THE ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION AGENCY 

Ms. Brenda Menard 

Special Deputy Attorney General 

North Carolina Department of Justice 

P.O. Box 629 

Raleigh, North Carolina 27602 

Dear Ms. Menard: 

WASHINGTON , D.C. 20460 

AUG 2 8 2014 

On behalf of the North Carolina Attorney General arid in a December 23, 2013, letter, you co-signed a .. 

petition for reconsideration and amended rulemaking concerning the U.S. Environmental Protection 

Agency's final rule, "Prevention of Significant Deterioration for Particulate Matter Less Than 2.5 

Micrometers Increments, Significant Impact Levels and Significant Monitoring Concentration" (20 10 

PM2.s PSD Rule). 75 FR 64,864 (October 20, 2010). The petition requests that the EPA reconsider the 

major source baseline date associated with the PM2.s increments under section 307(d)(7)(B) of the Clean 

Air Act. 40 USC 7607( d)(7)(B). In addition, the petition asks the EPA to undertake a rulemaking 

procedure to amend the major source baseline date for PM2.s pursuant to the Administrative Procedures 

Act, 5 USC 551 et seq. 

The EPA has carefully evaluated the issues and information in your petition and, as explained in the 

enclosure, does not believe that the North Carolina petition provides compelling policy or legal reasons 

for the EPA to change the existing major source baseline date. Therefore, the agency is denying the 

petition for reconsideration. The EPA also plans to publish a notice of this denial in the Federal 

Register. 

I appreciate North Carolina's interest in reducing PM2.s levels under your air-pollution-control program, 

including the Clean Smokestacks Act, to provide cleaner, healthier air for North Carolina residents. 

Please know that we look forward to working with you to ensure continued air-quality improvement 

throughout North Carolina. 

Sincerely, 

Enclosure 

This paper is printed with vegetable-oil-based inks and is 1 DO-percent postconsumer recycled material, chlorine-free-processed and recyclable. 
Enclosure 

Response to the Petition for Reconsideration and Amended Rulemaking from 

the State of North Carolina 

By letter dated December 23, 2013, the state ofNorth Carolina petitioned the U.S. Environmental 

Protection Agency to reconsider and revise the major source baseline date included in the final rule, 

"Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers 

(PM2.s)-Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)" 

(2010 PM2.s PSD Rule). 75 FR 64,864 (October 20, 2010). Specifically, North Carolina petitioned the 

EPA to reconsider the major source baseline date for PM2.s under section 307(d)(7)(B) of the Clean Air 

Act (CAA or Act). 40 USC 7607(d)(7)(B). The petition also asks the EPA to undertake a rulemaking 

procedure to amend the major source baseline date for PM2.s by changing it from 2010 to 1975 pursuant 

to the Administrative Procedures Act (APA), 5 USC 551 et seq. The EPA has carefully considered the 

requested rulemaking and, for the policy and legal reasons explained below, declines to undertake a 

reconsideration of the PM2.s major source baseline date established in the 2010 PM2.s PSD rule or a 

rulemaking to amend the EPA's regulations. 

The EPA had sound reasons, as discussed below, for establishing October 2010 as the major source 

baseline date for PM2.s reflected in existing regulations, as laid out in the 2010 PM2.s PSD rule, and 

North Carolina's petition does not provide compelling policy or legal reasons for the EPA to change that 

date. Most states are already applying the October 2010 date by incorporating it into current state 

regulations and state implementation plans (SIPs). Revising the date at this time would cause significant 

disruption to the consistent implementation of the PSD program. Moreover, North Carolina's petition 

does not address the air-quality implications of establishing a major source baseline date of 1975 for the 

PM2.s increments. Based on the EPA's understanding of national trends in PM2.s emissions, revising the 

major source baseline date to 197 5 would reduce the level of air-quality protection provided by the 

PM2.s increments. As discussed in detail below, the EPA is not persuaded that the court decision that is 

the foundation ofNorth Carolina's petition compels a change in the baseline date or any other aspect of 

the 2010 PM2.s PSD rule. 

In an effort to understand North Carolina's policy justification for asking that the EPA change the 

baseline date, the EPA has considered the legal and policy reasons provided in the North Carolina 

petition as well as the August 22, 2013, letter from the Secretary of the North Carolina Department of 

Environment and Natural Resources to the EPA Administrator requesting the EPA's position regarding 

the application of the court decision in NRDC v. EPA, 706 F.3d 428 (D.C. Cir. 2013), to the major 

source baseline date finalized in the 2010 PM2.s PSD rule. After careful consideration, the EPA has 

concluded that the concerns raised by the Secretary are outweighed at this time by other grounds 

discussed below that favor retaining the baseline date and other elements of the 2010 PM2.s PSD rule. 

Similar to the state's petition for rulemaking, the Secretary's letter also does not address the air-quality 

implications of enabling states to apply a 1975 major source baseline date for the PM2.s increments. 
Background 

Section 165(a)(3) of the Act requires a PSD permit applicant to demonstrate that emissions from the 

proposed construction and operation of a facility "will not cause, or contribute to, air pollution in excess 

of any ... maximum allowable increase or maximum allowable concentration for any pollutant .... " 42 

USC 7475(a)(3). The maximum allowable increase of an air pollutant that is allowed to occur above the 

applicable baseline concentration for that pollutant is referred to as the PSD increment. 

On October 20, 2010, the EPA published the 2010 PM2.s PSD rule. Among other things, the final rule 

established increments for PM2.s in the PSD permitting regulations .. As explained below, to implement 

the PM2.s increments, the 2010 PM2.s PSD rule established several important dates used to determine 

whether emissions from a given source may be considered to "consume" or "expand" the increment. 

Baseline Dates 

Whether an emissions increase or decrease from a particular source will be counted as part of the 

baseline concentration (or instead affect the PSD increment) depends upon three dates: (1) the minor 

source baseline date, (2) the trigger date, and (3) the major source baseline date. The North Carolina 

petition raises concerns about the "major source baseline date." 

The "major source baseline date" is a fixed date for each pollutant defined by federal regulation at 40 

CFR 51.166(b)(14)(i) and 52.21(b)(14)(i). The major source baseline date serves as the milestone for 

accounting for emissions changes that occur at major stationary sources. In other words, by statutory 

provision, emissions from major sources before the major source baseline date are counted as part of the 

baseline concentration. On the other hand, changes in emissions from major sources that commenced 

construction (i.e., underwent a physical change or a change in method of operation) after the major 

source baseline date are not included in the baseline concentration and will affect the amount of PSD 

increment consumed. 40 CFR 51.166(b)(13) and 52.21(b)(13). 

Proposed PM2.5 PSD Rule (2007) 

In the September 21, 2007, proposal for the 2010 PM2.s PSD rule, the EPA solicited comments 

regarding which statutory provision should apply to establish the increments for PM2.s. 72 FR 54,112. 

Section 166(a) of the Act provides authority for the EPA to promulgate additional pollutant-specific 

PSD regulations, which may include increments, for the pollutants identified in that provision and for 

additional pollutants for which the EPA may promulgate a NAAQS after August 7, 1977. 42 USC 

7476(a). Section 166(f) of the Act permits the agency to substitute PMw increments for the statutory 

particulate matter increments that apply when the indicator for particulate matter is total suspended 

particulate matter (TSP). 42 USC 7476(f). Section 166(f) requires that the substituted increments be "of 

equal stringency in effect as those specified in the provisions for which they are substituted." Id The 

EPA promulgated PMw increments to replace the statutory TSP increments on June 3, 1993. 58 FR 

31,622. 

Acknowledging that PM2.s is a subset of PMw and both are indicators for the same pollutant, particulate 

matter, the EPA proposed two main options for establishing increments. One option proposed, for 

purposes of increment, treating PM2.s as a new pollutant for which a NAAQS was promulgated after 

1977 pursuant to section 166(a) ofthe CAA and establishing new increments for both the annual and 24-

hour PM2.s standards separate from and in addition to the existing PMw increments. 72 FR at 54,123. 

1 
The second option proposed relying on section 166(t) to establish the annual PM2.s increment, 

recognizing that PM2.s is a new indicator for particulate matter. /d. at 54,136. Thus, the EPA proposed 

establishing annual PM2.s increments to replace the existing annual PMw increments because the 

primary and secondary annual PMw NAAQS had been previously revoked. Id Even under this second 

option, as the primary and secondary 24-hour PMw standard had been retained, the EPA proposed 

retaining the 24-hour increments for PMw and developing separate 24-hour PM2.s increments under the 

authority of section 166(a). Id at 54,136-37. However, the EPA requested comment as to whether the 

agency should instead rely on section 166(t) to also propose 24-hour PM2.s increments. Id at 54,137. 

The EPA similarly proposed two options for setting the baseline dates that aligned with the two options 

described above for setting the value of the new PM2.s increments. The first option proposed setting a 

new major source baseline date and trigger date for the PM2.s increments defined as the effective date of 

the final rule for the PM2.s increments, consistent with treating PM2.s as a "new" pollutant for purposes 

ofPSD and section 166(a). Id at 54,136. The second option proposed retaining the existing PMw 

baseline dates for the annual PM2.s increments, which would serve to replace the existing annual PMw 

increments, including the 1975 major source baseline date, consistent with past practice under section 

166(t). Id at 54,138. However, the EPA also requested comment on whether the EPA could instead 

establish new, more protective baseline dates under section 166(t) for the annual PM2.s increments. Id 

The EPA stated that section 166(t) did not address how the EPA should handle baseline dates for 

substitute increments and suggested that baseline dates set after the effective date of the final rule for the 

PM2.s increments would be more effective at preventing significant deterioration. Id With respect to the 

24-hour increments, which would supplement the existing 24-hour PMw increments, the EPA again 

proposed to set new baseline dates consistent with the first option. Id 

Comments Received 

The EPA received 3 5 sets of comments on the 2007 proposal from state/local regulatory agencies and 

regulatory agency associations, industry and industry associations, environmental groups, one federal 

agency, tribes and private citizens. The agency received and responded to a number of comments 

regarding the EPA's legal authority to rely on section 166(a) or section 166(t) to set the value of the 

PM2.s increments. Id at 64871-72; EPA-HQ-OAR-2006-0605-0059, Response to Comments (RTC) at 

7-12. Several commenters supported the application of section 166(a) to establish the PM2.s increments 

as the EPA proposed in the first option described above. R TC at 8-9. The agency also received 

comments regarding how to set the baseline dates for the PM2.s increments under either approach. 72 FR 

at 64,886-88; RTC at 47-51. Even among those commenters who advocated that the EPA use section 

166(t) to set the value of the PM2.s increments rather than section 166(a), most commenters supported 

the establishment of new baseline dates rather than the application of the existing TSP/PMw baseline 

dates to the new PM2.s increments. 72 FRat 64,887; RTC at 47-51. 

Only one commenter, the American Petroleum Institute (API), supported the use of the existing 

TSPIPMw baseline dates for the PM2.s increments because state SIPs would ensure attainment and 

maintenance ofthe NAAQS, which will, in turn, ensure that overconsumption of an increment does not 

occur. 72 FRat 64,887; RTC at 49; EPA-HQ-OAR-2006-0605-0008, API Comment at 7. The National 

Association of Clean Air Agencies (NACAA) submitted a comment in support of using section 166(t) to 

set the values of the PM2.s increments. EPA-HQ-OAR-2006-0605-0021, NACAA Comment at 3-5. 

However, NACAA also supported the establishment of new baseline dates for PM2.s for both the 24-

hour and annual averaging periods rather than retaining the existing baseline dates previously 

2 
established for TSP/PM10, citing the practical difficulties of using the historical baseline date. /d. at 5. 

The state of North Carolina did not separately comment on the proposed rule and, in particular, did not 

provide any information regarding the implications of the Clean Smokestacks Act. 

Final PM2.5 PSD Rule (2010) 

In the final 2010 PM2.s PSD rule, for purposes of increment, the EPA treated PM2.s as a new pollutant 

for which NAAQS were promulgated after 1977 pursuant to CAA section 166(a). See 75 FRat 64,871-

72. The EPA did not establish the PM2.s increments under section 166(f). The EPA determined that it 

would be more appropriate to promulgate the PM2.s increments pursuant to section 166(a) because the 

EPA was retaining the existing PM10 increments previously established pursuant to the authority in 

166(f). /d. Thus, the PM2.s increments were developed as additional increments under section 166(a) 

rather than substitute increments under section 166(f). A complete discussion of our rationale for relying 

upon section 166(a) is contained in the preamble to the 2010 PM2.s PSD rule. /d. 

Consistent with this determination, the EPA also established the major source baseline date for the PM2.s 

increments as October 20, 2010, and the trigger date as October 20, 2011. The EPA concluded that 

establishing a new baseline date on or after the effective date of the final rule would make the PSD 

increments for PM2.s more protective. /d. at 64,886-87. The final rule also explained that using the 

existing TSP/PM10 baseline dates would be administratively cumbersome and difficult because historic 

emission inventories going as far back as 1976 in many areas did not include PM2.s emissions that would 

allow sources and reviewing authorities to determine the baseline concentration in a given area. /d. at 

64,887. The commenters, except API, concurred with these conclusions. /d. 

The timely legal challenges to the 2010 PM2.s PSD rule did not raise concerns with the 2010 baseline 

date or the EPA's application of section 166(a) of the CAA, instead of section 166(f), to establish the 

PM2.s increments and the associated major source baseline date. 

Overview of Petition for Reconsideration and Amended Rulemaking 

North Carolina's petition raises questions regarding the appropriate major source baseline date for 

implementing the PM2.s increments. In particular, the petition contends that the recent court decision in 

NRDC v. EPA, 706 F .3d 428, precludes the EPA from applying the 2010 baseline date established in the 

2010 PM2.s PSD rule. Petition at 5-6. In particular, the state maintains that, because ofthe decision in 

NRDC v. EPA, the PM2.s increments in the PSD program should be implemented in a manner similar to 

the PM10 increments since the court remanded the 2007 and 2008 PM2.s implementation rules based on 

the premise that PM2.s is a subset ofPM10. North Carolina contends that, because the court held that the 

statutory definition ofPM10 includes PM2.s, the EPA must apply section 166(f) of the Act to establish 

PM2.s increments of "equal stringency" to the PM10 increments, instead of section 166(a) to treat PM2.s 

as a new pollutant for purposes of increment. Thus, the petition asserts that the EPA should apply the 

major source baseline date of January 6, 1975, to the PM2.s increments in the same manner that it applies 

to the PM10 increments. North Carolina therefore requests that the EPA reconsider the PM2.s major 

source baseline date established in that rulemaking and initiate a new rulemaking to change the major 

source baseline date for PM2.s to 1975. Petition at 7. 

For the reasons explained below, the EPA denies the Petition for Reconsideration and Amended 

Rulemaking. 

3 
Evaluation of Petition for Reconsideration 

The EPA has evaluated the administrative petition submitted by North Carolina according to the criteria 

provided in CAA section 307(d)(7)(B). The Act establishes a process by which parties may petition the 

EPA to reconsider aspects of a rule under certain circumstances. This process and the relevant criteria 

are laid out in section 307(d)(7)(B), which calls on the Administrator to convene a proceeding for 

reconsideration 

[i]fthe person raising an objection can demonstrate to the Administrator that it was 

impracticable to raise such objection within [the period for public comment (including 

any public hearing)] or if the grounds for such objection arose after the period for public 

comment (but within the time specified for judicial review) and if such objection is of 

central relevance to the outcome of the rule. 

42 USC§ 7607(d)(7)(B). That section essentially lays out two possible bases for reconsideration 

of a rulemaking. The first requires a showing that it was impracticable to raise an objection 

within the period for public comment (including any public hearing). The second requires 

showing that the grounds for such objection arose after the period for public comment (but 

within the time specified for judicial review). The petition does not demonstrate that either basis 

applies in this case. 

First, the petition does not demonstrate that it was impracticable to raise an objection to the PM2.s major 

source baseline date during the period for public comment on the 2010 PM2.s PSD rule. As discussed 

above and as the petition acknowledges, Petition at 3-4, the EPA took comment in the 2007 proposed 

rule on the appropriate section of the Act to apply in the development of the PM2.s increments, and the 

EPA considered a number of comments on the agency's legal authority to rely on sections 166(a) and 

166(f) ofthe Act. The EPA also took comment on the major source baseline date to apply to the PM2.s 

increments, including the option to apply the existing PMw baseline date of 1975. After reviewing 

comments received for and against the application of sections 166(a) and 166(f) to the development of 

the increments, the EPA determined in the final rule to apply section 166(a) to develop new increments 

for PM2.s and to set a new major source baseline date for implementation of those increments. 

Nothing in the NRDC v. EPA decision cited in the petition presented for the first time the argument that 

the EPA must apply section 166(f) to develop the PM2.s increments because PM2.s is a subset ofPMw. 

Rather, the EPA proposed to apply section 166(f) to PM2.s specifically because PM2.s is an indicator for 

particulate matter, as is PMw. 72 FRat 54,120-21. Numerous commenters pointed to the fact that PM2.s 

is a subset of particulate matter in support of their contention that section 166(f) should apply to the 

development of the PM2.s increments. See RTC at 9-11. The definition ofPMw in section 302(t) of the 

CAA, 42 USC 7602(t), that was considered by the court in NRDC v. EPA was the same in 2007, when 

the rule was proposed, as it was when the court issued its decision in 2013. Commenters were not 

precluded in 2007 from asserting that this definition included PM2.s and that the definition had relevance 

to the EPA's decision as to whether to apply 166(a) or 166(f) to PM2.s (an issue not even raised in 

NRDC v. EPA). Accordingly, the EPA does not agree that the NRDC v. EPA decision raises a ground for 

objection that could not have been raised within the period for public comment. See Am. Road & 

Transp. Builders Ass'n v. EPA, 588 F.3d 1109, 1113 (D.C. Cir. 2009) (ARTBA I) (petition for review of 

agency's denial of petition for rulemaking time-barred "insofar as the petition raises points that could 

have been brought to our attention" when the challenged rule was first adopted). Thus, it was not 

4 
impracticable for North Carolina to raise an objection to the EPA's reliance on section 166(a), as did 

several commenters, within the period for public comment. 

Second, the petition also does not demonstrate that the grounds for objection arose after the period for 

public comment on the 2010 PM2.s PSD rule and within the period for judicial review. The court 

decision in NRDC v. EPA cited in the petition did not address the 2010 PM2.s PSD rule or the major 

source baseline date. Rather, the court decision addressed whether the EPA acted appropriately in 

establishing SIP requirements for nonattainment areas in the 2007 and 2008 PM2.s NAAQS 

implementation rules that were based solely on subpart 1 of part D, title I, of the CAA. This subpart of 

the Act establishes plan requirements for nonattainment areas in general, while subpart 4 establishes 

additional provisions for particulate matter nonattainment areas. The court concluded that because the 

Act defines the term PM10 at section 302(t) to include PM2.s, the requirements of subpart 4 that pertain 

to PM10 nonattainment areas also apply to PM2.s nonattainment areas. NRDC v. EPA, 706 F.3d at 436. 

Additionally, the court's decision that PM2.s should be addressed through subpart 4, because PM2.s is 

included within PM10, does not compel North Carolina's interpretation of how PSD should be applied. 

As subpart 4 pertains exclusively to particulate matter requirements for nonattainment areas, the EPA 

does not interpret the court's decision to affect the PSD program requirements for PM2.s, which apply to 

attainment and unclassifiable areas. 

More specifically, the 2008 PM2.s NAAQS implementation rule1 at issue in NRDC v. EPA addressed 

both nonattainment new source review and some PSD requirements for PM2.s, but it did not contain any 

provisions addressing PM2.s increments. See 73 FR 28,321. Rather, the EPA adopted the PM2.s 

increments and the associated major source baseline date in the 2010 rule discussed above, which was 

not before the court. The petitioners in NRDC v. EPA did not argue, and the court did not evaluate, 

whether any statutory requirements other than the part D requirements for attainment plans must also be 

applied to PM2.s. The D.C. Circuit issued a separate decision on January 22, 2013, in Sierra Club v. 

EPA, 705 F.3d 458, that vacated the significant impact levels and significant monitoring concentration 

for PM2.s that were promulgated by the EPA in the 2010 PM2.s PSD rule; however, that decision did not 

address any of the PM2.s increment provisions, including the baseline date, adopted in that rule. 

As discussed above, the fact that PM2.s is a subset of PM10, and that the statute defines it as such at 

section 302(t), could have been raised during the public comment period on the 2010 PM2.s PSD rule to 

support application of section 166(t) to the development ofthe PM2.s increment regulations. Therefore, 

the EPA does not agree that the NRDC v. EPA decision provides a new ground for objection that arose 

only after the close of the public-comment period. See Nat'! Mining Ass 'n v. DOl, 70 F.3d 1345, 1350 

(D.C. Cir. 1995) (petition for review of agency's denial of petition for rulemaking untimely when filed 

outside the period for judicial review where the agency highlighted petitioners' concerns in the 

challenged rulemaking, and "Appellants cite cases decided in the meantime only to bolster their 

argument that the statute does not authorize the rule"). 

Even if the NRDC v. EPA decision arguably did create a new ground for objection to the 2010 PM2.s 

PSD Rule, the ground did not arise within the time specified for judicial review of the rule; and, 

therefore, the petition for reconsideration is likewise not timely. The period for judicial review is defined 

by section 307(b)(1) ofthe Act: 

1 The 2007 PMz.s implementation rule also at issue in NRDC v. EPA did not address any PSD requirements for PM2.5, and, 

thus, also does not implicate either the PMz.s increments or the baseline dates. Rather, that rule addressed state 

implementation plan requirements for areas designated nonattainment for the 1997 PMz.s NAAQS. See 72 FR 20,586. 

5 
Any petition for review under this subsection shall be filed within sixty days from the date notice 

of such promulgation, approval, or action appears in the Federal Register, except that if such 

petition is based solely on grounds arising after the sixtieth day, then any petition for review 

under this subsection shall be filed within sixty days after such grounds arise. 

40 USC 7607(b)(1). The final rule in this case was published in the Federal Register on October 20, 

2010, and the period for judicial review expired 60 days thereafter pursuant to section 307(b)(l). The 

petition seeking reconsideration under section 307(d)(7)(B) of the Act was submitted more than three 

years later, in a letter dated December 23, 2013. 

The petition suggests that North Carolina believes that section 307(b)(1) of the Act reopens the period 

for judicial review in this case, therefore also reopening the period within which to file a petition for 

reconsideration under section 307( d)(7)(B), because the NRDC v. EPA decision is a "ground[] arising 

after" the period for judicial review. In particular, North Carolina cites the "EPA's refusal to fully 

comply with the NRDC decision" as the ground for objection. Petition at 7. This seems to be referring to 

the EPA's approval of a Utah SIP submission applying the 2010 PM2.s PSD rule. Petition at 4 (citing 78 

FR 63,883 (October 25, 2013)). In that rulemaking, the EPA responded to comments from North 

Carolina questioning the proposed approval of the Utah SIP in light of the NRDC v. EPA decision. See 

78 FRat 63,884-85. 

First, even ifthe NRDC v. EPA decision could be characterized as a ground for objection arising after 

the rulemaking, North Carolina still failed to submit a reconsideration petition within 60 days of the 

court decision, which was issued on January 4, 2013. IfNorth Carolina believed that the court decision 

in NRDC v. EPA compelled the EPA to reconsider the 2010 PM2.s PSD rule, the appropriate course of 

action would have been to submit a timely petition within 60 days of the court decision. See ARTBA I, 

588 F.3d at 1113 (petitions brought outside the original 60-day window for judicial review "must be 

filed within 60 days ofthe new event, rather than any time after it"); cf Honeywell Int'l, Inc. v. EPA, 

705 F.3d 470, 473 (D.C. Cir. 2013) (holding petitioners timely sought review when petition filed within 

60 days of court decision constituting after-arising grounds under section 307(b )(1 )). 

Moreover, the EPA's response to North Carolina's comments in the Utah SIP action does not constitute 

the EPA's refusal to comply with a court decision. As noted above, the NRDC v. EPA decision did not 

address the provisions ofthe 2010 PM2.s PSD rule at all. North Carolina's comment on the Utah SIP 

proposal contended that the NRDC v. EPA decision required that the EPA treat PM2.s in the same 

manner as PMw for the purposes ofthe PM2.s baseline date and questioned the EPA's proposed approval 

ofthe Utah SIP, which incorporated the 2010 PM2.s PSD rule's baseline date. See 78 FRat 63,884. As 

the EPA explained, the agency was bound to apply the existing regulations to review of the Utah SIP 

and could not revise the federal regulations in the context of a rulemaking on a SIP submission. !d. at 

63,885; see also United States v. Nixon, 418 U.S. 683, 694-96 (1974); AFL-C/0 v. Fed Labor Relations 

Auth., 777 F.2d 751, 759 (D.C. Cir. 1985) ("Unless and until it amends or repeals a valid legislative rule 

or regulation, an agency is bound by such a rule or regulation."). The EPA's response to comment on the 

Utah SIP action, thus, cannot be viewed as a "refusal to comply" with the NRDC v. EPA court decision 

nor can such an action be viewed as triggering judicial review ofthe 2010 PM2.s PSD Rule. See Am. Rd 

& Transp. Builders Ass'n v. EPA, 705 F.3d 453,458 (D.C. Cir. 2013) (ARTBA II) (the consequences of 

failing to bring a challenge within 60 days of a regulation's promulgation would be meaningless "ifthe 

mere application of a regulation in a SIP approval were sufficient to constitute an after-arising ground 

and trigger a new 60-day statute of limitations period"). It is well-established that a would-be petitioner 

6 
cannot goad the agency into a reply as a means of triggering an opportunity for judicial review. See Am. 

Iron & Steel !nsf. v. EPA, 886 F.2d 390, 398 (D.C. Cir 1989). North Carolina's petition was, therefore, 

not timely submitted within the period for judicial review of the alleged after-arising grounds, and the 

requirements of section 3 07 ( d)(7)(B) of the Act have not been satisfied. 

Accordingly, the EPA denies the petition for reconsideration. 

Evaluation of the AP A Petition for Rulemaking 

The EPA has also evaluated North Carolina's request for a rulemaking pursuant to the APA, 5 USC 

553(e). The petition for rulemaking does not present any policy justification for amending the PM2.s 

baseline date or demonstrate that the EPA is legally required to do so. Accordingly, and for the reasons 

explained below, the EPA denies the request. 

The regulations establishing the PM2.s increments and the major source baseline date were finalized 

nearly four years ago. Since then, most states with SIP-approved PSD programs have adopted state 

regulations and submitted SIP revisions to reflect those regulatory changes, including the 2010 major 

source baseline date. To revise these provisions at this time to reflect a different, earlier baseline date 

would be disruptive to the states' permitting processes and would be administratively difficult. In the 

final rule, the EPA explained that it was rejecting the option to apply the 1975 TSP/PMw baseline date 

to the PM2.s increments, determining that it would lead to administrative difficulties and the potential for 

inaccuracies because historic emissions inventories in many areas did not include PM2.s emissions. See 

75 FRat 64,886-88. These complications would be compounded in states that have already permitted 

sources using the current PM2.s increments and the 2010 baseline date, potentially requiring reevaluation 

of increment consumption that has occurred to date. 

Moreover, although the petition does not explicitly request such relief, were the EPA to determine that 

CAA section 166(t) applies, we would also need to reevaluate the values of the PM2.s increments. 

Section 166(t) authorizes the EPA to substitute PMw increments for the statutory particulate matter 

increments so long as they are "of equal stringency." The EPA explicitly declined to finalize this 

approach in the 2010 PM2.s PSD rule. Therefore, application of section 166(t) would necessarily require 

reevaluation ofthe increments themselves. Thus, the anticipated disruption from revision ofthe 2010 

rule to apply section 166(t) in lieu of section 166(a) would be magnified. 

North Carolina's petition does not raise any previously unforeseeable considerations that merit imposing 

this level of administrative difficulty at this point in the implementation process. As previously 

explained and discussed further below, the state's concerns could have been raised during the period for 

public comment when the EPA explicitly solicited feedback regarding the appropriate statutory authority 

to govern development of the PM2.s increments and the associated major source baseline date in the 

2010 PM2.s PSD rule. The petition does not raise any new issues that justify or compel the EPA to 

reconsider the regulations finalized in that rule. 

The EPA understands from the Secretary's August 2013 letter that North Carolina is concerned that the 

2010 major source baseline date for PM2.s may place the state at a competitive disadvantage after 

displaying leadership in reducing emissions under the Clean Smokestacks Act and pursuing litigation 

against the Tennessee Valley Authority (TVA). However, the appropriate time to raise those concerns 

with setting the PM2.s major source baseline date at 2010 would have been in the course of the 

rulemaking for the 2010 PM2.s PSD rule that established the PM2.s increments and major source baseline 

7 
date. The August 2013 letter indicates that the Clean Smokestacks Act was enacted in 2002 and that 

litigation against TV A was initiated in 2006, but neither the August 2013 letter nor the petition explains 

why North Carolina did not communicate with the EPA during the public-comment period about the 

potential implications of the 2010 major source baseline date for North Carolina in light of its earlier 

actions to reduce emissions. Furthermore, it does not appear that the recent court decision in NRDC v. 

EPA impacts the requirements ofthe Clean Smokestacks Act or the state's settlement with TV A. The 

EPA is sensitive to these concerns expressed by the Secretary, but this information has been presented to 

the EPA at a time when there are several overriding grounds as discussed above that favor retaining the 

baseline date and other elements in the rule based on section 166(a) the Act. 

Perhaps most importantly, neither the petition for rulemaking nor the Secretary's letter speaks to the airquality implications of establishing a major source baseline date of 1975 for the PM2.s increments. North 

Carolina does not offer a compelling environmental justification for the EPA to revise its existing 

regulations. Based on the EPA's assessment ofPM2.s emission trends, a revision of the major source 

baseline date from 2010 to 1975 would result in less air-quality protection than the approach established 

in the 2010 PM2.s rule. As the EPA concluded in that rule, if a retroactive baseline date of 1975 were 

used, "emissions reductions occurring prior to the effective date of this rule would serve to expand the 

available increments, enabling more new pollution than would otherwise be allowed to occur." Id at 

64887. Thus, the EPA acknowledged that the use of the PM1o baseline date would be less stringent than 

if the EPA established a new baseline date for PM2.s. 

With respect to legal considerations, nothing in the NRDC v. EPA decision compels application of 

section 166(f) to the development ofthe PM2.s increments. By its terms, section 166(f) permits the 

agency to substitute for the statutory particulate matter increments new PMw increments of"equal 

stringency." Section 166(f) does not address how the EPA should proceed when it is developing new 

increments for a particulate matter indicator, as it did here, rather than creating substitute increments. 

North Carolina has not expressed the view that the EPA was unable to develop PM2.s increments 

different from and in addition to the PMw increments, and, as explained in the 2010 PM2.s PSD rule, the 

EPA continues to believe that the appropriate authority for such action is section 166(a). See 75 FRat 

64,871-72. The EPA recognizes, as the court in NRDC v. EPA acknowledged, that the definition of PMw 

in CAA section 302(t) includes PM2.s, but this does not mean section 166(f) is the exclusive authority 

available for the EPA to establish PM2.s increments and the associated implementing regulations. As 

noted above, the PM2.s increments were not developed to replace either the prior statutory TSP 

increments or the existing PMw increments, which is the only situation governed by section 166(f). 

Since the EPA had the authority to develop independent PM2.s increments pursuant to section 166(a), the 

EPA also necessarily had the authority to establish appropriate implementing regulations, including the 

appropriate major source baseline date. However, even ifthe EPA's only option were to apply section 

166(f) to establish PM2.s increments, nothing in that provision explicitly provides how the EPA should 

address the major source baseline date for either the PM2.s or PM1o increments. Thus, the EPA has the 

discretion to retain the baseline date in the 2010 PM2.s PSD rule. 

For the reasons discussed above, the EPA believes that it would be inappropriate to change the PM2.s 

major source baseline date and that the decision in NRDC v. EPA does not compel a revision. 

Accordingly, the EPA denies North Carolina's petition for amended rulemaking. 

8 
Conclusion 

The EPA concludes that reconsideration ofthe PM2.s major source baseline date in the 2010 PM2.s PSD 

rule is not warranted and, for the reasons explained above, also declines to initiate a rulemaking to 

amend the 2010 PM2.sPSD rule. 

tfzr/1( 

Date: 

i McCarthy 

~ ministrator 

U.S. Environmental Protection Agency 

9