September 2, 2009 

The Honorable Lisa P. Jackson, Administrator 

U.S. Environmental Protection Agency 

Ariel Rios Building 

1200 Pennsylvania Avenue, NW 

Mail Code 1101A 

Washington, DC 20460 

Dear Administrator Jackson: 

On behalf of 17 states in the eastern half of the U.S., we wish to provide the following 

recommendations to the Environmental Protection Agency (EPA) to consider as it 

develops a replacement rule for the Clean Air Interstate Rule (CAIR), in light of the 

December 23, 2008, remand by the U.S. Court of Appeals for the D.C. Circuit. 

The recommendations follow through on the commitment we made in the March 9, 2009, 

Framework Document to work together to address the transport requirements of Section 

110(a)(2)(D) of the Clean Air Act (CAA), and to attain the ozone and PM2.5 National 

Ambient Air Quality Standards (NAAQS). Please understand that in preparing these 

recommendations our fundamental air quality objective is to achieve attainment and 

ensure maintenance of the NAAQS as expeditiously as practicable. 

As the result of our collaboration, we recommend for your consideration a framework, 

which is based on in-depth technical evaluations and a sincere and concerted effort by 

all states to reach common ground on an overall approach to addressing transport. This 

comprehensive framework comprises national rules involving significantly contributing 

states that combine statewide emissions caps and complementary regional trading 

programs with a state-led planning process to address transport in a multi-pronged and 

layered approach. While the undersigned states have reached consensus on this 

suggested framework, there are some regional differences concerning the timing and 

stringency of electric generating unit (EGU) reductions, and the criteria for determining 

which states are included in the state-led planning process. In addition, the states differ 

in their perspectives on whether performance based standards should be part of the 

strategy. 

The Lake Michigan Air Directors Consortium (LADCO) and the Ozone Transport 

Commission (OTC) will be submitting separate letters to explain their perspectives on 

these areas of regional differences on implementation of the framework. 

Many areas in the eastern U.S. are designated as nonattainment for the current ozone 

and PM2.5 standards (1997 version), and it is expected that even more areas will not be 

in compliance with 2008 ozone and 2006 PM2.5 standards. Numerous data analysis and 

modeling studies have shown that some (not all) of these nonattainment problems are 

strongly influenced by inter-state transport. 

Additional regional emission reductions will be necessary to help states meet the new air 

quality standards. A timely and robust federal program that requires substantial regional 

emission reductions from mobile sources, area sources and large point sources such as 
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EGUs is an essential component of any strategy to reduce interstate transport of air 

pollution. These reductions are necessary to attain and maintain compliance with the 

NAAQS. 

The undersigned states recommend a 3-step approach, as further discussed below, to 

establish a framework from which to address the requirements of CAA section 

110(a)(2)(D): 

1. Identifying areas of interest (i.e., those not meeting the standards and those 

struggling to maintain the standards); 

2. Identifying, based on specific criteria, upwind states which contribute to 

nonattainment or interfere with maintenance in these areas of interest; and 

3. Implementing a multi-sector remedy to meet CAA requirements. 

Step 1 - Identifying Areas of Interest 

A. While the requirements of Section 110(a)(2)(D) apply to all areas, most attention 

should be given to those areas not meeting or struggling to maintain the NAAQS. 

These "areas of interest" should be identified using monitoring and modeling 

data. 

B. Specifically, areas with both base monitored design values and future modeled 

design values above the applicable NAAQS should be designated as areas of 

interest. The monitored design values are based on the maximum design value 

from the periods 2003-2005 through the most recent three-year period, and the 

future modeled values are based on future year modeling which reflects legally 

enforceable control measures and a conservative model attainment test - i.e., 

use of maximum design values rather than average design values. 

1. The use of maximum design values and a conservative model attainment test 

are intended to account for historic variability, which is necessary to ensure 

maintenance. An alternative means of accounting for historic variability is to 

conduct a statistical analysis of the year-to-year variation in meteorology. 

2. Requiring a more conservative model attainment test will necessitate a 

change in EPA's modeling guidance. EPA should also establish performance 

criteria to insure that the modeling is capturing transport appropriately. 

3. EPA's approach in CAIR also reflects a "monitored and modeled" test to 

identify areas of interest. 

Step 2 - Identifying Upwind States that Significantly Contribute to Nonattainment 

or Interfere with Maintenance 

A. An upwind state significantly contributes to nonattainment or interferes with 

maintenance in a downwind area of interest if its total impact from all source 

sectors equals or exceeds 1% of the applicable NAAQS. 
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B. Individual state contributions should be determined through a weight-of-evidence 

approach, including source apportionment modeling. 

C. Use of 1% of the NAAQS as the significance threshold is consistent with EPA's 

approach in CAIR. 

Step 3 - Implementing a Multi-Sector Remedy to Meet Clean Air Act Requirements 

A two-part process is recommended consisting of: (A) a national/regional control 

program adopted by EPA for EGUs and additional federal control measures for 

other sectors, and (B) state-led efforts to develop, adopt, and implement federally 

enforceable plans for each area of interest that is not expected to attain the 

standards even after implementation of the national/regional program. 

A. National/Regional Control Program

A significantly contributing state (i.e., a state which contributes at least 1% to a 

downwind area of interest) must comply with the national/regional control 

program described below. 

1. EGU point source strategy (applicable to units > 25 MW) 

In adopting a CAIR replacement rule EPA should: 

(a) make federally enforceable through appropriate mechanisms all 

nitrogen oxide (NOx) and sulfur dioxide (SO2) controls to comply 

with the original CAIR Phase I program; 

(b) make federally enforceable through appropriate mechanisms 

optimization by no later than early 2014 of existing NOx and SO2

controls; 

(c) make federally enforceable through appropriate mechanisms 

application by 2015 of low capital cost NOx controls; 

(d) establish statewide emission caps by no later than 2017 for all 

fossil fuel-fired units ≥25MW. The caps should reflect an analysis 

of NOx and SO2 controls on coal-fired units ≥ 100 MW which, in 

combination with the three measures above, will achieve rates 

that are not expected to exceed 0.25 lb/MMBTU for SO2 (annual 

average for all units ≥25 MW) and 0.11 lb/MMBTU for NOx (ozone 

seasonal and annual average for all units ≥25 MW) and which will 

result in lower rates in some states. Previously banked emissions 

under the Title IV or CAIR programs shall not be used to comply 

with the state-wide emission caps; and 

(e) to the fullest extent allowed under the Clean Air Act, EPA should 

work with the states to establish regional emissions caps with full 

emissions trading to replace the caps currently applicable under 

CAIR. 
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Again, there are regional differences on some elements of the EGU point 

source strategy, including mechanisms for achieving reductions prior to 

2017. Further recommendations will be provided in separate letters by 

LADCO and OTC. 

2. Non-EGU point source strategy 

a. EPA should identify and prioritize other categories of point 

sources with major emissions of NOx and/or SO2 (e.g., cement 

plants) based on a review of available emissions inventories and 

other information, such as source apportionment studies. 

b. For the non-EGU point sources, EPA should identify and evaluate 

control options for reducing NOx and/or SO2 emissions. The 

evaluation should consider the technological, engineering, and 

economic feasibility of each control option. 

c. At a minimum, EPA should evaluate the technological, 

engineering, and implementation feasibility, and cost-effectiveness 

of controlling SO2 and NOx emissions from industrial, commercial, 

and institutional boilers > 100 MMBTU/hour. 

3. Mobile source strategy, such as new engine standards for on-highway 

and off-highway vehicles and equipment, and a single consistent 

environmentally-sensitive formulated fuel. 

4. Area source strategy, such as new federal standards for consumer 

products and architectural, industrial and maintenance coatings as 

originally promised by EPA in 2007 

B. State- Led Attainment Planning 

The undersigned states recommend the use of a state-led attainment planning 

process concurrent with developing the transport SIP to address areas of interest 

that are not expected to attain after implementation of the national/regional 

control program. The state-led planning effort should involve a key subset of 

significantly contributing states to develop, adopt, and implement an appropriate 

attainment strategy. EPA should work with the states to establish criteria for 

determining which significantly contributing states should be involved in the stateled planning process. Additionally EPA should work with the states to determine 

the appropriate criteria for each state to satisfy CAA section 110(a)(2)(D). The 

advantages of this state-led planning effort include: 

• A one-size-fits-all federal solution cannot provide the most appropriate 

and cost-effective solution for each area; 

• Attainment planning is more effective and more likely to succeed if it is 

done on a non-attainment area basis with a key subset of contributing 

states; 

• Additional controls are identified where they are needed; and 

• States maintain their responsibility under the Clean Air Act to establish 

state implementation plans. 
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Further recommendations on this issue will be provided in separate letters by 

LADCO and OTC. 

The comprehensive framework outlined above represents the culmination of our 

collaborative work over the past six months. We look forward to working with you further 

as EPA develops its CAIR replacement rule. 

Sincerely, 

______________________ _______________________ 

Connecticut District of Columbia 

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Illinois Indiana 

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Maine Maryland 

 

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Massachusetts Michigan 

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New Hampshire New Jersey 

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New York Ohio 

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Pennsylvania Rhode Island 
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Vermont Virginia 

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Wisconsin