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- 1 **CHAPTER 6**  **STATUTORY AND EXECUT IVE**  **O RDER**  **A NALYSES**  **6 .1**  **Synopsis** This chapter presents discussion and analyses relating to Executive Orders and statutory requirements relevant to the proposed EGU GHG NSPS. 1 We discuss analyses conducted to meet the requirements of Executive Orders 12866 and 13563, as well as, potential impacts to affected small entities required by the Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA). We also d i s cuss the requirements of the Unfunded Mandates Reform Act of 1995 (UMRA) and assess the impact of the proposed rule on state, local and t ribal governments and the private sector, along with the analysis conducted to comply with the P aperwork Reduction Act (PRA). In addition, we address the requirements of Executive Order (EO) 13045: Protection of Children from Environmental Health and Safety Risks; EO 13132: Federalism; EO 13175: Consultation and Coordination with Indian Tribal Gove rnments; EO 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low
- Income Populations; EO 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use ; and the National Technology Transfer and Advancement A ct (NTTAA)
. **6 .2**  **Executive Order 12866, Regulatory Planning and Review, and Executive Order 13563, Improving Regulation and Regulatory Review**  Under EO 12866 (58 FR 51,735, October 4, 1993), this action is a “significant regulatory action” because it “raises novel legal or policy issues arising out of legal mandates
. ” Accordingly, EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been documented in the docket for this action. In addition, EPA prepared an analysis of the potential costs and benefits associated with this action. This analysis is contained in this RIA. Based on the analysis presented in Chapter 5, EPA believes this rule will have negligible compliance costs associated with it, over a range of likely sensitivity conditions, because even in the absence of the proposal, electric power companies will choose to build new EGUs that comply with the regulatory requirements of this

1 Electricity Generating Unit Greenhouse Gas New Source Performance Standard
- The NSPS would be established under section 111(b) of the Clean Air Act (CAA).***E.O. 12866 Review
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- 2 proposal because of existing and expected market conditions. Because our modeling shows that new fossil
-fuel fired capacity constructed through 2020 will most likely be natural gas combined cycle capacity al ong with a small amount of coal with CCS supported by federal funding, the proposed standard of performance
–– which is based on the emission rate of a new NGCC unit –– would not add costs. The EPA does not project any new coal
-fired EGUs without CCS to be built. **6.3 Paperwork Reduction Act**  The information collection requirements have been submitted for approval to the Office of Management and Budget under the Paperwork Reduction Act , 44 U.S.C. 3501 et seq . The Information Collection Request (ICR) document prepared by the EPA has been assigned EPA ICR number 2465.01
.

This proposed action would impose minimal new information collection burden on affected sources beyond what those sources would already be subject to under the authorities of CAA parts 75 and 98
. OMB has previously approved the information collection requirements contained in the existing part 75 and 98 regulations (40 CFR part 75 and 40 CFR part 98) under the provisions of the PRA, 44 U.S.C. 3501 et seq . and has assigned OMB control numbe rs 2060
- 0626 and 2060
- 0629, respectively. Apart from certain reporting costs based on requirements in the NSPS General Provisions (40 CFR part 60, subpart A), which are mandatory for all owners/operators subject to CAA section 111 national emission standar ds, there are no new information collection costs, as the information required by this proposed rule is already collected and reported by other regulatory programs. The recordkeeping and reporting requirements are specifically authorized by CAA section 114 (42 U.S.C. 7414). All information submitted to the EPA pursuant to the recordkeeping and reporting requirements for which a claim of confidentiality is made is safeguarded according to Agency policies set forth in 40 CFR part 2, subpart B. T he EPA bel ieves that electric power companies will choose to build new EGUs that comply with the regulatory requirements of this proposal because of existing and expected market conditions. The EPA does not project any new coal
-fired EGUs without CCS that commence c onstruction after this proposal to commence operation over the 3
-year period covered by this ICR. We estimate that 17 new affected NGCC units would commence operation during that time period. As a result of this proposal, those units would be required to prepare a summary report, which includes reporting of excess emissions and downtime every 6 months
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- 3 When a malfunction occurs, sources must report them according to the applicable reporting requirements of 40 CFR part 60, subpart TTTT. An affirmative d efense to civil penalties for exceedances of emission limits that are caused by malfunctions is available to a source if it can demonstrate that certain criteria and requirements are satisfied. The criteria ensure that the affirmative defense is available only where the event that causes an exceedance of the emission limit meets the narrow definition of malfunction (sudden, infrequent, not reasonable preventable, and not caused by poor maintenance and or careless operation) and where the source took necessa ry actions to minimize emissions. In addition, the source must meet certain notification and reporting requirements. For example, the source must prepare a written root cause analysis and submit a written report to the Administrator documenting that it has met the conditions and requirements for assertion of the affirmative defense. To provide the public with an estimate of the relative magnitude of the burden associated with an assertion of the affirmative defense position adopted by a source, the EPA has estimated what the notification, recordkeeping, and reporting requirements associated with the assertion of the affirmative defense might entail. The EPA’s estimate for the required notification, reports, and records, including the root cause analysis, as sociated with a single incident totals approximately totals $3,141, and is based on the time and effort required of a source to review relevant data, interview plant employees, and document the events surrounding a malfunction that has caused an exceedance of an emission limit. The estimate also includes time to produce and retain the record and reports for submission to the EPA. The EPA provides this illustrative estimate of this burden, because these costs are only incurred if there has been a violation, and a source chooses to take advantage of the affirmative defense. The EPA provides this illustrative estimate of this burden because these costs are only incurred if there has been a violation and a source chooses to take advantage of the affirmative defe nse. Given the variety of circumstances under which malfunctions could occur, as well as differences among sources' operation and maintenance practices, we cannot reliably predict the severity and frequency of malfunction
- related excess emissions events fo r a particular source. It is important to note that the EPA has no basis currently for estimating the number of malfunctions that would qualify for an affirmative defense. Current historical records would be an inappropriate basis, as source owners or oper ators previously operated their facilities in recognition that they were exempt from the requirement to comply with emissions standards during malfunctions. Of the number of excess emissions events reported by source operators,***E.O. 12866 Review
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- 4 only a small number would be expected to result from a malfunction (based on the definition above), and only a subset of excess emissions caused by malfunctions would result in the source choosing to assert the affirmative defense. Thus, we believe the number of instances in which so urce operators might be expected to avail themselves of the affirmative defense will be extremely small. In fact , w e estimate that there will be no such occurrences for any new sources subject to 40 CFR part 60, subpart TTTT over the 3
-year period covered by this ICR. We expect to gather information on such events in the future, and will revise this estimate as better information becomes available. The annual information collection burden for this collection consists only of reporting burden as explained ab ove. The reporting burden for this collection (averaged over the first 3 years after the effective date of the standards) is estimated to be $15,570 and 396 labor hours. This estimate includes semi
- annual summary reports which include reporting of excess e missions and downtime. All burden estimates are in 2010 dollars. Average burden hours per response are estimated to be 16.5 hours. The total number of respondents over the 3
-year ICR period is estimated to be 36. Burden is defined at 5 CFR 1320.3(b). An ag ency 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 numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. To commen t on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden the EPA has established a public docket for this proposed rule, which includes this ICR, under Docket ID number EPA
- HQ
- OAR
- 2011
- 0660. The final rule will respond to any OMB or public comments on the information collection requirements contained in this proposal. **6.4. Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcement**  **Fairness Act of 1996, 5 U.S.C. et seq.**  The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.***E.O. 12866 Review
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- 5 For purposes of assessing the impacts of thi s rule on small entities, small entity is defined as: (1) A small business that is defined by the S mall B usiness Administration ’s regulations at 13 CFR 121.201 (for the electric power generation industry, the small business size standard is an ultimate parent entity defined as having a total electric output of 4 million MWh or less in the previous fiscal year. The NAICS codes for the affected industry are in Table 6
- 1 below); (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 indepen dently owned and operated and is not dominant in its field. **Table 6 -**  **1 .**  **Potentially Regulated Categories and Entities a**  **Category NAICS Code**  **Examples of Potentially Regulated Entities** Industry 221112 Fossil fuel electric power generating units. Federal Government 221112 b Fossil fuel electric power generating units owned by the federal government. State/Local Government 221112 b Fossil fuel electric power generating units owned by municipalities. Tribal Government 921150 Fossil fuel electric power generating units in Indian Country.

a Include NAICS categories for source categories that own and operate electric power generating units (includes boilers and stationary combined cycle combustion turbines). b 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 this proposed rule on small entities, the Administrator of EPA certif ies th at this action will not have a significant economic impact on a substantial number of small entities. We do not include an analysis of the illustrative impacts on small entities that may result from implementation of this proposed rule by states because w e anticipate negligible compliance costs over a range of likely sensitivities as a result of this proposal. Thus the cost
to - sales ratios for any affected small entity would be zero costs as compared to annual sales revenue for the entity. The EPA believ es that electric power companies will choose to build***E.O. 12866 Review
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- 6 new EGUs that comply with the regulatory requirements of this proposal because of existing and expected market conditions. (See the RIA for further discussion of sensitivities.) Because our modeling sho ws that new fossil
-fuel fired capacity constructed through 2020 will most likely be natural gas combined cycle capacity along with a small amount of coal with CCS supported by federal funding, the proposed standard of performance
–– which is based on the e mission rate of a new NGCC unit
–– would not add costs. The EPA does not project any new coal
-fired EGUs without CCS to be built. Accordingly, there are no anticipated economic impacts as a result of this proposal. Nevertheless, the EPA is aware that there is substantial interest in this rule among small entities (municipal and rural electric cooperatives)
. In light of this interest, the EPA determined to seek early input from representatives of small entities while formulating the provisions of this propos ed regulation. Such outreach is also consistent with the President’s January 18, 2011 Memorandum on Regulatory Flexibility, Small Business, and Job Creation, which emphasizes the important role small businesses play in the American economy. This process ha s enabled the EPA to hear directly from these representatives, at a very preliminary stage, about how it should approach the complex question of how to apply Section 111 of the CAA to the regulation of GHGs from these source categories. The EPA’s outreach regarded planned actions for new and existing sources, but only new sources would be affected by this proposed action. The EPA conducted an initial outreach meeting with small entity representatives on April 6, 2011. The purpose of the meeting was to provi de an overview of recent EPA proposals impacting the power sector. Specifically, overviews of the Cross
- State Air Pollution Rule , the Mercury and Air Toxics Standards, and the Clean Water Act 316(b) Rule proposals were presented. The EPA conducted outreach with representatives from 20 various small entities that potentially would be affected by this rule. The representatives included small entity municipalities, cooperatives, and private investors. The EPA distributed outreach materials to the small entity representatives; these materials included background, an o verview of affected sources and GHG emissions from the power sector, an overview of CAA section 111, an assessment of CO 2 emissions control technologies, potential impacts on small entities, and a s ummary of the five listening sessions that EPA held in February and March 2011 with various stakeholder groups to get feedback from key stakeholders and the public before the agency***E.O. 12866 Review
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- 7 initiate d the rulemaking process for new greenhouse gas emissions standard s . 2 EPA met with eight of the small entity representatives, as well as three participants from organizations representing power producers, on June 17, 2011, to discuss the outreach materials, potential requirements of the rule, and regulatory areas where t he EPA has discretion and could potentially provide flexibility. A second outreach meeting was conducted on July 13, 2011. We met with nine of the small entity representatives, as well as three participants from organizations representing power producers. During the second outreach meeting, various small entity representatives and participants from organizations representing power producers presented information regarding issues of concern with respect to development of standards for GHG emissions for both new and existing sources . Specifically, topics discussed included: boilers with limited opportunities for efficiency improvements due to NSR complications for conventional pollutants; variances per kilowatt
- hour and in heat rates over monthly and annual op erations; significance of plant age; legal issues; importance of future determination of carbon neutrality of biomass; and differences between municipal government electric utilities and other utilities. Small entities expressed concern regarding units mak ing modifications being regulated as new sources. As explained above, we are not proposing a standard of performance for modifications. As a result, sources that undertake modifications would be treated as existing sources and thus would not be subject to the requirements proposed in this notice. As also explained above, the EPA is not proposing standards of performance for existing proposed EGUs, which are referred to as transitional sources, that have acquired a complete preconstruction permit by the time of this proposal and that commence construction within 12 months of this proposal. As a result, any transitional sources owned by small entities would not be subject to the standards of performance proposed in today’s rule. We invite comments on all aspects of the proposal and its impacts, including potential adverse impacts, on small entities. **6.5 Unfunded Mandates Reform Act of 1995**  This proposed rule does not contain a Federal mandate that may result in expenditures of $100 million of more for State, local, or tribal governments , in the aggregate, or the private sector in any one year . The EPA believes this proposed rule will have negligible compliance

2 http://www.epa.gov/airquality/listen.html***E.O. 12866 Review
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- 8 costs associated with it over a range of likely sensitivity conditions because electric power compani es will choose to build new EGUs that comply with the regulatory requirements of this proposal because of existing and expected market conditions. (See the RIA for further discussion of sensitivities.) As previously explained, because our modeling shows th at new fossil
-fuel fired capacity constructed through 2020 will most likely be natural gas combined cycle capacity along with a small amount of coal with CCS supported by federal funding , the proposed standard of performance
–– which is based on the emissi on rate of a new NGCC unit

–– would not add costs. The EPA does not project any new coal
-fired EGUs without CCS to be built. Thus, this proposed rule is not subject to the requirements of sections 202 or 205 of UMRA. This proposed rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. In light of interest in this rule among governmental entities , the EPA initiated consultations with go vernmental entities. The EPA invited the following 10 national organizations representing state and local elected officials to a meeting held on April 12, 2011, in Washington DC: 1) National Governors Association; 2) National Conference of State Legislatures, 3) Council of State Governments, 4) National League of Cities, 5) U.S. Conference of Mayors, 6) National Association of Counties, 7) International City/County Management Association, 8) National Association of Towns and Townships, 9) County Executives of America, and 10) Environmental Council of States. These 10 organizations representing elected state and local officials have been identified by the EPA as the “Big 10” organizations appropriate to contact for purpose of consultation with elected officia ls. The purposes of the consultation s were to provide general background on the proposal, answer questions, and solicit input from state/local governments. The EPA’s consultation regarded planned actions for new and existing sources, but only new sources w ould be affected by this proposed action. During the meeting, officials asked clarifying questions regarding CAA section 111 requirements and efficiency improvements that would reduce CO 2 emissions. In addition, they expressed concern with regard to the po tential burden associated with impacts on state and local entities that own/operate affected utility boilers, as well as on state and local entities with regard to implementing the rule. Subsequent to the April 12, 2011 meeting, the EPA received a letter f rom the National Conference of State Legislatures. In that letter, the National Conference of State Legislatures urged the EPA to ensure that the choice of regulatory options maximizes benefit and minimizes implementation and compliance costs on state and local***E.O. 12866 Review
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- 9 governments; to pay particular attention to options that would provide states with as much flexibility as possible; and to take into consideration the constraints of the state legislative calendars and ensure that sufficient time is allowed for state actions necessary to come into compliance. **6.6 Executive Order 13132, Federalism**  This proposed action does not have federalism implications. It would not 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, as specified in EO 13132 . This proposed action would not impose substantial direct compliance costs on state or local governments nor would it preempt state law
. Thus, Executive Order 13132 does not apply to this action
. The EPA consulted with state and local officials in the process of developing the proposed rule to permit them to have meaningful and timely input into its development. The EPA’s consultation regarded planned actions for new and existing sources, but only new sources would be affected by this proposed action. The EPA met with 10 n ational organizations representing state and local elected officials to provide general background on the proposal, answer questions, and solicit input from state/local governments. The UMRA discussion in this chapter includes a description of the consulta tion. In the spirit of EO 13132 and consistent with EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicits comment on this proposed action from state and local officials. **6.7 Executive Order**  **13175, Consultation and Coordination with Indian Tribal Governments**  Subject to the EO 13175 (65 FR 67249, November 9, 2000) EPA may not issue a regulation that has tribal implications, that imposes substantial direct compliance costs, and that is not requi red by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by tribal governments, or EPA consults with tribal officials early in the process of developing the proposed regulation and develops a tr ibal summary impact statement. EPA has concluded that this proposed action would not have tribal implications. It would neither impose substantial direct compliance costs on tribal governments, nor preempt t ribal law. This proposed rule would impose req uirements on owners and operators of EGUs. The EPA is aware of three coal
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- 10 EGUs owned or operated by tribal entities. The EPA notes that this proposal does not affect existing sources such as the three coal
-fired EGUs located in Indian c ountry, but addresses CO 2 emissions for new EGU sources only. Because the EPA is aware of t ribal interest in this proposed rule , the EPA offered consultation with tribal officials early in the process of developing this proposed regulation to permit them to have meaningful and timely input into its development. The EPA’s consultation regarded planned actions for new and existing s ources, but only new sources would be affected by this proposed action. Consultation letters were sent to 584 tribal leaders. The letters provided information regarding EPA’s development of NSPS and emission guidelines for EGUs and offered consultation. A consultation/outreach meeting was held on May 23, 2011, with the Forest County Potawatomi Community, the Fond du Lac Band of Lake Superior Chippewa Reservation, and the Leech Lake Band of Ojibwe. Other tribes participated in the call for information gather ing purposes. In this meeting, the EPA provided background information on the GHG emission standards to be developed and a summary of issues being explored by the Agency. Tribes suggested that the EPA consider expanding coverage of the GHG standards to inc lude combustion turbines, lowering the 250 MMBtu per hour heat input threshold so as to capture more EGUs, and including credit for use of renewables. The tribes were also interested in the scope of the emissions averaging being considered by the Agency (e .g., over what time period, across what units) for a possible existing source standard . In addition, the EPA held a series of listening sessions on this proposed action. T ribes participate d in a session on February 17, 2011 with the state agencies, as well as in a separate session with tribes on April 20, 2011. The EPA will also hold additional meetings with tribal environmental staff to inform them of the content of this proposal as well as provide additional consultation with tribal elected officials wher e it is appropriate. We specifically solicit additional comment on this proposed rule from tribal officials. **6.8 Executive Order 13045, Protection of Children from Environmental Health Risks and**  **Safety Risks** The EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying to those regulatory actions that concern health or safety risks, such that the analysis required under section 5
- 501 of the Order has potential to influence the regulation . This proposed action is not subject to EO 13045 because it is based solely on technology performance. The proposal is not***E.O. 12866 Review
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- 11 expected to produce changes in emissions of greenhouse gases or other pollutants but does encourage the current trend towards cleaner generation, helping to protect air quality and children's h ealth. The Agency recognizes that children are among the groups most vulnerable to climate change impacts and the public is invited to submit comments or identify peer reviewed studies relevant to this proposal. **6.9 Executive Order 13211, Actions Concern**  **ing Regulations That Significantly Affect Energy Supply, Distribution, or Use**  This proposed action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 , May 22, 2001), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This proposed action is anticipated to have negligible impacts on emissions, costs or energy supply decisions for the affected electric utility industry. **6.1 0**  **National Technology Transfer and Advanceme nt Act**  Section 12(d) of the NTTAA of 1995 (Public Law No. 104
- 113; 15 U.S.C. 272 note) directs the EPA to use Voluntary Census Standards (VCS) in their regulatory and procurement activities unless to do so would be inconsistent with applicable law or otherwise impractical. VCS are technical standards (e.g., materials specifications, test methods, sampling procedures, business practices) developed or adopted by one or more voluntary consensus bodies. The NTTAA directs the EPA to provide Congress, through annual reports to the OMB, with explanations when an agency does not use available and applicable VCS. This proposed rulemaking involves technical standards. The EPA cites the following standards in this proposed rule: D5287
- 08 (Standard Practice for Automatic Sampling of Gaseous Fuels), D4057
- 06 (Standard Practice for Manual Sampling of Petroleum and Petroleum Products), and D4177
- 95(2010) (Standard Practice for Automatic Sampling of Petroleum and Petroleum Products). The EPA is proposing use of Appendices B, D, F, and G to 40 CFR part 75; these Appendices contain standards that have already been reviewed under the NTTAA. The EPA welcomes comments o n this aspect of the proposed rulemaking and, specifically, invites the public to identify potentially
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- 12 **6.1 1**  **Executive Order 12898: Federal Actions to Address Environmental Jus tice in Minority**  **Populations and Low -**  **Income Populations** Executive Order 12898 (59 FR 7629, February 16, 1994) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable an d permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populat ions and low
- income populations in the U.S. EPA has determined that this proposed rule would not result in disproportionately high and adverse human health or environmental effects on any minority, low
- income , or indigenous populations
.