs of transitioning to the BART rule and guidelines, such as the costs associated with the retirement of smaller or less efficient non EGUs, employment shifts as workers are retrained at the same company or re employed elsewhere in the economy, and costs associated with applying both SO2 and NOX controls at one facility at the same time. Costs may be understated since the non EGU cost modeling presumed a leastcost approach, and the potentially regulated community may not react in the same manner to comply with the rules. Although EPA has not quantified these costs, the Agency believes that they are small compared to the quantified costs of the program on industries with potentially affected non EGU sources. The 241 annualized cost estimates presented are the best and most accurate based upon available information. In a separate analysis, EPA estimates the indirect costs and impacts of higher electricity prices and costs applicable to the non EGU sectors on the entire economy [ see Regulatory Impact Analysis for the Final Clean Visibility Rule, Appendix A ( June 2005)].

The costs presented here are EPA's best estimate of the direct private costs of the BART rule and guidelines. For purposes of benefit cost analysis of this rule, EPA has also estimated the additional costs of BART using alternate discount rates for calculating the social costs, parallel to the range of discount rates used in the estimates of the benefits of BART ( 3 percent and 7 percent). Using these alternate discount rates, the social costs of BART range from $ 0.3 to $ 2.9 billion in 2015. ( Note the portion of these annual costs associated with non EGU sources represents incremental private cost estimates that are used as a proxy for the social costs of the rule.)

Every benefit cost analysis examining the potential effects of a change in environmental protection requirements is limited to some extent by data gaps, limitations in model capabilities ( such as geographic coverage), and uncertainties in the underlying scientific and economic studies used to configure the benefit and cost models. Gaps in the scientific literature often result in the inability to estimate quantitative changes in health and environmental effects. Gaps in the economics literature often 242 result in the inability to assign economic values even to those health and environmental outcomes that can be quantified. While uncertainties in the underlying scientific and economics literatures ( that may result in overestimation or underestimation of benefits) are discussed in detail in the economic analyses and its supporting documents and references, the key uncertainties which have a bearing on the results of the benefit cost analysis of this rule include the following:

° Uncertainty concerning actions States will undertake to comply with BART;

° EPA's inability to quantify potentially significant benefit categories;

° Uncertainties in population growth and baseline incidence rates;

° Uncertainties in projection of emissions inventories and air quality into the future;

° Uncertainty in the estimated relationships of health and welfare effects to changes in pollutant concentrations including the shape of the C R function, the size of the effect estimates,

and the relative toxicity of the many components of the PM mixture;

° Uncertainties in exposure estimation; and ° Uncertainties associated with the effect of potential future actions to limit emissions. 87 Mrozek, J. R. and L. O. Taylor, What determines the value of a life? A Meta Analysis, Journal of Policy Analysis and Management 21 ( 2), pp. 253 270.

243 Despite these uncertainties, we believe the benefit cost analysis provides a reasonable indication of the expected economic benefits of the rulemaking in future years under a set of reasonable assumptions.

In valuing reductions in premature fatalities associated with PM, we used a value of $ 5.5 million per statistical life. This represents a central value consistent with a range of values from $ 1 to $ 10 million suggested by recent meta analyses of the wagerisk value of statistical life ( VSL) literature. 87 The benefits estimates generated for this rule are subject to a number of assumptions and uncertainties, that are discussed throughout the Regulatory Impact Analysis document [ Regulatory Impact Analysis for the Final Clean Air Visibility Rule ( April 2005)]. As Table IV 2 indicates, total benefits are driven primarily by the reduction in premature fatalities each year.

Elaborating on the previous uncertainty discussion, some key assumptions underlying the primary estimate for the premature mortality category include the following:

( 1) EPA assumes inhalation of fine particles is causally associated with premature death at concentrations near those experienced by most Americans on a daily basis.

Plausible biological mechanisms for this effect have 88U. S. EPA. ( 2004). Air Quality Criteria for Particulate Matter. Research Triangle Park, NC: National Center for Environmental Assessment RTP Office; Report No. EPA/ 600/ P 99/ 002aD.

244 been hypothesized for the endpoints included in the primary analysis and the weight of the available epidemiological evidence supports an assumption of causality.

( 2) EPA assumes all fine particles, regardless of their chemical composition, are equally potent in causing premature mortality. This is an important assumption,

because the proportion of certain components in the PM mixture produced via precursors emitted from EGUs may differ significantly from direct PM released from automotive engines and other industrial sources, but no clear scientific grounds exist for supporting differential effects estimates by particle type.

( 3) EPA assumes the C R function for fine particles is approximately linear within the range of ambient concentrations under consideration. In the PM Criteria Document, EPA recognizes that for individuals and specific health responses there are likely threshold levels, but there remains little evidence of thresholds for PM related effects in populations. 88 Where potential threshold levels have been suggested, they are at fairly low levels with increasing uncertainty about 245 effects at lower ends of the PM2.5 concentration ranges.

Thus, EPA estimates include health benefits from reducing the fine particles in areas with varied concentrations of PM, including both regions that are in attainment with fine particle standard and those that do not meet the standard.

The EPA recognizes the difficulties, assumptions, and inherent uncertainties in the overall enterprise. The analyses upon which the BART rule and guidelines are based were selected from the peer reviewed scientific literature. We used up to date assessment tools, and we believe the results are highly useful in assessing this rule.

There are a number of health and environmental effects that we were unable to quantify or monetize. A complete benefit cost analysis of BART requires consideration of all benefits and costs expected to result from the rule, not just those benefits and costs which could be expressed here in dollar terms. A listing of the benefit categories that were not quantified or monetized in our estimate are provided in Table IV 4. These effects are denoted by " B" in Table IV 3 above, and are additive to the estimates of benefits.

4. What are the Unquantified and Unmonetized Benefits of BART Emissions Reductions? 246 Important benefits beyond the human health and welfare benefits resulting from reductions in ambient levels of PM2.5 and ozone are expected to occur from this rule. These other benefits occur both directly from NOX and SO2 emissions reductions, and indirectly through reductions in co pollutants such as mercury. These benefits are listed in Table IV 4. Some of the more important examples include: Reductions in NOX and SO2 emissions required by BART will reduce acidification and, in the case of NOX,

eutrophication of water bodies. Reduced nitrate contamination of drinking water is another possible benefit of the rule. This final rule will also reduce acid and particulate deposition that cause damages to cultural monuments, as well as, soiling and other materials damage.

To illustrate the important nature of benefit categories we are currently unable to monetize, we discuss two categories of public welfare and environmental impacts related to reductions in emissions required by BART: reduced acid deposition and reduced eutrophication of water bodies.

a. What Are the Benefits of Reduced Deposition of Sulfur and Nitrogen to Aquatic, Forest, and Coastal Ecosystems?

Atmospheric deposition of sulfur and nitrogen, more commonly known as acid rain, occurs when emissions of SO2 and NOX react in the atmosphere ( with water, oxygen, and oxidants) to form various acidic compounds. These acidic compounds fall to earth in either 247 a wet form ( rain, snow, and fog) or a dry form ( gases and particles). Prevailing winds can transport acidic compounds hundreds of miles, across State borders. Acidic compounds ( including small particles such as sulfates and nitrates) cause many negative environmental effects, including acidification of lakes and streams, harm to sensitive forests, and harm to sensitive coastal ecosystems.

iv. Acid Deposition and Acidification of Lakes and Streams The extent of adverse effects of acid deposition on freshwater and forest ecosystems depends largely upon the ecosystem's ability to neutralize the acid. The neutralizing ability [ key indicator is termed Acid Neutralizing Capacity ( ANC)] depends largely on the watershed's physical characteristics: geology, soils, and size.

Waters that are sensitive to acidification tend to be located in small watersheds that have few alkaline minerals and shallow soils. Conversely, watersheds that contain alkaline minerals,

such as limestone, tend to have waters with a high ANC. Areas especially sensitive to acidification include portions of the Northeast ( particularly, the Adirondack and Catskill Mountains,

portions of New England, and streams in the mid Appalachian highlands) and southeastern streams.

v. Acid Deposition and Forest Ecosystem Impacts Current understanding of the effects of acid deposition on forest ecosystems focuses on the effects of ecological processes 248 affecting plant uptake, retention, and cycling of nutrients within forest ecosystems. Recent studies indicate that acid deposition is at least partially responsible for decreases in base cations ( calcium, magnesium, potassium, and others) from soils in the northeastern and southeastern United States. Losses of calcium from forest soils and forested watersheds have now been documented as a sensitive early indicator of soil response to acid deposition for a wide range of forest soils in the United States.

In red spruce stands, a clear link exists between acid deposition, calcium supply, and sensitivity to abiotic stress.

Red spruce uptake and retention of calcium is impacted by acid deposition in two main ways: leaching of important stores of calcium from needles and decreased root uptake of calcium due to calcium depletion from the soil and aluminum mobilization. These changes increase the sensitivity of red spruce to winter injuries under normal winter conditions in the Northeast, result in the loss of needles, slow tree growth, and impair the overall health and productivity of forest ecosystems in many areas of the eastern United States. In addition, recent studies of sugar maple decline in the Northeast demonstrate a link between low base cation availability, high levels of aluminum and manganese in the soil,

and increased levels of tree mortality due to native defoliating insects.

Although sulfate is the primary cause of base cation leaching,

nitrate is a significant contributor in watersheds that are nearly 249 nitrogen saturated. Base cation depletion is a cause for concern because of the role these ions play in surface water acid neutralization and their importance as essential nutrients for tree growth ( calcium, magnesium and potassium).

This regulatory action will decrease acid deposition in the transport region and is likely to have positive effects on the health and productivity of forest systems in the region.

vi. Coastal Ecosystems Since 1990, a large amount of research has been conducted on the impact of nitrogen deposition to coastal waters. Nitrogen is often the limiting nutrient in coastal ecosystems. Increasing the levels of nitrogen in coastal waters can cause significant changes to those ecosystems. In recent decades, human activities have accelerated nitrogen nutrient inputs, causing excessive growth of algae and leading to degraded water quality and associated impairments of estuarine and coastal resources.

Atmospheric deposition of nitrogen is a significant source of nitrogen to many estuaries. The amount of nitrogen entering estuaries due to atmospheric deposition varies widely, depending on the size and location of the estuarine watershed and other sources of nitrogen in the watershed. There are a few estuaries where atmospheric deposition of nitrogen contributes well over 40 percent of the total nitrogen load; however, in most estuaries for which estimates exist, the contribution from atmospheric 250 deposition ranges from 15 30 percent. The area of the country with the highest air deposition rates ( 30 percent deposition rates) includes many estuaries along the northeast seaboard from Massachusetts to the Chesapeake Bay and along the central Gulf of Mexico coast.

In 1999, National Oceanic and Atmospheric Administration ( NOAA)

published the results of a 5 year national assessment of the severity and extent of estuarine eutrophication. An estuary is defined as the inland arm of the sea that meets the mouth of a river. The 138 estuaries characterized in the study represent more than 90 percent of total estuarine water surface area and the total number of U. S. estuaries. The study found that estuaries with moderate to high eutrophication represented 65 percent of the estuarine surface area.

Eutrophication is of particular concern in coastal areas with poor or stratified circulation patterns, such as the Chesapeake Bay, Long Island Sound, and the Gulf of Mexico. In such areas,

the " overproduced" algae tends to sink to the bottom and decay,

using all or most of the available oxygen and thereby reducing or eliminating populations of bottom feeder fish and shellfish,

distorting the normal population balance between different aquatic organisms, and in extreme cases, causing dramatic fish kills.

Severe and persistent eutrophication often directly impacts human activities. For example, fishery resource losses can be caused directly by fish kills associated with low dissolved oxygen and 251 toxic blooms. Declines in tourism occur when low dissolved oxygen causes noxious smells and floating mats of algal blooms create unfavorable aesthetic conditions. Risks to human health increase when the toxins from algal blooms accumulate in edible fish and shellfish, and when toxins become airborne, causing respiratory problems due to inhalation. According to the NOAA report, more than half of the nation's estuaries have moderate to high expressions of at least one of these symptoms   an indication that eutrophication is well developed in more than half of U. S.

estuaries.

This rule is anticipated to reduce nitrogen deposition in the nation. Thus, reductions in the levels of nitrogen deposition will have a positive impact upon current eutrophic conditions in estuaries and coastal areas in the country.

5. Are There Health or Welfare Disbenefits of the BART that Have Not Been Quantified?

In contrast to the additional benefits of the rule discussed above, it is also possible that this rule will result in disbenefits in some areas of the region. Current levels of nitrogen deposition in these areas may provide passive fertilization for forest and terrestrial ecosystems where nutrients are a limiting factor and for some croplands.

The effects of ozone and PM on radiative transfer in the atmosphere can also lead to effects of uncertain magnitude and 252 direction on the penetration of ultraviolet light and climate.

Ground level ozone makes up a small percentage of total atmospheric ozone ( including the stratospheric layer) that attenuates penetration of ultraviolet  b ( UVb) radiation to the ground. The EPA's past evaluation of the information indicates that potential disbenefits would be small, variable, and with too many uncertainties to attempt quantification of relatively small changes in average ozone levels over the course of a year ( EPA,

2005a). The EPA's most recent provisional assessment of the currently available information indicates that potential but unquantifiable benefits may also arise from ozone related attenuation of UVb radiation ( EPA, 2005b). Sulfate and nitrate particles also scatter UVb, which can decrease exposure of horizontal surfaces to UVb, but increase exposure of vertical surfaces. In this case as well, both the magnitude and direction of the effect of reductions in sulfate and nitrate particles are too uncertain to quantify ( EPA, 2004). Ozone is a greenhouse gas,

and sulfates and nitrates can reduce the amount of solar radiation reaching the earth, but EPA believes that we are unable to quantify any net climate related disbenefit or benefit associated with the combined ozone and PM reductions in this rule.

B. Paperwork Reduction Act Today's rule clarifies, but does not modify the information collection requirements for BART. Therefore, this action does not impose any new information collection burden. However, the OMB has 253 previously approved the information collection requirements contained in the existing regulations [ 40 CFR Part 51] under the provisions of the Paperwork Reduction Act, 44 U. S. C. 3501 et seq.

and has assigned OMB control number 2060 0421, EPA ICR number 1813.04. A copy of the OMB approved Information Collection Request ( ICR) may be obtained from Susan Auby, Collection Strategies Division; U. S. Environmental Protection Agency ( 2822T);

1200 Pennsylvania Ave., NW, Washington, DC 20460 or by calling ( 202) 566 1672.

Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting,

validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources;

complete and review the collection of information; and transmit or otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The OMB control 254 numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act EPA has determined that it is not necessary to prepare a regulatory flexibility analysis in connection with this final rule.

For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: ( 1) a small business as defined by the Small Business Administrations' regulations at 13 CFR 121.201; ( 2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and ( 3) a small organization that is any not for profit enterprise which is independently owned and operated and is not dominant in its field.

Table IV 5 lists potentially impacted BART industry source categories and the current applicable small business criteria established by the Small Business Administration.

Table IV 5. Potentially Affected BART Source Categories and Small Business Size Standards NAICSa Description Size Standardb 221112c, d Fossil fuel fired electric utility steam generating units. electric output

4 million megawatt hours 212112 Bituminous Coal Underground Mining 500 Employees 311221 Wet Corn Milling 750 Employees 311311 Sugarcane Mills 500 Employees 255 311313 Beet Sugar Manufacturing 750 Employees 31214 Distilleries 750 Employees 321212 Softwood Veneer and Plywood Manufacturing 500 Employees 322121 Paper ( except Newsprint) Mills ( pt) 750 Employees 325188 All Other Basic Inorganic Chemical Manufacturing ( pt) 1,000 employees 325221 Cellulosic Organic Fiber Manufacturing 1,000 Employees 325222 Noncellulosic Organic Fiber Manufacturing 1,000 Employees 325182 Carbon Black Manufacturing ( pt) 500 Employees 327213 Glass Container Manufacturing 750 Employees 327212 Other Pressed and Blown Glass and Glassware Manufacturing 750 Employees 32731 Cement Manufacturing 750 Employees 32741 Lime Manufacturing 500 Employees 331111 Iron and Steel Mills 1,000 Employees 331315 Aluminum Sheet, Plate, and Foil Manufacturing 750 Employees 331319 Other Aluminum Rolling and Drawing 750 Employees 22121 Natural Gas Distribution 500 Employees a North American Industry Classification System. b Small Business Administration Size Criteria c Include NAICS categories for source categories that own and operate electric generating units only. d Federal, State, or local government owned and operated establishments are classified according to the activity in which they are engaged.

After considering the economic impacts of today's final rule on small entities, EPA has concluded that this action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any direct requirements 256 on small entities. The rule would apply to States, not to small entities.

Courts have interpreted the RFA to require a regulatory flexibility analysis only when small entities will be subject to the requirements of the rule. See Motor and Equip. Mfrs. Ass'n v.

Nichols, 142 F. 3d 449 ( D. C. Cir., 1998); United Distribution Cos. v. FERC, 88 F. 3d 1105, 1170 ( D. C. Cir., 1996); Mid Tex Elec. Co op, Inc. v. FERC, 773 F . 2d 327, 342 ( D. C. Cir., 1985)

( agency's certification need only consider the rule's impact on entities subject to the rule).

BART requirements in the regional haze rule require BART determinations for a select list of major stationary sources defined by section 169A( g)( 7) of the CAA. However, as noted in the proposed and final regional haze rules, the State's determination of BART for regional haze involves some State discretion in considering a number of factors set forth in section 169A( g)( 2), including the costs of compliance.

Further, the final regional haze rule allows States to adopt alternative measures in lieu of requiring the installation and operation of BART at these major stationary sources. As a result,

the potential consequences of the BART provisions of the regional haze rule ( as clarified in today's rule) at specific sources are speculative. Any requirements for BART will be established by State rulemakings. The States would accordingly exercise 89An ORIS code is a 4 digit number assigned by the Energy Information Administration ( EIA) at the U. S. Department of Energy to power plants owned by utilities.

257 substantial intervening discretion in implementing the BART requirements of the regional haze rule and today's guidelines.

EPA has undertaken an illustrative analysis to assess the potential small business impacts of BART based upon EPA's assessment of the actions States may take to comply with the BART rule and guidelines.

For this final rule, the engineering analysis conducted for the rulemaking identified 491 EGU units potentially affected by the outcome of this rule. Using unit ORIS89 numbers and the Energy Information Administration's publicly available 2002 electric generator databases ( Form EIA 860 and Form EIA 861), we identified utility names, nameplate capacity for affected units, and net electricity generation potentially affected by this rule. After identifying these units, we excluded units that are located in CAIR regions in order to identify those units most likely affected by the BART regulatory program. After an assessment of the ownership of these remaining units, we identified 2 potentially affected small entities in the EGU sector. We used a cost

tosales approach ( comparison of expected annual costs of emission controls to annual sales revenue or government entity budgets for the affected small entity) to assess the potential impacts of BART for these affected entities. Using data from the cost analysis, 258 EPA found one these small entities may experience a cost to sales ratio of 3 percent of sales. The other affected small entity in the EGU sector does not face additional compliance costs associated with the rule.

The engineering analysis conducted for the rulemaking identified over 2,000 records associated with affected non EGU units ( all source categories listed in table IV 5 other than EGUs  NAICS 221112) potentially affected by the rule. Using publicly available sales and employment databases, plant names, and locations, we identified 279 entities and potential owners. In order to classify affected ultimate entities as small or large,

EPA collected information on facility names, parent company sales,

and parent company employment data. Data were compared with the appropriate size standard and entities were classified as small or large according to Small Business Administration's definitions.

For example, ultimate parent companies of cement producers with employment exceeding 750 employees were classified as a large companies. This process identified 36 small companies and 195 large companies potentially impacted as a result promulgating this rule. The remaining 48 entities were either government owned ( 25 entities, primarily state universities) or parent ownership could not be definitively identified using available databases ( 23 entities).

Using the cost to sales approach described above, EPA found that five non EGU source category small entities may potentially 259 be affected at or above 3 percent. Two entities may be affected between one and three percent, and the remaining small entity cost to sales ratios are below one percent. The median cost

tosales ratio for non EGU source category small entities is estimated to be 0.3 percent and could potentially range from 0 to 20 percent. As previously discussed this analysis is illustrative and based upon EPA's assessment of actions States are likely to take as a result of the BART rule and guidelines promulgated today.

D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 ( Public Law 104 4) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under section 202 of UMRA, 2 U. S. C. 1532, EPA generally must prepare a written statement, including a cost benefit analysis, for any proposed or final rule that " includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $ 100,000,000 or more ...

in any one year." A " Federal mandate" is defined under section 421( 6), 2 U. S. C. 658( 6), to include a " Federal intergovernmental mandate." A " Federal intergovernmental mandate," in turn, is defined to include a regulation that " would impose an enforceable duty upon State, local, or tribal governments," section 421( 5)( A)( I), 2 U. S. C. 658( 5)( A)( I). A " Federal private sector 260 mandate" includes a regulation that " would impose an enforceable duty upon the private sector," with certain exceptions, section 421( 7)( A), 2 U. S. C. 658( 7)( A).

Before promulgating an EPA rule for which a written statement is needed under section 202 of UMRA, section 205, 2 U. S. C. 1535,

of UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost effective, or least burdensome alternative that achieves the objectives of the rule.

The RIA prepared by EPA and placed in the docket for this rulemaking is consistent with the requirements of section 202 of the UMRA. Furthermore, EPA is not directly establishing any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments. Thus, EPA is not obligated to develop under section 203 of the UMRA a small government agency plan. Further, EPA carried out consultations with the governmental entities affected by this rule in a manner consistent with the intergovernmental consultation provisions of section 204 of the UMRA.

The EPA also believes that today's rule meets the UMRA requirement in section 205 to select the least costly and burdensome alternative in light of the statutory mandate for BART.

As explained above, we are promulgating the BART rule and guidelines following the D. C. Circuit's remand of the BART provisions in the 1999 regional haze rule. The 1999 regional haze 261 rule provides substantial flexibility to the States, allowing them to adopt alternative measures such as a trading program in lieu of requiring the installation and operation of BART. The provisions governing such alternative measures were affected by a more recent decision of the D. C. Circuit and will be revised in a separate rulemaking process. Today's rule will not restrict the ability of the States to adopt such alternatives measures once those revisions to the regional haze rule have been made final. This will provide an alternative to BART that gives States the ability to choose the least costly and least burdensome alternative.

Today's rule also allows States affected by the Clean Air Interstate Rule to utilize emission reductions achieved by EGUs under that rule to satisfy BART requirements for those sources.

This will provide those States with another cost effective and less burdensome alternative to BART.

The EPA is not reaching a final conclusion as to the applicability of UMRA to today's rulemaking action. The reasons for this are discussed in the 1999 regional haze rule ( 64 FR 35762) and in the 2001 BART guidelines proposal ( 66 FR 38111

38112). Notwithstanding this, the discussion in chapter 9 of the RIA constitutes the UMRA statement that would be required by UMRA if its statutory provisions applied. Consequently, we continue to believe that it is not necessary to reach a conclusion as to the applicability of the UMRA requirements.

E. Executive Order 13132: Federalism 262 Executive Order 13132, entitled Federalism ( 64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure " meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications." Such policies are defined in the Executive Order to include regulations that have " substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government." Under Section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the regulation. The EPA also may not issue a regulation that has federalism implications and that preempts State law unless EPA consults with State and local officials early in the process of developing the regulation.

We have concluded that today's action, promulgating the BART guidelines, will not have federalism implications, as specified in section 6 of the Executive Order 13132 ( 64 FR 43255, August 10,

1999) because it will not have substantial direct effects on the States, nor substantially alter the relationship or the distribution of power and responsibilities between the States and 263 the Federal government. Nonetheless, we consulted with a wide scope of State and local officials, including the National Governors Association, the National League of Cities, the National Conference of State Legislatures, the U. S. Conference of Mayors,

the National Association of Counties, the Council of State Governments, the International City/ County Management Association,

and the National Association of Towns and Townships during the course of developing this rule.

F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments Executive Order 13175, entitled " Consultation and Coordination with Indian Tribal Governments" ( 65 FR 67249, November 9, 2000),

requires EPA to develop an accountable process to ensure " meaningful and timely input by Tribal officials in the development of regulatory policies that have Tribal implications."

This rule does not have Tribal implications as defined by Executive Order 13175. It does not have a substantial direct effect on one or more Indian Tribes. Furthermore, this rule does not affect the relationship or distribution of power and responsibilities between the Federal government and Indian Tribes.

The CAA and the TAR establish the relationship of the Federal government and Tribes in developing plans to address air quality issues, and this rule does nothing to modify that relationship.

This rule does not have Tribal implications, and Executive Order 13175 does not apply to this rulemaking. 264 G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks Executive Order 13045, " Protection of Children from Environmental Health Risks and Safety Risks" ( 62 FR 19885, April 23, 1997) applies to any rule that ( 1) is determined to be " economically significant" as defined under Executive Order 12866 and ( 2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, Section 5   501 of the Order directs the Agency to evaluate the environmental health or safety effects of the planned rule on children and to explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health and safety risks, such that the analysis required under Section 5 501 of the Order has the potential to influence the regulation. The BART rule and guidelines are not subject to the Executive Order because the rule and guidelines do not involve decisions on environmental health or safety risks that may disproportionately affect children. The EPA believes that the emissions reductions from the control strategies considered in this rulemaking will further improve air quality and will further improve children's health. 265 H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use We have conducted a Regulatory Impact Analysis for this rule,

that includes an analysis of energy impacts and is contained in the docket ( Docket No. OAR 2002 0076). This rule is not a " significant energy action" as defined in Executive Order 13211,

" Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use" ( 66 Fed. Reg. 28355 ( May 22, 2001))

because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This rule is not a " significant energy action," because it will have less than a 1 percent impact on the cost of energy production and does not exceed other factors described by OMB that may indicate a significant adverse effect. ( See, " Guidance for Implementing E. O.

13211," OMB Memorandum 01 27 ( July 13, 2001)

www. whitehouse. gov/ omb/ memoranda/ m01 27. html.) Specifically, the presumptive requirements for EGUs for this rule, when fully implemented, are expected have a 0.25 percent impact on the cost of energy production for the nation in 2015. States must use the guidelines in making BART determinations for power plants with a generating capacity in excess of 750 MW. Our analysis evaluates the impact of the presumptive requirements for these sources and does not consider any possible additional controls for EGU sources or non EGU sources that States may require. Although States may choose to use the guidelines in establishing BART limits for non 266 EGUs , ultimately States will determine the sources subject to BART and the appropriate level of control for such sources.

We are finalizing today's rule following the D. C. Circuit's remand of the BART provisions in the 1999 regional haze rule. The 1999 regional haze rule provides substantial flexibility to the States, allowing them to adopt alternative measures such as a trading program in lieu of requiring the installation and operation of BART. The provisions governing such alternative measures were affected by a more recent decision of the D. C.

Circuit and will be revised in a separate rulemaking process.

This rulemaking will not restrict the ability of the States to adopt alternative measures once those revisions to the regional haze rule have been made final. This will provide an alternative to BART that reduces the overall cost of the regulation and its impact on the energy supply. Today's rule also allows States affected by the Clean Air Interstate Rule to utilize emission reductions achieved by EGUs under that rule to satisfy BART requirements for those sources. This will provide those States with another cost effective and less burdensome alternative to BART. The BART rule itself offers flexibility by offering the choice of meeting SO2 requirements between an emission rate and a removal rate.

For a State that chooses to require case by case BART, today's rule would establish presumptive levels of controls for SO2 and NOX for certain EGUs that the State finds are subject to BART. 267 Based on its consideration of various factors set forth in the regulations; however, a State may conclude that a different level of control is appropriate. The States will accordingly exercise substantial intervening discretion in implementing the final rule.

Additionally, we have assessed that the compliance dates for the rule will provide adequate time for EGUs to install the required emission controls.

I. National Technology Transfer and Advancement Act Section 12( d) of the National Technology Transfer Advancement Act of 1995 ( NTTAA), Public Law No. 104 113, § 12( d)( 15 U. S. C. 272 note) directs EPA to use voluntary consensus standards ( VCS) in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e. g., materials specifications,

test methods, sampling procedures, and business practices) that are developed or adopted by VCS bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the EPA decides not to use VCS.

This action does not involve technical standards; thus, EPA did not consider the use of any VCS.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations Executive Order 12898, " Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations," requires federal agencies to consider the impact of 90 U. S. Environmental Protection Agency, 1998. Guidance for Incorporating Environmental Justice Concerns in EPA's NEPA Compliance Analyses. Office of Federal Activities, Washington, D. C., April, 1998.

268 programs, policies, and activities on minority populations and low income populations. According to EPA guidance90, agencies are to assess whether minority or low income populations face risks or a rate of exposure to hazards that are significant and that " appreciably exceed or is likely to appreciably exceed the risk or rate to the general population or to the appropriate comparison group." ( EPA, 1998)

In accordance with E. O. 12898, the Agency has considered whether this rule may have disproportionate negative impacts on minority or low income populations. Negative impacts to these sub populations that appreciably exceed similar impacts to the general population are not expected because the Agency expects this rule to lead to reductions in air pollution emissions and exposures generally.

K. Congressional Review Act The Congressional Review Act, 5 U. S. C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996,

generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this rule and other required information to the 269 U. S. Senate, the U. S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A Major rule cannot take effect until 60 days after it is published in the Federal Register. This action is a " major rule" as defined by 5 U. S. C. 804( 2).