1 TABLE OF CONTENTS

CHAPTER 9 STATUTORY AND EXECUTIVE ORDERS

................................ .................... 2 9.1 Executive Order 12866: Regulatory Planning and Review, and Executive Order 13563: Improving Regulation and Regulatory Review

................................ .............................. 2 9.2 Paperwork Reduction Act

................................ ................................ ................................ ...... 7 9.3 Regulatory Flexibility Act

................................ ................................ ................................ .... 11 9.4 Unfunded Mandates Reform Act

................................ ................................ ........................ 19 9.5 Executive Order 13132: Federalism

................................ ................................ .................... 25 9.6 Executive Order 13175, Consultation and Coordination with Indian Tribal Governments

................................ ................................ ................................ ................... 29 9.7 Executive Order 13045, P rotection of Children from Environmental Health Risks and Safety Risks

................................ ................................ ................................ ...................... 49 9.8 Executive Order 13211, Actions Concerning Regulation s That Significantly Affect Energy Supply, Distribution, or Use

................................ ................................ ............. 50 9.9 National Technology Transfer and Advancement Act

................................ ...................... 51 9.10 Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populations and Low

- Income Population s ................................ ................................ ... 52

CHAPTER 10 RULE LANG UAGE CORRECTIONS

................................ ......................... 100 10.1 Definitions (existing)

................................ ................................ ................................ ......... 100 10.2 Definitions (new)

................................ ................................ ................................ ............... 108 10.3 Rule language

................................ ................................ ................................ .................... 112 10.3.1 Applicability for EGUs/affected entities

................................ ................................ ...... 112 10.3.2 Incorporation of Part 75

................................ ................................ ................................ 115 10.3.3 Requirements for affected entities

................................ ................................ ................ 117 10.4 Other

................................ ................................ ................................ ................................ .. 118

CHAPTER 11 GENERAL S UPPORT AND GENERAL O PPOSITION

........................... 133 11.1 General Support

................................ ................................ ................................ ................ 133 11.2 General Opposition

................................ ................................ ................................ ........... 133

CHAPTER 12 OTHER

................................ ................................ ................................ ............. 135

APPENDIX A: CROSS

- REFERENCED COMMENTS

................................ ...................... 1622 CHAPTER 9 STATUTORY AND EXECUT IVE ORDERS

9.1 EXECUTIVE ORDER 12866 : REGULATORY PLANNING AND REVIEW , AND EXECUTIVE ORDER 1356 3 : IMPROVING REGULATION AND REGULATORY REVIEW

Comment 1: Commenters stated that the EPA's Clean Power Plan (CPP) and the public participation process fall far short of President Obama's Jan. 18, 2011 executive order outlining how regulations should be crafted and implemented.

Commenter s noted that Executive Order 13563 holds as a "general principle" that the nation's "regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.[... ] It must allow for public participation and an open exchange of ideas. It must promote predictability and reduce uncertainty. It must identify and use the best, most innovative, and least burdensome tools for achieving regulatory ends. It must take into accoun t benefits and costs, both quantitative and qualitative."

Response 1: The EPA agrees with the commenters that public participation and an open exchange of ideas in the regulatory process are crucial and necessary to develop rules that

‘ “ protect public heal th, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness and job creation... ’ ” Following the direction in the Presidential Memorandum to the Administrator (June 25, 2013), 1 the EPA engaged in extensive and vigo rous outreach to stakeholders and the general public at every stage of development of the rule. The EPA’s outreach included direct engagement with the energy and environment officials in states, tribes, and a full range of stakeholders including leaders in the utility power sector, labor leaders, non

- governmental organizations, other federal agencies, other experts, community groups and members of the public. The EPA participated in more than 300 meetings before the rule was proposed and more than 300 after the proposal. The proposed guidelines were also subject to a formal comment and response process. For more information on the process afforded the public for participation in this rulemaking see section II. K ( Stakeholder Outreach and Consultations ) of the final rule preamble of the CPP . The EPA also conducted a Regulatory Impact Analysis (RIA) to assess the benefits, costs and economic impacts to society for both the proposed and the final emission guidelines. In this analysis, the EPA found that th e benefits of the guidelines to society far outweigh the costs. S ee the RIAs for the proposed and final rule in the docket (EPA

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1 Presidential Memorandum

– Power Sector Carbon Pollution Standards, June 25, 2013. http://www.whitehouse.gov/the

- press

- office/2013/06/25/presidential

- memorandum

- power

sector

- carbon

- pollution

- standards.3 Comment 2: Commenters stated that the EPA failed to conduct a cumulative analysis o f the Rule as required by E.O. 12866 and E.O. 13563.

Commenters noted that the EPA is obligated to "propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs" and "tailor its regulations to impose the least burden on society...taking into account...the costs of cumulative regulations." Commenter s stated that the EPA's failure to consider the cumulative impacts of its proposal along with other numerous and extremely costly rules that directly impact the utility indu stry is in direct contradiction to E.O. 13563. Commenter s stated that EPA must conduct this cumulative impact analysis and provide the public with an opportunity for review and comment.

Commenter s noted that the requirement for cumulative analysis stems f rom the regulatory philosophy of E.O. 12866 "that the need for an effects of government regulatory actions should not be examined in isolation but instead on an overall and coordinated basis." Commenter s additionally noted that the Statement of Regulatory Philosophy and Principles in E.O. 12866 also
stress es the need for planning and coordination with respect to both new and existing regulations.

R esponse 2: The EPA conducted a n RIA assessing the costs and benefits of the Clean Power Plan proposal and final guidelines consistent with the requirements of E.O. 12866 and E.O.13563. The Integrated Planning Model (IPM) was used to estimate the emission reductions and costs associated with the guidelines. All promulgated EPA regulations affecting the power
sector are incorporated into the baseline of IPM for development of the emission reductions,
costs , and benefits for the guidelines. (See docket EPA

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- 0602 for the RIA conducted for the proposed and final emission guidelines and more details on the analysis conducted.) The final C PP establishes emission guidelines for states to use in developing plans to address GHG emissions from existing fossil fuel

- fired EGUs. Specifically, th e EPA is establishing: 1) CO 2 emission performance rates based on the BSER for two subcategories of existing fossil fuel

- fired EGUs, fossil fuel

- fired electric utility steam generating units and stationary combustion turbines, and 2) guidelines for the dev elopment, submittal and implementation of state plans that implement the CO 2 emission performance rates. Each state may comply with the guidelines by adopting the emission rates as emission standards for their sources or by adopting a plan that is projecte d to achieve equivalent emission reductions as determined by the ir state goal, which is tailored to its particular mix of sources

. Because states will ultimately make the decisions as to implementation of the guidelines, the RIA reflects illustrative benef its and costs. The guidelines set in motion actions to lower the CO 2 emissions associated with existing power generation sources in the United States.

The EPA recognizes that each state has different policy considerations, including varying emission reduction opportunities and existing state programs and measures, and characteristics of the electricity system (e.g., utility regulatory structure, generati on mix, electricity demand). The final e mission guidelines provide states with options for establishing standards of performance in a manner that accommodates a diverse range of state approaches. The guidelines also allow states to collaborate and to demon strate emission performance on a multi

- state basis, in recognition of the fact that electricity is transmitted across state lines, and local measures often impact regional EGU CO2 emissions.4 Comment 3: Commenters stated that the best means to tackle carbo n emissions may require an all for one and one for all approach; however, section 111(d) cannot be interpreted to have such expansive power and doing so will place enormous burdens on already limited governmental resources which, as the court in Utility Ai r Regulatory Group v. EPA found, was alone a good reason for rejecting the EPA's interpretation of other Act provisions to regulate carbon emissions. Commenters noted that they co

- own generation that the Proposed Rule will affect in Indiana, Illinois and K entucky, potentially subjecting the commenter s to three different state implementation plans which will involve three different governments, three different state environmental enforcement agencies and three different public utility commissions, amongst
ot her interested parties. Commenters also noted that they uniquely serve municipal electric communities that lie in both the MIS065 and PJM territories, which will require commenters to comply with different regional transmission operator ("RTOs") compliance strategies. Commenters stated that such examples are playing out repeatedly across the nation and the burdens on limited governmental resources will only become more apparent if the Proposed Rule moves forward.

Commenters noted that the EPA has set its st ate emission rate goals based on presumptions that there will be dramatic shifts in generation, both locational shifts and shifts in fuel type, yet the infrastructure costs necessary to accommodate such shifts are completely ignored. Commenters stated that the EPA cannot impose burdens on the states to achieve such emission rates without accounting for the costs that the EPA's goals would impose. Commenters further argued that the EPA's suggestion that the states have the "flexibility" to undertake differen t measures if they find such costs to be too great is neither accurate nor does it relieve the EPA from this legal failing. Commenters stated that the EPA cannot simply impose burdens on the states without a full analysis of the costs of such burdens.

Resp onse 3: Costs realized by states to develop their state plans for the period 2016

- 2018 were developed and reported in the Supporting Statement for the proposed rule. These estimates included the costs to coordinate with other states, based on previous cost s developed for the regional haze rules (and as discussed in the supporting statement). Without receiving actual information on hours needed to coordinate with other states for state plan development on this final rule, the EPA has no basis to change the o riginal estimates. Refer to document EPA

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Comment 4: Commenters stated that the EPA has failed to take into account the interagency cooperation necessary to implement Rule 111(d) and has also failed to account for the increased costs this will place on states. Commenters stated that their agency anticipates that a new program within t heir agency will be required to track industry compliance with the proposed rule, which will require two to three full time staff. In addition, commenters relayed that their agency will need assistance from other state agencies to coordinate "outside the f ence" activities related to Blocks 2

- 4 that are typically overseen by state public utility commissions and/or the FERC, not by the EPA or state environmental agencies. Commenters estimated that assisting their agency in monitoring compliance with energy ef ficiency programs would likely require one to two additional staff members but meaningful estimates are difficult because the EPA has yet5 to provide guidance on the evaluation, measurement & verification (EM&V) standards for renewable energy or demand side energy efficiency programs.

Response 4: The EPA has accounted for the costs that the commenters describe. Refer to the RIA for the proposed carbon pollution guidelines for existing power plants that can be found in the docket, (EPA

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- 0391, Section 3.11). In that section of the RIA for the proposed guidelines, the EPA developed projections for the compliance years 2020, 2025, and 2030. Table 3

- 25 of that section displays projections for 2020 of $61,583,896 annually for review and assessment o f all building blocks, development of contingency measures, state plan revisions, coordination with affected sources, oversight of consumer

- based energy efficiency programs, and public meeting development, development of a monitoring system, and staff need ed by the affected EGU's to compile quarterly data downloaded to the EPA's Emission Collection and Monitoring Plan System ( ECPMS ) . For the years 2025 and 2030, the EPA projected the monitoring system will be in place, so costs will have reduced. The projec tion is for 2 full time state staff to continue implementation, monitoring and recordkeeping at a rate of $8,215,237 annually nationwide. After receiving input from the commenters above, the EPA has added the cost to the agency’s original staffing estimate s, for two additional staff members in the final Paperwork Reduction Act ( PRA ) burden estimate for the years 2016

- 2018, to account for the additional staffing the commenter s believe will be needed in their agency, and has extrapolated this need to each sta te where the agency believes it will receive a state plan. The revised estimates can be found in the final docket for this rulemaking, in s ection 6 of the Supporting Statement, and section 3.11 of the RIA.

Comment 5: Commenters stated that the EPA has und erestimated the number of full time staff states will need to implement the proposed rule because it has not considered the multiple state agencies impacted by the EPA's proposed rule. Commenters stated that the exact number of staff needed to implement a state plan will depend on numerous factors, such as whether the state implements a cap and trade program or if energy efficiency and renewable energy measures are relied upon, and cited their agency's estimates that additional resources will be needed from other agencies. Commenters stated that in addition, significantly more resources will be needed by the state in the initial years during development of the state plan for activities such as developing rules and guidance, creation of databases, and establi shing new programs to implement the state plan. Commenters also stated that the EPA has not accounted for all aspects of the proposed rule that have direct fiscal implications for the states, such as the state database for making records available to the EPA and the public, the requirements of the E M&V Plan, and the possible need to contract out activities to independent parties.
Response 5: The EPA points out that with regard to the costs developed for the proposed rule, the RIA did include costs (see Cha pter 3.11) for the proposal related to state implementation activities for the years 2020, 2025, and 2030. The EPA included 2 full time equivalent personnel that covered 4 to 5 staff working part time in both the energy and air offices to coordinate activi ties. Since there is no way to predict how many states will submit a multiple state plan, the EPA assumed that at the time of proposal, only one grouping of states would submit a multiple6 plan, which is the Regional Greenhouse Gas Initiative comprised of t he northeastern states. In addition, as documented in the Supporting Statement, docket number EPA

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- 0438, Exhibits 1a and 1b include the lower and upper bounds, respectively, of individual burdens for the reporting requirements applicable to the states for the first 3 years. The lower bound estimate accounts for 23 states already having active energy efficiency programs in place for meeting their emission performance goals, while the upper bound assumes that no energy efficiency programs exis t. By accounting for states' existing programs, the burden estimates in Exhibit 1a are lower than those in Exhibit 1b. The national range for these costs was estimated to be $22 million (lower bound) and $44 million (upper bound) per year between 2016 and 2018. These estimates have been revised to reflect an additional 2 full time staff members’ participation, in response to commenters. The final estimates are $ 35.8 million (lower bound) to $ 58.1 million (upper bound) per year, between the years 2016 to 2 018.

In developing estimates for the years 2020, 2025, and 2030, the EPA did not include costs for possible contracting out the EM&V activities to independent parties, nor did the EPA include costs for states to develop a database for making records availa ble to the EPA and the public. The activity of contracting out the EM&V activities is not mandated in the rule. In addition, EPA will have in place a central database for states to upload their information and thus the

a gency does not see a need for stat e specific databases to be developed. Thus, these two activities have not been accounted for in agency calculations. The lower estimate reflects assumptions that 23 states already have active energy efficiency programs in place, and the higher estimate ref lects estimates that no energy efficiency programs are in place. The revised costs for 2020, 2025, and 2030 can be found in the RIA, in the docket.

Comment 6 : Commenter s noted that the EPA estimates that reducing co

- pollutants under the CPP will generate $25

- $59 billion in monetized benefits, plus significant unquantified effects. Commenters stated that counting such indirect benefits from reducing co

- pollutants like particulate matter and mercury is required by federal administrative guidelines, recommended by standard economic methodologies and prior agency practices, and consistent with cas e law. Commenters noted that E.O. 12866 requires federal agencies to conduct regulatory impact analyses of significant rulemakings and that the E.O. broadly defines costs and benefits to encompass all regulatory impacts on the economy, government, health, safety, and environment, and does not differentiate between direct and indirect effects. Commenters further noted that the EPA has regularly assessed indirect benefits in its economic analyses since at least 1978. Commenters noted several court cases whic h have consistently found that, in cases where agencies either choose or are required by statute to consider regulatory costs and benefits, important indirect effects deserve equal treatment and urged the EPA to continue to consider the value of significan t ancillary benefits from reductions in co

- pollutants, as it properly has for decades under administrations of both parties.

Court cases cited:

• Competitive Enterprise Inst. v. NHTSA, 956 F.2d 321, 327 (D.C. Cir. 1992) (finding the agency "must exercise i ts discretion; that means conducting a serious7 analysis of the data and deciding whether the associated fuel savings [direct benefits] are worth the lives lost [indirect costs]");

• Am. Trucking Ass'ns v. EPA, 175 F.3d 1027, 1051

- 52 (D.C. Cir. 1999), rev'd on other grounds sub nom. Whitman v. Am. Trucking Ass'ns, Inc., 531 U.S. 457 (2001) (holding that "all identifiable effects" included indirect costs and benefits, and cautioning that "it seems bizarre that a statute [the Clean Air Act] intended to improve human health would ... lock the agency into looking at only one half of a substance's health effects in determining the maximum level for that substance");

• U.S. Telecom Ass'n v. FCC, 290 F.3d 415, 425 (D.C. Cir. 2002) (remanding an FCC rule for failure t o consider indirect costs);

• Corrosion Proof Fittings v. EPA, 947 F.2d 1201, 1225 (5th Cir. 1991);

• Am. Dental Ass'n v. Martin, 984 F.2d 823, 826 (7th Cir. 1993).

Response 6 : The EPA agrees with the commenter s ’ conclusion that the benefits from reducing

co

- pollutants such as particulate matter and mercury associated with the CPP are appropriately considered in the assessment of benefits of the emission guidelines to society. Pursuant to E.O. 12866, the EPA conducted a RIA of the CPP to estimate the costs, benefits, and economic impacts of the emission guidelines. In the RIA, the EPA assessed climate benefits associated with the emission guidelines, as well as the benefits associated with air quality co

- pollutant emission reductions expected as a result of t he emission guidelines. For more information, see the RIA available in the docket (EPA

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9.2 PAPERWORK REDUCT ION ACT

Comment 1 : Commenters stated that the EPA does not have the legal authority under CAA section 111(d) to require the states to create and maintain public databases to make records submitted by affected entities available to the public and the EPA. Commenters further s tated that the EPA has not accounted for the costs of creating and maintaining such a database in the RIA of the proposed section 111(d) rule. Commenters referred to 79 FR 34910 which proposes that the periodic reports from affected entities must be submit ted annually, electronically, and "disclosed on a state database accessible to the public and EPA." Commenters stated that the EPA does not have the legal authority to mandate what media a state uses to make records available to the public. Additionally, c ommenters claimed that they do not currently have a publically accessible database for posting such records. Commenters further stated that the EPA's analysis in Section 3.11 of the RIA regarding the Monitoring, Reporting, and Recordkeeping Costs does not provide any cost estimates for the states to create and maintain such databases. Commenters stated that the costs for modifying an existing public database or creating a new database system would be substantial. As such, commenters stated that the EPA's im pact analysis8 with regard to the burden to state agencies is not valid. Commenter s said the EPA's analysis for the Unfunded Mandates Reform Act is also invalid because the EPA has not factored in the costs for the public databases when determining whether the proposed rule would result in expenditures of $100 million or more for state, local, and tribal governments.

Response 1 : As discussed in previous responses to comments addressing public databases, the EPA has not included the cost of developing a publi c database in the final estimates since the agency does not mandate the development of a public database in the final rule. The EPA will have a national database available for state data.

In responding to the commenters’ assertion that the EPA does not h ave the legal authority to mandate what media a state uses to make records available to the public, the issue is moot since the EPA is not mandating what media a state uses to make records available to the public: a national database is instead being devel oped.

In responding to the assertion that the EPA has not factored in the costs for the public databases and that these costs would result in expenditures of $100 million or more for state, local and tribal governments, the EPA believes that public databas es are not needed since the a gency will have a national database in place for states to use, and thus, there will be no need for such expenditures.

Comment 2 : Commenters observed that the EPA notice of PRA applicability reflects a disregard for the procedural requirements of the Act and among other things, the rulemaking does not respond in any meaningful way to the important inquiry concerning what significant aspects of the burden associated with the reporting and recordkeeping involved with State plan development, submission, and ongoing use subject to the EPA's discretionary approval are within the scope of the PRA's Public Protection provision.

Commenters no ted that the EPA does not clarify for the public's understanding that the entire rulemaking cannot be made final until final approval from OMB pursuant to EPA's and OMB's responsibilities under the PRA. Commenters further noted that OMB must make a decisio n within 30 to 60 days after June 18, 2014 which have long since passed. Commenters stated that with its extension of the comment period until after the elections, the EPA has not, to the commenters’ knowledge, informed the public of the status of the OMB decision, including to what extent the public could comment on the proposed collection of information specifically contained in the rulemaking.

Commenters also stated that there is no mention made of whether the EPA analysis has determined, as it is requir ed by the law to do, how States can determine what aspects of the State submission and the EPA's discretionary approval of State plans mandate collections of information which are federally "sponsored". Commenters stated that due to the discretionary and c onditional approval by the EPA of State plan elements the fruits of all collection of information provided to the EPA by a State for the EPA's use to determine approval should be considered "federally sponsored". Commenters believed that the EPA misguidedl y assumed that collection of information by the States which may be already collected for State purposes is not9 considered "federally sponsored" if it is in turn provided as part of a required element of a State plan, which is contrary to the statute's mea ning for "sponsored" collections of information. Commenters stated that the EPA's assumptions are significant because the standard of review for the EPA and OMB under the PRA is "necessity, including practical utility" [44 USC 3508] as opposed to "reasonab leness" subject to judicial review under the (Administrative Procedure Act ( APA ) . Commenters noted that federally sponsored collections of information are required to be

re

- approved every three years and that opportunity for public comment in the re

- review is to be provided, otherwise they are legally unenforceable.

Commenters also noted that the EPA obfuscates by not delineating EPA information collection request ( ICR ) numbers from OMB control numbers which hinders the public participation required by the PRA and intended to be accomplished concurrently with the opportunity to comment on related provisions in the rulemaking. Commenters stated that the fact that OMB control numbers can be viewed in the Federal Register without indicating which OMB control nu mbers are associated with State plan requirements adds to this lack of transparency and clarity.

In addition , commenters stated that EPA's assertion that "These recordkeeping and reporting requirements are "specifically" authorized by CAA section 114 (42 U .S.C.7414) " further obfuscates and confuses the public. Commenters noted that the content and substance of what is contained in the reporting and recordkeeping requirements the Administrator may discretionarily prescribe is not specifically contained in t he language of the cited authorizing provision. Commenters noted that the collections of information which flow from the Administrator's discretion are subject to the PRA's required procedures and the scope of the Public Protection section. Commenters sta ted that the EPA gives the appearance of flouting the law and seeking an exemption from its statutory responsibilities by its use of the word "specifically" in this
context.
Commenters concluded by stating that the EPA's approach to its legal responsibi lities under the PRA lacks common sense and that they doubted the creditability of the EPA's high

- end labor cost estimate of some 44.8 million dollars for the whole Country to provide the necessary "federally sponsored" collections of information which und erpin State plans. Commenters stated that this estimate is not realistic or meaningful and when properly interpreted,
commenters believe the labor costs, among other burdens, are at least five times greater.

Response 2 : The EPA disagrees with comments sugg esting it has not fully satisfied its legal obligations under the PRA

. The information collection requirements in this propose rule have been submitted for approval to the OMB . The ICR document prepared by the EPA for the final rule has been assigned the EPA ICR number 2503.02. The average annual labor costs over the 3

- year period of this ICR from these reporting requirements increased from the proposed burden estimates due to specific comments received on staff labor needed to coordinate with other state agencies. The final estimate developed is still a range, but was increased and is now from approximately $ 35.8 to $ 58.1 million per year for states (detailed in Exhibit 1c of the Suppo rting Statement as found in the docket). Labor rates and associated costs are based on Bureau of Labor Statistics (BLS) data. Technical, managerial, and clerical average hourly rates for state government workers were based on the Bureau of Labor Statistics , Occupational Employment Statistics, May 2013 National Industry

- Specific Occupational Employment and Wage Estimates10 for state government (NAICS code 999200). The state government labor rates from BLS were multiplied by an overhead multiplier of 110 percen t to estimate loaded labor rates of $74.05 per hour for technical, $89.67 per hour for managerial, and $35.09 per hour for clerical. This information was provided in the docket for the proposed rule whereby the public had an opportunity to comment on thes e estimates and all estimates of costs, for an unprecedented period of 180 days.

With regard to the comments suggesting that CAA section 114 does not specifically authorize the information collection requirements in the rule, this is not accurate. Subpart B of 40 CFR part 60 requires the plans to include monitoring, recordkeeping, and reporting provisions consistent with the emission guidelines. In addition, section 114(a) states that the Administrator may require any owner or operator subject to any requir ement of this Act to: (A) Establish and maintain such records; (B) make such reports; (C) install, use, and maintain such monitoring equipment, and use such audit procedures, or methods; (D) sample such emissions (in accordance with such procedures or meth ods, at such locations, at such intervals, during such periods, and in such manner as the Administrator shall prescribe); (E) keep records on control equipment parameters, production variables or other indirect data when direct monitoring of emissions is i mpractical; (F) submit compliance certifications in accordance with section 114(a)(3); and (G) provide such other information as the Administrator may reasonably require.

Further, the public protection provision applies to collections of information conduc ted or sponsored by a federal agency. While the PRA does not prevent federal agencies from promulgating final rules containing collections, the PRA’s public protection provision does prevent federal agencies from penalizing a person for failing to comply w ith a federal collection of information that does not have a currently

- valid OMB control number. Dithiocarbamate Task Force v. EPA , 98 F.3d 1394 (D.C. Cir. 1996). The EPA disagrees with comments suggesting that state collections of information are necessar ily sponsored by the Federal government. Determining whether a Federal agency sponsors a collection of information is a fact

- specific inquiry to be addressed on a case

- by

- case basis.

N ote that this action has been assigned the OMB Control Number 2060

- 0698

. The final supporting statement will be provided to OMB, and after discussions between the a gency and OMB regarding its content, the supporting statement will be submitted for approval.11 9.3 REGULATORY FLEXI BILITY ACT

Comment 1: Commenters stated concerns about the EPA's lack of consideration of small entities when developing the proposed rule.

Commenters stated that the EPA failed to satisfy its statutory obligations under the Regulatory Flexibility Act (RFA) by not convening a small business advo cacy review (SBAR) panel for the proposed regulation.

Commenters disagreed with the EPA's conclusion that the emission guidelines established under CAA 111(d) will not have a significant economic impact upon a substantial number of small entities and that EPA's "acknowledgement" of an RFA analysis is not adequate. Commenters further stated that the rule was tailor made for an RFA analysis, and that the EPA itself admits that electricity prices, one of the largest concerns of small businesses, will increase as a result of the proposal. Commenters stated that energy costs are one of the top three business expenses for 35 percent of small businesses.

Commenters stated that the EPA has a duty to correctly estimate the proper number of entities to be included in the RFA analysis and that the EPA has failed to do so. Commenters noted that the EPA attempts to claim it conducted the RFA analysis in the preamble to the proposed rule and that the EPA attempts to brush off its RFA duty by stating it conducted stakehold er outreach. Commenters felt that there is no actual analysis as to why the EPA's proposed rule and its BSER determination including interim and final goals will not have a "significant economic impact on a substantial number of small entities" and stated that the EPA simply provided "buzz" words
to indicate an analysis was completed, but its statements lack any justifying substance. Commenters stated that they are entitled to a full analysis under the RFA and, because this did not occur, the Court must vac ate and remand the Rule to EPA.

Commenters stated that the proposed section 111(d) rule for existing power plants is fundamentally different from the prior national ambient air quality standards (NAAQS) proposed rules which the EPA cites as precedent for t he argument that an RFA analysis is not required for the proposed section 111(d) rule. . Commenters additionally stated that "while the EPA interprets the Regulatory Flexibility Act to only apply to costs directly imposed by a proposed rule, the Regulatory Flexibility Act does not make this distinction" in that "Section 605 of the Regulatory Flexibility Act only speaks to a significant economic impact on a substantial number of small entities and does not preclude indirect impacts on such entities." Comment ers further stated that the EPA is incorrect to assert that the emission guidelines set under section 111(d) do not result in direct costs to small entities through the application of the emission guidelines by states. Commenters noted that in the EPA's ec onomic analysis of Building Block 4, EPA "clearly expects a potentially significant economic impact on small entities" because

"...EPA acknowledges that half of the costs associated with enhancing energy efficiency programs will fall to the electricity con sumers, which will include the small entities that the Regulatory Flexibility Act is intended to address." Commenters stated that it is "irrational for EPA to provide these estimated cost impacts to electricity consumers, which clearly will have a signific ant economic1 2 impact on small businesses, yet certify there is no significant economic impact on small entities for purposes of avoiding a Regulatory Flexibility Act analysis."

Commenters stated that the 1999 Court decision cited by the Administrator to sup port her certification that this action will not have a significant impact on a substantial number of small entities does not preclude the EPA undertaking an analysis as contemplated by the Act to address the rising prices of electricity prices upon small businesses that will result. ( American Trucking Assoc. v. EPA , 175F.3d 1029, 104

- 45 (D.C. Cir.1999)) Commenters stated that how small businesses and governments must change to conform to the EPA's State plan requirements in the face of rising electricity p rices to meet the needs of its senior citizen populations is a consideration that merits more attention as millions of senior citizens are engaged in attempts to supplement social security income by becoming small business owners and participants. Commente rs recommended that Congress provide oversight of this certification under the procedures of the Congressional Review Act (CRA).

Commenters also stated that by proposing a "beyond the fenceline BSER analysis that includes emission reductions by electricity consumers and a portfolio approach that allows direct regulation of entities outside the regulated source category, the EPA has virtually ensured that small businesses will be regulated under the proposed rule. In fact, given the lack of practical flexibi lity available to states to achieve the aggressive emission reduction targets proposed by the EPA, section 111(d) implementing agencies will likely have no choice but to impose legally binding energy efficiency obligations on electricity consumers, includi ng many small businesses." Commenters expressed concern towards the possibility that small businesses, particularly industrial and manufacturing facilities, could be called upon to shoulder part of the compliance burden for this proposal if individual stat es choose to go beyond EGUs to achieve emission reductions under the proposed rule.

Commenters were specifically concerned that municipal power systems will bear the brunt of the EPA's proposed rule in ways that could put local communities at risk. Comment ers stated that small plants will suffer due to diseconomics in trying to achieve optimistic heat rate efficiency at plants that are already attempting to incorporate these improvements as they are available. Commenters further stated that many public powe r systems in Michigan have only a single basic unit, or a very small number of units, eliminating the ability to redispatch to a lower emitting unit or apply controls flexibly across multiple units. Commenters noted that these units are generally in isolat ed and/or rural areas where there are limited options for securing power. Commenters noted that the EPA has said itself that municipal utilities, small entities, and utilities with only one unit may suffer under the proposed rule.

Commenters noted that th e EPA continues to rely on unfounded data to support its regulatory actions. Commenters noted that the APA of 1946, in addition to the RFA and other long

- standing statutes, set clear guidelines covering public transparency of science and economic data used to justify a new regulation; however, the EPA continues ignore these requirements and dismiss the impact their actions have on small manufacturers and their employees.

Response 1: The EPA disagrees with commenters’ assertion that the EPA did not consider small businesses when developing the proposed rule. The EPA is aware that there is substantial interest in the rule among small entities (e.g., municipal and rural electric cooperatives) and has13 conducted an unprecedented amount of stakeholder outreach. As part of that outreach, agency officials participated in many meetings with individual utilities as well as meetings with electric utility associations. Specifically, the EPA Administrator, Gina McCarthy, participated in separate meetings with both the Nat ional Rural Electric Cooperative Association (NRECA) and the American Public Power Association (APPA). The meetings brought together leaders of the rural cooperatives and public power utilities from across the country. The Administrator discussed and excha nged information on the unique challenges, in particular the financial structure, of NRECA and APPA member utilities. Agency officials also engaged with industry leaders and trade association representatives from various industries. While formulating the p rovisions of the proposed rule, the EPA considered the input provided over the course of the stakeholder outreach. After proposal, the EPA continued to seek input from stakeholders, including small businesses. Opportunities for stakeholder input included p roviding testimony during public hearings and submitting comments during the public comment period. In addition, agency officials participated in over 300 meetings after proposal with a full range of stakeholders, including stakeholders with small business interests. The EPA considered this input in determining the provisions of the final rule.

The EPA disagrees with commenters that believe the EPA failed to satisfy the RFA’s statutory obligations and the rule must be vacated and remanded to the EPA because a full analysis was not conducted. The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the APA 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. The impact of concern is any significant adverse economic impact on small entities directly regulated by the rule. See American Trucking Assoc. v. EPA

, F.3d 1029, 1044

- 45 (D.C. Cir. 1999). The EPA made such a certification and, thus, a regulatory flexibility analysis is not required. In addition, the EPA was not statutorily obligated to convene a small business advocacy review panel. The EPA also disagrees with comm enters that believe the CAA section 111(d) rule for existing power plants is fundamentally different from the NAAQS. The EPA continues to assert that the establishment of NAAQS is analogous to establishing section 111(d) emission guidelines and that the EP A’s analysis here is consistent with the analysis conducted when the EPA establishes NAAQS. As stated in the preamble to the proposed rule (79 FR 34946

- 34947, June 18, 2014) and reaffirmed in the preamble to the final rule, the EPA’s rule will not impose a ny requirements on small entities. Specifically, emission guidelines established by the EPA under CAA section 111(d) do not impose any requirements (or associated costs) on non

- state entities (i.e., existing power plants) and, thus, will not have a significant economic impact upon a substantial number of small entities. After emission guidelines are promulgated, states establish standard s on existing sources, and it is those
state requirements that could potentially impact small entities.

With regard to commenters’ recommendation that Congress provide oversight of this certification under the procedures of the CRA, the EPA will submit a r ule report, which includes a copy of the rule and other required information, to the 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 , as required by th e CRA, 5 U.S.C. 801

– 808.

With regard to commenters’ concerns that non

- power producing small businesses, such as industrial and manufacturing facilities that consume electricity, may be required to bear some14 compliance burden and that small municipal power systems may be required to bear a significant compliance burden, the EPA points out that we do not prescribe how a state must meet the emission guidelines. That is, the emission guidelines do not require that non

- power producing small business

- owned facili ties or small municipal power systems bear compliance burden. CAA section 111(d) creates a partnership between the EPA and the states under which the EPA establishes emission guidelines and the states take the lead on meeting them by creating plans that ar e consistent with the EPA emission guidelines. The final rule establishes the BSER specifically for affected sources in the form of sub category

- specific performance rates for affected EGUs instead of only setting goals for a state. Performance rates are be ing established for two sub categories of affected fossil fuel

- fired EGUs

– fossil fuel

- fired electric utility steam

generating units and stationary combustion turbines. Each state will determine whether to impose

source

- by

- source limitations reflecting the BSER performance rates to each affected EGU or to adopt a state measures approach and meet a statewide mass

- based goal. A state choosing the state measures approach will have the option to place few or no requirements directly on affected EGUs. Specifical ly, the final guidelines are structured so that states are not required to use each and every one of the measures that the EPA determines constitute the BSER or to apply any one of those measures to the same extent that the EPA determines is achievable at reasonable cost on a national basis. Instead, in developing its plan, each state will have the flexibility to select the measure or combination of measures it prefers in order to achieve the CO 2 performance rates for its affected EGUs or meet the equivalen t statewide rate

- or mass

- based CO 2 goal.

The EPA recognizes that each state has differing policy considerations

– including varying emission reduction opportunities and existing state programs and measures

– and that the characteristics of the electricit y system in each state (e.g., utility regulatory structure, generation mix and electricity demand) also differ. The final rule gives states the flexibility to implement a broad range of approaches that recognize that the power sector is made up of a diver se range of companies that own and operate fossil fuel

- fired EGUs, including vertically integrated companies in regulated markets, independent power producers, rural cooperatives and municipally

- owned utilities, all of which are likely to have different ra nges of opportunities to reduce GHG emissions while facing different challenges in meeting these reductions. By expressing the application of the final BSER as a source

- specific performance standard, and by providing a translation of that to statewide rate

- and mass

- based CO 2 goals based on each state’s particular mix of sources , the rule allows states the flexibility to determine how to achieve the CO 2 reductions (i.e., greater reductions from one building block and less from another, as well as the adopti on of other measures that lower carbon intensity), and to adjust the timing in which reductions are achieved, in order to address key issues such as cost to consumers, electricity system reliability and the remaining useful life of existing generation asse ts.
The EPA disagrees with commenters’ assertions that the EPA continues to rely on unfounded data to support its regulatory actions, to ignore guidelines covering public transparency of science and economic data used to justify new regulations, and to dis miss the impact of its actions. Commenters did not provide specific information regarding these assertions. Through the public comment process, the public is provided an opportunity to comment on the EPA’s proposed action, including technical and economic data and analyses used by the EPA to support its proposal.15 Comment 2: Commenters asserted that the f inal rule should acknowledge states' discretion to address disproportionate cost impacts regulation will have on small utilities

.
Commenters said that cert ain small utilities will be impacted especially hard by the costs and related impacts of the Proposed Rule. Commenters said the Proposed Rule, although stating on its face that cost

- effectiveness is "especially important," does little to provide flexibilit y for certain small utilities to achieve any modicum of cost

- effectiveness. Commenters said given the small relative size of certain utilities and the relative impact that having very few jurisdictional EGUs

- even one jurisdictional EGU in many cases

- ca n have on electricity customers, the EPA should encourage states to exercise their discretion to address those impacts.

Commenters said the communities served by Deseret's rural cooperative members are sparsely populated, and most of the communities lie wi thin counties that are economically at

- risk, and include especially sensitive tribal communities as well as challenged communities located in rugged geographical areas sometimes surrounded by federally protected lands. Commenters said these communities are especially vulnerable to fluctuations in electricity rates, with sensitivities for already marginal economic development, business development, and relocation particularly at risk to price sensitivities.

Commenters said at the same time, electric reliabi lity and transmission constraints/limits pose special threats to some of these communities, many of which are fed through radial transmission systems, without significant backup electric generation within the load area should price/cost considerations pose potential threats to deliveries of power and energy.

Commenters said small systems such as Deseret have no large investor base to draw from, as Deseret is customer

- owned and cooperatively operated; it has no large customer base to which increases in oper ating expenses can be spread. Commenters said in fact, much of the power and energy generated by Deseret's generation system has long ago been committed under long

- term power sales agreement to third

- party utilities and Deseret has limited ability to pass through increases in costs associated with compliance with the CO 2 limits under the Proposed Rule to these long

- term purchase customers. Commenters said as a result, the increased cost of compliance will fall disproportionately on the rural and tribal customers who depend on Deseret as sole

- source all

- requirements suppli er.
Commenters said that state discretion should be acknowledged and encouraged in implementing the Proposed Rule to take into account the disproportionate cost

- impacts the Proposed Rule will have on small utilities, especially those such as Deseret. Comm enters emphasized that these small utilities have significantly fewer resources at their disposal to comply with the Proposed Rule and often there are no alternative electricity suppliers to serve small utilities' customers. Commenter s said rural cooperati ves in particular would be adversely impacted by the disproportionate effects the Proposed Rule would have on customers.

Response 2: As pointed out in the previous response, the EPA does not prescribe how a state must meet the emission guidelines. That is, the emission guidelines do not require that small utilities bear compliance burden. CAA section 111(d) creates a partnership between the EPA and the states under which the EPA establishes emission guidelines and the states take the lead on meeting them by creating plans that are consistent with the EPA emission guidelines. The final16 rule establishes the BSER specifically for affected sources in the form of source category

specific performance rates for affected EGUs instead of only setting goals for a s tate. Each state will determine whether to impose source

- by

- source limitations reflecting the BSER performance rates to each affected EGU or to adopt a state measures approach and meet a statewide mass

based goal. A state choosing the state measures approa ch will have the option to place few or no requirements directly on affected EGUs. Specifically, the final guidelines are structured so that states are not required to use each and every one of the measures that the EPA determines constitute the BSER or to apply any one of those measures to the same extent that the EPA determines is achievable at reasonable cost on a national basis. Instead, in developing its plan, each state will have the flexibility to select the measure or combination of measures it pref ers in order to achieve the CO 2 performance rates for its affected EGUs or meet the equivalent statewide rate

- or mass

- based CO 2 goal.

The EPA recognizes that each state has differing policy considerations

– including varying emission reduction opportuni ties and existing state programs and measures

– and that the characteristics of the electricity system in each state (e.g., utility regulatory structure, generation mix and electricity demand) also differ. The final rule gives states the flexibility to imp lement a broad range of approaches that recognize that the power sector is made up of a diverse range of companies that own and operate fossil fuel

- fired EGUs, including vertically integrated companies in regulated markets, independent power producers, ru ral cooperatives and municipally

- owned utilities, all of which are likely to have different ranges of opportunities to reduce GHG emissions while facing different challenges in meeting these reductions. By expressing the application of the final BSER as a source

- specific performance standard, and by providing a translation of that to statewide rate

- and mass

- based CO 2 goals based on each state’s particular mix of sources , the rule allows states the flexibility to determine how to achieve the CO 2 reductions (i.e., greater reductions from one building block and less from another, as well as the adoption of other measures that lower carbon intensity), and to adjust the timing in which reductions are achieved, in order to address key issues such as cost to consu mers, electricity system reliability and the remaining useful life of existing generation assets.

Comment 3 : Commenters stated that the supplemental proposal fails to meet the EPA's obligations under the RFA.

Commenters noted that the EPA's justification for concluding that this rulemaking will not have a significant impact on a substantial number of small entities is that the emissions caps do not apply directly to individual entities. Commenters stated that this misinterpretation depends on the notion th at the agency has satisfied its BSER obligations by announcing high

- level emissions standards, thus leaving selection of actual "systems of emission reduction" to the states: "states establish standards on existing sources, and it is those state requiremen ts that could potentially impact small entities." (79 FR at 34947) Commenters stated that this interpretation is mistaken for the same reason the agency is incorrect about characterizing emission goals as BSER

-- namely, those goals are not BSER, but the "st ate requirements that could potentially impact small entities" are. Commenters stated that the agency has therefore not only failed to meet the CAA requirement of identifying BSER but, in so doing, has also failed to comply with the RFA. Commenters stated that the agency's reliance on American Trucking Associations, Inc. v. EPA

,17 175 F.3d 1027, 1043

- 44 (D.C. Cir. 1999), is inappropriate, 79 Fed. Reg. at 34,947, because American Trucking concerned the NAAQS system, which specifically calls for local emissions caps, accompanied by State Implementation Plans ("SIPs"); it does not include a BSER requirement. Moreover, commenters stated that the EPA's argument assumes that states will play al ong and submit their own plans for implementing the proposed rule which was not a concern for the NAAQS in American Trucking because of the looming threat that non

- participating states could lose the federal highway funding or face other penalties. Comment ers noted that presumably, in instances where states decline to submit a plan, the agency itself will impose the very "requirements that could potentially impact small entities," but for which no RFA study has occurred. Commenters concluded that the agency was incorrect in assuming that it could sidestep the requirements of the RFA by denying any "significant economic impact on a substantial number of small entities."

Commenters stated that the EPA appears to take the position that it is not required to do a full analysis under these authorities because its proposal will not directly affect the Uintah

- Ouray Tribe or the small communities in commenters’ areas. Commenters noted that they do not have the authority in place to develop and implement a section 11 1(d) plan and that, absent changed circumstances, the EPA itself will need to implement the requirements set forth in the supplemental proposal.

Response 3 : The EPA disagrees with commenters’ assertion that the supplemental proposal fails to meet the EPA's obligations under the RFA and that the agency's reliance on American Trucking Assoc. v. EPA is inappropriate. As previously explained, the RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comm ent rulemaking requirements under the APA 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. The impact of concern is any significant adverse economic impac t on small entities directly regulated by the rule. See American Trucking Assoc. v. EPA , 175 F.3d 1029, 1044

- 45 (D.C. Cir. 1999). The EPA made such a certification and, thus, a regulatory flexibility analysis was not required. The EPA continues to assert t hat the establishment of NAAQS is analogous to establishing section 111(d) emission guidelines and that the EPA’s analysis here is consistent with the analysis conducted when the EPA establishes NAAQS. As stated in the preamble to the proposed rule (79 FR 34946

- 34947, June 18, 2014) and reaffirmed in the preamble to the final rule, the EPA’s rule will not impose any requirements on small entities. Specifically, emission guidelines established by the EPA under CAA section 111(d) do not impose any requirement s (or associated costs) on non

- state entities (i.e., existing power plants) and, thus, will not have a significant economic impact upon a substantial number of small entities. After emission guidelines are promulgated, states establish standards on existin g sources, and it is those
state requirements that could potentially impact small entities.

The EPA has appropriately met the CAA requirement of identifying the BSER for the sources affected by the final rule. As also previously explained, the final rule e stablishes the BSER specifically for affected sources in the form of source category

- specific performance rates for affected EGUs instead of only setting goals for a state. Performance rates are being established for two sub categories of affected fossil fu el

- fired EGUs

– fossil fuel

- fired electric utility steam

generating units and stationary combustion turbines. Each state will determine whether to impose

source

- by

- source limitations reflecting the BSER performance rates to each affected EGU or to18 adopt a state measures approach and meet a statewide mass

- based goal. A state choosing the state measures approach will have the option to place few or no requirements directly on affected EGUs.

Tribes are not required to submit implementation plans under the CAA. With respect to comments regarding states that decline to submit 111(d) plans or tribes without authority to develop and implement section 111(d) plans, the EPA has initiated a rulemaking for a federal plan as a mechanism for implementation of the emissio n guidelines for those states or tribes that do not develop a plan and for which the EPA makes a finding that it is necessary or appropriate

. . The affected EGUs in the states or areas of Indian country that do not develop a state plan as part of the emission guidelines are the entities that will be subject to the federal plan rulemaking. The federal plan rulemaking will appropriately assess the direct impacts on those EGUs, including those owned by small entities.

Comment 4 : Commenters requested that the EPA produce the modeling and cost information supporting the RFA analysis for Alaska.

Response 4 : The EPA is not setting CO 2 emission performance goals for Alaska. See section VII.F of the final rule preamble for discussion of geographically isolated states.

Comment 5 : Commenters believed that the EPA needs to provide flexibility to small businesses and cooperatives as provided in section 111(d) of the CAA. Commenters asserted that remaining useful life and stranded assets are the types of factors th at Congress expected states to be able to consider in determining what standard of performance to apply to each specific facility within their individual borders. Commenters provided an example of a flexibility that could be provided for small entities tha t would allow the entity to continue to operate and pay off its debt over the remaining life of the unit and not become a stranded asset. Specifically, the example provided by commenters is to allow the state flexibility to require smaller emissions reduct ions by small businesses without punishing the larger entities by increasing their reductions, which, according to commenters, would lead to a minor slippage in the state’s goal.

Response 5 : As stated above, under the CAA, the states are given the flexibility to design state plans that include any measure or combination of measures to achieve the required emission limitations. Each state may consider factors such as remaining useful life and s tranded assets in their determination of the most cost

- effective measures that achieve the reductions necessary to meet its goal. The final rule gives states the flexibility to implement a broad range of approaches that recognize that the power sector is m ade up of a diverse range of companies that own and operate fossil fuel

- fired EGUs, all of which are likely to have different ranges of opportunities to reduce GHG emissions while facing different challenges in meeting these reductions. By expressing the a pplication of the final BSER as a source

- specific performance standard, and by providing a translation of that to statewide rate

- and mass

- based CO2 goals, the rule allows states the flexibility to determine how to achieve the CO2 reductions (i.e., greater reductions from one19 building block and less from another, as well as the adoption of other measures that lower carbon intensity), and to adjust the timing in which reductions are achieved, in order to address key issues such as cost to consumers, electric ity system reliability and the remaining useful life of existing generation assets.

9.4 UNFUNDED MANDATE S REFORM ACT

Comment 1: Commenters stated that the EPA did not meet its requirements under the Unfunded Mandates Reform Act (UMRA).

Commenters noted th at the EPA stated in the proposed rule "The EPA has concluded that this action may have federalism implications, because it may impose substantial direct compliance costs on state or local governments, and the federal government will not provide the funds necessary to pay those costs." Commenters stated that this preamble language appears to contradict the EPA's rationale in the statutory and executive review of the UMRA and its determination that the Act does not apply to this rulemaking. Commenters stated concern that the EPA did not fully evaluate the potential impact on state and local governments when stating the following: "This proposed rule is also not subject to the requirements of section 203 of the UMRA because it contains no regulatory requiremen ts that might significantly or uniquely affect small governments." Commenters stated that the EPA must consider the significant costs imposed upon the states as well as the adverse impacts on local or small governments and requested that the EPA provide ap propriate funding to state agencies for the specific development, implementation and enforcement of a section 111(d) plan

Commenters stated that the proposed rules are an unfunded mandate and could impose substantial direct compliance costs on state and lo cal governments. Commenters noted that even though the unfunded mandate has been estimated by the EPA to be below $100 million in any one year, they question those estimates and assert that the proposed rules are contrary to the UMRA. Commenters stated tha t the EPA's analysis did not factor in the costs for creating and maintaining public databases to fulfill monitoring, reporting and recordkeeping requirements when determining whether the proposed rule would result in expenditures of $100 million or more f or state, local, and tribal governments. Commenters further stated that the federal government and state governments cannot afford the monitoring, reporting and record

- keeping costs associated with this rule, which the EPA estimates to be $68.3 million in 2020.

Commenters stated that the EPA's argument that the proposed rule does not result in expenditures of $100 million or more for state, local, and tribal governments, or the private sector, in any one year is incorrect and reflects the EPA's efforts to o bscure the costs that the proposed rule will impose. Commenters stated that the EPA ignored the costs of this rule on the private sector and noted that given the national scope and complexity of the proposed rule, the private sector expenditures alone will exceed $100 million annually. Commenters stated that the EPA touts flexibility in allowing states to develop their own SIPs, yet hides behind state responsibility when it comes to the resulting economic impacts of the rule. Commenters likened this to mand ating 50 outcomes for 50 different states under the guise of flexibility, then absolving responsibility for those 50 outcomes and concealing the resulting costs, which20 commenters stated is precisely the kind of unfunded mandate that the UMRA was designed t o prevent. Commenters concluded that the EPA erred in failing to conduct a qualitative and quantitative assessment of the costs, as well as identify and consider less costly regulatory alternatives as required by the UMRA.

Commenters stated that the EPA in sinuates that apart from the requirements for states to develop State plans the rulemaking does not impose direct compliance costs upon the states. Commenters asserted that the EPA’s PRA estimates demonstrating that costs are below $100 million are serious ly flawed and disagreed with the EPA’s determination that the costs do not reach threshold amounts to trigger the UMRA’s requirements. Commenters noted that the EPA acknowledges the expenses incurred by states to develop state plans will not be paid for by the federal government which amount to an EPA imposition of untold billions of dollars in "hidden taxes" in the next 10 years above and beyond those inherent in rising electricity prices that the public must eventually pay to state and local taxing author ities. Commenters stated that this incredible declaration by the EPA is an attempt to flout the purpose and requirements of the UMRA.

Commenters stated that any and all unfunded mandates associated with this proposed rulemaking are explicitly rejected by c ommenters. Commenters stated that if this rule proceeds, the EPA should provide adequate funding to the state environmental regulatory agencies from 2015

- 2033 for developing and modifying state plans, tracking progress with state goals, determining inter im compliance, and writing annual compliance certifications. Commenters stated that insufficient Federal resources would equate to an unfunded mandate on the states.

Commenters stated that much of the proposed rule relies on states to develop and implement
state

- specific plans and regulate areas that they have not in the past and that s tates are not staffed to implement the rule without additional funding and authority that would need to be appropriated through the legislative process.

Commenters stated tha t Arkansas will require significant resources, which are not available at the state level, to develop and implement a successful Plan and needs the EPA to provide additional financial resources to facilitate states' abilities to conduct their s ection 111(d ) planning and implementation.

Commenters further stated that the EPA must provide financial assistance to help states with the development of state or multistate plans.

Commenters stated that the EPA must provide state and local agencies with the signifi cant additional resources needed to make the CPP a success. Commenters urged the EPA to build upon its strong foundation of pre

- proposal dialogue to develop resources to facilitate states' abilities to conduct their s ection 111(d) planning.

Commenters requested that the EPA seek to secure additional federal funding for the states to cover the customary portion of costs associated with any new rule, and consider the availability of funding support in planning for new obligations. Commenters st ated that they understand that the Administration is seeking Congressional reallocation of funds from state air quality planning budgets for FY2015, but noted that it is important for the EPA to provide states with additional21 assistance, not reallocated fu nding, wherever possible, to help states meet the deadlines and obligations proposed under 111(d). Commenters further requested that the EPA include in its support of any final rule estimates of both state administrative costs and state direct implementati on costs (see ECOS Resolution 14

- 3. Approved September 2014).

Response 1: The EPA disagrees with commenters’ assertion that the EPA did not meet its requirements under the UMRA. With regard to one commenter s ’ statement that the UMRA language in the preamb le to the proposed rule contradicts the Federalism language in the preamble to the proposed rule (79 FR 34947, June 18, 2014), the EPA points out that the applicability criteria for UMRA and Federalism are not the same. With regard to Federalism , the EPA h as concluded that the action may have federalism implications, because it may impose substantial direct compliance costs on state or local governments, and the federal government
may not provide the funds necessary to pay those costs. Specifically, the rul e is likely to result in the expenditure by state and/or local governments in the aggregate of $25 million or more in any
one year.
With regard to UMRA , the EPA has concluded that the action is not subject to the requirements of section 202 or section 205 of the UMRA. Specifically, the action does not contain a federal mandate that may result in expenditures of $100 million or more for state, local and tribal governments, in the aggregate, or the private sector, in any one year. The basis for these conclusi ons is that the emission guidelines under CAA section 111(d) do not impose any direct compliance requirements on EGU sources. After emission guidelines are promulgated, states establish standards for existing sources, and it is those state requirements tha t impact EGU sources, including those owned by state, local and tribal governments and by the private sector. The federal mandate associated with these emission guidelines is the burden imposed on states 2 to develop, implement, and enforce state plans. The average, annual burden on states during 2016 through 2018 is estimated to be $3 5

. 8

- $ 58

. 1 million. Estimated state burden during this time period includes activities associated with developing state plans, such as team leadership, political outreach, gen eral coordination of state plans, energy and policy analysis, coordination between state energy office and air office, modeling, and data analysis.

The EPA has developed projections for the compliance years 2020, 2025, and 2030. State burden is estimated to be $ 13.9 million in compliance year 2020 and $ 14.8 million in each of the compliance years 2025 and 2030. State burden in all three compliance years includes implementation activities such as the review and assessment of building blocks used by the stat e that contribute to their state reduction goal

, possible development of contingency measures, state plan revisions, coordination with affected sources, oversight of consumer

- based energy efficiency programs, and possible public meeting development on stat e plan revisions. State burden in compliance years 2025 and 2030 also includes compilation of quarterly EGU data and preparation of a summary of the state program ’s progress . The EPA did not include costs for states to create and maintain public databases to fulfill monitoring, reporting and recordkeeping requirements. The EPA will have in place a central database for states to upload required

2 “State” is defined under UMRA as “a State of the United States, the District of Columbia, a territory or possession of the Unites States, and an agency, instrumentality, or fiscal agent of a State but does not mean a local government of a State.”22 information and, thus, there is not a need for state specific databases. With regard to commenters’ reference to the proposal’s estimate of $68.3 million in 2020 for monitoring, reporting, and recordkeeping, and their statement that federal and state governments cannot afford such costs, the EPA points out that the vast majority of the estimated monitoring, reporting and recordkeeping cost in that 2020 estimate is the one

- time cost to EGUs for development of a monitoring system for net energy output to comply with state requirements. As
p reviously noted, state burden in 2020 is estimated to be $ 13.9 million.

With regard to section 203 of the UMRA, the EPA has concluded that the rule is not subject to the requirements of section 203 because it contains no regulatory requirements that might significantly or uniquely affect small governments. UMRA defines a “small government” as a city, county, town, township, village, school district, or special district with a population of less than 50,000. Specifically, the emission guidelines impose no d irect compliance requirements on small governments but, rather, impose a burden on state governments in that they are required to develop, implement and enforce state plans. Nevertheless, as explained in the preamble to the proposed rule (79 FR 34947, June 18, 2014), in light of the interest among governmental entities, the EPA consulted with 10 national organizations representing state and local elected officials prior to proposing the emission guidelines.

The EPA points out that, in accordance with Execut ive Order 12866, Executive Order 13563, and the EPA’s “Guidelines for Preparing Economic Analyses,” a n RIA was prepared in support of the proposed action as well as the final action. The RIA presents the expected benefits, costs, and economic impacts of il lustrative strategies states may implement to comply with the emission guidelines in 2020, 2025, and 2030. Additionally, the RIA includes information on potential impacts on electricity markets, employment, and markets outside the electricity sector.

With regard to commenters’ request that funding be provided to state agencies for development, implementation and enforcement of their section 111(d) plans, the EPA points out that the President’s FY 2016 Budget request recognized that states will play a critic al role in the successful implementation of the Clean Power Plan. That is why the budget included a $25 million increase to support states as they implement the requirements of the President’s Clean Power Plan. Of this increase, $17.5 million would be prov ided to support states’ Clean Power Plan modeling, technical analysis, and training efforts under CAA section 103 authority and $7.5 million would be allocated to states for Clean Power Plan activities under CAA section 105 authority. The President’s FY 20 16 Budget also included a $4 billion Clean Power State Incentive Fund to support states that choose to go beyond the minimum requirements established in the Clean Power Plan for the pace and extent of carbon pollution reductions from the power
sector.

In a ddition, other existing sources of funding might be available, such as other funds made available under Clean Air Act sections 103 and 105 which could assist with planning generally. There are also sources of funding targeted at specific sectors or emissio ns reductions opportunities, such as the Drinking Water State Revolving Fund and Clean Water Revolving Loan Fund, which may be able to assist states in reducing water pollution and achieving carbon dioxide emissions reductions through demand side energy ef ficiency measures.23 Comment 2 : Commenters stated that the EPA's broad interpretation of its authority to regulate carbon under the CAA unfairly shifts the cost of designing, implementing and enforcing this proposed federal rule t o the states. Commenters noted that since the EPA has no existing CO 2 emission program for electricity generating units, the EPA is also shifting to the states the cost, uncertainty and risk of developing a new program. Commenters stated that any proposal that shifts such burdens to the states must be accompanied by adequate resources for planning and implementation, and these resources should not come at the expense of a state's existing air quality programs.

Commenters noted that the EPA proposed to impl ement this rule through state implementation plans that would address such far

- reaching topics as re

- dispatch of power from coal to natural gas generation facilities, new renewable and nuclear generation, and energy efficiency programs. However, commenters stated that once approved, these plans would become federally enforceable and would conflict with the state's ability to pass timely and responsive legislation to protect and enhance its power system. Commenters stated that the EPA's proposed regulation o f CO 2 emissions from EGU's through federally enforceable state implementation plans should be abandoned.

Response 2: The EPA’s rule provides states the flexibility to design state plans that include any measure or combination of measures to achieve the req uired emission limitations. The final rule establishes the BSER specifically for affected sources in the form of subcategory

- specific performance rates for affected EGUs

– fossil fuel

- fired electric utility steam

- generating units and stationary combustion turbines. Each state will determine whether to impose source

- by

- source limitations reflecting the BSER performance rates to each affected EGU or to adopt a state measures approach and meet a statewide mass

- based goal. A state choosing the state measures
ap proach will have the option to place few or no requirements directly on affected EGUs. Specifically, the final guidelines are structured so that states are not required to use each and every one of the measures that the EPA determines constitute the BSER o r to apply any one of those measures to the same extent that the EPA determines is achievable at reasonable cost on a national basis. Instead, in developing its plan, each state will have the flexibility to select the measure or combination of measures it prefers in order to achieve the CO 2 performance rates for its affected EGUs or meet the equivalent statewide rate

- or mass

- based CO 2 goal. T hus, t he rule does not force states to change their energy policies and move away from coal

- fired power plants. Each state has the flexibility to choose the most cost

- effective measures given that state’s energy profile and economy, as long as the state achieves the reductions necessary to meet its goal. The EPA recognizes that each state has differing policy considerat ions

– including varying emission reduction opportunities and existing state programs and measures

– and that the characteristics of the electricity system in each state (e.g., utility regulatory structure, generation mix and electricity demand) also diffe r. The final rule gives states the flexibility to implement a broad range of approaches that recognize that the power sector is made up of a diverse range of companies that own and operate fossil fuel

- fired EGUs, including vertically integrated companies in regulated markets, independent power producers, rural cooperatives and municipally

- owned utilities, all of which are likely to have different ranges of opportunities to reduce GHG emissions while facing different challenges in meeting these reductions. In formulating their plans, states will be in a position to recognize the distinctive attributes of their government, affected utilities, including small businesses and electric cooperatives, and private citizens and to consider compliance strategies to in crease flexibility and address key issues such24 as cost to consumers, electricity system reliability and the remaining useful life of existing generation assets.

With regard to comments regarding resources for state agencies for planning and implementation purposes, as pointed out above, the President’s FY 2016 Budget request recognized that states will play a critical role in the successful implementation of the Clean Power Plan. That is why the budget included a $25 million increase to support states as th ey implement the requirements of the President’s Clean Power Plan. Of this increase, $17.5 million would be provided to support states’ Clean Power Plan modeling, technical analysis, and training efforts under CAA section 103 authority and $7.5 million wou ld be allocated to states for Clean Power Plan activities under CAA section 105 authority. The President’s FY 2016 Budget also included a $4 billion Clean Power State Incentive Fund to support states that choose to go beyond the minimum requirements establ ished in the Clean Power Plan for the pace and extent of carbon pollution reductions from the power sector.

In addition, other existing sources of funding might be available, such as other funds made available under Clean Air Act sections 103 and 105 which could assist with planning generally. There are also sources of funding targeted at specific sectors or emissions reductions opportunities, such as the Drinking Water State Revolving Fund and Clean Water Revolving Loan Fund, which may be able to assist st ates in reducing water pollution and achieving carbon dioxide emissions reductions through demand side energy efficiency measures.

Finally, in response to states’ and other stakeholders’ requests for guidance from the EPA on how to design plans, the agency is proposing this summer a federal plan that will serve as a model rule that states can adopt or tailor. Using the model rule could relieve the administrative burden on states to design plans. The model rule will provide an example for how to design an

em issions trading program that is implementable without command

- and

- control regulatory measures such as ordering installation of specific pollution control equipment, ordering re

dispatch to different fuel sources, building new renewable energy, or operating new energy efficiency programs. Further, states may simply choose not to submit a plan and to have a federal plan based on the proposed model trading rule promulgated for their affected EGUs rather than designing a state plan of their own. Finally, in response to states’ and other stakeholders’ requests for guidance from the EPA on how to design plans, the agency is proposing this summer a federal plan that will serve as a model rule that states can adopt or tailor. Using the model rule could relieve th e administrative burden on states to design plans. The model rule will provide an example for how to design an emissions trading program that is implementable without command

- and

- control regulatory measures such as ordering installation of specific polluti on control equipment, ordering re

- dispatch to different fuel sources, building new renewable energy, or operating new energy efficiency programs. Further, states may simply choose not to submit a plan and to have a federal plan based on the proposed model trading rule promulgated for their affected EGUs rather than designing a state plan of their own.

Comment 3: Commenters stated that the supplemental proposal fails to meet the EPA's obligations under the UMRA and that the EPA appears to take the position that it is not required to do a full analysis under these authorities because its proposal will not directly affect the25 Uintah

- Ouray Tribe or the small communities in commenters’ areas. Commenters noted that they do not have the authority in place to devel op and implement a section 111(d) plan and that, absent changed circumstances, the EPA itself will need to implement the requirements set forth in the supplemental proposal.

Response 3: The EPA has initiated a rulemaking for a federal plan as a mechanism for implementation of the emission guidelines for tribes (where it makes a finding that it is necessary or appropriate) , such as the commenters’, that do not have the authority in place to develop and implement a section 111(d) plan. The affected EGUs in t he areas of Indian country that do not develop a tribal plan under the emission guidelines are the entities that will be subject to the federal plan rulemaking. The federal plan rulemaking will appropriately address the requirements of UMRA with regard to those EGUs.

9.5 EXECUTIVE ORDER 13132: FEDERALISM

Comment 1 : Commenters agreed with the EPA that multiple stakeholder calls and meetings were held prior to the proposed rule, but noted that during these meetings the EPA did not identify its intent to propose "beyond the fenceline" measures in regulating electric generating units, providing little time for input on these measures. Commenters stated that the EPA has not adhered to the principles and criteria of E.O. 13132 in the following ways:

1. Commenter s noted that section 2(f) of the E.O. states, "In the search for enlight ened public policy, individual s tates and communities are free to experiment with a variety of approaches to public issues. One

- size

- fits

- all approaches to public policy problems can i nhibit the creation of effective solutions to those problems." Commenters stated that the EPA's criteria for establishing state goals utilize a one

- size

- fits

- all approach. Commenters noted that there exists significant variation in conditions among the 50 states and the EPA's one

- size

- fits

- all approach that will inhibit states from developing effective solutions creatively.

2. Commenters noted that section 2(g) of the E.O. states, "Acts of the national government... that exceed the enumerated powers of that go vernment under the Constitution violate the principle of federalism established by the Framers." Commenters contend ed the EPA's proposed rule violates the principle of federalism established by the framers by going "beyond the fence line" in controlling CO 2 from fossil fueled fired power plants.

3. Commenters noted that section 2(i) of the E.O. requires the EPA to be deferential to states when taking action that affects the policymaking discretion of the states and act with the greatest caution where state an d local governments have identified uncertainties regarding the constitutional or statutory authority of the national government. Commenters stated that the EPA is affecting the policymaking discretion of the states and not acting with the greatest caution by proposing a rule that impacts state agencies, small businesses, electric coops, and private citizens that have not26 before been regulated under the CAA. Commenters believed that it also forces states to change their energy policies and move away from re liable and affordable coal

- fired power plants to unreliable and unaffordable power sources.

4. Commenters noted that section 3(b) of the E.O. states, "National action limiting the policymaking discretion of the States shall be taken only where there is consti tutional and statutory authority for the action .... " Commenters stated that the EPA is not adhering to this section because section 111(d) of the CAA limits the EPA's role to procedure and not the substance. Commenters noted that by defining the state's standard (goal) that a state may not revise, the EPA is exceeding its constitutional and statutory authority.

5. Commenters noted that section 3(c) of the E.O. states, "With respect to Federal statutes and regulations administered by the States, the national government shall grant the States maximum administrative discretion possible. Intrusive oversight of State administration is neither necessary nor desirable." Commenters noted that the EPA has the authority to approve or disapprove a 111(d) plan and if the EPA approves of that plan, the requirements of the plan are federally enforceable and allow the EPA oversight. Commenters noted that one of the building blocks involves the demand side use of electricity, which if included by a state, allows the EPA overs ight and enforcement authority over individuals and small business. Commenters stated that the U.S. Supreme Court has just ruled this is beyond the EPA's authority under the CAA. Section 111(d) was not designed to regulate individuals and small business

an d therefore the EPA's claimed authority to regulate individuals under section 111(d) is intrusive federal oversight created by the EPA's coercion of state goal calculations.

6. Commenters noted that section 3(d)(2) of the E.O. states, "When undertaking to formulate and implement policies that have federalism implications, agencies shall ... where possible, defer to States to establish standards ... " Commenters believed that by informing states that once this rule is finalized state goals can no longer be

a djusted; the EPA is not adhering to this section of the Executive Order. Commenters noted that the EPA may state this proposed rule gives states the flexibility to demonstrate compliance, but the only flexibility it gives is to follow the EPA's goal to shu tdown coal

- fired power plants.

7. Commenters noted that section 6(b) of the E.O. states, " ... no agency shall promulgate any regulation that has federalism implications, that imposes substantial direct compliance costs on State and local governments, and th at is not required by statute, unless: 1) funds necessary to pay the direct costs incurred by the State and local governments in complying with the regulation are provided by the Federal Government; or 2) the agency, prior to formal promulgation of the reg ulation, (A) consulted with State and local officials ... " Commenters noted that EPA states in the preamble that this proposed regulation will require states to expend resources on the development and implementation of the program without any funds from t he federal government. Commenters stated that this is an unfunded mandate upon the states.27 Response 1 : The EPA disagrees with commenters’ statement that the EPA has not adhered to the principles and criteria of E.O. 13132. With respect to section 2(f) of E.O. 13132, the EPA disagrees with commenters’ assertion that the EPA’s criteria for establishing state goals utilizes a

one

- size

- fits

- all approach. The EPA provides for variation in conditions that exists among the 50 states in that the states have the fl exibility to design state plans that include any measure or combination of measures to achieve the required emission limitations. The final rule establishes the BSER specifically for affected sources in the form of specific performance rates for affected E GUs instead of only setting goals for a state. Performance rates are being established for two sub categories of affected fossil fuel

- fired EGUs

– fossil fuel

- fired electric utility steam

generating units and stationary combustion turbines. Each state will determine whether to impose

source

- by

- source limitations reflecting the BSER performance rates to each affected EGU or to adopt a state measures approach and meet a statewide mass

- based goal. A state choosing the state measures approach will have the optio n to place few or no requirements directly on affected EGUs. Specifically, the final guidelines are structured so that states are not required to use each and every one of the measures that the EPA determines constitute the BSER or to apply any one of thos e measures to the same extent that the EPA determines is achievable at reasonable cost on a national basis. Instead, in developing its plan, each state will have the flexibility to select the measure or combination of measures it prefers, given that state’ s energy profile and economy, in order to achieve the CO 2 performance rates for its affected EGUs or meet the equivalent statewide rate

- or mass

- based CO 2 goal.

With respect to section 2(g) of E.O. 13132, the EPA disagrees with commenters’ assertion that
t he EPA’s rule violates the principle of federalism by going "beyond the fence line" in controlling CO 2 from fossil fueled

- fired power plants. By expressing the application of the final BSER as a source

- specific performance standard that can be imposed on e ach affected EGU, and by providing a translation of that performance standard to statewide rate

- and mass

- based CO 2 goals, the rule allows states the flexibility to determine how to achieve the CO 2 reductions. States can require greater reductions from one building block and less from another, and, thus, are not required to obtain CO 2 reductions through any particular measures.
With respect to section 2(i) of E.O. 13132, the EPA disagrees with commenters’ assertions that the EPA is affecting states’ policym aking discretion and not acting with greatest caution. As discussed in section V.B. of the preamble to the final rule , the EPA has the authority to establish the BSER and the resulting emission performance levels, and the structure of this rule does not

re present over

- reaching by the EPA. As previously stated, the EPA’s rule provides states the flexibility to design state plans that include any measure or combination of measures to achieve the required emission limitations. The final rule establishes the BS ER specifically for affected sources in the form of subcategory

- specific performance rates for affected EGUs

– fossil fuel

fired electric utility steam

- generating units and stationary combustion turbines. Each state will determine whether to impose source

- by

- source limitations reflecting the BSER performance rates to each affected EGU or to adopt a state measures approach and meet a statewide mass

based goal. A state choosing the state measures approach will have the option to place few or no requirements d irectly on affected EGUs. Specifically, the final guidelines are structured so that states are not required to use each and every one of the measures that the EPA determines constitute the BSER or to apply any one of those measures to the same extent that the EPA determines is achievable at reasonable cost on a national basis. Instead, in developing its plan, each state will have the flexibility to select the measure or combination of measures it prefers in28 order to achieve the CO 2 performance rates for its affected EGUs or meet the equivalent statewide rate

- or mass

- based CO 2 goal. T hus, t he rule does not force states to change their energy policies and move away from coal

- fired power plants. Each state has the flexibility to choose the most cost

- effective measures given that state’s energy profile and economy, as long as the state achieves the reductions necessary to meet its goal. The EPA recognizes that each state has differing policy considerations

– including varying emission reduction opportunities and existing state programs and measures

– and that the characteristics of the electrici ty system in each state (e.g., utility regulatory structure, generation mix and electricity demand) also differ. The final rule gives states the flexibility to implement a broad range of approaches that recognize that the power sector is made up of a dive rse range of companies that own and operate fossil fuel

- fired EGUs, including vertically integrated companies in regulated markets, independent power producers, rural cooperatives and municipally

- owned utilities, all of which are likely to have different r anges of opportunities to reduce GHG emissions while facing different challenges in meeting these reductions. In formulating their plans, states will be in a position to recognize the distinctive attributes of their government, affected utilities, includin g small businesses and electric cooperatives, and private citizens and to consider compliance strategies to increase flexibility and address key issues such as cost to consumers, electricity system reliability and the remaining useful life of existing gene ration assets.

The EPA disagrees with commenters’ overall assertion that the EPA is not adhering to section 3(b) of E.O. 13132. Specifically , the EPA disagrees with commenters’ inference that the EPA’s action limits the policymaking discretion of states a nd commenters’ assertions that by defining the state's standard (goal), the EPA is exceeding its constitutional and statutory authority which is limited by section 111(d) of the CAA to the role of providing procedure and not substance . As explained immedia tely above, section V.B. of the preamble explains that the EPA has the authority to establish the BSER and the resulting emission performance levels, and that the structure of this rule does not represent over

- reaching by the EPA. In addition, as also exp lained immediately above, the final rule does not force states to change their energy policies, but gives states the flexibility to design state plans that may include a broad range of measures to achieve CO 2 reductions.

With respect to commenters’ assert ions regarding section 3(c) of E.O. 13132, the EPA points out that the final state goals do not include demand

- side energy efficiency (building block 4) as a component of the BSER. Thus, commenters’ assertion that use of the building block that involves d emand side use of electricity creates intrusive federal oversight in that it allows the EPA oversight and enforcement authority over individuals and small businesses is moot and need not be addressed in this response. The EPA disagrees with the commenter’s characterization of the recent UARG decision. While the court noted that the EPA’s analysis was limited so as to not include such programs, the legality of such a requirement as part of a Best Available Control Technology determination was not before the court, let alone the legality of such programs under the CAA generally. Moreover, the EPA is not regulating non

- EGU entities.

The EPA disagrees with commenters’ assertion that the EPA is not adhering to section 3(d)(2) of E.O. 13132. As explained above, se ction V.B. of the preamble explains that the EPA has the authority to establish the BSER and the resulting emission performance levels, and that the structure of this rule does not represent over

- reaching by the EPA. As previously stated, the EPA’s rule pr ovides states the flexibility to design state plans that include any measure or29 combination of measures to achieve the required emission limitations and, further, does not force states to change their energy policies and move away from coal

- fired power pla nts.
With respect to section 6(b) of E.O. 13132, the EPA consulted with state and local officials early in the process of developing the proposed regulation. As described in the Federalism discussion in the preamble to the proposed standards of performance for GHG emissions from new EGUs (79 FR 1501, January 8, 2014), the EPA consulted with state and local officials in the process of developing the proposed standards for newly constructed EGUs. This outreach regarded planned actions for new, reconstructed, modified and existing sources. The EPA invited the following 10 national organizations representing state and local elected officials to a meeting on April 12, 2011, in Washington DC: (1) National Governors Association; (2) National Conference of State Leg islatures, (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) Coun ty Executives of America, and (10) Environmental Council of States. On February 26, 2014, the EPA re

- engaged with those governmental entities to provide a pre

- proposal update on the emission guidelines for existing EGUs and emission standards for modified and reconstructed EGUs. In addition, as described in section III.A of the preamble to the proposed carbon pollution emission guidelines for existing EGUs (79 FR 34845

- 34847, June 18, 2014), extensive stakeholder outreach conducted by the EPA allowed state leaders, including governors, environmental commissioners, energy officers, public utility commissioners, and air directors, opportunities to engage with EPA officials and provide input regarding reducing carbon pollution from power plants. The EPA also in cluded in the preamble to the final regulation, and provided to the OMB, a federalism summary impact statement (FSIS). The FSIS consists of a description of the extent to which the agency consulted with state and local officials, a summary of the nature of their concerns and the agency’s position supporting the need to issue the regulation, as well as, a statement of the extent to which the concerns of state and local officials have been met. In addition, a list of the state and local government commenters, including the docket document identification numbers associated with the comments, has been provided to the OMB and has been placed in the docket for the rulemaking.

9.6 EXECUTIVE ORDER 13175, CONSULTATION AND COORDINATION WIT H INDIAN TRIBAL GOVERN MENTS

Comment 1: Commenters believed that the EPA lacked meaningful government

- to

- government consultation as part of E.O. 13175. Commenters stated that the EPA's outreach to tribes was minimal at best, and that no one in the agency contacted commenters directly as required by E.O. 13175. Commenters stated that significant substantive policy prescriptions are likely to cause serious setbacks to their Nation, potentially over multiple generations. Commenters noted that the longstanding trust responsibility between the federal government and commenters may be violated unless an exception and/or mitigation of the rule is provided to commenters.

Response 1: The EPA appreciate s the comments and recognize s the importance of understanding the tribes' interests and providi ng appropriate consultation with tribes in the30 development of this rule, consistent with EPA policy and the federal government's trust responsibility to all federally recognized tribes. We agree that these guidelines impact tribes and, as such, we actively encouraged tribes to participate in the pre

- proposal outreach for these guidelines. Additionally, we conducted outreach and information sharing on the content of the proposal with tribal environmental professionals through the monthly National Tribal Air Association (NTAA) calls and held an informational session at the National Tribal Forum (NTF) in Anacortes, Washington in May 2014. Furthermore, we held five webinars open to tribal environmental professionals; 11 listening sessions held at all ten EPA reg ions and at EPA headquarters in Washington D.C.; four two

- day public hearings for the proposed guidelines and a public hearing for the supplemental proposal; and three informational meetings (via teleconference) targeted specifically to the tribal communit y.

In addition, we sent out four letters in 2013 and 2014 to all tribal leaders and offered consultation on the rule, prior to proposal and after the proposal, to ensure tribes had the opportunity to participate in the process. As further recognition of th e importance of appropriate consultation with tribes in the development of these guidelines, we held (face

- to

- face) informational meetings (2) and government

- to

- government consultations (10) with tribes requesting consulta tion on July 18, 2014 at EPA's Reg ion 8 office in Denver, Colorado; September 15, 2014 in New Mexico; and at the Inter Tribal Council of Arizona on November 18, 2014 in Phoenix, Arizona. In addition, we held two teleconference government

- to

- government consultations with other tribes
as req uested and we held government

- to

- government consultation several more times in 2015. The concerns raised in these interactions helped us to understand tribes' interests and allowed tribes to weigh in on the decisions made on the rule, consistent with EPA p olicy and federal trust responsibilities. Further information on the consultations conducted can be found in the docket for this action.

Furthermore, commenters expressed concern about the potential effects on tribal treaty rights. Under the U.S. constitut ion, treaties have the same legal force as federal statutes, and the United States' government

- to

- government relationship with and trust responsibility to federally recognized tribes reinforces the importance of honoring these treaty rights. The EPA takes seriously its obligation to honor and respect tribal rights and resources protected by treaties. While treaties do not expand the authorities granted by the EPA's underlying statutes, we must ensure that our actions do not conflict with tribal treaty right s. When implementing programs, the EPA strives to enhance protection of tribal treaty rights and treaty

- covered resources where we have the discretion to do so.

Comment 2: Commenters found that the proposed guideline s have implications to t ribes beyond those identified by the EPA. Commenters stated that some of these have already been addressed under the multistate plans and environmental justice sections of their organization's comments, but other implications to t ribes could exist such as potential effects on t ribal treaty rights. Commenters noted that E.O. 13175 requires the EPA to develop an accountability process to ensure "meaningful and timely input by development of regulatory policies that have tribal implications." Commenters stated that the EPA accomplished this on a number of levels as identified in the proposed guidelines, but more needs to be done by the EPA to fulfill the intent of E.O. 13175.31 Response 2: The EPA agrees with commenters that it is importan t to ensure meaningful a nd timely input in the development of regulatory policies that have tribal implications. As a result, the EPA offered consultation to all tribes during the pre

- proposal and post

- proposal phases of th e rulemaking. The extent of EPA’s outreach and consultati on efforts is fully explained in Response 1 above. Additionally, the EPA will offer consultation to all tribes after this rule is pro mulgated to assist them in understanding the implications that implementing this rulemaking may have on them. Furthermore, the EPA will be conducting outreach to tribes throughout the implementation
process.

Comment 3: Commenters noted that the proposed guidelines indicate that the EPA organized, encouraged, and attended meetings to discuss multistate planning efforts with the rationale for th ese meeting being that "because the power sector is interconnected and electricity generated at power plants crosses state lines, states, utilities, and ratepayers might benefit from states working together to address the requirements o f the rulemaking implementation." Commenters were unaware of any Indian Tribes being invited to participate in any of these meetings, which would appear to contradict the EPA's understanding of EGUs located on t ribal lands that would warrant the involvemen t of t ribes in multistate planning meeting efforts. Commenters noted that Indian Tribes can be treated as states under s ection 301(d) of the CAA and as such, there is no reason why the EPA should not have involved them in meetings with states concerning mu ltistate planning efforts. Commenters stated that "this lack of consultation is compounded by the EPA's request for comments under the proposed rule as to whether a Tribe wishing to develop and implement a plan, much like a state, should have the option of including the EGUs located in its areas of Indian Country in a multi

- jurisdictional plan with one or more states."

Response 3: Commenters stated that tribes were not involved in the multi

- state planning process. The EPA is committed to ensuring that tribe s are included in conversations regarding multistate planning. In regards to the meetings commenters noted above, the EPA is unaware of any meetings organized by the EPA on multi

- jurisdictional planning. However, the EPA is aware that external organization s have held multi

- state planning meetings. Those organizations, and not EPA, determined who was invited to participate in those meetings.

Comment 4: Commenters also noted that in the EPA's promotion of a multistate planning approach under the proposed ru le, it did not work through the five regional planning organizations (RPOs) which the EPA has supported financially in the past. Commenters stated that the RPOs have "an established framework and governance, established relationships between states and Tri bes, and a proven track record of using their combined technical, policy, and legal resources and expertise to address air quality issues effectively on a local, regional, and national level." Commenters additionally noted that "in some of the RPOs, there is a particularly high understanding and respect among state and federal partners about t ribal cultural values and practices, which would help in implementing the proposed r ule across state and t ribal borders."32 Commenters recommended that the EPA provide s ufficient funding to and work closely with the existing RPOs to help implement the proposed r ule properly and effectively.

Commenters noted that Indian Tribes can be treated as states under s ection 301(d) of the CAA and as such, there is no reason why the EPA should not have involved them in meetings with states concerning multistate planning efforts. Commenters noted that this relates to the EPA's responsibility to consult with t ribes on a government

- to

- government basis, something that it failed to do in t his specific case. Commenters stated that this lack of consultation is compounded by the EPA's request for comments under the p roposed r ule as to whether a t ribe wishing to develop and implement a plan, much like a state, should have the option of includin g the EGUs located in its areas of Indian Country in a multi

- jurisdictional plan with one or more states.

Commenters stated that the EPA's outreach to tribes was minimal at best, and that no one in the agency contacted commenters directly as required by E. O. 13175. Commenters stated that significant substantive policy prescriptions are likely to cause serious setbacks to their Nation, potentially over multiple generations.

Commenter s expressed concern that the Navajo Nation president and his carbon plan team have not shared with the general Navajo public their plan and that there has been no public hearing conducted on the Navajo land. Commenter s stated that they do not know if the Navajo Nation Council had their input into this plan.

Response 4: Commente rs stated that the five regional planning organizations were not involved in the multi

- state planning process. As stated above, the EPA is committed to ensuring that tribes are included in conversations regarding multistate planning. In regards to the meet ings commenters noted above, the EPA is unaware of any meetings organized by the EPA on multi

jurisdictional planning. However, the EPA is aware that external organizations have held multi

state planning meetings. Those organizations, and not EPA, determin ed who was invited to participate in those meetings. Additionally, the EPA is committed to including all stakeholders including tribes in the outreach activities around this rulemaking. As detailed in Response 1 above, the EPA conducted outreach with tribe s in both the pre

- proposal and post

- proposal stages of this rulemaking and we will continue to do so throughout the implementation process. Furthermore, the EPA is not aware of what public involvement the Navajo Nation sought, but the EPA is not in this ac tion acting on a plan for the Navajo Nation.

Comment 5: Commenters requested additional consultation between the EPA and Indian Tribes. Commenters requested consultation to discuss aspects of the EPA's proposed carbon pollution emission guidelines for existing stationary sources and the anticipated supplemental EPA rulemaking that is important to the Nation. Commente rs noted that although the proposed Clean Power Plan for Existing Power Plants does not directly affect the existing EGUs located on the Navajo Nation

- the Navajo Generating Station ("NGS") and the Four Comers Power Plant ("FCPP")

- the EPA's anticipated s upplemental rulemaking and planning actions will impact the Nation and these two sources. Commenters stated that they are requesting "an opportunity to consult with EPA on the emission reduction goals and CAA 111(d) plan options that are most33 appropriate f or the Navajo Nation." Commenters stated that they are particularly interested in discussing: "(1) The timeframe involved for plan submittal for the two sources on the Nation, should the Nation pursue development of such a plan; (2) Whether EPA has or will calculate emission reduction goals for any areas of Indian Country and when such determination will take place; and (3) How EPA envisions the Nation participating in multi

- jurisdictional planning with states in the implementation of the proposed national guidelines" as impacts of all three topics have the potential to adversely affect the Nation. Commenters stated that they would also like to discuss the implications of any actions that could require the NGS and FCPP to install additional emission controls to meet carbon emission reductions, despite the early retirement of units at both sources. Commenters noted that they stand to lose significant economic benefits through additional retirement of units, or departure of the sources, if the EPA does not spec ifically tailor its goal

- setting and planning to reflect the circumstances listed above. Commenters additionally recognized that the proposed rule and the EPA's supplemental goal

- setting and planning actions for Indian country "may continue to shape the Na tion's goals for renewable energy development and for maintaining low carbon emissions" and that "flexibility in the goals and planning options for carbon dioxide emission reductions are also worth discussing during a consultation meeting."

Response 5:

Th e EPA recognizes the importance of government

- to

- government consultation with tribes, particularly on issues that may affect EGUs in Indian country. During the development of the Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories; Multi

- Jurisdictional Partnerships ("Supplemental Proposal"), the EPA held government

- to

- government consultation with the Navajo Nation in Santa Fe, New Mexico on September 15, 2014. At that consultation we discussed th e issues raised by the Navajo Nation in their letter requesting consultation; one issue included how the four building blocks would be applied to the Navajo Nation. The EPA presented a summary of the main issues raised during consultation in the Supplement al Proposal (see 79 FR 65482 at 65489 and 65502).

Following publication of the supplemental proposal, the EPA offered consultation to all tribes and held government

- to

- government consultation with the Navajo Nation, as well as other tribes as requested, i n Phoenix, Arizona on November 18, 2014. In 2015, the EPA twice held further government

- to

- government consultation with the Navajo Nation in Washington, D.C. The EPA recognizes that NGS and FCPP are important sources of economic benefit to the Navajo Natio n, and the EPA remains committed to engaging in government

- to

- government consultation with the Nation, and any other tribes, as requested, on issues related to EGUs located in Indian country.

With regard to Commenters’ specific comments concerning Four Cor ners Power Plant (FCPP) and Navajo Generating Station (NGS), the EPA believes that it should be consistent in its approach to setting emission reduction targets for EGUs like FCPP and NGS that operate as part of the interconnected system of electricity pro duction and distribution. Consistent with this approach, in the final rule, EPA establishes emission performance rates for the four EGUs located in Indian country, including FCPP and NGS, and mass

- and rate

- based performance goals for the three affected a reas of Indian country, including the Navajo Nation, that were derived using the same methodology (the application of BSER) used to derive goals for EGU located outside of Indian country. It is not possible to know at this juncture how the final34 Emission Guidelines will affect FCPP and NGS, or any other EGU, since that will depend on the structure (e.g., participation in a multi

- jurisdictional trading program) of any applicable implementation plan and how a particular EGU chooses to comply with the require ments of such a plan.

Comment 6: Commenters stated that the proposed guideline's promotion of nuclear energy "will help increase the amount of waste that could one day be transported across or near Tribal lands, and ultimately be stored on lands cultura lly important to Indian Tribes." Commenters noted that nuclear’s promotion as a low

- or zero

- carbon generation energy source could cause "increased
pressure on some t ribes to open up their lands to uranium mining to support nuclear energy use." Commenters noted that the EPA doesn't find that the potential disadvantages of nuclear waste relative to fossil fuel

- fired generation outweighs nuclear generation's other advantages as an element of Building Block 3 and indicated disagreement with the EPA's statement . Commenters recommended that the EPA engage in a government

- to

- government consultation with t ribes and include other federal agencies such as DOE, to discuss and address the prospective issues of transporting and/or storin g nuclear waste across or near t r ibal lands, and legacy waste.

Commenters noted the Nuclear Regulatory Commission actions in September 2014 allowing for continued 'temporary' storage of nuclear waste "paving the way for nuclear plant license extension do not adequately resolve the critica l problem of permanent waste storage." Commenters noted that the effects of uranium mining and milling activities from as early as the 1950s are still unresolved and pose present health risks to these communities in Indian Country. Commenters stated that t he naturally elevated levels of uranium, selenium, arsenic, and other elements associated with mine and mill sites on the Navajo N ation means that the health and environmental effects due to exposure to these elements can include lung cancer, bone cancer, and impaired kidney function and that until these nuclear legacy issues are adequately addressed, "any further expansion in nuclear generating capacity that results in increased nuclear waste should not be included in the CPP." Commenters stated that they do not support use of nuclear energy, either through extension of existing plant operations or new plant construction as an option for meeting state targets. Commenters noted that the EPA identifies nuclear power as a low

- and zero

- carbon generating capaci ty; however, "nuclear costs, the extensive legacy and future environmental issues associated with nuclear power make it an unacceptable option for long

- term health and environmental sustainability."

Commenters also stated that nuclear power has a longstand ing and tragic history of harming environmental justice communities to a disproportionate degree. Commenters noted that according to a literature survey prepared by the Southwest Research and Information Center, more than 1,200 abandoned uranium mines have been documented on the Navajo Nation alone. Commenters also noted that seven uranium mills were operated in the S tate of New Mexico between 1947 and 1995, generating more than 90 million tons of radioactive tailings that caused extensive radioactive and c hemical groundwater contamination. Commenters stated that the EPA35 lacks reasonable grounds to continue to characterize nuclear energy as "BSER," given the sufficiency of renewable and cost

- effective energy technologies that do not have such dire and dispro portionate effects on Native American communities.

Response 6: The EPA acknowledges the comments and , for reasons discussed in the preamble, has determined that the BSER for the final rule will not include either of the proposed provisions for existing and new nuclear units in the setting of state goals.

Comment 7: Commenters noted that the EPA intends to publish a supplemental proposal to

es tablish emission performance goals covering four potentially affected power plants in Indian Country: The South Point Energy Center, on Fort Mojave tribal lands within Arizona; the Navajo Generating Station, on Navajo tribal lands within Arizona; the Four Corners Power Plant, on Navajo tribal lands within New Mexico; and the Bonanza Power Plant, on Ute tribal lands within Utah. Commenters acknowledged the EPA's effort to work directly with tribes in this capacity on matters pertaining to new regulations. Co mmenters stated that they plan to review the supplemental proposal once it is released for public comment.

Response 7: The EPA published the Clean Power Plan supplemental proposal in the Federal Register on November 4, 2014. Comments received on that propo sal are also responded to in this document

.

Comment 8: Commenters noted the key principals of E.O. 13175, which includes ensuring meaningful and timely input by tribal officials in the development of regulatory policies that have t ribal implications and prohibiting regulations with tribal implications unless the agency has consulted with tribal officials early in the process of developing a regulation before its formal promulgation. Commenters noted that, consistent with E.O. 13175, the EPA and the Commun ity have scheduled a consultation meeting for January 15, 2015. Commenters stated they look forward to this meeting and reserve the right to supplement their comments following that meeting, as part of the consultation process.
Response 8: On October 27, 2 014, the EPA sent letters to the leaders of all federally recognized tribes inviting consultation on the s upplemental p roposal. On November 18, 2014, the EPA held an informational meeting on the s upplemental p roposal at the offices of the Inter Tribal Council of Arizona and held consultation meetings with several tribes located in Arizona. The Gila River Indian Community was unavailable for consultation on November 18, therefore, per their request, the EPA cond ucted consultation with the Gila River Indian Community on January 15, 2015 (see EPA memo to docket at EPA

- HQ

- OAR

- 2013

- 0602 ) . In addition, Lieutenant Governor and Governor

- elect Stephen Roe Lewis provided oral testimony at the November 19, 2014 public hearing on the s upplemental p roposal in Phoenix, Arizona and the Gila River Indian Community provided comments on the s upplemental p roposal to the docket on December 19, 2014. The EPA’s responses to those comments are provided elsewhere in this document.36 Comment 9: Commenters appreciated the extensive outreach conducted by the EPA concerning the p roposed s upplemental r ule, including t he September 15, 2014 and November 18, 2014 government

- to

- government consultations with the Navajo Nation and the November 19, 2014 public hearing. Commenters stated that the p roposed s upplemental r ule showed that the EPA reflected upon some of the concern s expressed by commenters during the September 15 , 2014 consultation and in commenters’ September 18, 2014 follow

- up letter to the EPA and noted that the s upplemental p roposal did in fact acknowledge some of commenters’ concerns.
Response 9: The EPA takes into account all comments received, when developing its rulemakings. The EPA is pleased that commenters felt that their concerns were acknowledged in the s upplemental p roposal.

Comment 10: Commenters urged the EPA to continue to provide outr each and consultations to tribes even after issuance of the EPA's s upplemental p roposal.

Commenters noted that the supplemental rule describes that the EPA has hosted webinars, listening sessions, teleconferences, outreach meetings, and consultations with tribal representatives between June 2013 and September 2014, including members of the Navajo Nation, the Ute Tribe, and the Fort Mojave Tribe (all of wh om own lands where affected sources are located) plus other interested tribes such as the Crow Nation and the MHA Nation. Commenters commended the EPA for these consultations, but urged the agency to continue to organize meetings not only with tribal offic ials, but also with tribal community grassroots organizations and individual tribal members, per the agency's 2011 Policy. Commenters specifically urged the EPA to carefully review the hearing transcript of the Navajo Nation's officials as they wish to tra nsition off of fossil fuels for health

- related reasons.

Commenters believed that a greater commitment toward tribal outreach and consultation is required in order for the EPA to fulfill its obligations under E.O. 13175. Commenters noted that the EPA state d that its p roposed r ule "would not impose substantial direct compliance costs on tribal governments that have affected EGUs located in their area of Indian country," but disagreed with the EPA's interpretation and stated that consultation is not limited t o federal actions with financial impacts to t ribes. Commenters noted that the EPA's 2011 Policy on Consultation and Coordinat ion with Indian Tribes defines actions that are subject to consultation which include regulations or rules and policies, guidance documents, and directives. Commenters encouraged the EPA to consult with tribal governments to ensure that their concerns are add ressed per the process discussed in the EPA's Policy on Consultation and Coordination with Indian Tribes.

Commenters stated that the EPA did not meaningfully consult with the Crow Nation T ribe, which owns merchantable coal deposits, and is one of only thre e t ribes (out of 566 federally recognized tribes) for whom the mining of coal burned in electrical generating units is impacted by the proposal is a hugely significant piece of the t ribal economy. Commenters stated that the37 extent of the EPA's outreach was a single letter sent to tribal leaders and that no one in the agency contacted the Crow Nation directly for consultation as required by E.O. 13175.

Response 10: The EPA appreciate s these comments and recognize s the importance of appropriate consultation w ith tribes in developing this rule, consistent with the federal government’s trust responsibility to federally recognized tribes. Under EPA’s 2011 Consultation Policy, the agency recognizes its obligations to consult with federally recognized tribes when i ts actions and decisions may affect tribal interests and to involve the public as required by federal environmental laws. Tribal officials may request consultation in addition to the EPA’s ability to determine what requires consultation. The EPA attempts t o honor the tribal government’s request with consideration of the nature of the activity, past consultation efforts, available resources, time considerations, and all other relevant factors. As proposals and options are developed, consultation and coordina tion is continued, to ensure that the overall range of options and decisions is shared and deliberated by all concerned parties, including additions or amendments that may occur later in the process. In addition, under EPA’s 2011 Policy, the agency recogni zes the need to be responsive to the environmental justice concerns of individual tribal members, tribal community

- based/grassroots organizations and other indigenous stakeholders.

Commenters stated that the EPA did not meaningfully consult with the Crow Nation Tribe and that the EPA’s outreach was a single letter sent to tribal leaders. Under E.O. 13715, the EPA takes seriously its obligation to provide tribes with an opportunity to provide meaningful input that can be considered prior to the agency deci ding whether, how, or when to act on an action. To ensure that tribes had the opportunity to participate in the action development process, the EPA conducted outreach and information sharing on the content of the proposal with tribal environmental professi onals through the monthly National Tribal Air Association (NTAA) calls and held an informational session at the National Tribal Forum (NTF) in Anacortes, Washington in May 2014. Furthermore, we held five webinars open to tribal environmental professionals; 11 listening sessions held at all ten EPA regions and at EPA headquarters in Washington D.C.; four
two

- day public hearings for the proposed guidelines and a public hearing for the supplemental proposal; and three informational meetings (via teleconference ) targeted specifically to the tribal community.

In addition, we sent out four letters in 2013/2014 to tribal leaders and offered consultation on the rule, prior to proposal and after the proposal, to ensure tribes had the opportunity to participate in th e process. As further recognition of the importance of appropriate consultation with tribes in the development of these guidelines, we held (face

- to

- face) informational meetings (2) and government

- to

- government consultations (10) with tribes on July 18, 20 14 at EPA's Region 8 office in Denver, Colorado (which included government

- to

- government consultation with four members of the Crow Indian Tribe’s legislative branch); September 15, 2014 in New Mexico; and at the Inter Tribal Council of Arizona on Novemb er 18, 2014 in Phoenix, Arizona. In addition, we held two teleconference government

- to

- government consultations with other tribes as requested. Furthermore, the EPA continued to conduct outreach and, in some instances, government

- to

- government consultation after the supplemental proposal was issued. These further meetings are detailed in the docket and in responses above. The EPA appreciates these comments and recognizes the importance of appropriate consultation with tribes in developing this rule, consist ent with the federal government’s trust responsibility to federally recognized tribes. Under EPA’s 2011 Consultation Policy, the agency recognizes its obligations to consult38 with federally recognized tribes when its actions and decisions may affect tribal interests and to involve the public as required by federal environmental laws. Tribal officials may request consultation in addition to the EPA’s ability to determine what requires consultation. The EPA attempts to honor the tribal government’s request wit h consideration of the nature of the activity, past consultation efforts, available resources, time considerations, and all other relevant factors. As proposals and options are developed, consultation and coordination is continued, to ensure that the overa ll range of options and decisions is shared and deliberated by all concerned parties, including additions or amendments that may occur later in the process. In addition, under EPA’s 2011 Policy, the agency recognizes the need to be responsive to the enviro nmental justice concerns of individual tribal members, tribal community

- based/grassroots organizations and other indigenous stakeholders.

Commenters stated that the EPA did not meaningfully consult with the Crow Nation Tribe and that the EPA’s outreach w as a single letter sent to tribal leaders. Under E.O. 13715, the EPA takes seriously its obligation to provide tribes with an opportunity to provide meaningful input that can be considered prior to the agency deciding whether, how, or when to act on an act ion. To ensure that tribes had the opportunity to participate in the action development process, the EPA conducted outreach and information sharing on the content of the proposal with tribal environmental professionals through the monthly National Tribal A ir Association (NTAA) calls and held an informational session at the National Tribal Forum (NTF) in Anacortes, Washington in May 2014. Furthermore, we held five webinars open to tribal environmental professionals; 11 listening sessions held at all ten EPA regions and at EPA headquarters in Washington D.C.; four
two

- day public hearings for the proposed guidelines and a public hearing for the supplemental proposal; and three informational meetings (via teleconference) targeted specifically to the tribal

commu nity.

In addition, we sent out four letters in 2013/2014 to tribal leaders and offered consultation on the rule, prior to proposal and after the proposal, to ensure tribes had the opportunity to participate in the process. As further recognition of the im portance of appropriate consultation with tribes in the development of these guidelines, we held (face

- to

- face) informational meetings (2) and government

- to

- government consultations (10) with tribes on July 18, 2014 at EPA's Region 8 office in Denver, Colo rado (which included government

- to

- government consultation with four members of the Crow Indian Tribe’s legislative branch); September 15, 2014 in New Mexico; and at the Inter Tribal Council of Arizona on November 18, 2014 in Phoenix, Arizona. In additio n, we held two teleconference government

- to

- government consultations with other tribes as requested. Furthermore, the EPA continued to conduct outreach and, in some instances, government

- to

- government consultation after the supplemental proposal was issued . These further meetings are detailed in the docket and in responses above.

Comment 11: Commenters stated that the s upplemental p roposal fails to meet the EPA's obligations under E.O. 13175 and that the EPA appears to take the position that it is not required to do a full analysis under these authorities because its proposal will not directly affect the Uintah

- Ouray Tribe or the small communities in commenters’ areas. Commenters noted that they do not hav e the authority in place to develop and implement a Section 111(d) plan and that,39 absent changed circumstances, the EPA itself will need to implement the requirements set forth in the s uppl emental p roposal.

Response 11: Under the Tribal Authority Rule (TAR ) , the EPA will develop regulations where it is necessary or appropriate to implement Clean Air Act programs in Indian country. The EPA will make that determination at a future time and will provide for consultation at that time.

Comment 12: Commenters st ated that the EPA is obligated to consult with the Navajo Nation's leaders on a government

- to

- government basis and noted that the EPA should consult with the Navajo Nation during the development of any 111(d) plan for the Navajo Nation. Commenters stated t hat this is consistent with the federal government's trust responsibilities as well as the EPA Policy on Consultation and Coordination with Indian Tribes (May 4, 2011). Commenters stated that they appreciate the extensive outreach the EPA has conducted in this rulemaking process, including its government

- to

- government consultations with the Navajo Nation on September 15, 2014 and November 18, 2014 and noted that the s upplemental p roposed r ule does incorporate some of the concerns raised by commenters in the September 15th consultation and in commenters’ follow

- up letters.

Response 12: The EPA recognizes the importance of government

- to

- government consultation with tribes, particularly on issues that may affect EGUs in Indian country. In January 2015, we

annou nced our intention to propose, for public review and comment, a federal plan for meeting the goals of the CPP. As we did for the s upplemental p roposal, the EPA intends to invite government

- to

- government consultation on a federal plan, as well as a finding that it is necessary or appropriate to promulgate a federal plan, for affected EGUs on the Navajo Nation. Additionally, government

- to

- government consultation will be an important component of the process for any future 111(d) plans of particular applicabil ity in Indian country.

Comment 13: Commenters stated that E.O. 13175 requires the EPA to prepare and provide to OMB a tribal summary impact statement as part of its obligation to consult and coordinate with Indian tribes which consists of a description of the extent of the agency's prior consultation with tribal officials, a summary of the nature of their concerns and the agency's position supporting the need to issue the regulation, and a statement of the extent to which the concerns of tribal officials h ave been met. Commenters noted that the supplemental proposal provides a description of EPA's consultations with tribal officials and a summary of their concerns, but it does not state the agency's position supporting the need to issue the proposal in cons ideration of the aforementioned concerns or explain how tribal officials' concerns have been met. Commenters stated that the EPA has not provided this full tribal summary impact statement, and must do so in the final rule. Commenters also noted that the EP A's statements to the effect that tribes are not required to develop 111(d) plans to implement the emission guidelines for affected EGUs in their areas of Indian country unless they seek Treatment in the Same Manner as a State ( TAS ) approval to do so, and that the proposal does not directly impose specific requirements on40 affected EGUs in Indian country, while accurate, should be supplemented with the additional discussion articulating the agency's need for this regulation in a manner that fully considers t he various concerns expressed by tribal members

- not just tribal officials, but also members of the community.

Response 13: The EPA will provide a summary impact statement as part of its obligation to consult and coordinate with Indian T ribes after the r ulemaking is completed.

Comment 14: Commenters stated that although the two power plants, Four Corners and Navajo Generating Station, are generating significant profits, the Navajo people continue to suffer from extremely high levels of poverty, unemploym ent, and poor health. Commenters also added that

one

- third of more of the Navajo Nation residents remain without electricity in their homes.

Response 14: The EPA recognizes that commenters have expressed frustration regarding social inequities related to the profits generated from the coal

- fired power plants on the Navajo Nation, and the high levels of poverty, unemployment, poor health, and limited access to e lectricity on the Navajo Nation. We note that NGS and Kayenta Mine are undergoing a process to renew various leases and rights

- of

- way, and that these approvals are federal actions that are subject to NEPA. The joint EIS process for NGS and Kayenta Mine is an appropriate venue to raise these concerns related to costs, benefits, and the environmental and social justice of coal mining and coal combustion on the Navajo Nation , as some of these concerns are beyond the scope of this action.

Comment 15: Commente rs stated that, although Tribal Nations have access to financial and technical assistance with energy efficiency and weatherization through the DOE's Tribal Energy Program, more technical and financial assistance would be helpful. Commenters explained that Tribal Nations stand to benefit significantly from implementing energy efficiency programs, which have the direct effect of reducing utility bills and improving quality of life. Commenters encouraged the EPA to work with the DOE to evaluate whether these programs will help meet the needs of tribes that seek and receive authority to develop implementation plans under the supplemental rule. Commenters added that, while energy efficiency programs pay for themselves by reducing total system costs, there is a s teep learning curve in implementing these programs and establishing comprehensive evaluation, measurement and verification protocols, and commenters encouraged the EPA to continue its efforts to make technical resources and advisors available to tribes so that they may realize all cost

- effective energy efficiency opportunities among their customers.

Commenters noted that the U.S. Department of Energy's Tribal Energy Program, which provides financial and technical assistance for renewable energy and energy e fficiency in tribal areas, could provide use ful support in consulting with t ribal governments and with other federal agencies to provide guidance and support on ways to address this transition, including opportunities for economic diversification, job crea tion from investments in renewable energy41 and energy efficiency, and access to new funding streams such as from the sale of renewable energy credits ( RECs )

. Response 15: As noted in the community and environmental justice considerations section IX of the f inal rule preamble of the CPP , the EPA is encouraging st ates in the development of their state plans to use available tools that help low

- income communities (including tribal communities) access EE/RE and financial assistance programs

. Furthermore, to help all stakeholders become aware of programs available t o low

- income communities , the EPA is crafting a guidance document that provides a list of EE/RE and financial assistance programs. This guidance document once finalized will be post ed on the EPA’s Community Climate Protection Portal

.

Comment 16: Commenter s stated that the TAR does not provide enough reductions and therefore protection for tribal lands (AZ

- 52, NM

- 34%, tribal only up to 6%). Commenter s stated that the difference in th e two reduction goals amounts to environmental injustice. Commenter s stated that the Navajo G enerating S tation and the Four Corner Power plants are among the largest sources of carbon pollution in Indian country and until now have been allowed to pump unlimited carbon pollution. Commenter s stated that tribal communities are in the front line of climate disruption, threatening the health and eco systems that land

- based people depend upon. Commenter s stated that tribal community deserves an equal and str ong carbon power plan that protects health and communities.

Response 16: The EPA agrees that tribal communities deserve equal protection under the CAA and the TAR. The TAR provides flexibility in how the CAA is implemented in Indian country, in that the tribal government may take on all or part of the Act and in meeting the schedules in the Act. The TAR requires Tribal Implementation Plans, if the tribe choses to develop one, to meet the same requirements as those of the states. The EPA will develop a Fed eral Implementation Plan, if it is necessary or appropriate to do so in the absence of a tribal plan. In addition, in setting the goals for the areas of Indian country with affected sources, the EPA tried to balance the providing consistency with the state goals, with flexibility for the tribal governments and the need to provide for public health and environmental protection. The EPA believes that communities will benefit from this final rulemaking because this action directly addresses the impacts of clim ate change by limiting GHG emissions through the establishment of CO 2 emission guidelines for existing affected fossil fuel

- fired EGUs.

In addition to reducing CO 2 emissions, the guidelines finalized in this rulemaking w ill reduce other emissions from affected EGUs that reduce generation due to higher adoption of energy efficiency and renewable energy. These emission reductions will include SO 2 and NOx, which form ambient PM 2.5 and ozone in the atmosphere, and hazardous air pollutants (HAP), such as42 mercury and hydrochloric acid. In the final rule revising the annual PM 2.5 NAAQS, 3 the EPA identified persons with lower socioeconomic status as an at

- risk population for experiencing adverse health effects related to PM exposures. Persons with lower socioeconomic status have been generally found to have a higher prevalence of pre

- exist ing diseases, limited access to medical treatment, and increased nutritional deficiencies, which can increase this population’s risk to PM

- related and ozone

- related effects. 4 Therefore, in areas where this rulemaking reduces exposure to PM 2.5 , ozone, and m ethylmercury, persons with lower socioeconomic status will also benefit from such emissions reductions. The RIA for this rulemaking, included in the docket for this rulemaking, provides additional information regarding the health and ecosystem effects

asso ciated with these emission reductions.

In addition, in the final rulemaking, the EPA has recognized the interconnected nature of the grid in a way that addresses commenters’ equity concern regarding the disparity between the goals for different jurisdicti ons.

Comment 17: Commenter s stated that as citizens of a planet that is threatened by global warming and ocean acidification from coal being burned, it would be racist and discrimination to not require the same rules as to have been promulgated for non

- nat ive lands, to not be required on Native American lands.

Response 17:

Leading up to this rulemaking, the EPA summarized the public health and welfare effects of GHG emissions in its 2009 Endangerment Finding. See section II.A of the final rule preamble of the CPP where the EPA summarizes the public health and welfare impacts from GHG emissions that were detailed in the 2009 Endangerment Finding under CAA section 202(a)(1). 5 As part of the Endangerment Finding, the Administrator considered climate change ris ks to minority populations and low

- income populations, finding that certain parts of the population may be especially vulnerable based on their characteristics or circumstances. Populations that were found to be particularly vulnerable to climate change ri sks include the poor, the elderly, the very young, those already in poor health, the disabled, those living alone, and/or indigenous populations dependent on one or a few resources. See sections XII.F and G of the final rule preamble of the CPP, where the EPA discusses Consultation and Coordination with Tribal Governments and Protection of Children. The Administrator placed weight on the fact that certain groups, including children, the elderly, and the poor, are most vulnerable to climate

-

3 “ Natio nal Ambient Air Quality Standards for Particulate Matter, Final Rule,” 78 FR 3086 (Jan. 15, 2013).

4 U.S. Environmental Protection Agency (U.S. EPA). 2009. Integrated Science Assessment for Particulate Matter (Final Report) . EPA

- 600

- R

- 08

- 139F. National Cen ter for Environmental Assessment

– RTP Division. December. Available on the Internet at

< http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546 >.

5 “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Ai r Act,” 74 Fed. Reg. 66,496 (Dec. 15, 2009) (“Endangerment Finding”).43 related health ef fects.

The record for the 2009 Endangerment Finding summarizes the strong scientific evidence in the major assessment reports by the U.S. Global Change Research Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National Resea rch Council (NRC) of the National Academies that the potential impacts of climate change raise environmental justice issues. These reports concluded that poor communities can be especially vulnerable to climate change impacts because they tend to have more limited adaptive capacities and are more dependent on climate

- sensitive resources such as local water and food supplies. In addition, Native American tribal communities possess unique vulnerabilities to climate change, particularly those impacted by degra dation of natural and cultural resources within established reservation boundaries and threats to traditional subsistence lifestyles. Tribal communities whose health, economic well

- being, and cultural traditions that depend upon the natural environment wil l likely be affected by the degradation of ecosystem goods and services associated with climate change. The 2009 Endangerment Finding record also specifically noted that southwest native cultures are especially vulnerable to water quality and availability impacts. Native Alaskan communities are already experiencing disruptive impacts, including coastal erosion and shifts in the range or abundance of wild species crucial to their livelihoods and well

- being.

The most recent assessments continue to strengthen scientific understanding of climate change risks to minority populations and low

- income populations in the United States. 6 The new assessment literature provides more detailed findings regarding these populations’ vulnerabilities

6 Melillo, Jerry M., Terese (T.C.) Richmond, and Gary W. Yohe, Eds., 2014: Climate Change Impacts in the United States: The Third National Climate Assessment. U.S. Global Change Research Program, 841 pp.

IPCC, 2014: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Field, C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D. Mastrandrea, T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. Levy, S. MacCracken, P.R. Mastrandrea, and L.L. White (eds.)]. Cambridge University Press, 1132 pp.

IPCC, 2014: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part B: Regional Aspects . Contribution of Working Group II to th e Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Barros, V.R., C.B. Field, D.J. Dokken, M.D. Mastrandrea, K.J. Mach, T.E. Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. Levy, S. MacCracken, P.R. Mastrandrea, and L.L. White (eds.)]. Cambridge University Press, 688 pp.44 and projected impacts the y may experience. In addition, the most recent assessment reports provide new information on how some communities of color may be uniquely vulnerable to climate change health impacts in the United States. These reports find that certain climate change rela ted impacts

— including heat waves, degraded air quality, and extreme weather events

— have disproportionate effects on low

- income populations and some communities of color, raising environmental justice concerns. Existing health disparities and other inequiti es in these communities increase their vulnerability to the health effects of climate change. In addition, the studies also find that climate change poses particular threats to health, well

- being, and ways of life of indigenous peoples in the United States

. As the scientific literature presented above and as the Endangerment Finding illustrates, low income populations and some communities of color are especially vulnerable to the health and other adverse impacts of climate change. The EPA believes that vu lnerable communities will benefit from this final rulemaking because this action directly addresses the impacts of climate change by limiting GHG emissions through the establishment of CO 2 emission guidelines for existing affected fossil fuel

- fired EGUs.

In addition to reducing CO 2 emissions, the guidelines finalized in this rulemaking would reduce other emissions from affected EGUs that reduce generation due to higher adoption of energy efficiency and renewable energy. These emission reductions will inclu de SO 2 and NOx, which form ambient PM 2.5 and ozone in the atmosphere, and HAP, such as mercury and hydrochloric acid. In the final rule revising the annual PM 2.5 NAAQS, 7 the EPA identified persons with lower socioeconomic status as an at

- risk population fo r experiencing adverse health effects related to PM exposures. Persons with lower socioeconomic status have been generally found to have a higher prevalence of pre

- existing diseases, limited access to medical treatment, and increased nutritional deficienci es, which can increase this population’s risk to PM

- related and ozone

related effects. 8 Therefore, in areas where this rulemaking reduces exposure to PM 2.5 , ozone, and methylmercury, persons with lower socioeconomic status will also benefit from such emiss ions reductions. The RIA for this rulemaking, included in the docket for this rulemaking, provides additional information regarding the health and ecosystem effects associated with these emission reductions.

Additionally, as outlined in the community and environmental justice considerations section IX of the final rule preamble of the CPP, the EPA has put a number of conditions in place to help ensure that this action will not have potential disproportionately high and adverse human health or environmental effects on vulnerable communities. As described in the community and environmental justice considerations section of the preamble, the EPA also conducted a

7 “National Ambient Air Quality Standards for Particulate Matter, Final Rule,” 78 FR 3086 (Jan. 15, 2013).

8 U.S. Environmental Protection Agency (U.S. EPA). 2009. Integrated S cience Assessment for Particulate Matter (Final Report) . EPA

- 600

- R

- 08

- 139F. National Center for Environmental Assessment

– RTP Division. December. Available on the Internet at <http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546 >.45 proximity analysis, which is available in the docket of this rulemaking and is discussed in section IX of the final rule preamble.

In addition, in the final rulemaking, the EPA has recognized the interconnected nature of the grid in a way that addresses commenters’ equity concern regarding the disparity between the goals for different jurisdictions.

Com ment 18: Commenter s stated that President Obama and his EPA are pushing to clean up the oldest and dirtiest power plants all across our nation. Commenter s stated that the Navajo Generating Station, the nation's only coal power plant where the United States Government is an operator, would have been a good place to start; instead the people of the Navajo N ation will be left breathing poisons for another three decades.

Commenter s stated that NGS is the largest coal

- fired power plant on the Colorado Plateau, a nd one of the 10 biggest polluters in this country and after years of delay, rather than holding the federal owners to the requirements of the CAA, EPA Administrator McCarthy caved. Commenter s stated that the health and cultural integrity of people whose homelands surrounds the power plants is being compromised for the sake of coal jobs and cheap power to pump the Colorado River.

Commenter s stated that animals and crops are directly impacted by the pollution emitted from this 40 year

- old generating statio n and people are not only breathing in the pollution but are also ingesting the toxins that fall upon the vegetation, crops, and animals.

Commenter s stated that the EPA was supposed to clean up NGS's emissions within five years. Administrator McCarthy s hould have acquired the federal operator, the U.S. Bureau of Reclamation, to cut smog forming nitrogen oxide currently spewing from the stacks by 85 percent by 2020.

Commenter s stated that those improvements would have ended generations of disproportionat e health impacts to people from the plant's pollution, and clear up hazy vistas in the Grand Canyon National Park. Commenter s stated that the EPA watered down the CAA requirements and adopted a plan to let the power plants to keep polluting until 2044, con tinuing a legacy of asthma, bronchitis, and choking haze.

Commenter s stated that ending the United States' Government's interest in this dirty coal plant would have also spurred needed investment in renewable energy on tribal lands and keep water flowing to every thirsty metropolitan areas, benefiting the Arizonians and commenters’ community.

Response 18: This comment is referring to the EPA’s Federal Implementation Plan for NGS under the Regional Haze Program, which is an action that is unrelated to the proposed Clean Power Plan . The EPA notes that the comment period for the Regional Haze FIP for NGS closed in January 2014 and the EPA responded to comments and took final action on August 8, 2014 (79 FR 46514). The EPA’s FIP for NGS establishes a cap in NO x emissions from NGS over 2009 to 2044 and requires the operator of NGS to implement one of several alternative operating scenarios to comply with the emission cap. Generally, the alternative operating scenarios require46 NGS to close one unit at NGS, or cur tail electricity generation by a similar amount, in 2019, and to meet a NOx emission limit that is achievable with the installation of selective catalytic reduction (SCR) on two units in 2030. When fully implemented, this final action requires over an 80 p ercent reduction in NOx emissions from NGS and is expected to significantly reduce the impact of NGS on visibility at 11 mandatory Class I Federal areas.

Comment 19: Commenter s stated that the fossil fuel industry holds them back from going into other form s of economic development that builds off a traditional economy, and is more sustainable and in line with traditional values and teachings such as improve the wool industry, how to build traditional food economy backup to provide for people, and how to pro mote renewable energy in these areas.

Commenter s stated that there are precious resources that we need to use for other things besides fossil fuel, power plants, and coalmines.

Commenter s stated that the Navajo Nation are economic hostages to the fossil fuel industry and it's been set up this way. Commenter s stated that this supplemental proposal is another example of that because it's believe off of this false dichotomy between environmental protection, protections of human health, and jobs and economy. Commenter s stated that it is a form of environmental racism and that's why most Navajo communities continue to bear the brunt and all the negative impacts of this industry while down here, its cheap electricity, cheap water, economic prosperity, housing go ing up all over the place, all over the city.

Commenter s asked why they have to continue to bear these negative impacts and miss out on this very rare moment in which the EPA is actually able to mandate and enforce

, and when the actual pollu ters pay for what they're doing.

Commenter s stated that the EPA laws that it is enforcing now are a very important way to break out of this position and while the EPA has consulted with tribal leaders they don't necessarily represent us because they're operating from this economic hostage mentality in which their focus is on providing more than the 1,000 jobs that these coal industries provide.

Commenter s stated that it is the EPA's obligation to not only consult with the tribes, tribal governments, but also with our own people, transition away from fossil fuels, enforce these regulations, the same on the Navajo Nation as every other place in the United States.

Response 19: The EPA agrees that it is equally important to ensure that we not only consult with tribal gov ernments but also with members of Indian Nations. The EPA recently released its EJ policy on tribes and indigenous people located at: https://www.epa.gov/compliance/ej/indigenous/index.html.

This policy acts to clarify and integrate environmental justi ce principles in a consistent manner in the a gency’s work with federally recognized tribes and indigenous peoples throughout the United States, and with others living in Indian country to protect their environment and public health. As mentioned before, t he EPA believes that vulnerable communities will benefit from this final rulemaking because this action directly addresses the impacts of climate change by limiting47 GHG emissions through the establishment of CO 2 emission guidelines for existing affected fo ssil fuel

- fired EGUs.

In addition to reducing CO 2 emissions, the guidelines finalized in this rulemaking would reduce other emissions from affected EGUs that reduce generation due to higher adoption of energy efficiency and renewable energy. These emissio n reductions will include SO 2 and NOx, which form ambient PM 2.5 and ozone in the atmosphere, and HAP, such as mercury and hydrochloric acid. In the final rule revising the annual PM 2.5 NAAQS, 9 the EPA identified persons with lower socioeconomic status as a n at

- risk population for experiencing adverse health effects related to PM exposures. Persons with lower socioeconomic status have been generally found to have a higher prevalence of pre

- existing diseases, limited access to medical treatment, and increased nutritional deficiencies, which can increase this population’s risk to PM

- related and ozone

related effects. 10 Therefore, in areas where this rulemaking reduces exposure to PM 2.5 , ozone, and methylmercury, persons with lower socioeconomic status will also benefit from such emissions reductions. The RIA for this rulemaking, included in the docket for this rulemaking, provides additional information regarding the health and ecosystem effects associated with these emission reductions.

Comment 20: Commenter s stated that the proposed emissions reduction of four percent for both the Peabody and NGS power plants is severely insufficient and a racial, social environmental injustice and also discrimination. Commenter s stated that the EPA knows that Native American s suffer the worst pollution everywhere in the U.S.

, are perplexed that the agency is not doing better

, and as many people have voiced their concerns here today, they do not benefit. Commenter s refer red to an ASU economic study which failed to account for the fact that the plant workers and the coal mine workers mostly live off reservation, so the money they earn does not come back to the nation at all. Commenter s emphasized that nothing is ever

-- hardly ever purchased on the reservation ; most of the payr oll from the workers at those plants is spent off the reservation, so the EPA must stop saying that because it is very erroneous.

Commenter s wished that the EPA and all the plant owners and APS, SRP, BOR would take into consideration the high cost of health that this imposes on the people and the commenter s

. Commenter s stated that the government is always talking about how it has to cut back a nd that funding these Native American tribes are, too high. Commenter s stated that the government could save a lot of money by cleaning up these power plants the right way and on time, rather than waiting 30 years as well as the coal mine which is taking a nd abusing contaminating precious water supplies. Commenter s stated that Maricopa County has the highest number of golf courses while Navajo are still hauling water in 55 gallon barrels; that's a severe injustice.

9 “National Ambien t Air Quality Standards for Particulate Matter, Final Rule,” 78 FR 3086 (Jan. 15, 2013).

10 U.S. Environmental Protection Agency (U.S. EPA). 2009. Integrated Science Assessment for Particulate Matter (Final Report) . EPA

- 600

- R

- 08

- 139F. National Center for En vironmental Assessment

– RTP Division. December. Available on the Internet at

< http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=216546 >.48 Commenter s stated people have illnesses an d thought that 4 percent for both power plants by 2030 is ridiculous and is protecting the owners and their pocketbooks no the people.

Response 20: The EPA believes that vulnerable communities will benefit from this final rulemaking because this action dir ectly addresses the impacts of climate change by limiting GHG emissions through the establishment of CO 2 emission guidelines for existing affected fossil fuel

- fired EGUs.

In addition to reducing CO 2 emissions, the guidelines finalized in this rulemaking w ould reduce other emissions from affected EGUs that reduce generation due to higher adoption of energy efficiency and renewable energy. These emission reductions will include SO 2 and NOx, which form ambient PM 2.5 and ozone in the atmosphere, and HAP, such as mercury and hydrochloric acid. In the final rule revising the annual PM 2.5 NAAQS, 11 the EPA identified persons with lower socioeconomic status as an at

- risk population for experiencing adverse health effects related to PM exposures. Persons with lower so cioeconomic status have been generally found to have a higher prevalence of pre

- existing diseases, limited access to medical treatment, and increased nutritional deficiencies, which can increase this population’s risk to PM

- related and ozone

related effect s. 12 Therefore, in areas where this rulemaking reduces exposure to PM 2.5 , ozone, and methylmercury, persons with lower socioeconomic status will also benefit from such emissions reductions. The RIA for this rulemaking, included in the docket for this rulema king, provides additional information regarding the health and ecosystem effects associated with these emission reductions.

Comment 21: Commenter s stated that they have two major power plants, and both are major polluters in the country and the only thing that separates th em is an invisible boundary of reservation and a river, 10 to 15 miles apart from one another. Commenter s stated that the Four Co rners area , where commenter s live in

, holds the highest carbon pollution in the entire country with those two power plants 15 minutes apart from one another, both emitting a carbon factor of 25.3 metric tons of carbon pollution in the Four Corners area. Co mmenter s stated that the Four Corners P ower P lant is one of the oldest and dirtiest power plants in the entire country.

Commenter s stated that it would be an injustice not to implement stronger measures for the Four Corners Power Plant, just as our statesi de neighbors at the San Juan Power Plant are going to have implemented on them. Commenter s stated that to curb the carbon pollution on one and not the other makes no logical sense.

Response 21: The response to this comment is addressed elsewhere in this section

.

11 “National Ambient Air Quality Standards for Particulate Matter, Final Rule,” 78 FR 3086 (Jan. 15, 2013).

12 U.S. Environmental Protection Agency (U.S. EPA). 2009. Integrated Science Assessment for Particulate Matter (Final Report) . EPA

- 600

- R

- 08

- 139F. National Center for Environmental Assessment

– RTP Division. December. Available on the Internet at

< http://cfpub .epa.gov/ncea/cfm/recordisplay.cfm?deid=216546 >.49 9.7 EXECUTIVE ORDER 13045, PROTECTION OF CHILDREN FROM ENVIRONMENTAL HEALTH RISKS AND SAFETY RIS KS

Comment 1 : Commenters stated that it is essential that a greater importance be placed on the value to providing children with a healthy future and, as the agency proceeds with the rulemaking, it assures that the agency’s policy to consistently and explicitly consider the risks to infants and children is followed.

Commenters further stated that climate change presents major challenges to the health and welfare of children because it exacerbates existing environmental problems and has detrimental effects on air quality. Commenters asserted that children are especially vulnerable to the effects of air pollution because the airways of young children are sm aller than those of adults and, thus, inhalation of air pollutants that would produce only a slight respiratory response in an adult can result in potentially significant obstruction in the airways of a young child. Commenters explained that children breat he more rapidly and inhale more pollutants per pound of body weight than adults, and they often spend more time engaged in vigorous outdoor activities.

Commenters also explained that because of their developing organs, children are at risk due to poor air pollution of all kinds, but especially the CO 2 and global warming.

Commenters urged the agency to adopt stronger standards and suggested that the agency consider timing with regard to the impact on children's health, in addition to timing with regard to th e determination of BSER. Commenters said that children are more vulnerable than adults and, as a result of their developing bodies, are more susceptible to environmental contaminants. Commenters added that it is imperative that effective emissions reductio ns be implemented as expeditiously as possible since achieving the greatest portion of the emissions reductions in the least amount of time would be most beneficial for the health of children.

Response 1 : E.O. 13045 requires agencies to identify and assess health and safety risks that may disproportionately affect children and ensure that activities address disproportionate risks to children. Protecting children’s health from environmental risks is fundamental to the EPA’s mission. Accordingly, the agency h as evaluated the environmental health and welfare effects of climate change on children. In the preamble to the final rule, the EPA summarizes the assessment literature cited in the EPA’s 2009 Endangerment Finding, which concluded that certain populations and life stages , including children, the elderly, and the poor, are most vulnerable to climate

- related health effects. We also describe the assessment literature since 2009, which strengthens these conclusions by providing more detailed findings regarding these groups’ vulnerabilities and the projected impacts they may experience.

For th e final rule, the EPA has followed the CAA in determining the BSER and establishing CO 2 emission performance rates for the two categories of affected EGUs that reflect the B SER. We have also established a timeframe for achievement of those reductions that will result in meaningful reductions of CO 2 emissions from the utility power sector while maintaining electric system reliability and affordable electricity. The EPA believe s that the CO 2 emission reductions resulting from implementation of the final guidelines, as well as substantial ozone and PM 2.5 emission reductions as a co

- benefit, will further improve children’s health.50 9.8 EXECUTIVE ORDER 13211, ACTIONS CONCE RNING REGULATIONS THAT SIGNIFICANTLY AFFECT ENERGY SUPPLY, DISTR IBUTION, OR USE

Comment 1 : Commenters stated that EPA did not meet its requirement to fulfill E.O. 13211 when proposing the Clean Power Plan.

Commenters cited OMB Memorandum 01

- 2717, regarding imple mentation of E.O. 13211, where the memorandum details what constitutes a "significant adverse effect" under E.O. 13211 Section 2(b). Commenters stated that the Statement of Energy Effects offered by EPA in the Federal Register and the very limited discussi on in the RIA did not constitute a "detailed statement" of the "numerous adverse effects of this rule in two dimensions" as required by E.O. 13211. Commenters stated that "EPA's statement does not provide any regional or local impacts of the proposed rule" and that "while noting that electricity prices will increase by four to seven percent and that natural gas prices will increase by eight to twelve percent, EPA does not reference the regional and local impacts of these changes." Commenters additionally st ated that "EPA's Statement of Energy Effects for this action notes a "16 to 22 percent reduction in coal

fired electricity generation", but does not reference the change in U.S. coal production. Commenters noted that EPA omitted reference to its own projec tions that this rule will reduce U.S. coal production by 20 to 27 percent in 2020 which, according to the EIA's Annual Energy Outlook 2014 estimates, is a reduction of between 217 and 291 million tons of coal annually

-- at least 40 times greater than the 5 million ton reporting threshold required by OMB Memorandum 01

- 27. Commenters urged EPA to expand its statement and provide more detail on these impacts, and noted that any final rule should include this detail as well as address alternatives that mitigate regional and local impacts of the rule.

Commenters stated that EPA has "focused on speculative and in fact utterly unproven "benefits" while turning a blind eye to the clear and palpable economic harms, particularly the steep increase in electricity rates that low

- income ratepayers will not have the financial ability to afford" and that EPA cannot refuse to consider these relevant costs. Commenters noted that although EPA finds that the national average electricity rate will increase only between 5.9 and 6. 6 percent in 2020 under the Proposed Rule, EPA's approach is flawed since EPA commingles rates for coal

- dependent states with those for coal

- independent states which produces an overall mean rate figure that is not representative of what occurs in either t ype of state. Commenters noted that some coal

- dependent states could see an increase of up to 30 percent which has a consider effect on low

- income populations in the state. Commenters stated that EPA does not conduct an analysis of any financial impact tha t price increases resulting from the Proposed Rule will have on low

- income ratepayers and accordingly, EPA has no basis for assuming that the conjectural "benefits" of the Proposed Rule will outweigh its certain costs on low

- income ratepayers.

Response 1 : The EPA conducted a thorough analysis of the energy impacts of the CPP as required by E

. O

. 13211. The results of this analysis are reported in the preamble and the RIA for the proposed and final emission guidelines. The EPA used the Integrated Planning Mod el (IPM),51 developed by ICF International, to conduct its analysis of the potential impacts of the emission guidelines on the electricity and fuel input markets such as natural gas and coal. IPM is a dynamic linear programming model that can be used to exam ine air pollution control policies for CO 2 , SO 2 , NO X , Hg, HCl, and other air pollutants throughout the United States for the entire power system. The IPM analysis is complemented by an analysis of the cost and scope of reductions in electricity demand tha t can be achieved through energy efficiency programs. Projected impacts of the CPP on electricity generation and fuel input markets such as coal and natural gas are reported in chapter 3 of the RIA. Given the flexibilities afforded states in complying with the emission guidelines, the benefits, cost and economic impacts reported in the RIA are not definitive estimates, but are instead illustrative of compliance actions states may take.

Energy and economic impacts are evaluated on a regional as well as nati onal basis. For example in chapter 3 of the RIA, the EPA reports expected retail electricity price changes as a result of the illustrative emission guidelines option for the 22 regions evaluated by IPM as well as national estimates. Retail price estimates for electricity embody generation, transmission, distribution, taxes, and utility demand

- side energy efficiency program costs. Thus differences in coal dependencies in the regions are reflected in the price change estimates. IPM modeling projects changes i n regional wholesale power prices and capacity payments related to imposition of the represented policy that are combined with EIA regional transmission and distribution costs to calculate changes to regional retail prices. As described in Chapter 3 of the RIA, the utility funding for demand

- side energy efficiency programs (to cover program costs) is typically collected through a standard per kWh surcharge to the ratepayer and the regional retail price impacts assume that first

- year costs of these policies are recovered by utilities in retail rates. There are many factors influencing the estimated retail electricity price impacts, namely projected changes in generation mix, fuel prices, and development of new generating capacity. Projected price changes by r egion are reported in section XI of the final rule preamble of the CPP and Chapter 3 of the RIA. Price change estimates vary regionally in response to the goals, and they also vary depending upon retail electricity market structure (e.g., cost

- of

- service v s. competitive). It is important to note that energy efficiencies may lead to lower consumption of electricity and average bills paid by customers are expected to decline upon full implementation of CPP rather than increase. The EPA addresses the impact of the guidelines on low income populations in sections 8.6 and 9.1 0 of this Response to Comments document.

9.9 NATIONAL TECHNOL OGY TRANSFER AND ADV ANCEMENT ACT

No comments were received on this topic.52 9.10 EXECUTIVE ORDER 12898, FEDERAL ACTIO NS TO ADDRESS ENVIRONMENTAL JUSTIC E IN MINORITY POPULA TIONS AND LOW

- INCOME POPULATIONS

Analysis

Comment 1: Commenters recommended that the EPA conduct a thorough environmental justice analysis of the proposed rule, which quantifies emissions reductions and co

- be nefits while stating where these reductions occur, and make it a required part of the planning process for state implementation plans. Commenters stated that the EPA needs to conduct a proper environmental justice analysis as required under Executive Order 12898 in order to address concerns and protect the welfare of minority and low

- income communities, especially those located next to power plants. Commenters recommended that the EPA conduct an Environmental Justice analysis of the same standard as the one conducted for the Definition of Solid Waste Rule, which the EPA had described as the "gold star" standard, on this rule prior to its promulgation. Commenters asked that in the final rule accompanying EPA guidance, the EPA should include language that reco gnizes and considers potential disparate impacts the rule may have on environmental justice communities, and direct states to identify environmental justice communities and where there are potential disparate impacts, and take steps to avoid or mitigate th ose disparate impacts.

Commenters stated that the EPA could follow the 6

- step approach used in the DSW Rule to define the parameters of the environmental justice analysis to be prepared after state plan submission and before approval. Commenters said that the EPA can readily perform Step 1, Hazard characterization, at this time by assessing the co

- pollutant implications of the generic application of Building Blocks 1 and 2 to coal

- fired and gas

- fired plants that are sited in areas where minority and low inc ome communities reside. Commenters stated that the EPA could also perform Steps 2 and 3, identifying potentially affected communities and collecting demographics of potentially affected communities, to construct its guidance to states, but may require them to provide specific information. Commenters suggested that the EPA can complete these steps by getting unit

- level data for select plants with large nameplate capacity or high capacity factors, or plants in coal

- or gas

- heavy states (which may apply Buildi ng Blocks 1 and 2) and assess their emissions of CO 2 and criteria air pollutants by mapping the facilities against demographics of the surrounding communities and finding out whether communities with a high percentage of Environmental Justice populations a re located near these plants. Commenters noted that the focus on specific pollutants, however, does not account for cumulative effects on minority and low income populations from a variety of environmental hazards such as industrial facilities, landfills, poor housing, leaking underground tanks, pesticides, and incompatible land uses. Commenters noted that the EPA has undertaken significant efforts to develop research on cumulative impacts, and should draw from this research in assessing the potential cumul ative impacts of the proposed rule. Commenters stated that if the EPA found environmental justice impacts from the general application of Building Blocks 1 and 2 to these plants, the agency should, to the extent practicable, incorporate in the final rule a range of additional measures that states can incorporate in their plans to mitigate these impacts such as requiring affected sources to site additional monitors in locations where minorities and low

- income communities reside to address any risks of increa sed exposure to air pollutants.53 Commenters stated that while they contend that all rulemaking should involve an analysis of the impacts on EJ communities, this requirement should not be mandated on the states, which do not have the appropriate staff and fi nancial resources to conduct such analyses, and instead, recommended that the EPA evaluate the impacts a proposed rule would have on low

- income and minority communities as a standard element of the rulemaking process and should work closely with the states to thoroughly and meaningfully address EJ issues during development of a rule. Commenters stated that the EPA should work with all applicable federal public health partners to thoroughly consider all pollutants and their environmental and health impacts b efore a rule is proposed.

Commenters noted that the EPA should not rely solely on reservation boundary maps or census records when conducting an environmental justice analysis, because these may not accurately reflect all tribes that have interest in a giv en area. Commenters stressed that disadvantaged communities living on Native reservations are highly affected by rising electricity prices, pollution from power generating plants, and the effects of climate change. Commenters noted that residents of the Na vajo Nation have previously asked the federal government to assess the health impacts of the Four Corners Generating Station, but no study has been done to date and stated that the EPA should undertake this task as part of its environmental justice analysi s of the supplemental rule. Commenters noted that because territories are treated as states under the CAA, the EPA could require Puerto Rico and Guam to perform an environmental justice analysis as a component of their implementation plans, and use that in formation to perform its own expanded analysis prior to plan approval. Commenters noted that tribes, however, are sovereign nations, and the EPA may not be able to directly require such an analysis from tribes that seek TAS approval, unless those tribes pr ovide evidence that they are able to do so as part of their application and the EPA may therefore need to develop the tribal environmental justice analysis on its own.

Commenters stated the EPA should also mandate that states use whatever tools at their d isposal, and their best science to identify the regulated entities in their state, understand the socio

demographic make

- up of the communities around those facilities, take stock of the other environmental pollution sources within the defined community (ad dressing cumulative impacts), and analyze the cost and benefits to EJ communities of potential mitigation strategies, including the state plans developed pursuant to the EPA's Clean Power Plan.

Commenters stated that the EPA should employ analyses using t he same baseline and regulatory option scenarios conducted in support of the rule to determine distributional impacts using the pending draft Environmental Justice Technical Review Guide. Commenters noted that this analyses should include modeling potentia l changes in co

- pollutants and GHGs due to shifts in load capacities across geographic regions, conducting cumulative impact assessments to determine the effects of projected increases in frequency of periods of high concentration; and benefit

- cost and eco nomic impact analyses to assess the distributive impacts of all proposed options including efficiency and renewable implementation options proposed should be conducted in support of the rule. Commenters stated that if the proposed rule would result in envi ronmental or socio

- economic impacts, or would add to cumulative impacts to minority and low

- income populations that already face environmental hazards, the EPA should include measures to avoid or mitigate these impacts in the final rule but if, after perfo rming the analysis, no such impacts would result, the agency should adequately support the basis of its conclusions.54 Commenters noted that the EPA concluded that local air quality, as a result of the rule, is likely to be affected very little. Commenters s tated that the EPA did not conduct an adequate analysis to determine if co

- pollutants will increase in the local areas with increased gas

- fired plant utilization. Commenters stated that as one of the most significant rules promulgated by the EPA to address the significantly challenging environmental and human health threat of climate change, the EPA should not base such determinations on "assumptions"; rather the EPA should base such determinations of potential environmental justice effects using informed b est practice methodologies.

Commenters also asked that, in addition to conducting a thorough environmental justice analysis, the EPA should provide a proximity analysis of all the impacted facilities that details the location of permitted/affected EGUs an d Natural Gas Combined Cycle Plants (NGCC)s, that includes the current emissions profile, review of the community demographics, other permitted sources in the 1 to 3 mile buffer zone, the prevalence of asthma and/or other related/recorded health outcomes i n the impacted community, and other key variables before or by the time the final rule is completed. Commenters noted that this type of proximity analysis could be extremely useful to provide to states and state

- based stakeholders as they work to implement the building blocks to meet the new emissions goals. Commenters noted while they suggest that the EPA require states to perform a distributional analysis on their SIPs, commenters would also support the EPA if the EPA believes it is more appropriate for t he agency itself to perform the analyses.

Commenters stated that despite the EPA's environmental justice commitments in Plan EJ 2014, the proposed rule is devoid of a meaningful analysis of how the EPA incorporated environmental justice considerations into the development and implementation of the Clean Power Plan proposal. Commenters stated that this void in the proposal is in stark contrast to the public but very general statements made by EPA Administrator McCarthy touting the Clean Power Plan as advanci ng the agency's commitment to environmental justice. Commenters stated that the EPA
must demonstrate how environmental justice is incorporated throughout all phases of the Action Development Process and, in the EPA's own words, the agency should document e xplicitly how environmental justice is woven "into the fabric" of this process.

Commenters addressed the usage of science

- based tools in order to help guide investments generated by the implementation of the Clean Power Plan. Commenters provided a list of readily available tools that the EPA could utilize to collect environmental and demographic information in commencing an Environmental Justice analysis.

Commenters first referenced the EJView tool which allows users to create maps and generate detailed rep orts based on the geographic areas and data sets they choose and incorporates Hazardous Waste data, Toxics Release Inventory data, Superfund data, Brownfields data, data on nonattainment areas, demographics data (based on 2010 US Census Population and Hous ing 100 percent count database), health information from the National

- Scale Air Toxics Assessment, and other monitoring data. Commenters noted that this tool would be particularly useful to gather information on cumulative impacts as its aggregate database can incorporate multiple factors.

Next, commenters referenced the EJ SEAT tool, designed by the EPA's Office of Enforcement and Compliance, which assigns scores (higher scores are indicative of areas that could be environmental justice areas facing dispro portionate impacts) to every census tract in the country55 by using an index compiled from 18 indicators which are grouped into 4 different categories: environmental indicators, human health indicators, compliance indicators, and social/demographic indicator s. Commenters noted that the process is conducted on a state

- by

state basis rather than for the U.S. as a whole. Commenters stated that EJ SEAT is nationally consistent and systematic in its approach and can be helpful in evaluating whether or not the Clea n Power Plan has been effective in improving environmental justice in those particular areas during compliance. However, commenters noted that EJ SEAT's human health category is hard to quantify because only a few indicators are available at the census tra ct level across the nation in a way that is accessible. Commenters noted that EJ SEAT also cannot capture communities smaller than 4,000 people due to census tracts which may not capture some tribal communities. Commenters also noted that the compliance in dicator has no distinction between serious violations and violations with no material environmental impact.

Next, commenters referenced the CalEnviroScreen 2.0 tool which measures environmental impacts by using 19 different indicators including pollution b urden, socioeconomic vulnerabilities, public health risk factors, among other indicators, which can be used to assess areas most heavily impacted by pollution. Commenters noted that the demographic data is derived from roughly 8,000 census tracts (using th e 2010 census) throughout the state and then assembled into an interactive map. Commenters stated that the tool compiles all of these different indicators when evaluating a particular location, and ranks zip codes statewide for comparison and by dividing r egions by census tracts rather than just the roughly 1,800 zip codes in the state, CalEnviroScreen 2.0 has the ability to provide an impartial accounting of circumstances in areas that potentially have a smaller number of residents, thus making it possible to obtain a more in

- depth analysis. Commenters noted that by using these indicators, the tool has the ability to take into account socioeconomic characteristics, health statistics, and environmental exposure to give a much more precise indication of the e nvironmental risks faced by these vulnerable populations and can provide guidance to state and local policymakers on where to best direct their resources and programs. Commenters noted that CalEnviroScreen 2.0 is available to the public, unlike EJSEAT, and that guidance documents state that the tool should be used mostly in planning for compliance and use by local and regional governments.

Lastly, commenters referenced the EJ Screen tool which compiles "EJ indexes" using demographic information (at the cen sus tract level and group block level) and environmental indicators in order to identify specific communities that may be disproportionately burdened by a given environmental harm. Commenters noted that there are 12 different environmental indicators and s even demographic indicators. Commenters also noted that like EJ SEAT, EJ Screen will be a nationally consistent environmental justice screening tool and can be used to identify where specific environmental risks occur in certain communities. Commenters sta ted that a report in EJ Screen generates all 12 environmental indicators in one area, while a map provides one environmental indicator at a time over a wider area which the EPA could use
to identify disproportionately burdened communities using the differe nt environmental indicators.

Response 1: The EPA appreciates the commenters’ concern that the EPA consider environmental justice in its development of the final Clean Power Plan. Commenters s tate that the EPA should conduct an environmental justice analys is to illustrate the potential disproportionate impacts that these guidelines may have on vulnerable communities, especially56 those located near power plants. 13 The commenters provided a number of suggested types of analyses that the agency should consider w hen conducting its analysis. The EPA agrees with the commenters that environmental justice is an important consideration and that an analysis is needed for this final rulemaking. In section IX.A of the preamble to the final CPP, the EPA outlines how it con ducted a proximity analysis for this final rulemaking . A more detailed discussion on the proximity analysis is available in the EJ Screening Report for the Clean Power Plan, which is located in the docket for this rulemaking and on the Clean Power Plan Com munities Portal located at www.epa.gov/cleanpowerplan. Commenters also stressed the impo rtance of states and EPA conducting analyse s to better understand how state plans

, once implemented

, impact vulnerable communities. The EPA addresses this comment in se ction IX.F of the preamble of the final Clean Power Plan. The EPA commits to assessing the impact of the Clean Power Plan during the implementation phase and encourages states to do so as well . If the assessment identifies adverse disproportionate impacts of air quality rules including the CPP on vulnerable communities, the EPA will work with the states to mitigate the impacts using Clean Air Act authorities.

States Using an Analysis

Comment 2: Commenters stated that the EPA should develop and adopt a definition of an "impacted community" to guide investments and program implementation

, which may be done by using a science

- based tool (e.g. the EPA's EJ View or the Community Development Financial Institution Fund's CIMS Mapping Tool). Commenters stated t hat these actions ensure that the Clean Power Plan will reduce carbon emissions and address social, economic, health, and environmental conditions in an equitable and responsible way. Commenters urged that the Clean Power Plan direct states to use science

- based tools in identifying disadvantaged communities and that the EPA should require implementation plans to list facilities of regulated entities in their state, describe the socio

- demographic make

- up of communities around those facilities, take stock of the other environmental pollution sources within the defined community, and incorporate a mechanism that dedicates to these communities a fair portion of the funds raised for implementation. Commenters felt that these steps will ensure that the Clean Power Plan reduces carbon emissions in ways that address social, economic, health, and environmental conditions that impacted communities face.

Commenters stated they recommend that the rule require each state to conduct an environmental justice analysis as a c omponent of its plan. Commenters said that each state should seek to maximize the health benefits accruing to local communities who have suffered the long

- term impacts of living near high

- polluting operations. Commenters said that they also recommend consi deration of the development of a health registry to record and analyze the effects of carbon pollution on those who live near these facilities to ensure maximum health benefits are achieved from the rule. Commenters also said that it is important to look at the entire energy value chain taking into account health impacts associated with the production of the power plant feed stocks.

13 The EPA in section I X defines the term “ vulnerable /overburdened communities” to refer to low

- income communities, communities of color, and indigenous communities that are central to the agency’s community and environmental justice considerations.57 Commenters said they encourage specific attention to potential deleterious impacts on local communities and the environment f rom hydraulic fracturing and the production of oil and gas.

Commenters urged states to strongly consider, in the SIP process, an analysis and demonstration that the burden of any predicted increases to consumer bills, for any part of the period (taking int o account remedial measures proposed in the plan, such as discounts and other safeguards), will not make electricity unaffordable to lower

- income customers nor to disadvantaged communities in the state.

Commenters stated that the State of Georgia has no la ws or regulations requiring environmental justice considerations in air regulations in permitting and has historically failed to take into account the disproportionate effects of pollution in low

- income and minority communities, such as in 2007 when the GA EPD approved the siting of a proposed coal

- fired power plant, even though the population of the surrounding area is 49.6 percent African American and nearly 30 percent of the population lives below federal poverty levels. Commenters stated that because of the state's history with environmental justice considerations, it is essential for EPA to require that this analysis occur as a compliance requirement under the Clean Power Plan. Commenters suggested that states be required to determine the location of EJ communities where pollution sources are located and additional monitors should be placed at those sites...to find if any NAAQS limits have been violated.

Commenters stated that the environmental justice analyses as part of SIPs should demonstrate that the state's plan would achieve emissions reductions in and near environmental justice communities and evaluate the impact of its SIP on environmental justice communities. Commenters noted that if the EPA chooses to include a policy that considers "intentional maximization of co

- pollutant reduction", then state's environmental justice analyses should demonstrate this as well; however, if the EPA only requires states to prevent emissions increases in and near EJ communities, then this prohibition should be demons trated by the EJ analyses. Commenters also recommended that a distributional analysis of costs and benefits to EJ communities caused by the state's implementation plan should be performed as part of the state's EJ analyses and that this analysis should inc lude an evaluation of the elements used from each building block included in the EPA's Clean Power Plan and anything else the state uses to meet its obligation under the Clean Power Plan. The analysis should also take into account cumulative impacts. Comme nters stated that the “The EJ distributional analysis should be required by the states even if the EPA does not require mandated emissions reductions, or the prevention of emissions increases, in and near EJ communities. Gaining this type of information fr om an EJ analysis would be a vital step in allowing EJ communities to attempt to protect themselves from detrimental impacts of the Clean Power Plan or to attempt to ensure benefits from the Plan."

Commenters stated that a state's approach to meeting the three criteria must include a demonstration to the EPA that the implementation policies meet these environmental justice tests through providing a valid and sophisticated analysis of how populations and communities will experience the plan's cost impacts, face health risks and benefits broadly construed to include affordability of energy, share in the policy's benefits and be represented in a meaningful way in the process of state plan development and implementation. Commenters further stated that when the EPA assesses a completed plan, they must review of the quality of the analysis should include whether both the methodology and the final analysis is peer

- reviewed and achieves an58 examination of the differential impacts of policies and costs on vulnerable p opulations and communities and inform states that plans which cannot demonstrate they meet environmental justice standards based on a valid analysis will be subject to greater scrutiny, including possible

re

- analysis by experts of the EPA's choice. Comment ers stated that they do not believe that it is necessary for the agency to establish a single methodology nor to provide a single data source and that the tests applied to state plans should be procedural.

Commenters urged the EPA to include in the final rule a robust discussion of how states can perform analyses to identify air pollution burdens disproportionately burdening disadvantaged communities and of the ways in which state plans can be designed to ensure that communities bearing a disproportionate share of air pollution burdens have those burdens reduced.

Response 2: The EPA appreciates c ommenters ’ request that the EPA define what constitutes an “impacted community,” in order to help guide investments and program analysis as part of the CPP. The EP A in section IX defines the term “vulnerable/overburdened communities” to refer to low

- income communities, communities of color, and indigenous communities that are central to the agency’s community and environmental justice considerations. The EPA’s inten t is for these terms to be understood in an expansive sense, in order to capture the full scope of communities that are central to our environmental justice and community considerations. This definition was also used to guide the proximity analysis that th e agency conducted. Please see section IX of the CPP preamble for more information on how the EPA addresses this comment. The EPA will forward to each state the results of the proximity analysis that the EPA conducted. States may use these results as a st arting point for their own analyses. C ommenters further ask that the EPA require states to conduct an analysis as part of the development of their state plans. The EPA
encourages states to conduct an analysis ; the agency provides a response to this comment in section IX.A of the final CPP preamble. Additionally, as noted in section IX .G of the final preamble , the EPA will provide states with resources containing examples of analyses that other states have conducted to examine the impacts of their programs o n vulnerable communities. States can use this information to conduct analyses of their own if they choose to do so

. The EPA stands ready to assist states in conducting these analyses as they commence or continue their outreach to communities and other stak eholders and as they begin to consider plan options.
RE/EE/Financial Assistance Programs and State Plans/Jobs

Comment 3: Commenters expressed concerns as to how the proposed rule will affect the livelihood of low and fixed

- income communities and individuals and urged the EPA to decrease the burden on these individuals.

Commenters stated that higher electricity prices as a result of this rule have a disproportionately greater impact on lower and middle

- income families, with lower

- income families be ing especially vulnerable to higher costs as a large portion of their budgets go towards energy which reduces the amount of income they are able to spend on other necessities. Commenters noted that these families constitute the working class, and that thes e families are more likely to have more children, spend more time at home, have less well

- insulated homes, and also have lower efficiency appliances. Commenters noted that those earning between $10,000 and $30,000 per59 year will, on average, spend almost 10 percent of their disposable income on residential energy needs.

Commenters noted that the most recent estimate shows that, on average, 2014 energy bills of lower

- income consumers will equal 16.5 percent of their tota l income and also noted that the electricity bill burden on low

- income consumers today is more than 11 percent of their limited resources, while others will pay 2.3 percent of income for their power. Commenters also noted that in a survey of households tha t received federal home energy assistance, 37 percent went without medical care, 34 percent did not fill a prescription or took less than their full dose of prescribed medication, 29 percent did not make a house payment, and 24 percent went without food fo r at least one day as a result of high home energy costs. Commenters stated that State Clean Power plans should demonstrate the impact of expected bills on the most vulnerable consumers has been evaluated and, as needed, remediated in the implementation pl an. Commenters also stated that states should adopt, and the EPA should review, rules for allocating costs and mitigating increases to ensure access to electricity for all and that these rules should be reviewed through the environmental justice policy fil ter.
Commenters request ed that the EPA both re

- examine this over

- simplified long range view, and

- most importantly

- set criteria for state plans that include sophisticated assessments of the impact of planned programs and predicted rates on vulnerable pop ulations and disadvantaged communities. Commenters noted that as the expert review of the rule by Synapse Inc. for the National Association of State Utility Consumer Advocates points out, "customers not participating in efficiency programs will not share i n benefits and will face higher costs." Commenters noted that Synpase's analysis, based on EPA data, demonstrates that compliance with the Clean Power Plan (at least using EPA's building block compliance) will result in higher rates, but lower bills for en ergy efficiency participants. Commenters stated that based on the EPA expectations for EE utilization in Building Block 4, the number of consumers participating in energy efficiency programs would also be anticipated to grow substantially, meaning such
peo ple would be expected to see the benefit of lower bills and customers not participating in EE programs will not share in benefits and will face higher costs. Commenters also noted that although they expect that many more consumers will realize the benefits of lower bills due to increased energy efficiency, consumer advocates still need to ensure that the allocation of costs and benefits among different customer types is equitable and does not unfairly burden any one group of customers (such as low

- income ho useholds). Commenters submitted that EPA's obligation to Environmental Justice is far greater than that to predict an average national outcome in fifteen years and that the EPA's obligation to Environmental Justice requires that equity considerations be bu ilt into the criteria for state plan acceptance.

Commenters stated that the number of people who are now vulnerable to increased energy prices is increasing. Commenters stated that poverty rates have increased to historic highs along with the declining lon g

- term trend in family incomes and that the number of people in poverty in 2010 was the largest number in the 52 years since the Census Bureau began to publish poverty statistics. Commenters noted that poverty is more prevalent among some minority groups w ith some 27% of Blacks and 26% of Hispanics lived in poverty in 2010, compared with 15% for the overall population. Commenters stated that, nationally, between 2000 and 2012, the percentage of people in poverty increased from 12.2 percent to 15.9 percent, while the number of people in poverty increased from 33.3 million to 48.8 million and the percentage of people in the United60 States with income below 50 percent of the poverty thresholds grew from 5.0 percent in 2000 to 7.0 percent in 2012. Commenters furt her noted that over this period, the percentage of people with income below 125 percent of the poverty thresholds grew from 16.5 percent to 20.8 percent. Commenters stated that increased energy costs also cause harm to the health of lower income people. Co mmenters pointed to two studies that show that greater use of coal

- fueled electricity helps free a family's disposable income for good nutrition, quality medical care and other smart lifestyle choices that lead to improved health. Commenters noted a 2002 s tudy by researchers Daniel E. Klein and Ralph L. Keeney which found that coal prevents at least 14,000 to 25,000 premature deaths each year due to low

- cost electricity and a 2007 study by Dr. M. Harvey Brenner, a professor of Health and Policy Management a t Johns Hopkins University, confirming the Klein

- Keeney findings, as Brenner concluded that if coal were removed from the energy mix, the result would be approximately 170,000 to 368,000 premature deaths in the United States.

Commenters noted that health i mpacts from climate change are expected to be exacerbated in cities as concrete, asphalt, and densely

- packed buildings absorb the sun's radiation and can increase heat on urban populations by as much as 10 degrees F compared to nearby rural areas while wor sening health conditions. Commenters noted that heat does not affect everyone equally; because low

- income areas frequently have more concrete and less vegetation in their neighborhoods, these neighborhoods experience more severe heat.

Commenters stated tha t electric customers with lower income levels often reside in older homes that are less energy efficient and generally lack the financial ability to upgrade appliances to more energy efficient models. Commenters noted that these customers with lower income levels often use as much

- or more

- electricity than customers with higher income levels and will carry the heavier burden of the Clean Power Plan. Commenters stated that they cannot support

an environmental program that disproportionately burdens those who are least able to pay.

Commenters stated that several studies have demonstrated a strong connection between a family's inability to pay its home energy bills and some obvious and not

- so

- obvious consequences such as children being removed from their ho mes because of loss of electricity, senior homeowners being forced to leave their homes because they cannot keep up with their bills, and the inability to pay utilities being second only to inability to pay rent as a reason for homelessness.

Commenters add itionally stated that the distribution of the benefits of 111(d) state implementation strategies should be subject to analysis from the environmental justice perspective and noted that the heart of the issue is whether the cost of compliance and of the imp lementation of the Plan will be balanced by the benefits received by low

- income and disadvantaged consumers and communities. Commenters noted that most utility efficiency and renewable energy program incentives are financed by all ratepayers but are primar ily designed for consumers who can pay a large share of the total upgrade costs themselves and that analyses of the impact of such policies highlight the need for thoughtful state evaluation of the incidence of costs v. benefits. Commenters noted that lowe r income consumers use substantially less household energy than others make up a large share of the low

- usage population. Commenters stated that inequitable sharing in the costs and benefits will disproportionately burden those with lower incomes.61 Comment ers noted that is it typical for them to find that their clients spend a significant portion of their annual income on electricity alone and that the low

- wage workers and retirees they serve are disproportionately likely to carry arrears on their utility b ills and to face utility disconnection. Commenters noted that these individuals will they typically sacrifice good nutrition and medical care to meet their rent and utility obligations to avoid utility disconnection. Commenters noted that unaffordable ener gy leads to a cascade of health risks from poor nutrition, erratic medication purchase and the threat of eviction, in addition to the dangerous possibility of disconnection from electricity. Commenters also noted that utility program expenditures are biase d towards those who can share the costs out of pocket. Commenters stated that presently, the vast majority of utility efficiency investments in our state are set up to match a small share of a larger, private consumer expenditure on new equipment or a buil ding upgrade. Commenters stated that while their clients pay for these programs in their bills, they are excluded because the requirement for personal spending to access a benefit is unaffordable.

Commenters stated that the Clean Power Plan does not do eno ugh to address concentrations of localized pollution in low

- income communities and stated that they would like to see strong incentives to protect these communities who can be disproportionately affected by carbon pollution.

Commenters said that states sho uld place higher priorities on alternatives that will benefit environmental justice communities, including conservation and efficiency, renewable energy, and retirement of coal

- fired power plants. Commenters noted that conservation and efficiency provide c lear environmental benefits and also create job opportunities and result in energy cost savings for low

- income families. Commenters stated that U.S. EPA's Energy Star program estimates that through energy efficiency and energy efficient products, local gov ernments can help homeowners in the U.S. reduce annual energy bills by an average of $750 and that this number is even more significant when considering low

- income families' annual income. Commenters noted that as most energy efficiency jobs consist of ins tallment or maintenance of equipment locally, as opposed to conventional energy supplies and delivery, this will increase job production in lower

- income communities. Commenters noted that these jobs are also available to employees without higher education, and energy efficiency investment also creates more jobs than an equivalent investment in the utility sector or fossil fuels. Commenters stated the importance of renewable energy to environmental justice communities such as tribes as the Inter

- Tribal Counc il on Utility Policy reports that over 4,500MW of wind and solar energy projects are currently on tribal land. Commenters noted that renewable energy also brings an increase in green jobs to low

- income environmental justice communities and that while this is being recognized and introduced into law in certain regions, states should consider and place priority on green jobs in their proposal to U.S. EPA. Commenters lastly noted that coal

fired power plants are the largest stationary sources of GHG emissions and today many old, poorly controlled and inefficient plants are being phased out, separate and apart from the CPP. However, commenters noted that coal

- fired power plants still contribute to 25.5% of GHG emissions in the country, and still provided 41% of energy generation in Illinois. Commenters noted that these plants pose significant health risks to Americans, and that these numbers are higher in lower

- income communities. Commenters stated that according to a report by Physicians for Social Responsibilit y, "detrimental health risks are associated with every aspect of coal's life cycle, including mining, hauling, preparation at the power plant, combustion, and the disposal of post

- combustion wastes." Commenters noted that the life cycle of coal generally62 p oses health risks to environmental justice communities, and as such, retirement of coal

- fired power plants should be a priority in state implementation plans. Commenters also noted that members of environmental justice communities perform most of the jobs required to produce coal and in addition to coal miners themselves, "communities near coal mines may be adversely affected by mining operations due to the effects of blasting, the collapse of abandoned mines, and the dispersal of dust from coal trucks." Co mmenters stated that surface mining, mountaintop removal, coal washing, and transportation all take tolls on environmental quality and human health.

Commenters expressed specific concern about the incorporation of and access to renewable energy services in environmental justice communities and asked the EPA to ensure that the Rule assures that sufficient resources are made available to help workers in affected communities make the transition to a clean energy economy.

Commenters recommended that the EPA urg e states to ensure that communities that have borne heavy burdens from fossil fuel

- fired power plant emissions

- and low

- income communities more broadly

- have full access to opportunities to develop renewable generation (including distributed renewable ge neration) and opportunities to benefit from investments in demand

- side energy efficiency improvements. Commenters noted that full access will likely mean ensuring that traditional barriers to accessing these types of cost

- saving and energy

- saving programs are overcome by encouraging innovative financing arrangements. Commenters specifically mentioned addressing problems that arise when landlords are not paying energy bills and thus lack a sufficient incentive to invest in demand

- side energy efficiency impro vements. Commenters also urged the EPA to prioritize developing guidance that will facilitate investments in energy efficiency in low

- income communities and communities of color, and make it clear to states that these types of programs can be deployed, and verified, as part of a compliance strategy.
Commenters stated that "at this time, many EJ communities are not energy efficiency ready

- states must be required to make a commitment to fund projects that will create the infrastructure (i.e. homes, multi

- fa mily dwellings) in EJ communities that can be retrofitted to meet baseline standards for weatherization, as well as the financial support to own and operate clean energy sources, like solar power." Commenters urged the EPA to ensure that "clean energy trai ning and job opportunities, and other innovative ways to stimulate the local economy are considered in the SIP planning process to help create a thoughtful, just transition for plant

- dependent communities." Commenters stated that the EPA's lack of attentio n to equity in the Clean Power Plan "can give the impression that equity is not important in the context of the Clean Power Plan and reducing GHG emissions." Commenters expressed concern that the EPA stated in the final pages of the preamble that the Clean Power Plan might even lead to local increases in emissions, and then "surprisingly does not direct the states to address the issue." Commenters stated that "even if EPA believes it lacks the authority to force the states to prevent emissions increases in and near EJ communities, a position with which we disagree, EPA should at least urge states to address this issue and provide the guidance for them to do so."

Commenters stated that the use of renewable energy should be prioritized as a method of reducing economic burdens in environmental justice communities and ratepayers as a whole. Commenters noted that renewable energy offers unique opportunities both to avoid63 environmental injustice and to affirmatively advance environmental justice as well. Commenter s stated that "in displacing sources of pollution, which have disproportionately affected environmental justice communities, a sector

- wide shift toward renewable energy serves a central environmental justice objective of reducing industrial pollution" and additionally noted that "there is a quality of life difference between living within close proximity to a solar or wind farm as opposed to a plant that burns fuel to produce electricity." Commenters noted that improving a building's resistance to the eleme nts and other energy efficiency improvements are effective in reducing fuel poverty which is in contrast to the Low Income Home Energy Assistance Program "which is expensive and costly to the government as well as to energy providers, making such assistanc e programs unsustainable." Commenters stated that investments in energy efficiency permanently lower energy use in low

- income households while simultaneously reducing government and energy provider outlays. Commenters stated that environmental justice

comm unities can benefit from energy efficiency initiatives "if there is adequate support to make them energy efficiency ready."

Commenters stated that environmental justice must include access to affordable energy efficiency and renewable energy services and equitable distribution of incentives must be made available to middle and upper income populations and that delegating energy services to environmental justice households in effect to programs of rate relief, provides unequal and inequitable access to rene wable energy and energy efficiency.

Commenters specifically stated support for the Clean Power Plan, but asked the EPA and all relevant federal and state agencies to work to ensure the following four items: making sure that workers and communities that are affected by the phasing out of fossil fuels are treated fairly and justly, making sure that the jobs that the plan creates are good family sustaining jobs, making sure than disadvantaged communities receive their fair share of clean energy related economi c opportunities, and making sure that clean energy continues to be affordable.

Commenters stated that ensuring that clean energy training and job opportunities, and other innovative ways to stimulate the local economy should be considered in the SIP planni ng process to help create a thoughtful and just transition for plant

- dependent communities.

Commenters stated that the Obama Administration to commit to measures that will direct resources to workers and communities to mitigate undue hardship that may resu lt from state implementation plans approved by the EPA pursuant to the final rule. Commenters also stated that enhanced support should also be provided to people and communities experiencing continued exposure to the hazardous impacts of ongoing fossil fue l energy production.

Commenters recommended that the state's plan include a rate and bill impact analysis that should make transparent the burden of any predicted increases to consumer rates and bills. State plans should include a summary of any low

- incom e discount rates or other programs that will mitigate any rate or bill impacts on low

- income and minority communities. Commenters also recommended that state's provide an analyses that 1) demonstrate that emissions reductions of pollutants other than GHG w ill equitably benefit disadvantaged low

- income and minority communities; and, 2) demonstrate that investments in and benefits from renewable energy and energy efficiency are distributed so as to equalize access to utility service, including improving

curre nt disparities, for disadvantaged communities and consumers.64 Commenters stated that in its current form, the Clean Power Plan does not directly address equity or environmental justice and this needs to be corrected. Commenters urged the EPA to at least
qu estion whether an environmental justice and equity

- driven reading of section 111(d) and related court opinions might provide the authority to: prohibit the use of carbon trading, new and 'extended' nuclear energy, and CCS to satisfy requirements under the Clean Power Plan; target EJ communities for emissions reductions, renewable energy use and the use of energy efficiency under the Plan; and to mandate that states include distributional EJ analyses as part of their state implementation plans.

Commenters s tated that delegating energy services to environmental justice households in effect to programs of rate relief, provides unequal and inequitable access to renewable energy and energy efficiency. Commenters also noted that all existing state emission budget trading programs addressing GHG emissions include out

- of

- sector, project based emission offsets, which may be used to cover a portion of the compliance obligation of affected sources and that environmental justice advocates do not support the use of offse ts as a method of compliance obligations by states, either domestically or internationally.

Commenters encouraged the EPA to adopt policies that direct states to make long

- term investments into communities disproportionately burdened by pollution and econ omic stress. Commenters stated that revenues committed to, or generated by, policies or programs created to meet Clean Power Plan requirements should be invested into programs that maximize environmental and economic benefits in impacted communities.

Comm enters urged the EPA to provide guidance for states to design energy efficiency, distributed renewable energy programs and other broad

- based initiatives that can be implemented with maximum benefits for consumers. Commenters also urged the EPA to work with states and stakeholders to promote processes and programs that will reduce the threat of climate disruption while ensuring that service and affordability is safeguarded for low

- income

consumers.

Commenters stated that the EPA should include language that moves long

- term investments into impacted communities that are disproportionally burdened by pollution and economic distress. Commenters stated that policies or programs created to meet the Clean Power Plan requirements

- in addition to any revenues commi tted to or generated by such programs

- should maximize environmental, social and economic benefits in impacted communities. Commenters stated that these programs and investments should be guided by the following basic principles: 1) reinvestments must pri oritize mitigating the costs of implementation to low

- income communities; 2) create clean, living wage jobs and business opportunities for minority

- and

women

- owned businesses that open pathways for low income individuals, people of color, and local reside nts to enter the green industry workforce; 3) enable people to live where they work with access to clean transportation, an affordable place to live, and clean and secure food sources; and 4) prevent displacement of low

- income residents and local businesse s that may be caused by investments that reduce carbon pollution and increase the quality of life in neighborhoods that have long suffered from disinvestment.

Commenters noted that the EPA has recognized in the proposal that there is no technological optio n to reduce CO 2 emissions from power plants and instead determined that BSER for CO 265 emissions from EGUs is primarily a reduction or elimination of coal generation, much of which was built in compliance with the federal Fuel Use Act of 1978. Commenters sta ted that the reliability of the country's electric grid is severely threatened without this coal generation. Commenters stated that coal generation is essential to serving this county's electric load, ensuring that owners and operators of coal generation r emain viable, and preventing dramatic increases in electricity rates. Commenters noted that these impacts will fall on the lowest income electric consumers in the country, which they feel is unacceptable. Commenters stated that the Clean Power Plan is ille gal and must be withdrawn.

Commenters noted that lower

- income residents have fewer resources to adapt to the impacts of global warming. Commenters stated that lower

- income residents have less access to demand response and energy

- efficiency programs that the EPA plan relies upon, and that these types of programs are often economically and organizationally challenging for rural residents with budget constraints.

Commenters noted that low

- income ratepayers incur a significantly higher energy burden than the general population which creates a disparity in the impacts of family budgets, and are more likely to suffer severe heat island effect and environmental gap. Commenters stated that in order to address such situations, programs to explicitly consider and am eliorate the energy burden and environmental gap of low

- income residents must be considered. Commenters stated that weatherization is a well

- established program that is able to accomplish these objectives while reducing greenhouse gas emissions and any pla n must make considerations for low

- income residents to receive weatherization.

Commenters stated "to minimize costs for their citizens, states should take full advantage of renewable energy and energy efficiency resources and use this opportunity to crea te a much cleaner, more resilient electric system" and that "states should also take into account both environmental justice communities and transitioning workers from jobs in the coal mines, power plants, and associated equipment manufacturers to other jo bs in a cleaner energy economy." Commenters stated that states should "evaluate the jobs and environmental justice impacts

- both positive and negative

- of their proposed state plans.

Commenters stated that we must ensure that the most vulnerable communi ties are protected by the standards and consulted throughout the standard setting and state plan development process and that public resources are made available to help workers and affected communities’ transition to the clean energy economy.

Commenters a sked the EPA to develop guidelines and outreach for citizens and states that wish to incorporate energy efficiency in a way which build equity within the state. Commenters recommended that the EPA highlight and provide guidance to states on considering a v ariety of policy mechanisms, both within the context of state compliance plans and through complementary policies enacted by state legislatures, to retain workers and invest in economic diversification. Commenters noted that such policies have the potentia l to generate revenue that the state can then invest as they see fit. Commenters noted that these policies may include: market

- based mechanisms similar to RGGI, carbon fees/taxes to drive down emissions, permanent mineral trust funds which levy a special t ax on companies for right to remove resources from the ground, renewable energy standards which designate a portion of RE66 development from in

- state resources to support local job creation, energy efficiency resource standards which promote energy efficienc y in homes and businesses, worker training programs, and economic development and economic diversification. Commenters noted several instances of success with these policies in a number of states.

Commenters expressed concerns for the senior citizen commun ity in response to the proposed rule. Commenters noted that higher costs associated with CO 2 regulations will be passed on to the consumer, and that many seniors live on fixed incomes and do not have additional capital to spare. Commenters stated that the health of millions of low income senior citizens are disproportionately harmed by the EPA's deliberate actions to raise electricity prices. Commenters were upset by what they felt was a lack of sensitivity towards senior citizens and recommended that the E PA reconsider its environmental justice analysis. Commenters noted that some states, such as Alaska, have a quickly increasing percentage of senior residents who will be impacted by this rule as their energy costs will consume disproportionate percentages of their income.

Commenters believed that strong support for, and use of, the energy efficiency building block incorporated in EPA's Clean Power Plan is essential for low

- income households. According to commenters, energy efficiency not only leads to the l owest overall cost of compliance with the rules, but it also represents the best opportunities for low

- income families to reduce their own energy bills. Commenters urged the EPA to further articulate and encourage opportunities for energy efficiency progra ms aimed at low

- income households (including renewable and alternative energy resources) and to emphasize the role these programs can play in keeping costs low for those families that can least afford energy cost increase.

As an example of these opportuni ties, commenters cited Wisconsin's low

- income weatherization program. Commenters stated that this program has a 30+ year track record of positively impacting low

- income energy bills, yet, over the past 4

- 5 years, funding for the program both nationally and within Wisconsin has been reduced, oftentimes so as to continue to support payments for bill assistance. While a worthy goal, commenters said bill payment assistance does not have anywhere close to the impact that weatherization does on reduction in energ y usage, while, at the same time, creating self

- sufficiency for low

- income families in their energy choices. Commenters stated that robust funding for low

- income weatherization, as Wisconsin's single, largest energy efficiency program, would have clearly i dentifiable impacts on the Clean Power Plans goals.

Commenters stated that low

- income weatherization must be included in the Clean Power Plan. Commenters said that weatherization is a unique tool that both mitigates climate change and promotes resilience and adaptation. By improving a low

- income resident's building envelope, home insulation, and replacing inefficient appliances, commenters stated that energy efficiency savings are realized and greenhouse gas emissions are mitigated. Commenters indicated

we atherization also helps low

- income families save on their utility bills, on average $400 per year; this increases their resilience to other possible climate

- related hurdles by making them more financially secure. Commenters estimated that weatherization of fers a 1.83:1 ROI in energy savings, and with non

- energy benefits the returns are 2.69:1. Commenters stated that low

- income communities are disproportionately affected by the negative impacts of climate change; it's only right that a plan to address climat e change would explicitly provide assistance to ameliorate these impacts.67 Commenters stated that the EPA should require states to demonstrate equal access to these benefits, and should evaluate state plans on this basis. Commenters noted that in this cont ext, environmental justice is not only the avoidance of disproportionate harm, it also encompasses an affirmative obligation to ensure equal access to anticipated services and benefits.

Response 3: The EPA appreciates c ommenters ’ highlight ing the importance of communities having access to EE/RE and financial assistance programs. The EPA addresses these comments in section IX .C of the final rule preamble

, in which the EPA encourages states to take steps to make sure that low

- income communities gain additional access to EE/RE benefits. In section IX.C , the EPA provides examples of state programs including those conducted by Maryland, New York, and Colorado that assist communities in increasing their ability to access RE/EE and financial assistanc e programs. The EPA encourages states in developing their plans to use these and other models to address issues around increasing low

- income communities ’ access to EE/RE and financial assistance programs. Additionally, as stated in sections IX.C

- D of the preamble, the EPA in the coming months will continue to provide information resources for communities and states on existing federal, state, local, and other financial assistance programs to encourage EE/RE that are already available to low

- income communit ies. The EPA will also provide a catalog of current or recent state and local programs that have successfully helped low

- income communities adopt EE/RE measures. The goal in providing these resources is to help communities gain the benefits of this rulemak ing by encouraging that states use these types of tools in their state plans. The commenters also reference potential incentive programs that could be conducted as a result of this rulemaking. The EPA encourages states to award early investm ents in RE and E E projects that benefit low

- income communities, and the EPA has established a state

- federal partnership program, the Clean Energy Incentive Program

, to encourage such investments. Further information on this can be found in section VIII.B of the final pre amble. Additionally, commenters raise concerns with the potential of the EPA allowing cap and trade programs and CCS. Both of these topics will be addressed in responses to other comments that are presented below, in response 15 and in response 18.

Includ ing Vulnerable Communities in State Plan Process

Comment 4: Commenters presented concerns about the inclusion and participation of environmental justice communities within the development of state s’ plans and the EPA's proposed rule.

Commenters stated that

, because the EPA indicated that it cannot predict, with accuracy, how CO 2 emissions from specific EGUs would change as an outcome of the proposed rule due to
state

- led implementation, the EPA therefore cannot determine whether there would be a disproportionately high and adverse human health or environmental effect on i ndigenou s populations. Commenters assumed by extension that the EPA cannot determine the effects of the proposed building block measures used by states, in isolation and in combination with others, on Indian Tribes. Commenters noted that understanding the effect o f individual EGUs as well as the building blocks used under state programs is critical and that the EPA must perform an environmental justice analysis. Commenters stated that the EPA's statement is very concerning, especially with previous criticism the EP A has received for its lack of inclusion of environmental68 justice in drafting regulations (the Gasoline Rule, the Diesel Rule, and the Ozone Implementation Rule where EPA "generally devoted little attention to environmental justice"). Commenters also state d that the EPA's statement also contradicts its own mandates for its operations, as its Plan EJ 2014 states the EPA is continuing to identify and prioritize EJ

- related research activities. Commenters stated that "our main demand is that the federal EPA inc lude language in the final rule and the subsequent guidance that recognizes and considers potential disparate impacts the rule may have on environmental justice communities, and explicitly direct states to identify environmental justice communities and whe re there are potential disparate impacts, and take steps to avoid or mitigate those disparate impacts."

Commenters stated that the Clean Power Plan, in its current form, fails to ensure meaningful involvement of EJ communities in the development of state implementation plans. Commenters noted that it is not clear if the Clean Power Plan requires a state to have even one hearing for the general public, as 79 FR at 34900 indicates that a hearing is required, but 79 FR at 34915 seems to state that no hearing is required on an initial plan. Commenters stated that perhaps a hearing on the final plan is necessary but to the degree the requirement for a hearing is unclear in the Clean Power Plan it needs to be clarified; but in any case, a more robust public parti cipation process needs to be developed that specifically involves EJ communities in the development of state implementation plans. Commenters also noted that the Clean Power Plan does not specifically mention the involvement of environmental justice commun ities at all. Commenters stated that the EPA should either place a robust EJ participation requirement in the Clean Power Plan itself that states must follow or require states to develop and submit an EJ participation strategy as part of their state implem entation plans, which would make the participation strategy subject to EPA approval.

Commenters stated that meaningful participation in the state planning process by low

- income and minority groups is a fundamental environmental justice requirement and that they are disappointed that the EPA's review of environmental justice concerns in the preamble addressed the agency's own considerable record in consulting with such groups and advisors, but ignored application of the requirement to the states' procedures. Commenters stated that the Clean Power Plan contains no requirements or guidance for states to ensure adequate low

- income and minority participation in the development of state plans. Commenters noted that the EPA requires the state to conduct a public he aring when the plan is made public, prior to submission to the EPA and stated that this is certainly a necessary procedural step, and the EPA should commit to careful consideration of the public hearing record; however, the requirement to hold a public hea ring does not mean that low

- income and minority communities will have an adequate opportunity to participate, nor that the state plan process will be sufficiently transparent. Commenters stated that strong consumer participation and oversight is both in th e national interest and in the interest of sound climate policy and that providing low

- income consumer representation in the state implementation process makes it more likely that states will produce sound, reliable and low

- cost plans. Commenters recommend ed that as part of a state's demonstration that it has provided for meaningful participation, the EPA should stipulate that providing financial support for planning and regulatory participation will be the best evidence the mandate has been carried out eff ectively.

Commenters noted that the systematic engagement of leaders and advocates who authentically represent the concerns of low

- income community members in climate

- protection efforts can69 generate publicly endorsed plans that are more attendant to equity concerns and carry more public support. Commenters stated that the process of engagement itself will help to build social cohesion within states, and lessons from place

- based innovation with intentional focus on meaningful civic engagement as well as the inclusion and benefit of low

- income communities will improve the effectiveness of the field as a whole.

Commenters noted that the EPA's guidance provides that minority and low income communities must have an adequate opportunity to participate in decisio ns about a proposed activity that will affect their health or their environment, and their concerns must be considered in the agency's decision

- making process and that the inability of these communities to participate in this process constitutes an "EJ con cern" that may itself contribute to disproportionate impacts. Commenters stated that the EPA must engage these communities early in the process through targeted outreach efforts, in a manner that overcomes any lack of trust, as well as any language,

commun ication, and information barriers. Commenters commended the EPA for hosting webinars, conference calls, and workshops for environmental justice communities in the context of this rulemaking and urged the EPA to continue to provide these communities with
op portunities for meaningful involvement in the rule making process, and to actively seek their input in the development of a comprehensive environmental justice analysis of the Clean Power Plan.

Commenters stated that the EPA should commit to careful consi deration of the public hearing record; however, it is no substitute for continuous engagement of advocates for all key constituencies throughout the process. Commenters noted that few changes will be possible once the yearlong planning process has produced a tidy submission and an innovation on the scale of this policy requires far more. Commenters stated that strong consumer participation and oversight is both in the national interest and in the interest of sound climate policy and that providing low

- incom e consumer representation in the state implementation process makes it more likely that states will produce sound, reliable and low

- cost plans.

Commenters urged the EPA to require states to demonstrate the following within their compliance plans: that equ ity was part of the state's planning process from the beginning; that states find the best path through the challenges of developing a plan to reduce carbon pollution in a socially equitable manner that reflects the distinct ethnic, social, economic, and p olitical qualities of each state; that the needs of disadvantaged stakeholders' capacity to participate were developed through understanding the different motivations, needs, and barriers and developing collaborative strategies to address them; and that s tate compliance plans ensure a fair distribution of the costs and benefits of carbon reduction.

Commenters appreciated that each state is required to certify that it held a hearing on the plan, including a list of witnesses and their affiliation, along wit h a summary of the presentation. However, commenters encouraged even broader community participation in the creation of the state plans and recommended the inclusion of representatives from the environmental justice communit y. As the state plans are both d eveloped and implemented, commenters wanted to ensure that the needs of the most vulnerable and low

- income populations are taken into account.

Commenters also recommended that the EPA encourage states to solicit input on state compliance plans from a wide variety of stakeholders. Commenters stated that outreach efforts70 should include robust and extensive dialogues with community leaders and the public, with particular attention to EJ communities. Commenters recommended that the EPA solicit feedback and par ticipation from EJ groups like WE ACT and National Environmental Justice Advisory Council (NEJAC) to help formulate guidance on including EJ concerns in state compliance plans.

Commenters noted that the results of small

- scale energy efficiency programs al ready in place in South Carolina have demonstrated that citizens need guidance and assistance throughout the entire process in order to reap the cost savings and other benefits promised by such programs. Commenters stated that while they have already begun this important work, more time and resources are needed to help develop better outreach methods to increase participation among the state's families, including those with limited discretionary money. Commenters recommended that states be given more time a nd resources to provide more outreach in order to increase participation among the state's families, including and especially those within EJ communities, who have the potential to be more financially impacted.

Commenters noted that the EPA's obligations t o ensure meaningful public participation from tribes under E.O. 12898 are distinct from the agency's consultation obligations under E.O. 13175. Commenters noted that the EPA must ensure public participation by a broad range of tribal stakeholders, includin g community and neighborhood groups; traditional leaders (elders); community service, environmental, and other non

- governments organizations; academic institutions; and religious communities. Commenters noted that the supplemental proposal explains that, i n order to provide opportunities for meaningful participation early in the process, the EPA hosted webinars and conference calls on the Clean Power Plan specifically for environmental justice and tribal communities. Commenters stated, however, that the pro posal does not discuss any targeted outreach efforts for U.S. territories. Commenters urged the agency to continue to provide as many interested members of these communities with opportunities for meaningful involvement in the rulemaking process, and to th oroughly describe how these concerns have been taken into consideration in the final rule.

Commenters stated a general need for the inclusion and protection of environmental communities as a result of the proposed rule, as some of these communities are suf fering health impacts from exposure to pollution will continue to do so into the future unless the EPA offers this safeguard. Commenters stated that the negative health effects associated with air pollution are especially damaging for vulnerable population s including the elderly, young children, those individuals already in poor health, and also communities of color and low

- income residents. Commenters said that even though the findings and the reduction of co

- pollutants are aligned with EJ concerns, there is no guarantee that these reductions will occur in historically overburdened communities.

Commenters stated that the EPA must require the states to specifically determine ways to reduce ongoing burden to these communities and prevent increased exposure to emissions from steps taken in the plan while reaching out to these communities specifically to engage them in the process. Commenters noted that the EPA discusses steps that states can do to monitor and address higher emissions that occur, but preventing exposure remains a much better approach.71 Commenters urged the EPA to prioritize innovative emissions reduction to lessen the health impacts to vulnerable communities with significant health disparities. Commenters said that exposure to cumulative risks fr om carbon emissions impacts acute health conditions and long term health of vulnerable people with important health disparities or those who live in small and underserved communities. Commenters said that air quality is a life and death issue, especially

a mong those individuals suffering from chronic respiratory and cardiopulmonary diseases, those who are immune

- compromised and more generally among women and children. Commenters stated that public health statistics indicate a rise in air contaminants across the nation, which triggers exposure to irritants to those dealing with health disparities.

Commenters encouraged the EPA to include the following in the final rule: 1) a requirement for states to include local leaders from impacted "hot spot" communities in the development and execution of State Plans; 2) a directive for states to make long

- term community benefit investments in these communities disproportionately burdened with pollution; 3) a requirement to identify "impacted communities" for inclusion in planning and targeted investments, using existing federal government

- derived instrument (e.g., EPA's Environmental Justice View or the CDFI Fund's CIMS Mapping Tool) to define target areas; and 4) a requirement that states conduct an "equity" analysis of their Carbon Reduction Plans.

Commenters urged that the EPA ensure that each state's plan is done inclusively so that equity

based input is heeded.

Commenters asked that the final rule includes language and the subsequent guidance to force States to recognize and consider potential disparate impacts the rule might have on environmental justice communities, and explicitly direct states to identify envi ronmental justice communities and where there are potential disparate impacts, and take steps to avoid or mitigate those disparate impacts. Commenters noted that making equity and environmental justice concerns a mandatory part of the state implementation planning process is key because the States have the ultimate responsibility for crafting their solutions. Commenters stated that some states may currently be questioning how to define their environmental justice communities, since there is no widely accept ed definition, and noted that the EPA is in a position to advise states on how to identify vulnerable communities and insure that the BSER measures that each state decides to use to meet emission reduction requirements do not adversely impact low income, a nd/or communities of color. Commenters stated that by writing equity into the final rule and subsequent guidance, "the EPA will send a message to States that environmental justice is a priority."

Commenters noted that the integration of social equity into any carbon reduction planning process will increase the quality and reduce the extent of inequitable impacts while a lack of attention to social equity in low

- carbon initiatives is likely to lead to the worsening of existing inequalities. Commenters state d that states should integrate social equity into their plans because: 1) As a society, we have an obligation to ensure that policies and institutions do not disadvantage or exclude weaker groups; 2) Introducing an equity focus to carbon reduction initiati ves will help extend the reach and overall impact of carbon initiatives; 3) Transition will bring new costs and responsibilities to consumers, industry, and regulators that will require political support. Disadvantaged communities have a political voice th at can help drive through new policies and regulation, or conversely, resist change; 4) Disadvantaged communities hold a range of72 economic assets and resources

- land, investment funds, purchasing power, social networks, skills and knowledge

- that are inc reasingly recognized but still largely under

- utilized in low

carbon strategies; and 5) Equitable approaches can increase the efficiency and impact of carbon reduction investments by simultaneously generating new wealth creating opportunities and social

an d economic benefits for deprived communities and for society as a whole.

Commenters recommended that the EPA work with states to engage local governments to promote emission reductions and to share these approaches through multimedia outreach, work with s tates and tribal governments to provide incentives to achieve and implement these innovative emission reducing approaches, further efforts to work with states on broad targets for consideration of environmental justice communities that have the most critic al health concerns and vulnerable populations, and work with states to provide incentives for private sector partnerships which aim at reducing harmful emissions.

Commenters noted, however, that the proposed rule is devoid of meaningful directions to stat es about how they must incorporate environmental justice considerations into the development and implementation of their state implementation plan. Commenters stated that the failure to incorporate explicit, proactive environmental justice guidance to stat es is guaranteed to cause havoc for years to come; states will not know what they are required to do to incorporate environmental justice into the development or substance of their plans and environmental justice communities will become frustrated because state efforts will be ad hoc, rather than consistently administered pursuant to clear EPA guidance. Commenters stated that the EPA should address its expectations for its state partners related to environmental justice, and explicitly indicate that adheren ce to these expectations will be a basis by which state implementation plans will be evaluated.

Response 4: The EPA appreciates commenters’ interest in the EPA’s providing guidance to states with regard to engaging environmental justice leaders, community leaders, and others who can speak to the concerns of vulnerable communities. The EPA agrees with the importance of such engagement

, and the agency guides and directs state s accordingly in the final rule

.
The EPA added a requirement to the final rule that a state ’ s initial submittal must contain a description of the engagement with stakeholders including vulnerable communities that the state has undertaken already and that it plans for the period of final plan development. Further, states’ final plan subm ittals must contain similar descriptions. The EPA provides guidance to the states in the final rule on how to engage communities in a meaningful way. The EPA states in the preamble to the final rule that it will continue to provide recommendations and too ls to states and communities that will help enable meaningful conversations about the concerns of vulnerable

commu nities. The EPA consulted its May 2015 Guidance on Considering Environmental Justice During the Development of Regulatory Actions in the creation of this final rulemaking and encourages states to consult this document as they create their state plans. See sections VIII.E&D and IX.B of the final rule preamble of the CPP for more details on how EPA has addressed these comments in the rule.73 Co

- pollutants

Comment 5: Commenters stated that because the immediate health benefits will be the result of reductions in emissions of GHG co

- pollutants, it is preferable that co

- pollutant emissions reductions be intentionally maximized. Commenters noted t hat the co

- pollutants of greatest concern are particulate matter (PM), nitrogen oxide, and sulfur dioxide. Commenters stated that given the detrimental impact fine PM has on the health of residents in EJ and other communities, it only makes sense to utiliz e and develop strategies that will maximize co

- pollutant emissions reductions while achieving the goal for GHG emissions reductions. Commenters stated that reductions of co

- pollutants, and therefore of GHGs also, should be ensured in and near EJ communitie s because these communities tend to have the highest concentrations of, and exposure to, air pollutants. Commenters stated that EPA should create one of three policies to ensure GHG and co

- pollutant emissions reductions under the Clean Power Plan: 1) the b est policy would be an intentional maximization of co

- pollutant emissions reduction and mandated reductions of co

- pollutant and GHG emissions in and near EJ communities; 2) the next best policy would be a mandated reduction of GHG emissions in and near EJ communities so these communities could benefit from the accidental reduction of co

- pollutants that would accompany the reduction in GHG emissions; or 3) a minimally protective policy would prohibit increases in emissions that impact EJ communities.

Comment ers also indicated that states should be required to develop multi

- pollutant plans because CO 2 is not the only pollutant harmful to environmental justice communities.

Response 5: The EPA appreciates the commenters ’ recommendations for approaches states may take to reducing emissions of co

- pollutants in vulnerable communities. In the final rule, the EPA encourages states and communities to engage in conversations about how state plan options may affect overburdened communities. The EPA notes in Section IX o f the preamble to the final rule that we expect that EGUs that may increase their GHG emissions as part of how utilities respond to the requirements in a state plan would be the cleanest generators, with the lowest emissions of

co

- pollutants The EPA in sec tion IX .E addresses the issue of co

- pollutants and the agency encourages that states use a multi

- pollutant planning approach when developing their plans. Additionally, the EPA in section IX.F outlines the path forward for the agency and states in terms of addressing the impacts that state plans have on vulnerable communities during the implementation phase of this rulemaking. In particular, the EPA commits to assessing the impacts of this and other rules on the air quality of communities and encourages stat es to conduct assessments of the impacts of their plans on their vulnerable communities

. If adverse impacts are identified, the EPA commits to working with the state to address them using Clean Air Act authorities.

Communities Shouldering Burden

Comment 6: Commenters expressed concerns about the proposed rules' effect on various minority communities and how these communities that are less able to adapt to the consequences of climate change may be required to bear the burden of environmental and regulatory effects. Commenters stated that the EPA must ensure that the CPP provides real relief to communities located near power plants who have suffered the impacts of power plant pollution for decades.74 Commenters stated specific concerns about the impacts of the proposed rule on African American communities. Commenters cited an NAACP report, "Energy Justice," which stated that approximately 68 percent of African Americans live within 30 miles of a coal plant and that the impact of this proximity is clear in the r ates of respiratory illnesses in African Americans. Commenters additionally stated that, nationwide, African American children are twice as likely to experience asthma and three times as likely to be admitted to the hospital for an asthma attack versus the national average. Commenters stated that the EPA must ensure that each state's development of implementation plans is done inclusively, so that equity

- based input is heeded and all stakeholders are heard, particularly in communities that are most impacted by coal pollution directly as well as indirectly. Commenters cited the 1987 report by the United Church of Christ Commission for Racial Justice on Toxic Waste and Race and noted that the study found that 3 out of 5 African Americans live in communities wi th abandoned toxic waste sites and that 3 of the 5 largest commercial hazardous waste landfills are located in predominantly African American or Latino communities.

Commenters referenced an NAACP report titled "Cold Blooded" that analyzed criteria air poll utant emissions from coal

- fired plants in conjunction with demographic factors, concluding that a number of coal plants in the United States had "a disproportionately large and destructive effect on the public's health, especially on the health of low

- inco me people and people of color," who are more likely to be disproportionately affected by climate change. Commenters stated that the report found that 6 million Americans living near coal plants had an average income of $18,400, in comparison to the $21,857 average income nationwide, and of those 6 million Americans, 39 percent were people of color. Commenters noted that while the 75 plants that received a grade of "F" in the study only produced 8 percent of the total electricity, they accounted for 14 perce nt of overall SO2 emissions and 13 percent of NOx emissions and that the average per capita income of the people living within 3 miles of these 75 plants (roughly 4 million people) was $17,500, and nearly 53 percent were people of color. Commenters expande d on this analysis by incorporating the data from the NAACP report and analyzing emissions from a list of 384,460 coal

- fired power plants. Commenters stated that the 197 plants identified in the NAACP report that fall in the low

- income threshold of $17,505 per capita produced more CO2, SO2, and NOx emissions overall in both 2012 and 2013 compared to the 187 other plants in the study that are above the low income threshold. Specifically, commenters stated that these plants produced on average 33 percent more NOx emissions, 21 percent more SO2 emissions, and 11 percent more CO2 emissions than the other 187 plants in 2013, and 24 percent more NOx emissions, 11 percent more SO2 emissions, and 9 percent more CO2 emissions in 2012. Commenters concluded that these 197 plants identified as under the low income threshold would be causing adverse impacts in low income communities in comparison with the rest of the plants identified in the study.

Commenters stated that environmental justice communities need reductions in air pollution that the Clean Power Plan could deliver to them because it appears these neighborhoods bear a disproportionate burden of pollution that includes air pollution. Commenters noted that there is evidence that a disproportionate number of pollu ting facilities and other unwanted land uses are sited in Environmental Justice communities that most likely cause these neighborhoods to suffer from the effects of pollution. Commenters were troubled by the relationship between race, income, and pollution that is suggested in the State of New Jersey by a cumulative impacts screening tool

-- and nationally by other reports

-- and stated that these findings "go against our75 country's most tightly held values of justice and fairness." Commenters also indicated tha t particulate matter (PM) in general causes health problems in environmental justice communities and that the Clean Power Plan provides the EPA with a mechanism to save lives in environmental justice communities by mandating emissions reductions in these n eighborhoods and thereby reducing fine PM concentrations...to levels that are probably not attainable without utilizing the Plan. Commenters stated that if used in this fashion the Clean Power Plan would also help to fight the very disturbing link that exi sts between race, income and pollution in New Jersey and in the country; if the Clean Power Plan is not utilized in this fashion the EPA will miss an opportunity to improve health in environmental justice neighborhoods and to improve equity and environment al justice in our country that may never present itself again.

Commenters stated that community differences in health concerns, income disparity, energy access, and housing can contribute to health disparities given the disproportionate access to
energy an d environmentally sustainability resources and exposures to unhealthy conditions. Commenters noted that living near toxic waste dumps, freeways and other sources of exposures that are harmful to health is highly correlated with race as well as socioeconomi c status. Commenters noted that racial segregation and past U.S. Indian policy also means that Indigenous, Blacks, Latino are more likely than Whites to live in poor

- quality housing, posing a greater risk of cumulative exposure to environmental condition s that can contribute to poor health and that approximately 40 percent to 45 percent of Black, Latino, and Native individuals live in poor neighborhoods.

Commenters stated specific concerns about the impacts of the proposed rule on Hispanic and Latino com munities. Commenters noted that 90 percent of Latinos live in metropolitan areas, and one out of two lives in a state that doesn't meet air quality standards regularly for ozone and air pollutants. Commenters stated that Hispanic children are almost twice as likely as non

Hispanic white children to be admitted to the hospital for asthma and that even full

- time employed Hispanic parents are less likely to be fully insured and have to resort to emergency rooms with steep costs for medical treatment due to res piratory distress.

Commenters conducted a national poll among African

- American, Latino, and Asian American populations to determine whether or not vulnerable populations across the country would support the carbon emissions standards. Commenters stated th at 50 percent of likely minority voters across the country believe that the carbon emission standards are going to increase their energy prices and are going to cut jobs; however, 75 percent of those same likely minority voters also believe that in the lon g term, the carbon emission standards are going to make them healthier, it's going to spur innovation, and it's going to create jobs. Commenters noted that the people polled have a complex understanding of the carbon emission standards and are actually wil ling to accept short

- term costs if that's what it takes so that in the long term they'll be healthy. Commenters tallied what voters thought was most important to them regarding climate change and the environment and noted that "at the very top of the list ... was the moral obligation to leave a healthy planet for our children. The second thing was jobs and the economy, and the third thing was health." Commenters provided a copy of the poll results.

Commenters questioned why minority communities are at the f ront gates of toxic oil spills, super fund sites, and are living daily in the shadow of coal burning power plants. Commenters said that even though minorities have dealt with the devastating health impacts, pollution affect us all.76 Commenters stated that m inority communities often borne the effects of harmful energy extraction and experience the worst side effects of our energy production cycle. Commenters said the mad rush to mine, drill, and burn off our natural resources, often fails to take into

accoun t the effect on our communities, on our environment and the cost and effect on future generations in favor of temporary profit and short

- term gain. Commenters said that communities in New Mexico are ready for clean energy such as solar and wind, to power t he country without polluting air and water resources.

Commenters stated that is essential that the EPA mandate that the co

- benefits of this rule be equally accessible to all households and communities, and do not become amenities that are de facto only ac cessible to wealthier or racial majority communities. Commenters stated that the rule should require states to demonstrate equal access to these benefits, and should evaluate state implementation plans on this basis.

Response 6: The EPA recognizes that overburdened communities are often disproportionately impacted by pollution. As stated in section XII.J of the final rule preamble of the CPP, the EPA defines environmental justice as the fair treatment and meaningful involvement of all people regardless o f race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies. The EPA has this goal for all communities and persons across this Nation. It will be achieved when everyone enjoys the same degree of protection from environmental and health hazards and equal access to the decision

- making process to have a healthy environment in which to live, learn, and work.

As outlined in sections VIII

. E&D, IX and XII.J of th e final rule preamble

, the EPA has taken a number of actions to help ensure that this rule will not have disproportionately high and adverse human health or environmental effects on vulnerable communities. The EPA has conducted a proximity analysis, encourages s tates to conduct analyses of their vulnerable communities, commits to continuing to engage with communities during implementation, requires states to describe their engagement with vulnerable communities as part of their initial submittal and final plan su bmittal, commits to assessing the impact of this and other air quality rules on communities’ air quality, and encourages states to conduct their own assessments of the impacts of their plans on communities

.

Comment 9: Commenters stated that while shifting to more efficient coal combustion may be a better alternative than current coal

- fired power plants, the total environmental burdens of coal remains the same. Commenters noted that in addition to the large health effects and environmental burdens placed in environmental justice communities, coal combustion is also profoundly uneconomic.

Response 9: The commenters expressed concerns with the total environmental impacts of coal emissions. The EPA in the RIA for this rulemaking discusses the economics of coal combustion and in section II.A of this preamble the agency discusses the impacts of climate cha nge and in section IX the EPA discusses the actions that the agency has taken to ensure that vulnerable communities are not disproportionately impacted by this rulemaking. Please see these sections for the EPA’s response to this comment.77 Comment 10: Commenters stated that the proposed regulations appear to go far beyond what the CAA requires and will adversely affect low and fixed

- income citizens by forcing ratepayers to bear the cost of acquiring new renewable electricity sources that are much more expensive (solar and wind) than the low to zero

- emission sources already located in the city (nuclear and hydropower).
Response 10: Commenters raised concerns about the potential impacts that this rulemaking will have on the price of electricity. See secti on X I .C of the final rule preamble of the CPP for the EPA’s response to this comment. Additionally, the EPA addresses its authority to regulate carbon pollution under section 111(d) in section IV.A of the preamble for this final rulemaking.

Comment 11: Com menters stated that the proposed rule places a heavy burden on the members served by rural electric cooperatives and fails to acknowledge the limited resources and unique characteristics of rural communities served by distribution cooperatives and that fac t that many rural electric cooperatives do not have diverse generation sources and have limited ability to obtain energy from lower

- emitting sources and thus, commenters stated that the proposed rule defies the directive of the CAA and will prevent rural e lectric cooperatives from providing affordable and reliable electricity to its members, thus violating the REA.

Commenters noted that low population density affects not only the cost of providing electricity, but also electricity demand, making rural Ameri cans much more vulnerable to rising electricity costs and because population is more dispersed in America's rural expanses, people tend not to live in close proximity, but in detached single unit homes that endure significant exposure to the elements. Comm enters noted that for these reasons, the average monthly electricity usage for households served by electric cooperatives is 1,128 kW a month, significantly higher than the IOU average of 829 kWh or even the municipal average of 971 kWh. Commenters also no ted that because many rural residents do not have access to natural gas and depend on electricity, expensive propane and heating oil for warmth during cold months, electric cooperative members lack practical, affordable alternatives they can turn to when t heir electric rates rise.

Commenters stated that the proposed rule exacerbates urban

- rural inequalities, placing a heavy burden on the rural electric consumers cooperatives serve and in failing to acknowledge the difficulties rural Americans face, the EPA 's proposed rule has set up rural communities for failure. Commenters noted that the rule requires that roughly half of the total reductions in greenhouse gases be achieved through implementing energy efficiency measures, yet the rule fails to consider the EPA's own analysis that energy efficiency measures undertaken in the residential sector are considerably less effective on a dollar

- per

- KWh

- reduction basis than those undertaken in the industrial and commercial sectors. Commenters stated that in proposing unrealistic, binding, state

- wide targets, the proposed rule threatens to strand assets, encumber reliability, and increase the cost of electricity in rural America and America's most vulnerable residents.

Commenters noted that over one

- half of rural elec tric cooperatives' members are residential and moreover, rural electric co

- ops serve the vast majority of the nation's persistent poverty counties (327 out of 353, or 93 percent). Commenters stated that these counties have deeply entrenched poverty with ra tes consistently 20 percent or above and will incur higher than "average" costs to achieve the CPP mandates. Commenters stated that the CPP fails to acknowledge the need of a78 safety net for these cooperative members to meet the EPA's proposed rule and requ ested the CPP address the issues and concerns of these members in the final rule.

Commenters stated that small systems, have no large investor base to draw from because they are customer owned and cooperatively operated and has no large urban customer base across which to spread increased operating expenses. Commenters stated that much of the power and energy generated was long ago committed under long

- term power sales, agreements to third

- party utilities, and the cooperative has only limited ability to pas s through increases in cost to those long

- term purchasers. In considering the proposed supplemental rule, discretion should be exercised in implementing it to take into account the disproportionate cost impacts the proposed rule will have on small utilitie s, especially those like Desert.

Response 11: The comments expressed concerns that the CPP will have on rural electric cooperatives. See section V.A of the final rule preamble of the CPP in which EPA details how it addressed these concerns.

Comment 12: Co mmenters stated that West Virginia's job force would suffer greatly from reductions in coal demand, which would by extension cause suffering in low

- income and minority population communities that rely on these jobs. Commenters noted that the coal industry, and associated transportation and power generation industries, employ 63,896 people, accounting for 11.3% of employment by private industry in the state with these industries accounting for 17.5% of income paid by private industry to West Virginians, with combine d labor income impacts of $3.9 billion. Commenters noted that studies have shown that increasing the regulatory burdens placed on these industries can lead to significant job losses, as well as the loss of hundreds of millions of dollars in income across West Virginia. Commenters stated that job loss as a result of decreased demand for coal will also lower the tax base in the states and municipalities where displaced coal mining employees live, leading to increased poverty and negative health outcom es. Commenters also stated that the rule will increase electricity in gas prices in the state, which as severe economic consequences on environmental justice communities.

Response 12: The commenters expressed concerns that this rulemaking could potentially have on the coal industry and consequently on jobs in West Virginia. The EPA responds to the issue regarding potential job losses and recommends that states in designing their plans should consider the effects of their plans on employment and overall econ omic development. P lease see sections VIII.G and IX .C of the final rule preamble of the CPP for the EPA’s response to this
comment.

Comment 13: Commenters expressed concern with the proposed rule regarding its effect on disadvantaged communities within the State of Arkansas. Commenters noted that Arkansas' 44% reduction target, the highest in the nation, is higher than that of any surrounding stat e and that all 18 of the states that have higher carbon emission rates (lbs/MWh) than Arkansas have lower reduction targets. Commenters stated that Arkansas bears a disproportionate burden of compliance, as Arkansas has the 5th lowest per capita income and the 2nd highest child poverty rate in the United States. Commenters noted that the average Arkansas household spends about79 20 percent of its after tax income on energy, with electricity representing more than 77 percent of that cost. Commenters urged that sharp increase in electricity costs will be especially hard on lower income households, as cost of living or salary increases will not likely keep pace with electricity prices. Commenters also noted that "the proposed rule will result in the forced, early retirement of coal plants, which provide a stable tax and employment base for the communities in which they are located...such plant closures will further exacerbate the economic strife already being experienced in those communities, several of which are in high unemployment counties within Arkansas."
Commenters attached a document titled "Energy Cost Impacts on Arkansas Families" which assesses the impact of energy costs on Arkansas households using energy consumption survey date and current energy price data from the U.S. Department of Energy's EIA. Energy costs are summarized by household income group using 2013 Arkansas data from the U.S. Bureau of the Census. Energy expenditures as a percentage of after

- tax income are estimated for the effects of fede ral and state income taxes and federal social insurance payments.

Commenters noted the following key findings from the paper which further detail the adverse effect the proposed rule will have on economically disadvantaged families in the State of Arkansas :

• Some 61% of Arkansas's families have gross annual incomes of $50,000 or less, with an average after

- tax income of $22,116. These households collectively receive 27% of Arkansas's total household income. The median gross household income of Arkansas famil ies in 2012 was $40,112, 21% below the national median household income of $51,017. The average gross income of Arkansas households in 2012 was $54,116, 24% below the national average of $71,274.

• Measured in constant 1990 prices, residential electricity pr ices in Arkansas are 34% below their 1990 levels. After more than a decade of sharp price increases, residential natural gas prices are 13% above their 1990 levels. The relative low price of electricity in Arkansas reflects in part the state's dependence o n low

- cost domestic coal for a majority of its electric power supplies. In 2013, Arkansas will generate approximately 53% of its electricity from domestic coal.

• Energy costs are consuming the household incomes of Arkansas's low

- and middle

- income families at levels comparable to other necessities such as housing, food, and health care. Arkansas families spend an estimated average of 12% of their after

- tax incomes on energy. The 683,000 Arkansas households earning less than $50,000 devote an estimated averag e of 20% of their after

- tax incomes to
energy.

• The 111,000 poorest families in Arkansas, living well below the federal poverty line and earning less than $10,000 per year, are being squeezed hardest by energy cost increases. Many of these families receive state and other energy assistance to help reduce energy costs. Yet for most lower

- income families and for the 34% of Arkansas households receiving Social Security, energy costs are competing with other basic necessities for the family budget.80 Response 13: Commenters raised concerns about the potential impacts that this rulemaking will have on the price of electricity in the State of Arkansas. The EPA addres ses these comments in section IX .C of the final rule preamble in which the EPA encourages states to ta ke steps to ensure that low

- income communities have additional access to EE/RE benefits. In section IX.C, the EPA provides examples of state programs including those conducted by Maryland, New York, and Colorado that assist communities in increasing their ability to access RE/EE and financial assistance programs. The EPA encourages states in developing of their plans to use these and other models to address issues around increas ing low

- income communities ’ access to EE/RE and financial assistance programs. A dditionally, as stated in sections IX.C

- D of the preambl e, the EPA in the coming months will continue to provide information resources for low

income communities and states on existing federal, state, local, and other financial assistance programs to enco urage EE/RE that are already available to low

- income communities. The EPA will also provide a catalog of current or recent state and local programs that have successfully helped communities adopt EE/RE measures. The goal of these resources is to help commu nities gain the benefits of this rulemaking by encouraging that states use these types of tools in their state plans. Finally, the EPA is making available to states the Clean Energy Incentive Program, which can bring additional RE and demand

- side EE to com munities; incentives for EE are targeted specifically to low

- income communities.

Comment 14: Commenters noted several difficulties they face in ensuring environmental justice within Tennessee's compliance plan without a mandate to do so.

Commenters noted that in Tennessee, 24.1% of homeowners and 42.6% of renters live in unaffordable housing, which is defined as households that spend 30% or more of their income on housing costs. Commenters stated that 20% of working families are severely housing cost burde ned, meaning that they spend 50% of their income on housing and that the numbers of Tennesseans living in unaffordable housing continues to rise. Commenters noted that 33% of all Tennessee households are renters and that more than 42% of Tennessee househol ds that rent are cost burdened and one

- quarter of renters spend more than half their income on housing costs.

Commenters also noted that the TVA's energy efficiency programs are among the most limited in the nation, as Tennessee ranks 38th among the state s in energy savings largely because TVA has one of the smallest energy efficiency programs in the nation. Commenters further noted that TVA's energy efficiency programs are not accessible to those with the fewest resources. Commenters stated that the desig n of TVA's energy efficiency program, which involves customers paying for a home energy audit to obtain recommendations to increase energy efficiency in their homes so that they can access TVA rebates for installing the recommended
measures, assumes that t he customer has money to pay for the energy efficiency work or has at least a 620 credit score to access a TVA on

- bill financing program. Commenters stated that the program excludes renters, those with a credit score below 620, and those who do not have th e money to cover the cost of installing the energy efficiency measures which creates inequitable outcomes for low income people who could benefit most from this program. Commenters added that TVA spend no money on lower income energy efficiency programs, i n contrast to the national average for utility spending on lower income programs of 7% according to the Consortium for Energy Efficiency's 2013 study.81 Commenters were also concerned that the Tennessee Department of Environment and Conservation (TDEC) does not have the experience and tools to ensure fairness and protection of utility customers within the development of its compliance plan. Commenters stated that Tennessee does not have the tools needed to address and fairly manage the distribution of complia nce program costs and benefits among customers because it has no authority over or experience in TVA rate making or program design processes. Commenters noted that because the EPA has delegated to the State of Tennessee the authority to implement and enfor ce its environmental regulations, TVA must comply with TDEC regulations; however TVA has always protected its rate making authority from state oversight.

Response 14: Commenters raised concerns about the potential impacts that this rulemaking will have on the price of electricity in the State of Tennessee. See section X I .C of the final rule preamble of the CPP for information regarding electricity prices. The EPA addresses these comments in section IX .C of the final rule preamble

, in which the EPA encourages states to take steps to make sure that low

- income communities get more access to EE/RE benefits. In section IX.C

, the EPA provides some examples of state programs including those conducted by Maryland, New York, and Colorado th at assist communities in increasing their ability to access RE/EE and financial assistance programs. The EPA encourages states in developing their plans to use these and other models to address issues around increasing low

- income communities ’ access to EE/ RE and financial assistance programs. Additionally, as stated in sections IX.C

- D of the preamble, the EPA in the coming months will continue to provide information resources for communities and states on existing federal, state, local, and other financial assistance programs to encourage EE/RE that are already available to low

- income communities. The EPA will also provide a catalog of current or recent state and local programs that have successfully helped communities adopt EE/RE measures. The goal of thes e resources is to help low

- income communities gain the benefits of this rulemaking by encouraging that states use these types of tools in their state plans. Finally, the EPA is making available to states the Clean Energy Incentive Program, which can bring additional RE and demand

- side EE to communities; incentives for EE are targeted specifically to low

- income communities.
Cap and Trade

Comment 15: Commenters raised environmental justice concerns surrounding the use of regional emissions trading programs.

Commenters stated that they do not support any carbon trading mechanism as an option to achieve the proposed BSER in the Clean Power Plan, as they may lead to adverse effects on low

income or minority communities.

Commenters stated that the Clean Power Pla n as written is very slanted towards states initiating Cap & Trade programs, where facilities are given the opportunity to buy and sell permits to pollute. Commenters stated that if cap and trade is implemented, there must be controls integrated into the p rocess to make sure that the total reductions in carbon dioxide do not lead to disparate impacts of other pollutants such as sulfur oxides, nitrogen oxides, and particulate matter in environmentally stressed communities. Commenters offered a possible solut ion to this issue: "create an emissions or operating threshold that would mandate additional monitoring of82 any fossil fuel unit under this proposed plan, to make sure that our environmentally sensitive communities do not have to absorb the local burden of increased emissions while overall emissions have decreased." Commenters pointed to California's trading program in which often results in allowing the most polluting companies to 'buy their way out' of compliance, and not eliminating pollution in the most impacted communities. Commenters instead expressed support for a carbon tax while making renewable energy options accessible and affordable to low

- income communities and communities of color. Commenters stated that if states choose to embark or continue wi th a Cap & Trade program, the state implementation plans (SIPs) must address the potential negative impacts that commenters stated "has the potential to exacerbate the substandard environmental quality in EJ communities." Commenters noted that a Cap & Trad e program gives EGUs the ability to pay their way out of compliance through unfettered allowance/permit allocation, which allows the oldest and dirtiest facilities to avoid reducing emissions which poses a problem in an environmental justice context in tha t communities of color and low

- income communities are disproportionately affected by concentrations of co

pollutants, which are products of fossil fuel combustion. Commenters provided a list of stipulations that must be implemented for states or regions wi th pre

- existing Cap & Trade programs, as well as those intending to create one to comply with the Rule: (1) Complete an analysis of other market

- based compliance mechanisms; (2) Any market

- based compliance program must be designed to guarantee that they do not increase the emissions of co

- pollutants, especially in EJ communities ; (3) Restrict allowance allocations trading and offset use

- or fee options

- among facilities responsible for the worst health impacts; (4) Create trading zones to incentivize pol lution reduction in the areas with the dirtiest air; (5) Use revenues to improve air quality in highly polluted areas and enhance the ability of local residents to adapt to climate change impacts; (6) Mandate that "long

- term investments [are moved] into di sadvantaged communities to fund environmental programs that have co

- benefits, such as economic and employment benefits"; (7) Create a climate gap neighborhoods fund to protect the most vulnerable neighborhoods.

Commenters posed that in both re

- dispatch and emissions budget trading programs, location is important and that the potential of re

- dispatch and trading schemes in combination, can have disproportionate impacts on environmental justice communities. Commenters noted that the disproportionality of both costs and benefits of implementation of AB32 and RGGI have not been adequately documented or demonstrated, including identified issues such as exacerbation of pollution 'hot

- spots' in environmental justice communities. Commenters noted that the EPA
states that through 2012, the RGGI states invested approximately Dollar 460 million of proceeds into energy efficiency programs and the participating RGGI states estimate that those investments are providing benefits to energy consumers in the region of more tha n Dollar 1.8 billion in lifetime energy savings. Yet, In New York, a RGGI state for example, the Home Energy Affordability Gap for income vulnerable households has increased between 2011 and 2013 to Dollar 4,199,921,779, an increase of approximately Dollar 99,000,000. Commenters noted that at the same time, approximately 25,000 less heating/cooling average annual bills were covered by LIHEAP and the average dollar amount by which actual home energy bills exceeded affordable home energy rose from Dollar 1,77 4 to Dollar 1,821 per household. Commenters noted that in 2012, the cumulative revenue from RGGI totals $707,225,905

- of which 18% is dedicated to what can be defined as Environmental Justice populations for rate relief and efficiency. Commenters noted th at the reported also stated that more than 17% of cumulative RGGI investments to date, fund direct bill assistance programs in the region. Commenters83 concluded that this means that potentially, less than 1% of energy efficiency investments have benefitted environmental justice households.

Commenters also noted that all existing state emission budget trading programs addressing GHG emissions include out

- of

- sector, project based emission offsets, which may be used to cover a portion of the compliance obligati on of affected sources and stated that environmental justice advocates do not support use of offsets as a method of compliance obligations by states, either domestically or internationally. Commenters stated health and environmental outcomes should be base d on those affected by the operations of EGUs in their own community. Commenters noted that the EPA stated that some groups thought that the EPA should put forward a model rule for an interstate emissions credit trading program that could be easily adopted by states who wanted to use such a program for its plan and that at stakeholder meetings, some commenters noted that trading programs like RGGI have been successful at reducing GHGs. Commenters stated that the EPA should document to what extent environmen tal justice stakeholder groups were consulted, both in scope and quantity of engagement, specifically on interstate emissions trading programs. Commenters noted that consultation with the power industry, including utilities, power generators, and state reg ulatory authorities does not and should not constitute representation or "meaningful engagement" of environmental justice stakeholders.

Commenters stated that while there are currently two active market

- based CO 2 emission reduction programs operating in t he United States (the Regional Greenhouse Gas Initiative (RGGI), a market

- based CO 2 emission reduction program established in 2009 in 10 Northeast states is currently active, and California's market

- based GHG emissions trading program established under the authority of the 2006 Global Warming Solutions Act, known as Assembly Bill 32), market based CO 2 emission trading programs like Cap and Trade will not guarantee that states achieve absolute reductions of GHG and co

- pollutant emissions in communities that are already pollution

- burdened. Commenters noted that while the Clean Power Plan discusses how investments of both RGGI and California's cap and trade program have been used to support energy efficiency programs, there has been no analysis to examine if th e dividends actually reached "disadvantaged communities" and targeted specific communities to provide technology and resources to improve public health. Commenters stated that even if cap and trade programs do benefit environmental justice neighborhoods to some extent, "we do not find this an adequate trade

- off for a failure to guaranty emissions reductions that will improve health in these

areas. Hence, it is critical that the EPA require states to perform an analysis to evaluate the direct and indirect co sts and benefits of specific carbon reduction strategies on EJ communities, and most importantly comply with Executive Order 12898 and Title VI of the Civil Rights Act of 1964."

Commenters noted that EJ organizations have generally been against carbon trad ing as a climate change mitigation policy and that this opposition has often centered on the facts that carbon trading has not directly addressed the amount of co

- pollutant emissions and has not guaranteed emissions reductions of GHG's, and therefore also not of co

- pollutants, in or near EJ communities. Commenters stated that in a worst case scenario carbon trading can even allow an increase in emissions at certain locations and that there is also concern that emission offsets can prevent emissions reductio ns in the community where the facility seeking the offset is located and possibly even harm the community where it is being applied.84 Commenters noted that GHG emission trades could implicate the distribution of associated co

pollutants and stated that a r egional GHG trading program can produce environmentally unjust outcomes by placing a disproportionate burden on a region's low

- income communities. Commenters noted that older, larger and dirtier facilities are generally located in low

- income communities an d because of the high cost associated with retrofitting existing plants, these facilities are more likely to buy credits to pollute instead of controlling their own pollution. Commenters further stated that the states that house many of these old facilitie s are likely to buy credits from other states to avoid these retrofitting costs, thus meeting GHG pollution goals while continuing to harm communities than cannot otherwise protect themselves.

Commenters stated that, should a regional approach become a con sideration for South Carolina, some environmental justice communities are concerned that dirtier plants, such as older, coal

fired units, may 'trade' their way out (i.e. purchase credits to avoid) installing new controls, which could result in local areas of higher pollution levels in poorer communities. Commenters recommended that the EPA utilize the staff and resources of its own Office of Environmental Justice to respond to the concerns that result from regional trading on the national level, including t he additional impacts of increased emissions of co

- pollutants, prior to publishing its final regulation.

Commenters stated that because the Clean Power Plan relies on state

- based goals, it does
not effectively address how individual states or regional part ners should account for the total environmental costs of their choices on other states or regions. Commenters noted that while some environmental benefits may be realized in one state, it may be at the expense of environmental justice communities in other states which create an additional risk of environmental burden shifting where regional carbon reduction mechanisms are poorly constructed

--- for example, poorly constructed cap and trade programs. Commenters urged the EPA to provide guidance to ensure that states do not reduce CO 2 levels at the expense of environmental quality in other states, especially in environmental justice communities.

Response 15: The EPA appreciates commenters’ concerns about increases in pollution, particularly of co

- pollutants, in overburdened communities. The EPA anticipates that most communities will benefit from the implementation of this rule but acknowledges that localized increases in co

- pollutants are possible. Therefore, the EPA commits to conduct an assessment during progr am implementation to determine whether all communities are benefiting from the rule or whether there are communities experiencing adverse impacts. The EPA encourages states to conduct analyses of their own. Further, the EPA commits to work with states to address any adverse impacts that may be identified. The EPA ’s approach is discussed more fully in section IX .F of the final preamble to the rule.

Comment 16: Commenters expressed further concerns with the lack of inclusion of environmental justice surro unding nuclear energy.

Commenters stated that "nuclear energy should not be considered a form of clean of energy, it should not be expanded, and no scheduled shut

- downs of existing nuclear facilities should be extended." Commenters also stated that "the d efinition of clean energy does not involve nuclear power" and that "until the massive legacy of pollution from the last round of nuclear power plants is addressed, and nuclear energy generation no longer produces a waste product that is85 almost uniquely tox ic, no new nuclear generation should be expanded, and no EJ communities should be the host of waste sites."

Commenters noted that nuclear waste sites tend to be sited in areas with marginalized populations that have difficulty finding a voice in decision m aking. Commenters stated that if states continue to construct and operated nuclear reactors near environmental justice areas, it creates substantial health risks to these minority communities.

Response 16: The commenters expressed concerns regarding the impact of nuclear energy on environmental justice communities. The EPA acknowledges the comments and has determined that the BSER for the final rule will not include either of the proposed provisions for existing and new nuclear units in the setting of sta te goals.

Comment 17: Commenters expressed concern with the lack of environmental justice consideration for various practices related to the combustion of biomass as an alternative fuel.

Commenters stated that EPA is incentivizing the use of biomass as a CO 2 mitigation option by classifying it as a clean energy source. Commenters stated that this is "a faulty and troubling claim in an EJ and overall environmental context as the burning of biomass is more carbon

intensive than coal and as biomass facilities are a source of several dangerously toxic co

pollutants, at times emitting 14 times the amount as coal plants." Commenters noted that the promotion of biomass "ignores recommendations brought forward by the EPA's own EJ advisory council, which calls for t he consideration of the 'potential for industrial pollution and other significant quality of life impacts to surrounding communities by so

- called 'green' businesses and industries.'"

Commenters stated concern that the Clean Power Plan and the biogenic emis sions framework together will result in an increase of health consequences and related economic burdens for frontline communities of color and low

- income communities across the United States. Commenters urged EPA to prioritize the reduction of pollution bu rdens in communities disproportionately impacted, not promote such avenues for greater harm.

Commenters stated that the Clean Power Plan must become more restrictive

-- not less

-- towards other combustion energy sources, such as biomass, to make significan t reductions in greenhouse has output in and near environmental justice communities.

Response 17: The EPA’s position on this issue remains the same as it did in the proposed rule (79 FR 34949

- 34950). As we stated in the proposal for this rule, while many l ocations with EGUs will experience improved air quality for pollutants such as PM2.5, ozone, and HAPs due to implementation of this rule, we recognize that the emissions of these pollutants, their precursors and GHGs may increase at other EGU locations as a result of this rule. This may occur at EGUs that undertake a physical or operational change to improve a unit’s efficiency that in turn results in an increase in the unit’s dispatch and an increase in the unit’s annual emissions of GHGs including CO 2 emi ssions resulting from the burning of biogenic feedstocks for EGUs that use biomass as fuel , and other regulated pollutants . GHGs are not localized pollutants and this rule is not altering existing regulations of non

- GHGs pollutants. Non

- GHG emissions will continue to be subject to important safeguards that protect communities. Unlike, criteria86 pollutants, there is no National Ambient Air Quality Standard for GHGs and the “Endangerment and Cause or Contribute Finding” determined that GHGs have global climate

- change inducing effects (75 FR 66497).

The EPA recognizes that the use of some biomass

- derived fuels can play a role in controlling increases of CO 2 levels in the atmosphere. The use of some kinds of biomass has the potential to offer a wide range of en vironmental benefits, including carbon benefits. However, these benefits can typically only be realized if biomass feedstocks are sourced responsibly and attributes of the carbon cycle related to the biomass feedstock are taken into account.

A discussion regarding the use of some biomass feedstocks for compliance purposes can be found in Section VIII.I.2.c and Section VIII.K.1 of the preamble.
Comment 18: Commenters had concerns about the inclusion of environmental justice when considering CCS in implement ation plans.

Commenters stated that "due in large part to its experimental nature and the possibility of its disproportionate use in and near EJ communities many EJ advocates have opposed the use of carbon capture and sequestration (CCS) as a method of mit igating climate change." Commenters noted that "disproportionate siting would expose these communities to any accidents associated with CCS facilities and expose residents to a significant amount of local air pollution" and urged EPA to disallow the inclus ion of CCS in state implementation plans. Commenters asked that the ban on use of CCS be incorporated into building block one.

Commenters stated that CCS is a "false solution” to mitigating climate change and also said that "false solutions such as 'clean coal', also known as carbon capture and sequestration, are designed to facilitate the continued use of fossil fuels. These false solutions to climate change can exacerbate and expand environmental injustice, particularly when disproportionate siting issues are also considered."

Response 18: The EPA has indicated that affected EGUs may utilize retrofit CCS technology to reduce reported stack CO 2 emissions from the EGU. Affected EGUs that apply CCS under a state plan must meet the same reporting and sequestr ation requirements for sequestered CO 2 as new units with CCS capability subject to the final CAA section 111(b) rule for new EGUs. Specifically, the final CAA section 111(b) rule for new sources requires that, if a new affected EGU uses CCS to meet the app licable CO 2 emission limit, the EGU must report in accordance with 40 CFR part 98 subpart PP (Suppliers of Carbon Dioxide), and the captured CO 2 must be injected at a facility or facilities that report in accordance with 40 CFR part 98 subpart RR (Geologic Sequestration of Carbon Dioxide). See 40 CFR part 60.46Da(h)(5) and part 60.5555(d). Taken together, these requirements ensure that the amount of captured and sequestered CO 2 will be tracked as appropriate at project

- and national

- levels, and that the sta tus of the CO 2 in its sequestration site will be monitored, including air

- side monitoring and reporting.

For reasons noted in the proposal and in the final preamble, the EPA did not propose nor finalize CCS as a component of the BSER for existing EGUs. Ho wever, the EPA noted that CCS may be a viable CO 2 mitigation technology at some existing sources and that it would be available to states and to sources as a compliance option. The EPA believes that existing sources that87 implement CCS will so when they can take advantage of opportunities to reduce the cost of CCS implementation by selling the captured CO 2 for use in Enhanced Oil Recovery (EOR) operations. Those operations would take place at existing operational and depleted oil fields.

Comment 19: Commente rs stated that the EPA should do more to account for environmental justice concerns surrounding fracking and use of natural gas. Commenters noted that these projects are largely housed in communities of low socioeconomic status and create harmful emissions similar to those of coal

- fired power plants.

Commenters stated that most of the environmental and economic consequences associated with natural gas fracturing are well documented and include issues such as price vitality, contamination of ground and drin king water, induction of seismic events, and harm to air quality. Commenters noted that the EPA posed a series of questions in 2011 that remain unanswered regarding the environmental justice implications of hydraulic fracking whose topics included dispropo rtionately targeted or wastewater treatment facilities near environmental justice communities, perceived socioeconomic status of residents and their inability to challenge decisions, and whether water is being disproportionately taken from environmental ju stice communities for use in the fracturing process. Commenters added that the amount of water used in natural gas fracturing and the chemicals added in the fracturing process also pose significant threats to environmental justice communities as it is esti mated that each well consumes approximately 4 million gallons of freshwater during the drilling and extraction process.

Commenters expressed concern over the Clean Power Plan's incorporation of natural gas into its BSER determination. Commenters stated th at the "rising cost of natural gas consequent upon increased use for electricity generation would also impose disproportionate economic impacts on low

- income and minority populations that the EPA has ignored." Commenters stated that the EPA needs to "re

- ev aluate its characterization of natural gas as BSER, using complete, current and reliable data and taking into account environmental justice considerations, before it may characterize natural gas as BSER or allow states to credit increased use of natural ga s as an effective means for reducing carbon emissions." Commenters stated that the EPA has proposed to rely heavily on natural gas for carbon emission reductions with this rule, but fails to account for the disparate impacts of rising natural gas prices on low

- income households, many of whom already experience severe conflicts regarding whether and how to pay for necessities including food, fuel, medicine, and rent.

Response 19: The EPA does not provide a response to the comment regarding the impacts of hydraulic fracking as it is outside the scope of the CPP. In regard to the comment about the EPA’s characterization of natural gas in the setting of BSER, see section V.A of the final rule
pre amble of the CPP. In regard to the actions that the EPA put in place to ensure that this rulemaking does not disproportionately impact vulnerable communities, please see section IX of the final rule preamble.

Comment 20: Commenters suggested that communit ies like those in southwestern Pennsylvania coal fields should have a significant role to play in this process now and in the future because they are the ones that stand to be among the most impacted through this transition to a coal

- free88 generation. Comme nters supported the CPP for the environmental justice benefits associated with reduced coal mining.

Response 20: The EPA describes the benefits of this rulemaking to communities in sections IX and XII.J of the final rule preamble of the CPP. In addition, i n the final rule, the EPA encourages states to consider the effects of their plans on employment and economic development, especially in communities in transition such as that described by the commenters, and to engage with workers in the utility sector as they develop their plans.

Comment 21: Commenters stated that if environmental justice is the priority for the EPA that the agency insists it is, then the EPA "should put its lawyers, including those that represent EPA from the Department of Justice, to wo rk developing the legal support for policies recommended by...EJ organizations that will protect and benefit EJ communities both within and outside of the context of the Clean Power Plan" and that "this legal support should not be limited to the Clean Air Act." Commenters urged the EPA to consult with a wide range of attorneys (those working in the government, for environmental organizations, and in EJ communities) when developing this legal support while allowing environmental justice organizations to be a part of, and help guide, the legal discussions.

Response 21: As stated in this final rulemaking, environmental justice is an important p riority for the agency. The EPA’s Office of General Counsel and Office of Environmental Justice have been involved in developing the EPA’s approaches to address ing EJ issues , and issues of concern to vulnerable communities more generally, in this final rule. The EPA considered carefully the input provided by many environmental justice organizations as it developed these a pproaches. More information on how the agency considered environmental justice impacts in the rulemaking is available in sections IX and XII.J of this final rule preamble of the CPP.

Comment 22: Commenters stated that climate change will amplify existing vulnerabilities and create new risks for natural and human systems. Commenters added that strong scientific evidence shows that environmental justice ("EJ") communities are especially vulnerable to the impacts of climate change because they tend to have mo re limited adaptive capacities and are more dependent on climate

- sensitive resources. Commenters noted that the proposed Clean Power Plan presents an opportunity for government to address the impact of carbon pollution on EJ communities and garner public i nformation and participation as suggested by the E.O.

Commenters stated that the Clean Power Plan should not encourage the replacement of one fossil fuel with another, but should instead encourage clean, safe, renewable energy and increased energy efficien cy. Commenters urged the EPA to put forward a final rule that adequately addresses carbon pollution from the power sector, one that will result in the transformational change needed to end our dependence on dirty energy. Commenters noted that climate chang e is impacting a wide range of conditions in our communities including human health, energy systems, food and agriculture, ecosystems, and transportation and that the effects of climate change are interrelated with other environmental, social and economic conditions, which create disproportionate vulnerabilities on low

- income and communities of color, referred to as89 environmental justice communities. Commenters urged the EPA to set more aggressive emission reduction targets and increase energy efficiency an d renewable energy goals.

Commenters urged the EPA to include safeguards in the rule to protect environmental justice communities living near power plants that may be subjected to disproportionate health impacts from power plants that do not choose to upgr ade. Similarly, c ommenters asked the EPA to ensure equal protection for those who are so often left out of the conversation of climate change and environmental degradation but asked to bear the burden.

Response 22: The commenters assert that these communit ies are especially vulnerable to the impacts of climate change. The EPA acknowledges these concerns and took environmental justice issues seriously when developing this rule. See sections IX and XII.J of the final rule preamble of the CPP for a more detail ed response to this comment. In these sections, the EPA commits to continue engaging with vulnerable communities, encourages that states do so as they develop their plans, and requires that states describe their engagement with vulnerable communities in th eir initial and final plan submittals.

Comment 23: Commenters expressed concern about the inclusion of Tribes in environmental justice initiatives take by the EPA.

Commenters stated concern with the EPA's statement that is it not practicable to determine

w hether there would be disproportionately high and adverse human health or environmental effects on Indigenous populations from this rule because the EPA cannot accurately predict how carbon dioxide emissions from specific EGUs would change as an outcome of the proposed rule due to jurisdiction

- led implementation. Commenters stated that they find this statement unacceptable and urged the EPA to conduct a thorough environmental justice analysis of the proposed rule and its impacts on tribes. Commenters additi onally stated that the EPA has not done enough to protect the Ute Indian Tribe from power plant emissions, including GHG emissions on the Uintah and Ouray Indian Reservation in Utah. Commenters noted that the Bonanza Power Plant operating on land within th e Reservation is in violation of the CAA as the plan has been operating without a Title V permit required for all major sources under the Act, and it has operated without an appropriate PSD permit since 2001. Commenters stated that the EPA will perpetuate environmental justice against the Ute Indian Tribe unless is takes effective action regarding the Bonanza Power plant.

Commenters stated that the Navajo Nation is considered an environmental justice community and the U.S. EPA and the Navajo Nation EPA hav e an obligation to provide a safe and healthy environment for all people regardless of race, color, national origin, or income in order for these people to live, learn, and work. Commenters noted that Native American communities have been demanding justice for many years, "but to this day...are still fighting the same fight to make a change for the survival of (our) people. We have not seen justice served in regards to the pollution coming from power plants even though we have been to many meetings with the owners and have made comments during the public comment periods." Commenters further noted that community members residing near the power plants and mines are being ignored when they raise concerns about their livestock dying from contaminated water and p ollution. Sheep and cattle are the source of dietary supplement for the Dine people, so for these concerns to90 continue to be ignored and for the health impacts to be ignored, it poses a huge environmental justice issue that needs to be addressed.

Commenter s noted that the EPA is likely to feel severe pressure from well

- financed environmental groups to reduce CO 2 emissions on the Navajo Nation even more than what is currently stated in the supplemental proposed rule and stated that these groups may take furt her actions to curtail or end operation of the power plants located on the Navajo Nation; however, this is a situation where the Navajo Nation's environmental justice concerns should prevail. Commenters noted that the NGS and FCPP are an economic lifeline for the Navajo Nation and closing down or severely hindering the operation of these power plants would be devastating to the Navajo people and the Navajo Nation economy as the Navajo people live in extreme poverty. Commenters supported the EPA's efforts to take meaningful steps to combat climate change, but noted that the Navajo Nation is one of the indigenous populations that the Action Development Process (ADP) was designed to protect and the Navajo Nation has already suffered disproportionate impacts fro m other environmental rulemakings. Commenters stressed that the EPA carefully consider how the actions it takes in finalizing the supplemental proposed rule may adversely affect the Navajo Nation, including its people and its fragile economy.

Response 23: The response to this comment is addressed elsewhere in this section and in section XII.F of the final rule preamble of the CPP.

Comment 24: Commenters stated that the EPA's proposed reduction of carbon emissions for power plants on the Navajo Nation (4

- 6% by 2030) "is weak, unfair, and does not do justice for the Dine who have and continue to suffer the burden of the impacts from these 2 dirty coal

- fired power plants for the past 50 years." Commenters noted that the U.S. EPA met with the Navajo Nation Carb on Team to discuss the Clean Power Plan supplemental proposal, but further noted that this Carbon Team does not include "the important voices of the Dine who reside near these power plants, it does not include the voices of the elders, it does not include the voices of the youth, and it does not include the voices of those who are advocating for clean air and clean water for future generations." Commenters stated that there is an obvious disconnect between the Dine community members and the Tribal officials as the Navajo Nation EPA Director "supports a weak supplemental proposal all in the name of preserving jobs and revenue, yet the community members who lives near the power plants, who work with communities affected by environmental justice issues, and who want clean air and clean water for themselves and their families are the ones who do not want to suffer the burden of the pollution on their health, the air, water, animals, and plants any longer." Commenters requested that EPA thoroughly read their comme nts on the supplemental proposal. Commenters provided links to voice recordings of Dine community members who testified at the November 19, 2014 EPA Public Hearing held in Phoenix, AZ and noted that these individuals did not support EPA's supplemental prop osal with most members advocating for a stronger proposal for the Navajo Nation and equal treatment as the rest of the country.
Response 24: The EPA appreciates all the input provided by the commenters and those who attended the EPA’s hearing in Phoenix on November 19, 2014. The EPA has responded to the comment regarding the stringency of the proposed goal for the Navajo Nation elsewhere in this document and in section XII.F of the final rule preamble of the CPP. The EPA recognizes that91 comments submitted b y individual community members of the Navajo Nation may differ from comments provided by officials of the Navajo Nation, including the Navajo Nation Environmental Protection Agency and the Navajo Nation Department of Justice. We understand the Navajo Natio n has formed the Navajo Nation Carbon Team “to take the lead in determining the course of action that will be best from an environmental, economic, and cultural perspective in response to EPA’s Clean Power Plan.” 14 The EPA has provided the comments from the Diné community members to the Navajo Nation EPA and Navajo Nation Carbon Team and we encourage future work of the Navajo Nation Carbon Team related to the Clean Power Plan to include a process for public involvement.

Comment 2 5 : Commenters submitted that the EPA's obligation to ensure environmental justice as the result of its activities and policies cannot be satisfied by ratifying a predicted average national outcome in fifteen years. Commenters noted the EPA's obligations under its Plan EJ 2014 to thin k beyond average or aggregated impacts of environmental rules and instead ensure that disadvantaged communities are neither excluded from the general benefit of an action nor burdened disproportionately with the costs of securing the result. Commenters not ed that the EPA concludes communities impacted by the single risk that was considered, increased pollution from a nearby EGU, cannot be identified until specific state and industry plans are set; however "EPA proposes no procedural safeguards to identify a nd mitigate the potential risks when they ARE identified in specific areas." Commenters stated that in the EPA's reliance on state

- federal government dialogue, the agency "has not met its responsibility for ensuring the proposed rule guarantees the fair tr eatment and the public participation...required by federal policy."

Response 2 5 : The commenters state that it is the EPA’s obligation to ensure environmental justice as a result of its activities and policies. The EPA agrees with the commenters and is

comm itted to ensuring that its activities and policies do not disproportionately impact vulnerable communities. See sections IX and XII.J of the final rule preamble of the CPP for more information on the actions that the agency is taking around environmental j ustice in this final rulemaking. In particular, the EPA commits to assess the effects of plan implementation and to work with states to mitigate adverse impacts, if any, on overburdened communities.

Comment 2 6 : Commenters recommended three additional state plan requirements prior to finalizing the rule:

1. An Analysis Demonstrating the Fairness of the Consumer Utility Bill Cost Incidence and Cost Impact.

Commenters described this as a demonstration that the burden of any predicted increases to consumer bills, for any part of the period (taking into account remedial measures proposed in the plan, such as discounts and other safeguards),

14 See October 30, 2014 Press Release from the Navajo Nation titled “Navajo Nation pleased to work with U.S. EPA on proposed carbon rule,”, available at http://www.navajo

nsn.gov/News%20Releases/OPVP/2014/oct/U%20S% 20%20EPA%20Carbon%20Rule.pdf92 will not make electr icity unaffordable to lower

- income customers nor to disadvantaged communities in the state.

2. Demonstration of the Fairness of the Distribution of Efficiency and Clean Energy Benefits among Communities and Consumers

Commenters suggested that the states must provide analyses that: 1) demonstrate the emissions reductions occur at least proportionately to all reductions, if not to a greater degree, on and near disadvantaged communities; and, 2) demonstrate that investments in and benefits from renewable energy a nd energy efficiency are distributed so as to equalize access, including improving current disparities, for disadvantaged communities and consumers.

3. Demonstration that the State has Conducted an Inclusive Planning Process during CPP Development

Commenters recommended that skilled representatives of low

- income energy consumers and disadvantaged communities should be engaged consistently by the state at all periods and levels of plan development. Commenters stated that the EPA should accept proof of the foll owing three elements as evidence of an inclusive planning process and provide a far more deliberate review and re

analysis of plans that were not developed under such a process:

a. The legitimacy, expertise and constituencies of the participating groups;

b. The state resources provided for the participation of disadvantaged
groups

- such as intervener funding at state commission, and grants and/or in kind support for planning, analysis and participation; and,

c. Inclusive rules for participation in plann ing at each phase of plan development.

Commenters stated that the EPA would judge whether these three criteria are met by requiring that states perform a valid and sophisticated analysis. Commenters stated that tests of the quality of the analysis should include whether the methodology is peer

- reviewed and whether it models the differential impacts of policies and costs on vulnerable populations and communities. Commenters recommended that the EPA promise that plans lacking such analytic basis will be subj ect to greater scrutiny, including possible re

- analysis by experts of EPA's choice, than plans that demonstrate robust approaches to analysis and the use of accurate and in

- depth data.

Response 2 6 : Commenters above ask that the EPA require that states enga ge with communities throughout the state plan development process. As discussed above, the EPA addresses the requirements that it established for states as they engage with stakeholders including vulnerable communities throughout the state plan development process . Additionally, the EPA in the f inal preamble outlines the considerations that it has included in the final rulemaking to help determine the impacts of the rulemaking on vulnerable populations during the implementation93 process. See sections VIII.E& D and IX.C&F of the final rule preamble of the CPP for the EPA’s approach to assessing impacts of plan implementation.

Comment 2 7 : Commenters stated that while they support that reductions in carbon intensity of the U.S. economy should be achieved, perform ance targets should be defined on the basis of absolute carbon emissions. Commenters noted that "if the solution is simply shifting more energy use to the existing natural gas infrastructure this could actually result in an increase in emissions from some natural gas plants, which, of course, is exactly opposite to the decreased emissions needed in EJ communities." Commenters urged that the EPA develop guidance and require states to demonstrate verifiable absolute carbon reductions, and that absolute carbon reductions be achieved in environmental justice communities. Commenters additionally stated that "regardless if states decide to use a mass

- based or rate

- based system to account for their reductions, it is important chosen mitigation strategies document r eductions in emissions from the regulated EGUs in EJ communities." Commenters stated that any carbon trading mechanism should NOT be presented as an option to achieve emissions reductions. Commenters stated that the EPA should develop guidance and require that states demonstrate verifiable absolute carbon reductions, and that absolute carbon reductions be achieved in environmental justice communities. Commenters noted that because the possibility that reductions in carbon intensity can still result in incre ases in absolute carbon emissions, both goals should be addressed in the rule.

Response 2 7 : As mentioned above, see section VIII.C of the final rule preamble of the CPP for the EPA’s response to this comment. The implementation of state plans will be asse ssed to determine whether there are disproportionate impacts on overburdened communities and, if such impacts are identified, the EPA will work with states to mitigate the impacts.

Comment 2 8 : Commenters explained that with respect to a cap

- and

- trade prog ram, spatial restrictions can be imposed on the trading, in this case of renewable energy credits ("RECs"), by sources located in or near environmental justice communities. Commenters noted that this can be done by delineating zones where the flow of RECs is prohibited or limited, to ensure that adverse impacts on these communities from trading are minimized. Commenters noted that the EPA's own guidance suggests that these zones can be defined in terms of non

- attainment areas and therefore suggested that th ose zones should be defined in terms of hotspots that take into account cumulative impacts. Commenters noted that once state agencies have delineated these zones, they could forbid or limit REC purchases that allow dirty plants to increase or maintain thei r co

- pollutant emissions in these zones.

Response 2 8 : As mentioned above in response 1 3 , see section I X.F of the final rule preamble of the CPP for the EPA’s response to this comment.94 Comment 29 : Commenters noted that the EPA cannot predict which coal and natural gas

- fired EGUs will increase or decrease their utilization as a result of implementing specific Building Blocks because the Clean Power Plan gives states flexibility to comply with the required state goals instead of mandating the installation of s pecific control technologies as previous Section 111 rulings have done. Commenters stated that the EPA should require states to provide this information as a part of their submission plans. Commenters also asked that the EPA provide guidance to the states on how to prepare such an analysis and address emissions concerns in their plans. Commenters also stated that the EPA could provide qualitative assessment as part of its guidance in the final rule, and require states to provide a quantitative assessment of these impacts in connection with the compliance measures included in their plans which would allow the EPA to more rigorously assess how emissions and health effects will be distributed among minority and low

- income groups during implementation.

Response 29 : As noted above, the EPA has provided a response to this comment in sections VIII.E&D and XI.C of the final rule preamble of the CPP.

Comment 3 0 : Commenters advocated for absolute reduction of greenhouse gas and co

- pollutant emission from facilities and existing coal plants located in/within 30 miles of impacted communities, eliminating CCS technology as a mitigation option, preventing the expansion of nuclear energy, and ensuring that carbon trading mechanisms employed would not adversely affect impacte d communities or export negative consequences to other low

- income communities of color, domestically or internationally within EPA's and state's analyses.

Response 3 0 : The response to this comment is addressed in response 1 6 above.

Comment 3 1 : Commenters stated that the most recent report on the status of Urban Air Toxins to Congress supports the need for a strategy to address the cumulative impacts of pollution, especially in urban air areas and communities that are overburdened.

Response 3 1 : The EPA agre es with the commenters of the importance of addressing cumulative impacts of pollution in communities. The EPA in its outreach conducted throughout this rulemaking process received feedback from vulnerable communities about the cumulative impacts that they face and took this information into account when finalizing this rulemaking. The EPA believes this final rule addresses this issue. See section IX and XII.J of the final rule preamble of the CPP for the EPA’s response to this comment.

Comment 3 2 : Commente rs stated that they will engage in providing input to the Administration and the EPA on the Carbon Pollution Standards and other aspects of the Clean Power Plans to ensure that equity and justice based measures are integral to all policy and rule making, t hrough submitting comments, participating in EPA hearings, and through consultative meetings with administration officials led by the Washington Bureau. Commenters noted that they will call on the EPA to establish a strong, protective, effective and timely federal rule that ensures that coal95 ash is disposed of safely by regulating coal ash as a "special waste" under subtitle C of the Resource Conservation and Recovery Act, and that commenters and their units will facilitate the advancement of a justice base d energy policy and action agenda, including hosting the NAACP signature state level forums

--- "Bridging the Gap: Connecting Black Communities to the Green Economy" and the "Black Green Pipeline Career Fair" as well as launching state level "Just Energy Po licies: Reducing Pollution, Creating Jobs" Reports and Campaigns, and other national, state, and local activities.

Response 3 2 : The EPA is committed to working with all stakeholders throughout the implementation phase of this rulemaking. The EPA believes t hat this final rule addresses these issues. See section XI.E of the final rule preamble of the CPP for the EPA’s response to this
comment.

Comment 3 3 : Commenters stated that natural gas

- fired power plants emit significant amounts of conventional pollutants (especially NOx) and that even with modern pollution controls, they contribute to reduced air quality and harm public health. Commenters said older natural gas

- fired plants with lower efficiencies and less effective pollution controls result in more signi ficant environmental and health impacts. Commenters stated these harmful impacts are particularly acute for local communities that live in close proximity to power plants.

Response 3 3 : See section IX.E of the final rule preamble of the CPP for the EPA’s r esponse to this comment.

Comment 3 4 : Commenters urged that the final rule encourage the states to embrace in their
state implementation plans concrete support for new technologies that will protect existing jobs while reducing emissions.
Response 3 4 : As mentioned above in response 1 0 the EPA provides a response to this comment in section IX.C of the final rule preamble of the CPP.

Comment 3 5 : Commenters strongly supported the general goal and ultimate result of the 111(d) rule and the framework that allow s a building block of efficiency and clean energy policies as part of the solution. However, c ommenters suggested that the EPA should consider establishing:

1. The needed framework for participatory planning; 2. The criteria for establishing that each state's p lan is equitable with respect to access to clean energy; 3. Protection from environmental degradation; and, 4. Protection of human health.

Response 3 5 : The EPA agrees with the importance of these issues and has addressed them in sections VIII.E&D and IX.C of th e final rule preamble.96 Comment 3 6 : Commenters stated that equity must be at the center of policies addressing climate change. Commenters stated that the Clean Power Plan proposal creates an unprecedented opportunity to address the environmental inequities in the most impacted communities. Commenters stated that t he Plan can also provide multiple benefits and help alleviate longstanding economic and social problems, including unemployment, disinvestment, violence and blight. As such, commenters strongly encouraged the EPA to adopt policies that direct states to mak e long

- term investments into communities disproportionately burdened by pollution and economic stress.

Commenters stated that the EPA should ensure that equity is incorporated into implementation plans by including it in guidance for states developing the ir plans and also including it in any model federal plan that would apply to states without an acceptable state plan. Commenters suggested that when states submit plans to comply with the Clean Power Plan, the EPA should strongly encourage states to adopt policy choices and implementation approaches that specifically take equity into account. Commenters stated that this will ensure that as states reduce carbon pollution they also address inequities in the distribution of public health hazards that are corre lated with poverty, employment, and air quality.

Response 3: The EPA agrees in the importance of addressing environmental justice in its rulemakings. See section IX.B of the final rule preamble of the CPP for the EPA’s response to this comment.

Title VI Questions

Comment 3 7 : Commenters expressed the need for EPA to enforce Title 6 of the Civil Rights Act on their state

- funded partners since Title 6 "mandates that any entity that receives federal funds cannot discriminate on the basis of race, national origin, or color."

Commenters noted that the EPA has a long history of failing to enforce Title VI. Commenters stated that in a recent case involving EPA's Title VI program, the Ninth Circuit described the EPA's handling of administrative complaints as "a consistent pattern of delay." Rosemere Neighborhood Association v. EPA, 581 F.3d 1169, 1175 (9th Cir. 2009). Commenters stated that the Ninth Circuit noted that "Rosemere's experience before the EPA appears, sadly and unfortunately, typical of those who a ppeal to OCR to remedy civil rights violations" and that "discovery has shown that the EPA failed to process a single complaint from 2006 or 2007 in accordance with its regulatory deadlines." Id. Commenters noted that the EPA has neglected to consider or a nalyze the discriminatory effects of cap and trade in obligation to Title VI. Commenters stated that allowing cap and trade programs could potentially create disparate and adverse impacts to low

- income and minority communities. Commenters noted that the EP A has full knowledge of such potential impacts, including receiving and refusing to investigate a Title VI administrative complaint alleging that cap and trade in California violated Title VI and reiterated that the EPA has failed to articulate any rationa le for excluding cap and trade from the97 environmental justice analysis required by E.O. 12898. Commenters stated that if the EPA promulgates the proposed rule as written, then its action would be arbitrary and capricious and in violation of the law because the EPA has (1) failed to propose any regulatory provisions that would ensure states' comply with section 601 and 40 C.F.R. 7.35(b) when implementing the proposed rule; and (2) failed to explain how the EPA's existing Title VI regulations

- given the EPA' s history of inadequate Title VI enforcement

- ensure states implementing the proposed rule will comply with section 601 and 40 C.F.R. section 7.35(b). Commenters noted that the EPA could address its Title VI obligation by proposing additional regulatory l anguage as part of the proposed rule that (1) directs each state to include federally enforceable provisions in their state plan to ensure compliance with Title VI and demonstrate, when submitting their state plan to the EPA, that the state plan complies w ith Title VI; and (2) requires the EPA to make a finding, supported by evidence in the record, that the state plan ensures compliance with Title VI when the EPA reviews state plans under 40 C.F.R. section 60.27. Commenters stated that a simple certificatio n by a state that the state plan complies does not suffice since the CAA requires state plans under section 111(d) to contain enforceable provisions, and the EPA should affirmatively evaluate a state's compliance.

Commenters stated that the EPA must ensure its state

- funded partners conform to Title VI by providing a full and complete opportunity for public participation and not causing significant, adverse, and disproportionate effect on people receiving Title VI protections. Commenters noted that the EPA s hould, at a minimum, mandate measures to ensure full and complete public participation in the development of state implementation plans and mandate that state implementation plans do not cause a significant, adverse, and disproportionate effect on people

r eceiving Title VI protections. Commenters also stated that Title VI affirmatively mandates that federally funded entities ensure equal access to benefits and services. Commenters noted that this is a significant part of Title VI as applied to housing, heal th care, transportation, education, and other federally funded initiatives administered by states and units of local government.

Commenters stated that mandating emissions reductions in and near EJ communities, and targeting these communities for the use of renewable energy and energy efficiency, could possibly be legally justified as affirmative actions taken by the EPA in an attempt to ensure that state implementation plans developed pursuant to the Clean Power Plan do not violate Title VI. Commenters st ated that the environmental justice analyses would then be justified as supporting the targeted emissions reductions and renewable energy and energy efficiency utilization. Commenters recommended that all states should at least have to ensure that all aspe cts of their implementation plans do not violate Title VI.

Response 3 7 : Commenters stated that the EPA must ensure that all state

- funded partners are following the guidelines established under Title VI. See section VIII.G of the final rule preamble of the CPP for the EPA’s response to this comment. Recipients of EPA financial assistance must comply with all federal nondiscrimination statutes that together prohibit discrimination on the bases of race, color, national origin (including limited

- English profic iency), disability, sex and age. These laws include: Title VI of the Civil Rights Act of 1964; Section 504 of the Rehabilitation Act of 1973; Section 13 of the Federal Water Pollution Control Act Amendments of 1972; Title IX of the Education Act Amendments of 1972; and the Age Discrimination Act of 1975. Compliance with these nondiscrimination statutes is a recipient’s separate and distinct obligation from compliance with environmental regulations. In other words, all recipients are98 required to ensure that all aspects of their implementation plans of the Clean Power Plan guidance do not violate any of the federal nondiscrimination statutes, including Title VI.

EPA’s Office of Civil Rights (OCR) is responsible for carrying out compliance with these federal n ondiscrimination statutes and does so through a variety of means including: complaint investigation; agency

- initiated compliance reviews; pre

- grant award assurances and audits; and technical assistance and outreach activities. Anyone who believes that any of the federal nondiscrimination laws enforced by OCR have been violated by a recipient of EPA financial assistance may file an administrative complaint with EPA’s OCR.

In addition, commenters stated that the EPA should require states to demonstrate equal access to these benefits, and should evaluate state plans on this basis. Commenters noted that in this context, environmental justice is not only the avoidance of disproportionate harm, it also encompasses an affirmative obligation to ensure equal access t o anticipated services and benefits. Please see section IX.G of this final preamble for more information on how the EPA responds to this comment.

Comment 3 8 : Commenters stated that E.O. 12250 directs federal agencies to issue appropriate Title VI implement ing directives, either in the form of policy guidance or regulations consistent with the requirements prescribed by the Department of Justice's Assistant Attorney General for Civil Rights and therefore EPA must ensure that state plans ensure compliance wit h Title VI of the Civil Rights Act. Commenters noted that the EPA's implementing regulations forbid recipients of federal funds from using "criteria or methods of administering [their] program[s] or activit[ies] which have the effect of subjecting individu als to discrimination because of their race, color, national origin, or sex" and that state agencies implementing the Clean Power Plan who receive funding from the EPA are responsible for ensuring that funded activities (for example, permitting processes) that become part of compliance plans under the Clean Power Plan conform to Title VI requirements. Commenters noted that if compliance to Title VI cannot be achieved voluntarily, the regulations authorize the EPA to deny, suspend or terminate funding to the particular program under which the agency has found discrimination and that the EPA may also refer the matter to the Department of Justice to get compliance.

Commenters further noted that meaningful public involvement is also necessary to ensure recipient s' compliance with Title VI and that the EPA has suggested specific public involvement in the permitting process in Title VI's "Recipient Guidance" that could also apply to the process of developing SIPs under the Clean Power Plan. Commenters stated that t hese approaches include preparing a "public involvement plan" with the participation of Environmental Justice communities, equipping communities with information materials, training sessions, and grants to ensure participation, and working with local autho rities to integrate Environmental Justice concerns from communities into developing plans.

Response 3 8 : The EPA appreciates commenters ’ stress ing the importance of meaningful public involvement in the rulemaking process. The EPA agrees that meaningful engagement between states and stakeholders including vulnerable and overburdened communities is a critical component of state plan development. In sections VI I I

. E&D and IX.B of the final rule pream ble, the EPA outlin es its a pproach to providing guidance and assistance to states and communities to facilitate such engagement, and its inclusion of a requirement for states’ initial submittals and99 final plan submittals of descriptions of engagement with vulnerable communities. The EPA outlines in section VIII.G of the preamble the obligations of fund recipients with respect to Title VI of the Civil Rights Act, as well as how the EPA assures compliance with Title VI.100 CHAPTER 10 RULE LANG UAGE CORRECTIONS

This chapter addresses com ments received on the EPA’s proposed rule language for the EGU GHG Emission Guidelines. Comments received on the following topics are covered by this chapter: definitions (existing) ( Section 10.1 ), definitions (new) ( Section 10.2 ), rule language ( Section 1 0. 3 ), and comments received on other topics relevant to this chapter ( Section 10. 4 ).
Commenters also raised issues on topics that are not covered by this chapter. Please refer to the following chapters for responses specific to those issues:

• Chapter 1 : Legal

• Chapter 2 : Applicability

• Chapter 3 : GHG Mitigation Measures

• Chapter 4 : State Goal Computation

• Chapter 5 : State Plan Considerations

• Chapter 6 : State Plans

• Chapter 7 : Interactions With Other EPA Programs and Rules

• Chapter 8 : Impacts and Cost Analysis

• Chapter 9 : Statutory and Executive Orders10.1 Definitions (existing)

10.1 DEFINITIONS (EX IS T ING)

This section addresses comments on definitions existing in the proposed rulemaking.

Commenters have raised a number of issues related to this subsection whic h are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: Base Load Rating
Response 1: The EPA disagrees with the commenters that the definition of “base load rating” restricting to only allow for the “manufacturer’s design heat input capacity”. The EPA believes the current definition in 60.5840 allows for any change in operation of a stationary combustion turbine with respect to ISO conditions.

The following are summaries of the specific public comments under this c omment :101 Commenters stated, EPA should revise the definition of base load rating to enable the owner/operator to reflect actual heat input capacity or changes in the capacity of the stationary combustion turbine that may occur [this comment was originally m ade on the KKKK proposal, but commenter has asked that it be applied to UUUU]. Commenters said, as proposed in rule section 60.4421, the "base load rating" of a stationary combustion turbine would be fixed indefinitely at the "manufacturer's design heat in put capacity" value at ISO conditions and using higher heating value of the fuel. Commenters said, the base load rating is a key component in determining "potential electric output" of the turbine and ultimately whether the turbine is subject to Subpart KK KK under criteria in proposed rule section 60.4305.

Commenters stated, similar to the "potential electric output" proposed definition, the "base load rating" definition should enable "at the election of the owner/operator of the facility" to use or revise the base load rating to reflect actual heat input capacity (that may differ from manufacturer's design) or to reflect changes in the heat input capacity over time (e.g., due to degradation, new environmental requirements, efficiency improvements, etc.).

Co mmenters stated, the use of a base load rating different than the manufacturer's design heat input capacity could be based on methods such as a manufacturer's thermal performance test procedure or an ASME Performance Test Code (PTC), such as PTC 22 for sta tionary combustion turbines, or another known industry standard

- all at ISO conditions and using higher heating value of the fuel.

Comment 2: Emission Standard
Response 2: The EPA has expanded upon the discussion of emission standard in section VIII of the preamble. Additionally the EPA has explicit requirements for emission standards and state measures in 60.5775 and 60.5780 of the regulation.

The following are summaries of the specific public comments under this c omment :

Commenters requested that EPA p rovide greater clarity with respect to the term "emission standard." Commenters said, for instance, this term appears in Section VIII (D)(8). Commenters said, the proposed rule says, "For each emission standard, a plan must describe how it is quantifiable, non

- duplicative, permanent, verifiable, and enforceable with respect to an affected entity" (page 34,913). Commenters had several questions related to the term.

• How is the term distinct from the term "emission limit" (e.g. as used on pages 34,909

- 34910) ?

• Is each affected entity supposed to have an individual "emission standard," or does a group of affected entities roll

- up under a single emission standard?102 • Does an emission standard only apply to EGU affected entities?

Comment 3: Emission Standard
Response 3: The EPA has decided not to finalize the definition of “emission standard” as proposed, in part because the agency is not finalizing a definition of “affected entity.” The definition of “emission standard” in the framework regulations at 40 CFR 60.21(f) recognizes that an emission standard may be rate

- based or may be mass

- based. The EPA is authorizing in the final EGs the use of rate

- based trading as a means of meeting a rate

- based emission standard. A mass

- based trading program is encompassed by the term “allowance system.” The EPA is making clear in the final EGs that allowance systems are an allowable form of emission standard and, responding to the concern raised by the comment, is also including a definition of “allowance system” in the final EGs. The definition of “allowance system” allows for a certain degree of flexibility, within the requirements of the EGs. For instance, the “unit” of emissions is unspecified by the definition. While the agency agrees with the commenter s ’ statement that

“ novel” approaches to allowance systems (so long as they meet the terms of the EGs) may be accepted, the agency also believes there is substantial benefit in being able to link state plans and therefore uniformity of system requirements is advantageous. For instance, states may want to work with each other and/or the EPA to utilize a single approach to denominating the “unit” of emissions that each allowance will authorize. The agency believes that the final EGs provide a great deal of flexibility to states. In addition to the flexibilities available to states in the design of
a rate

- or mass

- based “emission standards” approach, the EPA is also allowing states to use “state measures,” subject to certain requirements, that are not “emission standards.”

The fol lowing are summaries of the specific public comments under this c omment :

Commenters stated, the final rule should clarify the definition of "emissions standard" to increase state flexibility. Commenters said, EPA touts the Proposed Emission Guidelines as p roviding states with a great deal of flexibility in how to achieve their goal. Commenters said, this flexibility could be significantly enhanced by clarifying and simplifying the definition of "Emission Standard" in proposed 40 C.F.R. section 60.5820 to re ad as follows:

Emission standard means in addition to the definition in section 60.21, any requirement applicable to any affected entity that has the effect of reducing emissions or utilization of one or more affected sources, including, for example, renew able energy and demand

- side energy efficiency requirements.

Commenters stated, section 60.5820, as currently drafted, appears to unduly restrict the types of requirements that can be imposed on "affected EGUs" or "affected sources" to reduce CO2 emissions in state plans. Commenters said, although 40 C.F.R. section 60.21 and section 60.24(b)(1) permit section 111(d) emission guidelines to impose either an emission rate or an allowance system on affected sources, it is conceivable that states plans could dev ise broader,103 more creative, and more effective options to address compliance from affected EGUs than now contemplated under section 60.21 and section 60 .24(b)(1). Commenters said, for example, one ambiguity that will confront states as they develop plans is that the term "allowance system" is not defined in EPA's section 111 general regulations in 40 C.F.R. Part 60. Commenters said, thus it is unknown precisely what types of "allowance systems" EPA will approve under state plans. Commenters said, there is potentially a vast array of allowance

- type systems that states may wish to explore, and EPA should remove any doubts that novel approaches will be encouraged and accepted. Commenters urged EPA to remove such questions and affirm state flexibility by revisi ng proposed 40 C.F.R. section 60.5820 as suggested above.

Comment 4: Net energy output
Response 4: The EPA has revised the definition of net energy output to include 100 percent of useful thermal output to address the issues raised by the commenters. S ee Comment 7 of this section noting that the EPA is using a definition of useful thermal output for the final rule consistent with other subparts in 40 CFR part 60. Additionally the EPA has added a definition for

The following are summaries of the specifi c public comments under this c omment :

Commenters stated, the definition of net energy output is somewhat unclear with regard to the precise meaning of the phrase "that is not used to generate additional electrical or mechanical output or to enhance the per formance of the unit." Commenters said, while EPA has intended that "net energy output" apply to the EGU for which the standard applies, the definition could be more precise. Commenters said, "EGU" should be used instead of "unit" in this definition. Comme nters said it needs to be clear that the phrase "is not used to generate additional electrical or mechanical output" applies to the EGU. Commenters said, many industrial processes involve the use of steam for mechanical or internal electrical needs of the process that are unrelated to the generation of electricity that is sold to a utility system. Commenters said, the most straightforward approach, and easiest to identify and measure, is the "energy in the steam delivered to an industrial process for whatev er purpose" or "thermal energy made available for use for whatever purpose." Commenters said, the amount of energy actually recovered may be much more difficult to measure, because this quantity may be dependent on an array of equipment with differing ther mal recovery efficiencies, steam usage rates, etc.

Commenters stated, for example, NHPC's Cogeneration Boilers (i.e., EGUs) send both high pressure and low pressure steam from the EGUs to a sugar mill and refinery, which use the thermal energy in the steam , but the sugar mill also generates additional electricity from the steam it receives. Commenters said, EPA should allow the useful thermal output to include 100 percent of the electrical energy generated, and 75 percent of the thermal energy made availabl e for use in any industrial or commercial process. Commenters said, this approach can be expressed as follows:104 (1) The net electric or mechanical output from the affected facility, plus 100 percent of any electrical energy generated outside the EGU by stea m generated from the EGU, plus 75 percent of the useful thermal output measured relative to SATP conditions that is not used to generate additional electric or mechanical output of the EGU , or to enhance the performance of the unit EGU (e.g., steam delivere d to an industrial process for a heating application).

(2) For combined heat and power facilities where at least 20.0 percent of the total gross energy output consists of electric or direct mechanical output and 20.0 percent of the total gross energy output consists of useful thermal output on a rolling 3 year basis, the net electric or mechanical output from the affected facility divided by 0.95, plus 100 percent of any electrical energy generated outside the EGU by steam generated from the EGU, plus 75 percent of the useful thermal output measured relative to SATP conditions that is not used to generate additional electric or mechanical output of the EGU , or to enhance the performance of the unit EGU (e.g., steam delivered to an industrial process for a heating application).

Commenters stated, this definition o f "useful thermal output" appears to exclude electrical generation that may be inherent to an industrial process and not sold to a utility system. Commenters said, however, the Proposed Rule and the proposed NSPS only apply to EGUs; they do not apply to ot her electrical generating systems. Commenters said, therefore, NHPC suggests that a definition of useful thermal output be included in the final rule and be stated as:

Useful thermal output means the thermal energy made available for use in any industrial or commercial process, or used in any heating or cooling application (i.e., total thermal energy made available for processes and applications or to enhance the performance of the stationary combustion turbine). Thermal output for this subpart means the en ergy in recovered thermal output measured against the energy in the thermal output at ISO conditions.

Comment 5: Clarify the terms "measures" and "actions".
Response 5: EPA has provided a detailed discussion on eligible resources with respect to renewab le energy measures and actions in the provisions for state plans in preamble section VIII to better clarify the issues raised by commenters.

The following are summaries of the specific public comments under this c omment :

Commenters said, the EPA states that the definition of an:

Existing state program, requirement, or measure means, in the context of a state plan, a regulation, requirement, program, or measure administered by a state, utility, or other entity that is curr ently established. This may include a regulation or other legal requirement that includes past, current, and future obligations, or current programs and measures that are in place and are anticipated to be continued or expanded in the future, in accordance with established plans.105 An existing state program, requirement, or measure may have past, current, and future impacts on EGU carbon emissions

.
Commenters stated, however, EPA never defines what "measures" constitutes even though it uses it to mean someth ing separate from a state "program" in many instances throughout the plan. Commenters said, while we support a broad definition of that term, EPA should clarify, from a compliance perspective, what types of measures might constitute a "measure" as long as it is incorporated into a state plan. Commenters seek clarification in the final rule as to whether "measure" can be merely included in a state plan to make it a "legal requirement." Commenters said, EPA should also clarify the standard for "legal requirem ent" so that it provides flexibility for bilateral contracts to be used as compliance tools, as long as they are enforceable at the state or federal level.

Commenters recommended that, while the EPA defer to states on terms and requirements contained in ex isting state EE and RE standards and plans, the EPA should clarify the key terms used in the EPA's requirements, such as meanings and differences between the terms "existing measures" and "actions" (Section 60.5750). Commenters said, for example:

• Would th e installation of a highly efficient motor, as part of an energy efficiency program required by State law, be considered a measure?

• If the installation occurred in 2013, would that be considered an existing measure?

• Would the electricity savings that occur red in 2020 from that existing measure be considered an action?

Commenters stated, if so, a kilowatt

- hour of electricity saved in 2020, from a measure (i.e., a highly efficient motor) installed in 2013, would count towards meeting the goal for 2020.

Comme nt 6: Stationary combustion turbine
Response 6: The EPA has revised the definition for stationary combustion turbine in the rule to be consistent with the definition listed in the GHG EGU NSPS, 40 CFR subpart TTTT of part 60. Additionally the EPA has revised the applicability section of the rule to make it clearer the certain types of units that are subject to the rule.

The following are summaries of the specific public comments under this c omment :

Commenters stated, in subpart KKKK, the proposed defin ition of "stationary combustion turbine" that would apply "with respect to CO2 emissions" is inconsistent with the current "stationary combustion turbine" definition that would remain in place in the same subpart. Commenters said, as a minimum, EPA should remove the term "steam turbine" from the106 proposed definition. Commenters said, more appropriately, subpart KKKK should have a single definition for the source category (stationary combustion turbines), i.e., the current definition.

Commenters stated, the c urrent (generally applicable) and proposed (for CO2 emissions) definitions are as follows:
Current Generally Applicable Definition At 40 CFR 60.4420 (with strikeouts indicating words that would not appear in proposed section 40 CFR 60.4421 for CO2 emission s): "Stationary combustion turbine means all equipment, including but not limited to the turbine, the fuel, air, lubrication and exhaust gas systems, control systems (except emissions control equipment) , heat recovery system, and any ancillary components and sub

- components comprising any simple cycle stationary combustion turbine, any regenerative/recuperative cycle stationary combustion turbine, any combined cycle combustion turbine, and any combined heat and power combustion turbine based system . Station ary means that the combustion turbine is not self propelled or intended to be propelled while performing its function. It may, however, be mounted on a vehicle for portability."
Proposed Definition for CO2 Emissions At Proposed 40 CFR 60.4421 (with bolded words indicating added words not in the current definition): "Stationary combustion turbine means all equipment, including but not limited to the combustion turbine engine , the fuel, air, lubrication and exhaust gas systems, control systems, heat recovery system, steam turbine, fuel compressor, heater, and/or pump, postcombustion emission control technology , and any ancillary components and subcomponents plus any integrated equipment that provides electricity or useful thermal output to the combustion turb ine engine, heat recovery system or auxiliary equipment . Stationary means that the combustion turbine is not self propelled or intended to be propelled while performing its function. It may, however, be mounted on a vehicle for portability."

Commenters st ated, the relatively short discussions in the preamble do not identify any rationale for establishing a separate definition of a stationary combustion turbine for CO2 emissions, nor does the Regulatory Impact Analysis or the relevant Technical Support Docu ment.

Commenters stated, while Section 111(b)(2) may allow EPA to distinguish among classes, types, and sizes within categories of new sources for establishing standards, there is nothing in Section 111 that appears to allow or encourage EPA to define a s ource category in different ways for different categories have focused on the emitting device or apparatus, along with directly integrated equipment. Commenters said, for the stationary combustion turbine category, the current definition incorporates the c ombustion turbine itself and any associated heat recovery steam generator (including any installed duct burner), but not a steam turbine.

Commenters stated, the current definition makes it clear that combustion turbines used in a number of applications (in simple cycle, regenerative/recuperative, combined cycle, and combined heat and power turbine applications) are within the definition. Commenters said, the current definitions of these applications in existing rule section 40 CFR 60.4420 make it clear107 that , in cases where there is heat recovery, the equipment used by the recovered heat (e.g., a steam turbine for combined cycle), is not considered part of the stationary combustion turbine.

Commenters stated, specifically, "steam turbine" should not be includ ed in any revised definition of "stationary combustion turbine." Commenters said, including "steam turbine" (a non

- emitting device) or any equipment associated with use of recovered heat would greatly expand the scope of the regulated source category. Comm enters said, while EPA has proposed to give credit for use of recovered heat for demonstrating compliance with the proposed emission standard in proposed rule section 40 CFR 60.4374, this is not a justification for expanding the definition of the source ca tegory itself.

Commenters stated, likewise, EPA should not make other expansions of the scope of "stationary combustion turbine"

- such as including other equipment that may make use of recovered heat input or post

- combustion emission control technology. C ommenters said, therefore, the current definition of "stationary combustion turbine" should be retained.

Comment 7: Useful thermal output

Response 7: The EPA acknowledges the comments, however the EPA is using the definition of useful thermal output consistent with other subparts in 40 CFR part 60.

The following are summaries of the specific public comments under this c omment :

Commenters stated, Massachusetts' new law's definition of useful thermal energy is offered as a potential substitute for or for incorporation in the current EPA proposed definition of useful thermal energy (Sec Section 1 of Massachusetts Session Law 251 (S . 2214) approved by the Governor on August 6, 2014, amending Massachusetts General Laws Part l, Title II, Chapter 25A. Section 3:

"Useful thermal energy," energy in the form of direct heat, steam, hot water or other Thermal form that is used in production and beneficial measures for heating, cooling, humidity control, process use or other valid thermal end use energy requirements and for which fuel or electricity would otherwise be consumed.

Commenters concurred with NGWA and proposes a modification to th e current definition of useful thermal output. Commenters said, Massachusetts, for example, has a new law [S.2214, the definition of Useful Thermal Energy is in the second paragraph of section 1. Retrieved October 22, 2014 at https://malegislature.gov/Bill s/188/Senate/S2214] defining useful thermal energy. Commenters said, this is offered as potential substitute for or for incorporation in the current EPA proposed definition of useful thermal energy. Commenters suggested that the EPA add or modify the curre nt definition to include the following:

"Useful thermal energy", energy in the form of direct heat, steam, hot water or other thermal form that is used in production and beneficial measures for space comfort and air quality control,108 process use or other va lid thermal end use energy requirements and for which fuel or electricity would otherwise be consumed.

10.2 DEFINITIONS (NE W)

This section addresses comments on new definitions that were not included in the proposed rulemaking.

Commenters have raised a nu mber of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: Renewable Energy
Response 1: The EPA will not be defining a definitive list of renewable energy in this rule mak ing, however the EPA points to examples of renewable energy in the rule making and in the preamble discussion in sections V.E and VIII.

The following are summaries of the specific public comments under this c omment :

Commenters noted that the proposed rule does not define renewable energy. Commenters suggested that the final rule give flexibility to states to develop their own definition of renewable energy that can be used for compliance. Commenters said, with this flexibility, states can develop renewable energy definitions that mirror state RPS definitions, which will reduce complexity and bring more certainty to affected sources.

Commenters stated, the concept of renewable energy is broadly stated in the Proposed Rule's Technical Support Document:

The p ortfolio of available RE sources encompasses a wide variety of technologies from utility

scale RE plants to smaller

- scale distributed generation sited at residential, commercial, or industrial facilities. RE technologies are fueled by the sun, wind, water, organic matter, and other resources regularly replenished by physical and biological cycles."

Commenters stated, background documentation for the Proposed Rule acknowledges that landfill gas and biomass are renewable energies. Commenters said, noting that the renewable energy proportion of electricity in the United States has "increased dramatically" and that "over 38 percent of new generating capacity (over 5 GW out of 13.5 GW) built in 2013 used renewable power generation technologies[,]" footnote 30 the n specifically identifies landfill gas and biomass renewable energy sources:109 Based on Table 6.3 (New Utility Scale Generating Units by Operating Company, Plant, Month, and Year) of the U.S. Energy Information Administration (EIA) Electric Power Monthly, da ta for December 2013, for the following renewable energy sources: solar, wind, hydro, geothermal, landfill gas, and biomass...

Commenters supported a broad definition of renewables and seeks a clearer statement in the final version of the Rule. Commenters have found a ready and reliable source of landfill gas that has simultaneously produced electricity and reduced greenhouse gas emissions by using gases that would otherwise vent to the atmosphere unabated. Commenters said, while landfill gas and biomass a re clearly included in the above quoted statement, to avoid any ambiguity or debate about the issue it would be preferable to expressly identify them both as a renewable energy sources in a conspicuous place in the rule instead of a footnote. Commenters sa id, furthermore, existing hydropower resources constitute a valuable source of zero emission baseload generation and should receive full credit as a renewable resource as opposed to crediting only incremental or new hydropower.

Commenters encouraged the E PA to allow States to continue to use their current definitions of renewable resources. Commenters said, for example, Chapter 269

- 91, Hawaii Revised Statutes, defines "renewable energy" as energy generated or produced using the following sources:

(1) Wind;

(2) The sun;

(3) Falling water;

(4) Biogas, including landfill and sewage

- based digester gas;

(5) Geothermal;

(6) Ocean water, currents, and waves, including ocean thermal energy conversion;

(7) Biomass, including biomass crops, agricultural and animal residues and wastes, and municipal solid waste and other solid waste;

(8) Biofuels; and

(9) Hydrogen produced from renewable energy sources.

Commenters stated, the development of the renewable energy definition through legislative proceedings involved many experts, consultants, and stakeholders. Commenters said, the inclusion of municipal solid waste and other waste materials as a renewable energy resource is of particular importance as an island state with limited land area. Commenters said, the pros and110 c ons of including these types of resources in Hawaii's RPS was debated and adopted by the Hawaii Legislature.

Commenters were concerned that, if the EPA indicates that it will redefine or specify renewable energy generation differently from Hawaii's current approach, it could require changes to Hawaii's laws and affect how the RPS is implemented, which may cause Hawaii to forego certain carbon reductions strategies due to uncertainty as to what resources would qualify.

Comment 2 : "Sustainable forest production" and "Waste"

Response 2 : A discussion regarding the use of some biomass feedstocks for compliance purposes can be found in section VIII.I.2.c and section VIII.K.1 of the preamble.

The following are summaries of the specifi c public comments under this c omment :

Commenters stated, with regard to diverse, sustainable bioenergy, major concepts such as "sustainable forest production" and "waste" should be clearly defined.

Comment 3 : Clarification of what it means to be "under co nstruction"

Response 3 : The proposed rule considered the term “under construction” in relation to proposed provisions addressing nuclear units in the goal

- setting methodology for BSER. The EPA determined that the final rule will not include provisions for under construction nuc lear units in the goal

- setting methodology, therefore, this term no longer requires a definition.

The following are summaries of the specific public comments under this c omment :

Commenters noted that the Proposed Rule deems resources not yet in commercia l operation, but under construction as of January 8, 2014, be considered as "existing resources" under 111(d). Commenters noted that the set of units considered "under construction" under the Proposed Rule does not match up with, and is in fact 3,000

- 4,000 MW less than, the set of combined cycle gas units that PJM would consider "under construction" as evidenced by signed Construction Service Agreements (CSAs). Commenters said, in PJM's recently released OPSI

- Requested Analysis, PJM included all units with CSAs as existing units for the purposes of meeting the PJM derived

mass

- based targets from the June 2nd Proposed Rule and November 6th Guidance. Commenters requested that EPA provide a more formal definition of what it means to be "under construction" for the purposes of the rule to help PJM, OPSI, and other interested parties more accurately evaluate different compliance options and to develop more informed State Plans. Commenters suggested that the term "under construction" should be tied to readily

- ident ified benchmarks used in the interconnection process such as executed CSAs as noted above.111 Comment 4 : Waste Energy Recovery (WER)

Response 4 : The EPA has included a definition of waste

- to

- energy in the final rule and a detailed discussion of waste

- to

- ene rgy is located in the discussion of eligible resources in section VIII of the preamble.

The following are summaries of the specific public comments under this c omment :

Several commenters suggested adding a definition for WER to identify this potential ener gy source that can reduce greenhouse gas emissions:

Waste Energy Recovery (WER) is energy recovered, such as through heat pump systems, and made available for reuse in any industrial or commercial process or used in any heating and/or cooling application, (e.g. this energy might normally be discharged as waste to the air or a non

stationary earth based thermal mass, such as the groundwater or a body of surface water). Usable waste energy calculations are the quantification of the energy recovered and reused that may be expressed in British Thermal Units (BTU) or Kilowatt hours (KWh) of avoided consumption or generation. From these net energy calculations, a normalized or localized estimate may be made of the emissions avoided and resource consumption avoided in the process of recovery and reuse of this energy.

Comment 5 : EPA should ensure that definitions and uses of terms relating to stationary combustion turbines are clear and consistent.

Response 5 : The EPA acknowledges the comments and has expanded upon the definition of stationary combustion turbine in the final rule and has ensured that it is consistent with the EGU GHG NSPS, 40 CFR part 60 subpart TTTT, and additionally revised the applicability for stationary combustion turbines to be clearer.

The fo llowing are summaries of the specific public comments under this c omment :

Commenters stated, in reviewing the proposed rule text and preamble, we found the definitions and uses of important terms to be unclear, inconsistent, and/or potentially confusing. Commenters said, to the extent used in a final rule, EPA should insure that definitions and uses of terms such as "Potential Electric Output," "Net

- Electrical Output," "Net Electric Output," "Gross Electric Sales," "Gross Energy Output," "Utility Distribut ion System," "Utility Power Distribution System," "Electric Grid," and "Purchased Power" are clear and unambiguous [this comment was originally made on the KKKK proposal, but commenter s ha ve asked that it be applied to UUUU].112 10. 3 RULE LANGUAGE

This section addresses comments on the proposed rule language. Topics covered by this section include applicability, incorporation of Part 75, and requirements for affected entities, which are organized under three subsections, 10. 3 .1 to 10. 3

. 3

. Responses to the comment topics of these subsections are discussed below along with summaries of the specific public comments.

10. 3 .1 Applicability for EGUs/affected entities

This subsection addresses comments on the proposed rule language related to applicability for EGUs and affected entities.
Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: EPA Should More Clearly Define "Affected Source"

Res ponse 1: The EPA has revised the sections for defining an affected EGU and points the commenter to sections 60.5800, 60.5805, and 60.5810 for further clarification of the changes.

The following are summaries of the specific public comments under this c omme nt :

Commenters stated, the EPA must clarify how sources can demonstrate that they were not constructed for the purposes of supplying one

- third or more of their potential electric output and more than 219,000 MWh net

- electrical output to the grid. Commenter s said, in addition, there seems to be some conflict in EPA's definition of affected units between the Proposed Rule and the accompanying technical support documents. Commenters said, specifically, the Proposed Rule describes a 73 MW base load rating thres hold for affected units as noted above, but the technical support documents reference a 25 MW nameplate capacity threshold. Commenters said, EPA must ensure consistency between its rule and its supporting analyses.

Comment 2: Clarify applicability criteri a for affected EGUs
Response 2: The EPA has revised the sections for defining an affected EGU and points the commenter to sections 60.5800, 60.5805, and 60.5810 for further clarification of the changes.

The following are summaries of the specific public c omments under this c omment :113 Commenters stated, the preamble indicates that the unit must actually sell at least 219,000 MW

- h per year, which raises questions. Commenters said, it is unclear if the unit is affected if it ever sold more than 219,000 MW

- hr in a year or if this is based on an average over a certain time period. Commenters said, in Missouri, there are multiple units that EPA has identified as "likely affected units" in the proposed rule; however, these units have never sold more than 219,000 MW

- h in a calendar year. Commenters said, it is unclear whether these units would be affected units under the rule, which could affect the goal calculation for Missouri. Commenters said, the preamble and the regulatory text should be clarified so that states can easily determine which units are affected and which are not.

Comment 3: Applicability criteria for affected EGUs

- "sells" versus "constructed for the purpose of supplying"
Response 3: The EPA has revised the sections for defining an affected EGU and points the commenter to sections 60.5800, 60.5805, and 60.5810 for further clarification of the changes.

The following are summaries of the specific public comments under this c omment :

Commenters stated, in reviewing the preamble and the proposed regulato ry text, there appear to be inconsistencies with the applicability criteria used to determine which EGUs are affected by the rule, specifically the criteria regarding the 219,000 MW

- h threshold. Commenters presented the inconsistency:

From the preamble 79 FR 34854: sells (emphasis added) the greater of 219,000 MWh per year and one

- third of its potential electrical output to a utility distribution system;

From the proposed regulatory text (Section 60.5795) 79 FR 34954: was constructed for the purpose of supp lying (emphasis added) one

- third or more of its potential electric output and more than 219,000 MWh net

- electric output to a utility distribution system on an annual basis.

Commenters stated, the phrase "constructed for the purpose of supplying" is not de fined in either established or proposed regulatory text. Commenters said, it is unclear if this means the same thing as "has the potential to generate and supply at least 219,000 MW

- h per year" or if there is another test for determining the purpose for wh ich the unit was constructed.

Comment 4: Treatment of new, modified, and reconstructed sources
Response 4: The EPA is finalizing the rule to not include those units that are subject to 40 CFR part 60 subpart TTTT, and those units are not included in the applicability of an affected EGU.

The following are summaries of the specific public comments under this c omment :114 Commenters stated, the preamble discusses how new, modified, and reconstructed sources should be treated in state plans. Commenters said, in g eneral, the preamble states that newly constructed sources subject to the NSPS (40 CFR 60 subpart TTTT) would not be affected sources under the 111(d) rule. Commenters said, it also states that existing sources would remain subject to the 111(d) plan requi rements even if modified or reconstructed in the future and became subject to requirements under 111(b) of the CAA. Commenters said, however, the preamble is inconsistent with the proposed regulatory text.

Commenters said, from the Preamble, 79 FR 34903: T he EPA is proposing that an existing source that becomes subject to requirements under CAA section 111(d) will continue to be subject to those requirements even after it undertakes a modification or reconstruction. Commenters said, under this interpretatio n, a modified or reconstructed source would be subject to both (1) the CAA section 111 (d) requirements that it had previously been subject to and (2) the modified source or reconstructed source standard being promulgated under CAA section 111 (b) simultan eously with this rule making.

Commenters stated, based on this preamble language, the proposed regulatory text (79 FR 34954) appears to have an error. Commenters said, by making the following edit (removing the words "or reconstruction") this corrects the apparent discrepancy between the regulatory text and the preamble:

Proposed Revision: Section 60.5800 What affected EGUs are exempt from my state plan? Affected EGUs that are exempt from your state plan include: those that are subject to subpart TTTT as a result of commencing construction after the subpart TTTT applicability date; and those subject to subpart TTTT as a result of commencing modification or reconstruction prior becoming subject to an applicable state plan.

Comment 5: Clarify methods of moni toring, recordkeeping and reporting.
Response 5: The EPA has revised the monitoring, recordkeeping and reporting requirements to make it clear that states can incorporate the current monitoring provision that are used under the Acid Rain Program in Part 7 5 and that any use of that system additionally meets the requirements of states to submit and keep records the source specific data.

The following are summaries of the specific public comments under this c omment :

Commenters stated, the requirement that a s tate plan must include monitoring that is no less stringent than section 60.5805(a)(1) to (6) is not clear. Commenters said, the EPA should indicate in guidance if a state plan would need to include the actual monitoring plans and data, or just the monitor ing requirements. Commenters said, the monitoring requirements are included in proposed rule section 60.5805(a).115 Commenters stated, paragraphs (a)(1) through (a)(6) specify what kind of equipment must be used and how it must be installed. Commenters said, they include equipment to measure CO2 emissions, as well as electric meters. Commenters said, a monitoring plan is also required. Commenters said, there is no indication as to whether monitoring plans would need to be submitted in their entirety in the sta te plan for each of the affected EGUs, or if these plans could be reviewed and referenced with the appropriate ORIS code and CAMD location.

10. 3

. 2 Incorporation of Part 75

This subsection addresses comments on the proposed rule language related to the incorporation of Part 75 requirements.
Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: Modify 60.5805(a)(2)(i)
Response 1: The EPA ag rees with the comment and has made the necessary changes in the final rule to correct the reference.

The following are summaries of the specific public comments under this c omment :

Commenters stated, the state plan monitoring requirements for measuring CO2 emissions in section 60.5805(a)(2)(i) include a reference to Part 75 that deals with SO2 emissions. Commenters said, the monitoring requirements are included in proposed rule secti on 60.5805(a)(2)(i). Commenters said, the language is as follows:

"(i) An affected EGU must install, certify, operate, maintain, and calibrate a CO2 continuous emissions monitoring system (CEMS) to directly measure and record CO2 concentrations in the aff ected EGU exhaust gases emitted to the atmosphere and an exhaust gas flow rate monitoring system according to section 75.10(a)(3)(i) of this chapter. If an affected EGU measures CO2 concentrations on a dry basis, they must also install, certify, operate, m aintain, and calibrate a continuous moisture monitoring system, according to section 75.11(b) of this chapter."

Commenters stated, section 75.11 specifies monitoring requirements for SO2; whereas, section 75.13 specifies monitoring for CO2. Commenters reco mmended that the reference be changed to section 75.13.

Comment 2: Modify 60.5805(a)(2)(ii)116 Response 2: The EPA agrees with the comment and has made the necessary changes in the final rule to correct the reference.

The following are summaries of the specific public comments under this c omment :

Commenters stated, the state plan monitoring requirements for measuring CO2 emissions in proposed rule section 60.5805(a)(2)(ii) include a reference to Part 75 that deals with SO2 emissions. Commenters said, the monitoring requirements are included in proposed rule section 60.5805(a)(2)(ii). Commenters said, the language is as follows:

"For each monitoring system an affected EGU uses to determine the CO2 mass emissions, they must meet the applicable certificatio n and quality assurance procedures in section 75.20 of this chapter and Appendices B and D to part 75 of this chapter."

Commenters stated, Appendix D to Part 75 is titled "Optional SO2 Emissions Data Protocol for Gas

- Fired and Oil

- Fired Units," not CO2 mas s emissions. Commenters said, the reference to Appendix D to Part 75 in the proposed rule should be dropped.

Comment 3: Modify 60.5805(a)(2)(v)
Response 3: The EPA acknowledges the comments and has removed this requirement in the final rule.

The followin g are summaries of the specific public comments under this c omment :

Commenters stated, the state plan monitoring requirements for measuring CO2 emissions in proposed rule section 60.5805(a)(2)(v) include a requirement to use a calibrated Type

- S pitot tube when following Method 2 in Appendix A

- 1 to this part to perform the required RATAs of the part 75 flow rate monitoring system, and specifically not to use the default Type

- S pitot tube coefficient. Commenters said, the proposed rule needs to specify the ca libration method(s) for use on the Type

- S pitot tubes. Commenters said, the monitoring requirements are included in proposed rule section 60.5805(a)(2)(v). The language is as follows:

"If an affected EGU chooses to use Method 2 in Appendix A

- 1 to this par t to perform the required relative accuracy test audits (RATAs) of the part 75 flow rate monitoring system, they must use a calibrated Type

- S pitot tube or pitot tube assembly. An affected EGU must not use the default Type

- S pitot tube coefficient."

Commen ters stated, the proposed rule must specify the calibration method that must be used, a visual inspection procedure or a wind tunnel calibration method of calibration, and whether a standard pitot tube is acceptable. Commenters said, additionally, the prop osed rule needs to specify the acceptable tolerance range outside of 0.84, as no two pitot tubes have the same precise coefficient.117 10. 3

. 3 Requirements for affected entities

This subsection addresses comments on the proposed rule language related to requi rements for affected entities.
Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: 60.5815

- affected entities versus affected EGUs
Response 1: The EPA acknowledges the comment and has removed the definition of affected entities and has update d the definition of affected EGUs in the applicability section of the rule.

The following are summaries of the specific public comments under thi s c omment :

Commenters stated, paragraphs (a)(1) and (a)(2) of proposed rule section 60.5815 require the reporting of emissions performance by affected entities and EGUs. Commenters found these requirements confusing. Commenters said, it is unclear why para graph (1) addresses requirements for "affected entities," which by EPA's definition include affected EGUs, and paragraph (2) separately addresses requirements for "affected EGUs." Commenters requested clarification of the separate reporting requirements fo r emissions performance of "affected entities" and "affected EGUs," against emissions performance projections for different periods.

Comment 2: 60.5815

- performance period versus compliance period

Response 2: The EPA has revised the periods required in the final rule to include interim steps composed of 3 interim steps and additionally a final period composed of final reporting periods of every 2 calendar years. Additionally, the EPA has added definitions in the definitions section of the final rule tex t to clarify the differences in the terminology relating to the time periods required in the rule.

The following are summaries of the specific public comments under this c omment :

Commenters stated, paragraphs (a)(1) and (a)(2) of proposed rule section 60.5 815 require the reporting of emissions performance by affected entities and EGUs. Commenters found these requirements confusing. Commenters said, another point of confusion is that paragraph (1) requires evaluation of "emissions performance for affected en tities during the plan performance period and compliance periods," whereas paragraph (2) requires evaluation of "emissions performance for affected EGUs during the plan performance period." Commenters said, note that proposed rule section 60.5820, Definiti ons, includes a definition for "compliance period" but not118 for "performance period." Commenters requested clarification of the difference between "performance period" and "compliance period."

10. 4 OTHER

This section addresses comments received on other topics relevant to this chapter.
Commenters have raised a number of issues related to this subsection which are organized by topics (comments) below. Responses are provided for these topics.

Comment 1: The text of the actual rule should be expanded and up dated to clearly address all requirements.

Response 1: The EPA has expanded the final rule to include mass based goals, eliminating the requirement for states to make the translation and has added detail with respect to EM and V. Additionally the EPA has removed the term affected entity to clarify the rule as the commenters suggest.

The following are summaries of the specific public comments under this c omment :

Commenters stated, the text of the proposed rule is only ten pages long. Commenters said, becaus e proposed Subpart UUUU is introducing new interpretations of BSER and a number of terms and concepts that are new to air quality regulation, it is very important for the text of the rule to be clear and thorough. Commenters said, a number of rule requirem ents are either omitted or else are not addressed in a clear and thorough manner. Commenters said, these requirements include the following:

- Conversion of rate

- based goal to mass

- based goal

- Evaluation, measurement, and verification of renewable energy and energy efficiency

- Definition and illustration of "affected entity"

- Consistent use and differentiation of "affected entity" and "affected EGU"

- Emissions standards for affected entities

Commenters recommended that the text of Subpart UUUU should be expanded and revised to clearly and thoroughly address all requirements.

Comment 2: Several commenters stated that the EPA should clarify that the rule allows for full flexibility for compliance.119 Response 2: The EPA has expanded in the rule text to ma ke it clear the flexibilities states have while also adding text that addresses structure and requirement principles that states should take into consideration upon creating and submitting a state plan.

The following are summaries of the specific public co mments under this c omment :

Commenters stated, although the proposed rule states that "the affected EGUs, to comply with the applicable standards of performance in the state plan, may rely on any efficacious means of emission reduction, regardless of whethe r the EPA identifies those measures as part of the BSER[,]"other sections of the proposed rule confuse the issue of how much flexibility is permitted. Commenters said, for example, elsewhere in the proposed rule, EPA lists a number of measures such as part ial carbon capture and sequestration and transmission and distribution system efficiency improvements, stating: "[t]he agency solicits comment on whether these measures are appropriate to include in a state plan to achieve CO2 emission reductions from affe cted EGUs." Commenters requested that EPA clarify that states and EGUs may rely on any efficacious means of emission reduction to comply with the state's goal.

Commenters stated, the Clean Power Plan appropriately devotes considerable attention to and expl anation of how the state emissions reductions goals were developed. Commenters said, in doing so, it chooses to use the organizational structure of "building blocks". Commenters said, the term "building block" has been widely and broadly interpreted by rea ders of the Proposed Rule to imply that the "blocks" are what a state would use to "build" its plan. Commenters said, in other words, there is a widely held interpretation that EPA is designating the four building blocks as the menu of eligible choices tha t a state has to work with in putting together its plan

- not the building blocks that EPA used to develop the goals. Commenters said, this misinterpretation is not based on loose anecdotal information. Commenters said, multiple parties, including state ut ility commissioners, have stated as much at NARUC events and industry conferences. Commenters said, even though the Proposed Rule goes on to explain the flexibility that it provides for compliance, the structure and wording of the document leads to the int erpretation that flexibility only applies within the four building blocks. Commenters said, since demand response and smart grid do not appear in any of the blocks, not even the one on energy efficiency, a signal is being sent that those tools are not elig ible to be used in state compliance plans, even if this was not EPA's intention.

Commenters stated, states can include in their compliance plan anything that can be shown to help meet the emissions reductions goal. Commenters said, in the Final Rule, EPA must clearly express this flexibility. Commenters said, it should go further and list and explain emissions reductions options that are pertinent, but not necessarily the first to be thought of, such as demand response and smart grid. Commenters considers smart grid to be a holistic, umbrella term that encompasses demand response, distributed energy resources, microgrids, electricity/energy storage, distribution automation, and other grid modernization and optimization strategies.120 Commenters urged EPA to a ccept and convey a similar use of terminology in its Final Rule so that it is clear to states that they have the flexibility to include smart grid, as well as the options included under "smart grid", in their compliance plans.

Comment 3: The final rule should say clearly that states may use CHP, natural gas direct use, and other non

- BSER building block measures as compliance options

Response 3: The EPA has improved the definition of eligible resources throughout the rule that are able to generate either credits in a rate

- based trading program or allowances in a mass

- based trading rule. This allows states the flexibility to implement a program o f their choice including state specific measures.

The following are summaries of the specific public comments under this c omment :

Commenters urged EPA to revise the rule text to make it clear that states are not restricted to just the emission reduction m easures that EPA used in the "building blocks" to develop the BSER goals. Commenters said, the rule should explicitly say that states are allowed and encouraged to include other emission reduction measures that were not used in the BSER building blocks.

Fi nal Rule: Commenters said, please add the following separate section to the regulatory text of the final rule:

Section 60.57XX Can I include emission reduction measures in my state plan that EPA did not use to develop the CO2 emissions goals?

(a) Yes, you may include emission reduction measures in your state plan that EPA did not use to develop the CO2 emissions goals. For example, you may include demand side management or energy efficiency programs that EPA did not consider in developing the CO2 emissions goals, or you may include programs to remove barriers to the deployment of combined heat and power (CHP), or you may include programs that credit replacing inefficient electric appliances with natural gas appliances or equipment even if EPA did not use the se measures to develop your CO2 emission goals.

B. Preamble

Commenters urged EPA to include a section in the preamble to the final rule entitled (with a boldface heading) "State Plans May Include Emission Reduction Measures Not Used to Set Proposed Goals"

- and provide a clear explanation that states are free to consider and use measures that reduce demand for and thus emissions from existing EGUs, including, for example, measures that were not used to set BSER goals. Commenters said, EPA should explain tha t these measures can include deploying more CHP or replacing electric appliances with efficient natural gas appliances to serve thermal load directly.121 C. Fact Sheets, Presentations and Other Outreach Materials

Commenters also urged EPA to highlight the opt ion to use non

- BSER emission reduction measures in the explanatory and outreach materials EPA uses to explain the rule to stakeholders and the public. Commenters said, these materials should clearly say that non

- BSER measures may be used and that EPA's fin al rule allows and encourages states to include CHP and natural gas direct use in their plans to comply with the Clean Power BSER goals.

Comment 4: Treatment of newly constructed cleaner units
Response 4: The final rule states that units subject to 40 C FR part 60 subpart TTTT are not affected units subject to emission standards under this rule.

The following are summaries of the specific public comments under this c omment :

Commenters stated, the proposed rule also solicits comments about the treatment of newly constructed units. Commenters said, the preamble clearly allows for new, cleaner sources to be relied on as a compliance option in states' 111(d) plans; however, this does not appear to be included in the proposed regulatory text. Commenters said, s ince the preamble appears to concede that EPA does not have authority to impose 111(d) requirements on newly constructed units, the Department suggests allowing states the option of allowing new units subject to the NSPS to opt

- in to the 111(d) plan if the y wish to do so. Commenters said, this will allow newly constructed units to be considered for compliance purposes as envisioned in the preamble but would not exceed statutory authority because it would not be a requirement. Commenters said, such an approa ch also grants states additional flexibility to determine whether it is in the state's interest to include or exclude new units from their 111(d) plan requirements. Commenters said, if this option is allowed in the final rule, then the Departments suggests that regulatory text similar to the following language be added to the end of section 60.5800:

Commenters stated, units meeting the conditions of this section can be exempt from consideration in a state plan under this subpart and can also be considered e xempt when states demonstrate compliance with the goals listed in Table 1 of this subpart. Commenters said, however, states have the option of including units that meet the conditions of this section in their plans under this subpart and including the gene ration and emissions data from such units when demonstrating compliance with the goals listed in Table 1 of this subpart.

Comment 5: Determining "Creditable Generation"
Response 5: In the final rule, the denominator for the calculation of goals no longer includes what the commenter s refer to as “creditable generation” as was proposed. However, the final rule includes provisions for the creation of credits for compliance purposes. The EPA has improved the definition of eligible resources throughout the r ule that are able to generate either122 credits in a rate

- based trading program or allowances in a mass

- based trading rule. Please see sections VII and VIII of the preamble for further discussion of emission rate credits.

The following are summaries of the specific public comments under this c omment :

Commenters stated, per the proposed regulatory text (Section 60.5740) 79 FR 34951:

(a) (3) (ii) The identified emission performance level for each plan performance period in paragraph (a)(3)(i) of this section must be equivalent to or better than the levels of the rate

based CO2 emission performance goals in Table 1 of this Subpart for affected entities in your state. The emission performance levels may be in either a rate

- based form or a mass based form which i s calculated according to Section 60.5770. The CO2 emission performance level specified must include either of the following as applicable: (A) For a rate

- based CO2 emission performance level, the identified level must represent the CO2 emissions rate, in pounds of CO2 per MWh of net energy output that will be achieved by affected entities.

Commenters stated, for states using a rate

- based approach, both the preamble and the Goal Computation TSD describe that the performance level for determining compliance is to be based on emissions from affected EGUs in the numerator and "all creditable generation" (which includes generation from sources that are not affected EGUs) in the denominator. Commenters said, however the proposed regulatory text above is not clear about what is allowed to be considered "net energy output that will be achieved by affected entities" when determining state compliance. Commenters suggested that EPA add another paragraph under 40 CFR 60.5740 (a)(3)(iii)(A) with language similar to the f ollowing:

Under a rate

- based emission performance level, the net energy output that will be achieved by affected entities includes all of the following if the SIP has measures in place to quantify and verify these amounts:

1. Net generation from affected EGUs in the state

2. Net generation from renewable energy generated in the state (excluding generation from hydropower capacity that was operational before June 20 14). Net generation from renewable energy is only allowed to be included in the calculation

- of the net energy output that will be achieved by affected entities if the renewable generation is supplied to an electricity distribution system that receives generation from one or more affected EGUs

3. 5. 8% of net nuclear generation in the state from n uclear capacity that commenced operations before June 2014

4. 100% of net nuclear generation in the state from nuclear capacity that commenced operations after June 2014.123 5. Cumulative avoided net

- generation in the state from demand

- side energy efficiency projects implemented after June 2014. The cumulative avoided net

- generation from demand

- side energy efficiency projects is to be calculated via a method included in a federally approved SIP for the state. Cumulative avoided net generation from demand

- side energy efficiency projects is only allowed to be included in the calculation of the net energy output that will be achieved by affected entities if the cumulative avoided net generation reduces demand from an electricity distribution system that receives g eneration from one or more affected EGUs

6. Other forms of net generation may be allowed to be included in the calculation of the net energy output that will be achieved by affected entities if specified in a federally approved SIP for the State.

Comment 6: 60.5740(a)
Response 6: Because the rule does not mandate the use or consideration of any specific technologies, EPA disagrees with the suggested regulatory text. Each affected source is expected to determine how best to meet the applicable requireme nts. Please see preamble section VIII.I.2.a for further discussion of considerations of carbon capture technology in this rule.
The following are summaries of the specific public comments under this c omment :

Commenters urged EPA to include language in th e final rule on Carbon Pollution Standards for Existing Power Plants that recognizes the viability and benefits of developing carbon capture and utilization technologies. Commenters said, for example, the final rule could include additions such as those su ggested below.

In Section 60.5740(a) revise the following provision:

(a) You must include the elements described in paragraphs (a)(1) through (12) of this section in your state plan.

In Section 60.5740(a) add the following provision:

(a) (12) A biennial an alysis of carbon capture, conversion, and/or utilization technologies that could provide significant, permanent, and cost

- effective reduction of carbon emission rates from affected units and the flexibility within the state implementation plan to require t hat such technologies be installed on affected units as they are proven cost effective and commercially available.

Commenters stated, the purpose of the above language is to require states to conduct an analysis every two years of the state of technology a s to carbon capture, conversion, and utilization and to adjust their state plants to require such technologies on existing power plants as they become124 commercially available and cost effective. Commenters said, this provision would not require the installa tion of any carbon emission reduction devices until those technologies are practical and feasible. Commenters said, but it adds a level of flexibility to the rulemaking that could make it much more effective at reducing emissions over its decades

- long impl ementation schedule. Commenters said, for ideas for more detailed regulatory language should EPA decide to require states to consider such technologies, please see their comments on the new plant proposal, which are included below.

PREVIOUSLY SUGGESTED REG ULATORY LANGUAGE FOR NEW PLANT PROPOSAL

Commenters urged EPA to include language in the final rule on Carbon Pollution Standards for New Power Plants that recognizes the viability and benefits of carbon utilization. Commenters said, for example, the final rule could include additions such as those suggested below.

In Section 60.46Da:

(h) (6) If your affected unit uses methods of carbon capture that convert carbon dioxide to other chemical forms to meet the applicable emission limit, you must demonstrate eit her one of the following fates of the carbon dioxide:

(i) the carbon dioxide is permanently converted to other chemical forms and will not revert back to carbon dioxide under natural or typical conditions, or

(ii) the carbon dioxide is converted to a carbo n

- sequestering product that will emit carbon dioxide only if used to supplant another product, such as a fossil fuel, the use of which would emit as much or more carbon dioxide as the carbon

- sequestering product.

(7) If your affected unit converts carbon d ioxide emissions into other chemical forms and produces materials that supplant other commonly purchased products with a significant carbon footprint, you may calculate your carbon dioxide emissions for purposes of achieving the GHG emission standard by su btracting supplanted emissions from your actual emissions only if you demonstrate:

(i) your carbon

- sequestering product replaces a product the manufacture or processing of which emits carbon dioxide, such as cement manufacturing or petroleum refining,

(ii ) your carbon

- sequestering product is introduced into commerce and thus actually supplants the purchase of a high

- carbon product,

(iii) the supplanted emission deduction from your actual emissions is calculated by multiplying the volume of carbon

- sequeste ring product that you introduce into commerce by an accepted carbon dioxide emission factor for the manufacturing or processing of the supplanted product, and125 (iv) if the use or combustion of your carbon

- sequestering product emits carbon dioxide at levels comparable to the emissions from the use or combustion of the supplanted product, the supplanted emission deduction for those products only includes emissions for the manufacture or processes of the supplanted product and not for the use or combustion of the supplanted product.

In Section 60.5555:

(e) If your affected unit uses methods of carbon capture that convert carbon dioxide to other chemical forms in a way that are permanent under natural or typical conditions to meet the applicable emission limit, then you must report the volume of emissions that are permanently converted.

(f) If your affected unit uses methods of carbon capture in which the carbon dioxide is converted to a carbon

- sequestering products that will emit carbon dioxide only if used to supplant another product to meet the applica ble emission limit, then you must report:

(g) If your affected unit uses a deduction for supplanting the manufacture or processes of other products with your carbon sequestering products to meet the applicable emission limit, then you must report:

(1) the carbon dioxide emission factor for the manufacture or processing of the supplanted product, and

(2) the volume of carbon sequestering products that is introduced into commerce.

Commenters stated, the purpose of the above language is to encourage and reco gnize the capture of carbon dioxide in a way that not only prevents emissions from reaching the atmosphere but also replaces other products that have a high greenhouse gas footprint. Commenters said, of course, this must be done in a manner that ensures ne t emission reductions and recognizes the ways to reduce overall emissions. Commenters said, for example, a product, like Blue Planet's carbon negative cement, that not only captures would

- be carbon dioxide emissions but also prevents additional emissions b y supplanting the manufacture of an equal volume of Portland cement provides a significant overall emission reduction. Commenters said, to encourage this practice, the suggested language above would enable an electricity generating facility to comply with the rule by calculating not only their actual emission reduction due to on

- site capture but also an additional reduction representing the indirect emission reduction achieved by making cement in a way that does not emit carbon dioxide.

Commenters stated, o n the other hand, a process that captures carbon dioxide from a power plant and converts it into a gasoline substitute should still get the benefit of reducing the emissions at the plant since the same amount of fuel would be combusted

- and thus the same amount of carbon would be ultimately emitted

- by the end user if they purchased petroleum fuel rather than carbon sequestering fuel. Commenters said, in this scenario, there would still be an external reduction worthy of a deduction, but only for the refi ning of the supplanting gasoline and not for126 the combustion of the gasoline, since this would be balanced out by the emissions resulting in the combustion of the carbon

- sequestering fuel.
Other commenters stated that a reduction at a single facility could make a modest but material difference in the state's compliance efforts, a value that could be monetized through a variety of mechanisms, which would encourage deployment of CCS. The commenters stated that the additional captured CO2 has value in productio n of a natural resource; this is precisely the kind of win

- win

- win situation the Department of Energy has touted for CCS and enhanced oil recovery. The commenters stated that some will oppose crediting CO2 emissions reductions below the 111(b) requirements because it may encourage compliance via an emitting source. The commenters stated that such criticism should be placed in the context that this rule is intended to reduce emissions and it does not, and should not, prevent new fossil

- fueled facilities from being constructed. The commenters recommended that if the rule is to continue generally in its current flexible form, it should be adjusted to provide this additional flexibility to incentivize a technology the Administration has identified as a high prio rity.

Comment 7: Modify wording of 60.5750

Response 7: The EPA’s final emission guidelines require that all EE providers demonstrate that they will quantify and verify MWh savings (including savings from building energy codes) using best

- practice EM&V approaches. One way to make this demonstration is to use the presumptively approvable EM&V approaches in the proposed Federal Plan, which specify that building code savings can only come from improving code compliance and/or increasing code stringency ove r baseline code compliance and stringency at the time of the CPP. The draft EM&V guidance that the EPA is releasing in conjunction with the Federal Plan proposal provides supplemental information on how to conduct quantification and verification consisten t with this building code provision.

The following are summaries of the specific public comments under this comment:
Commenters stated, EPA should modify wording of the proposed rule at Section 60.5750 ("Can I include existing requirements, programs, and measures in my state plan?") to clarify that for building energy codes the baseline or 'business

- as

- usual' condition is meant to be the code in force and its compliance rate at the time of the CPP proposal. Commenters said, this section states that emissio ns reduction "actions taken" after the date of rule proposal pursuant to existing "requirements, programs and measures" can be counted for rule compliance. Commenters said, this is an important and beneficial section that would allow projects and actions t aken under an existing EERS, ESPC authority or other policy or program to be credited for savings that are achieved during the compliance period. Commenters said, however, a particular concern with respect to building energy codes is that construction or r enovation of a building under an existing (and perhaps old code) could be construed as an "action taken" pursuant to an existing "requirement." Commenters said, in other words, the current wording of Section 60.5750 can be interpreted as allowing a state w ith a weak building energy code now on the books to count127 energy savings from building to that weak code as compared to building to an even weaker earlier code or no code at all. Commenters said, EPA should modify wording of the rule to assure that states should only be able to count code savings that come about from improving code compliance and/or increasing code stringency over baseline code compliance and stringency at the time of the CPP proposal.

Comment 8: Modify 60.5770
Response 8: The EPA has add ed text regarding the flexible choices that states can meet either CO 2 emission performance rates or emission goals and in addition the EPA is finalizing values for those different CO 2 rates and goals. The EPA points the readers to section VI of the
pream ble for a detailed discussion of the new terminology and calculation methods.

The following are summaries of the specific public comments under this c omment :

Commenters stated, section 60.5770(a)(3) is confusing and unclear as to what is required in a state plan that converts from a rate

- based standard to a mass

- based standard. Commenters said, the subsection appears to require that the conversion impose the en tirety of state emission reductions on affected EGUs, although the goal would have been developed through the application of all four Building Blocks. Commenters said, the conversion is required to represent emissions from affected EGUs as if "the affected EGUs were to perform at an average lb CO2/MWh rate equal to the rate

- based goal for the state," in other words, after the application of all four Building Blocks. Commenters said, reading from (a) of the subsection, this appears to be the identification o f the "mass

- based goal, [solely reflected] in tons of CO2 emitted by affected EGUs over the plan performance period." Commenters said, how this "beyond the fence" Building Block calculation would be included in emission limits imposed, through air permits, on the "inside the fence" operations of an affected unit is quite unclear.

Commenters stated, section 60.5740(a)(3), concerning the required elements of a state plan, requires the "identification of the state emissions performance level from affected ent ities." Commenters said, the definitions of "emissions performance level" and of "affected entities" given in 60.5820 indicate that this performance level does not apply only to EGUs, but to any entity "with obligations under this subpart for the purpose o f meeting the emissions performance goal requirements." Commenters said, section 60.5740(a)(3)(ii) also indicates that emission performance levels are for "affected entities," and refers back to the possibility of a conversion to mass under 60.5770. Commen ters said, section 60.5740(3)(ii)(B) then states that a mass

- based conversion is to "represent the total tons of CO2 that will be emitted by affected entities," not solely as reflected by affected EGUs, in contradiction to 60.5770.

Commenters stated, if t he language of 60.5770 is intended to create an enforceable emission rate for affected units that implement the reductions from all four Building Blocks, then the section is128 unrealistic, arbitrary and capricious, and would create a strong disincentive for conversion to a

mass

- based standard. Commenters said, at best, it is extremely unclear.

Comment 9: 60.5770
Response 9: The EPA acknowledges the comment and has added additional clarification in the final rule to address the issue raised.

The following are summaries of the specific public comments under this c omment :

Commenters stated, the EPA should clarify its proposed compliance requirements for states using a mass based approach to meet the goals set forth under Section 111(d). Commenters said,

as re ferenced in the Technical Support Document, it appears that a state can meet a Final Mass Equivalent and such a result should mean that a state is in compliance with the final rule, regardless of the EPA's calculated rate for 2030.

Comment 10: 60.5780
Response 10: EPA thanks the commenter s for identifying the omission. The EPA inadvertently excluded the required demonstration that states and other third parties can enforce against violations of an emission standard included in a state plan via civil act ion pursuant to CAA section 304, and has included this requirement in the final rule. Please see preamble section VIII.D.2 for further discussion of this provision.

The following are summaries of the specific public comments under this c omment :

Commenter s stated, the Proposed Rule omits citizens from important enforceability provisions. See 40 CFR 60.5780. Commenters said, EPA should specifically amend sections 60.5780(c) and (f)(5) to include citizens. Commenters said, the plans should include methods th at ensure citizens may independently evaluate, measure, and verify compliance. See 40 CFR 60.5780(c) (proposed) at 79 Fed. Reg. at 34953. Commenters said, furthermore, EPA should amend section 60.5780(f)(5) to specifically include reference to citizens and section 304, the Act's citizen suit provision. Commenters said, EPA does not have authority to exclude citizen enforcement of these section 111 requirements and Congress has specifically allowed citizens to enforce such requirements. See 42 USC 7604(a), 7 604(f)(3).

Comment 11: Modify 60.5795129 Response 11: The EPA disagrees with the commenters on the inclusion of oil fired combustion turbines and points the commenter s to section IV.C. Authority to Regulate EGUs of the preamble that addresses the EPA’s applicability rationale.

The following are summaries of the specific public comments under this c omment :

Commenters stated, subsection 60.5795(b)(2), concerning which EG Us must be addressed in a state plan, includes only a subset of stationary combustion turbines. Commenters said, the subsection includes only combustion turbines of a certain size, that supply a certain amount of electricity to a utility distribution syste m, and that "combust[s] over 90% natural gas on a heat input basis on a 3

- year rolling average basis." Commenters said, this provision would exclude from consideration in state plans combustion turbines that use oil as fuel more than 10% of the time. Comme nters said, this distinction is contrary to the discussion of the definition of "affected units" in the preamble, 79 Fed. Reg. 34854, where EPA describes the unit combustion type, size, and generation for distribution percentage elements of the definition but does not mention an exemption for oil

- fired units. Commenters said, if combustion turbines are included in the final rule as affected sources (see CICS comments regarding additional comments on why combustion turbines should be excluded from the final rule), then combustion turbines that fire oil should be included just as those that fire natural gas are included, especially since emission rates for oil

fired units are likely to be higher than those for gas

- fired units. Commenters said, EPA states no ba sis for the disparate treatment of oil

- fired and gas

- fired combustion turbines.

Comment 12: Modify 60.5795(b)(2)
Response 12: We appreciate the comment; the final rule has the requested regulatory text (as proposed at 79 FR 34954, 6/18/2014).

The followi ng are summaries of the specific public comments under this c omment :

Commenters provided the following text:

"A stationary combustion that has a base load rating greater than 73 MW (250 MMBtu/h), was constructed for the purpose of supplying, [ and supplies ] , one

- third or more of its potential electric output and more than 219,000 MWh net

- electrical output to a utility distribution system on a 3

- year rolling average basis, combusts fossil fuel for more than 10.0 percent of the heat input during a 3

- year rolli ng average basis and combusts over 90% natural gas on a heat input basis on a 3

- year rolling average basis." [Proposed section 60.5795(b)(2)]

Commenters stated, EPA should fix the drafting error in the proposed rule as noted above the words [ and supplies ] appear to have been omitted. Commenters said, EPA is proposing to use the same applicability for affected steam generating units and IGCCs as it proposed in the New Source Performance Standard (NSPS) issued on January 8, 2014 [see proposed section 60.5509,130 Federal Register, Vol. 79, No. 5, p 1511]. Commenters said, EPA's preamble states "The rationale for this proposal concerning applicability is the same as that for the January 8, 2014 proposal (see Fed. Reg. at 34854). Commenters said, the proposed New Un it NSPS includes the requirement that an affected steam generating unit or IGCC "sells the greater of 219,000 MWh per year and one

- third of its potential electrical output to a utility distribution system". Commenters said, the EPA appears to have mistaken ly omitted this [and supplies] criteria from the definition of affected steam generating units in the proposed regulatory text for the Clean Power Plan [see proposed section 60.5795(b)(1), 79 Fed. Reg. at 34954]. Commenters requested that the EPA correct t his drafting error in the final rule.

Comment 13: Modify 60.5795 (b)(2)
Response 13: The EPA agrees with the comment and is updating the exclusion criteria for combined heat and power units the final rule (see exclusion in §60.5850) with the intent to no t regulate units that are and have historically been industrial units.

The following are summaries of the specific public comments under this c omment :

Commenters urged EPA to adopt the following language for 40 CFR 60.5795 (b)(2), in lieu of the proposed l anguage: “40 CFR 60.5795 What affected EGUs must I address in my state plan? ...(2) A stationary combustion turbine that has a base load rating greater than 73 MW thermal (250 MMBtu/h), was constructed for the purpose of supplying, and supplies, more than 50% of total energy output, including MW electricity and MW thermal to a utility distribution system on a 3

- year rolling average basis, combusts fossil fuel for more than 1 0.0 percent of the heat input during a 3

- year rolling average basis, and combusts over 90% natural gas on a heat input basis on a 3

- year rolling average basis.” EPA should not regulate industrial cogeneration units that produce at least 50 percent thermal energy to a host facility. Commenter s also recommend EPA consider a 20 percent threshold consistent with the definition of net energy output, where units with at least 20 percent of the total gross energy output consists of useful thermal output on a roll ing 3 year basis would not be considered an affected source.

Comment 14: GHG Abatement Measures TSD
Response 14: EPA thanks the commenter s for noting the error.

The following are summaries of the specific public comments under this c omment :

Commenters noted, in the GHG Abatement Measures TSD (pg 4

- 29), the heading location for Interim and Final Proposed Targets are interchanged. Commenters said, the same error appears for the Alternate Targets on the following page.131 Comment 15: GHG Abatement Measures TSD, Table 5

- 21 has incorrect goal for NC
Response 15: EPA thanks the commenter s for noting the error.

The following are summaries of the specific public comments under this c omment :

Commenters noted, in the GHG Abatement TSD, the Option 1 2020 goal for NC given in Table 5

- 21 is 2.2%. Commenters said, based on EPA spreadsheets, this value should be 2.4%. Commenter said, the first table gives the table in the TSD and the second table gives the value from EPA's spreadsheets.

Comment 16: Behavioral Energy E fficiency
Response 16: The EPA recognizes the value of non

- BSER measures, such as demand

- side EE, to reduce CO2 emission from affected EGUs, and allows for the inclusion of non

- BSER measures as a part of a state’s plan to meet the emission guidelines. To the extent qualifying demand

- side EE measures are tied to a state plan, the quantified and verified MWh impacts of the measures may be used by an affected EGU or state to adjust a CO2 emission rate.

Incremental emission reduction measures, such as demand

- side EE, installed after 2012 can be recognized as part of state plans, but only for the emission reductions they provide during a plan performance period. Measures, including EE behavioral programs, must meet the general and specific eligibility requirem ents for resources used to adjust a CO2 emission rate as described in Section VIII.K.1. The measures must also meet the requirements and criteria related to proper quantification and verification of MWhs from demand

- side EE savings are described in Sectio n VIII.K.3.

The measures must also address the EM&V criteria in Section VIII.K.3 of the emission guidelines, which require that all EE providers demonstrate that they will quantify and verify MWh savings using best

- practice EM&V approaches. One way to mak e this demonstration is to apply the presumptively approvable EM&V approaches specified in the proposed Model Rule in section IV.D.8. States may also submit other means of meeting the EM&V requirements so long as the state satisfactorily demonstrates in th e state plan submittal that such alternative means of addressing requirements are as stringent as the presumptively approvable approach.

The following are summaries of the specific public comments under this c omment :

Commenters stated, in order to help EPA recognize the efforts that states are already taking to use behavioral energy efficiency, we include the following sample language that EPA could use to encourage broader adoption of best practices across the country:132 "State

- level behavioral energy effici ency programs will be approved as part of a state's pollution reduction plan if the program's savings are measured and verified using a randomized control trial."

Comment 17: Preamble text

- incidental correction
Response 17: EPA thanks the commenter s f or noting the error.
The following are summaries of the specific public comments under this c omment :

Commenters stated, footnote 260 on pages 34895 and 34896 of the proposed rule as published in the Federal Register states "EGUs whose capacity, fossil fuel combustion, or electricity sales were insufficient to qualify them as affected EGUs were not included in the goal computations. Commenters said most simple cycle combustion turbines were excluded on this basis. See the applicability criteria described in Section V.B. above."

Commenters stated, Section V.B. discusses EPA's authority to regulate EGUs. EPA should correct the footnote to reference Section V.C.

Comment 18: Prefer use of CO2 term rather than carbon term.

Response 18: EPA thanks the commente r s for the input and clarification.

The following are summaries of the specific public comments under this c omment:

Commenters opposed the proposal's use of the word "carbon" instead of "carbon dioxide" because, commenters believed this is misleading as the proposed rule regulates only CO2.133 CHAPTER 11 GENERAL S UPPORT AND GENERAL O PPOSITION

11.1 GENERAL SUPPORT

Eighty one percent (81%) of the commenters discussing non

- specific topics expressed general support for the rule.
The commenters expressed supp ort for the proposed rule due to concerns about the effects of climate change, to include health effects. Many commenters asked that the rule do more and move faster.
Commenters expressed support for the Clean Power Plan's renewable energy and energy effic iency goals. Many provided examples of renewable power and energy efficiency programs that are already in place.
The EPA appreciates the commenters’ support for the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Gene rating Units.

11.2 GENERAL OPPOSIT ION

Nineteen percent (19%) of the commenters discussing non

- specific topics expressed general opposition to the rule.

Commenters expressed a number of concerns, including the following:

- Unacceptable risk

- Hurt economic growth

- Hardship on utility providers

- Disagreement with the building blocks

- Loss of jobs

- Loss of retirement and pension benefits as a result of the rule

- Timeline is too fast

- They believe the rule doesn't follow constitutional requireme nts

- Disbelief in CO2 as a pollutant/Climate Change in general

- Rule won't create meaningful change

- A desire for states to control energy production

- Concerns about grid reliability

- Too much uncertainty in the rule

- Beyond the authority under the CAA134 The EPA acknowledges the general concerns of the commenters regarding the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, and responses to comments elsewhere in this document generally address those concerns.135 CHAPTER 12 OTHER
This chapter addresses comments received on topics not covered by the other chapters of this Response to Comments document.
Commenters also raised issues on topics that are not covered by this chapter. Please refer to t he following chapters for responses specific to those issues:

• Chapter 1 : Legal

• Chapter 2 : Applicability

• Chapter 3 : GHG Mitigation Measures

• Chapter 4 : State Goal Computation

• Chapter 5 : State Plan Considerations

• Chapter 6 : State Plans

• Chapter 7 : Interaction s With Other EPA Programs and Rules

• Chapter 8 : Impacts and Cost Analysis

• Chapter 9 : Statutory and Executive Orders

• Chapter 10 : Rule Language Corrections

Comment 1: Comments suggesting that non

- affected entities that participate in voluntary reductions should get credit or be exempted from future CAA section 111 rules.
Response 1 : This comment is out of scope for this rulemaking.
The following are summaries of the specific public comments under this comment

Commenters noted concerns that if EPA allows o ther (i.e., non

- affected source) entities to participate in voluntary emission reduction programs in association with 111(d) rules, then EPA should give them credit in upcoming standards issued under Section 111. Specifically, commenters suggested that ele ctricity consumers engaged in emission reduction activities in association with the 111(d) EGU rules that result in verified GHG emission reductions should be exempted from, or given credit towards, compliance with any subsequent future standards, so that they are not being subject to regulation under GHG standards for multiple source categories.

Comment 2: Commenters noted that as to the regulation of GHG emissions, other source categories in the manufacturing sector require a fundamentally different appro ach than EGUs because they are impacted by a much broader range of factors, such as industry economics, geography, federal and state incentives, transportation systems, ownership structures, foreign competition, profit margins, and customer bases. Commente rs added that regulating GHG emissions from the manufacturing sector is neither necessary nor sensible at this time, particularly given that so many industries have already been reducing GHG emissions through voluntary and extensive energy efficiency initi atives, and imposing uniform GHG standards of performance on other source categories could disadvantage these sectors by making them less competitive on the global stage. Commenters believed new regulations with high compliance costs that do not account fo r trade exposure will translate into significant job losses and136 reductions in economic activity without actually reducing GHG emissions, and for all of these reasons, the EPA should not expand GHG performance standards to other source categories; however, if the EPA were to proceed with regulations for other sectors, then the agency, at a minimum, should first proceed with an Advanced Notice of Proposed Rulemaking ("ANPR") for any particular source category.

Response 2: This comment is out of scope for this rulemaking.

Comment 3: Section 111(b) rules as the sole mechanism of uniform federal standards for GHG emissions from future power plants

Response 3: The commenter s are correct that this rule applies to existing EGUs and EPA’s proposed 111b rule would apply to new and modified EGUs. EPA’s response to comments on the stringency of the 111b rule are addressed in the preamble and response to comments for that rulemaking.

The following are summaries of the specific public comments under this comment:

Comme nters stated that regardless of federal or state regulation, existing plants will be replaced by new plants over time, and at some point in the future the EPA's proposed 111(b) rule may be the sole mechanism through which there are uniform federal standard s for GHG emissions from power plants; likewise, existing plants that modify or are reconstructed would fall under the associated 111(b) requirements. The commenters recommended that in the context of this future reality, the EPA should ensure that the Sec tion 111(b) rules for the evolving power sector are as rigorous as possible. The commenters stated that, in particular, they have previously urged the EPA to set distinct standards for natural gas

- fired power plants based on their operational profiles to e nsure low emissions from peaker, flexible, and baseload plants while maintaining sufficient flexibility to integrate zero

- emission renewable generation. The commenters stated that supporting a wide range of potential measures could allow states like Califo rnia, which recently implemented the region's first energy imbalance market as an option available to other balancing authorities in the West, to track carbon reduction stemming from more efficient utilization of the electric grid.

Comment 4 : Commenters s tated that in 2009 the President announced his goal of a 17% reduction below 2005 levels by 2020, and the power industry is on track to meet its share of that target. The commenters stated that over the long term, they see dramatic long term emission reduc tions in our sector very much in line with the President's 2050 goals given the average retirement age of a coal plant, the transformative shift to gas due to the enormous domestic resource now economically recoverable, MATS and other proposed EPA rules. G iven these facts, the commenters questioned the need for the current structure of the proposed rule.

Response 4 : EPA agrees that the CO2 emission performance rates established in the emission guidelines and the associated emission reductions are achievabl e and consistent with current industry trends but disagrees with the commenter’s view that the rule is therefore unnecessary. EPA is promulgating these emission guidelines as an important step in the process through which states develop and implement plans establishing standards of performance for their existing137 affected sources, consistent with CAA section 111(d) and the implementing regulations in 40 CFR part 60, subpart B.

The CPP will strengthen and further the ongoing trend toward a cleaner electricity system that is already in progress. State plans will require the CO2 emission reductions from affected EGUs that are achievable by 2030 through the best system of emission reduction. The emission guidelines provide states with flexibility to use different types of requirements and incentives, and to tailor their plans to their unique circumstances. The EPA believes that it would not be responsible given the serious impacts of climate change, nor legal given the requirements of the Clean Air Act, to issue no rule and assume that the needed emissions CO2 reductions from this sector will occur in the absence of federal policy.

Comment 5 : Commenters described the jurisdictional conflict that would arise between the state utility commissions and the state env ironmental agencies. Commenters stated that the CPP does not indicate which agency should take the implementation lead. Commenters also stated that there is not a simple solution to the jurisdictional conflict because the CPP is at once both an environment al regulation and an energy regulation.

Response 5 : The EPA has been encouraged to see that proposal of the CPP has prompted state utility commissions and state environmental agencies in many states to engage and communicate about ways to reduce CO2 emissi ons from affected EGUs in ways that are consistent with meeting energy needs. State laws and jurisdictions differ from state to state, and the CPP allows entities in each state to work out their appropriate roles under state laws. Environmental policy

an d energy policy are closely related, and increased cooperation among environmental and energy agencies at the federal, state and local levels will help to ensure that our nation meets both its environmental and its energy goals.

Comment 6: The commenters s tated that EPA needs to provide a clear timeline for when new gas plants will become part of the existing fleet for purposes of 111(d) compliance.

Response 6 : New sources will be required to meet the requirements of the 111(b) rule that we’re finalizing an d won’t become affected sources under the EGs. New NGCC capacity is subject to the CO 2 standards for new EGUs being established under section 111(b) in a separate, concurrent action (CAA section 111(b) final Standards of Performance for Greenhouse Gas Emis sions from New Stationary Sources: Electric Utility Generating Units rule).

Comment 7: Commenters recommended that EPA allow states to credit end use efficiency measures that reduce demand on the carbon

- free hydroelectric power system and subsequently off set fossil fuel generated power as emission reduction measures in a state compliance plan. For crediting emission reductions resulting from energy efficiency measures, commenters recommended that EPA allow each state to assign an emission reduction value e qual to the emissions rate of the marginal resources in the power pool.

Response 7: The EPA is finalizing a system of Emission Rate Credits (ERCs), where 1 ERC is issued for each verified MWh of energy actually generated or saved with zero associated CO2 emissions. See Section VIII.K of the final rule preamble of the CPP.138 Comment 8: Commenters stated, neither the Congress nor the states support the EPA's irresponsible agenda. Commenters said, a group of forty

- one senators sent a letter to President Obama in June after EPA's announcement of the rule, requesting its withdrawal due to concerns about the "outside the fence" approach, electricity price increases, threats to manufacturers' competitiveness, climate benefits of "essentially zero", and costs likely to "far exceed EPA's own estimate...if history is any guide." Commenters said, state elected officials are weighing in as well. Commenters said, thirteen State Attorneys General requested withdrawal of the rule in an August letter to EPA Administrator Gin a McCarthy. Commenters said, a September letter to President Obama from fifteen Governors requested additional plans and information in time for states to incorporate into their comments, and to withdraw the rule if unable to fulfill that request. Commente rs said, also in September, seventeen former and current public utility commissioners from eleven states sent a letter to energy regulators and the EPA expressing serious concerns about the proposed rule's threats to the diversity and stability of America' s electricity supply. Commenters said, according to ACCCE's count in August of 2014, legislative bodies and Attorneys General in 25 states have expressed opposition to EPA's approach for existing coal plants.

Response 8: The EPA conducted an unprecedented amount of outreach throughout this rulemaking process with all stakeholders including elected officials. The agency considered all feedback and comments received throughout the rulemaking process when writing these final guidelines.

Comment 9: Commenters s tated that EPA should coordinate the rule with other international policy actions. Commenters stated that the Clean Power rule is premature in the context of ongoing international negotiations for a "global" climate agreement in Paris in 2015, and the like lihood of a revised domestic ozone standard potentially requiring retrofits or closures of many fossil

- fueled generating units. Commenters stated that the U.S. should not risk higher electricity prices and diminished fuel diversity in the absence of legall y binding commitments from major developing nations to pursue meaningful emission reductions over a defined timetable that is not contingent upon the completion of industrial nations' commitments. Commenters stated that any commitments by industrial nation s to reduce emissions in advance of major developing nations would increase domestic job losses and accelerate the off

- shoring of
energy

- sensitive industries. Commenters stated that the deadlines of the rule should accommodate the uncertainty associated wi th the U.N. FCCC negotiations, such as by providing a trigger mechanism in the form of an Executive Order to determine the effective date of the rule following the successful negotiation of a global climate agreement. Commenters stated that adjustment of t he rule's deadlines in this manner also would allow for regulatory coordination with a revised ozone standard, which is scheduled to be promulgated in late 2015.

Commenters stated that the EPA and the Administration cannot gauge the extent to which other

n ations, particularly large developing nations, will be willing to bind themselves to a truly global program of GHG reductions

- a policy requisite in order to have efficacy. Commenters stated that the United States should not expect that our actions will h ave any meaningful climate impact in a world economy that is using more coal and other fossil fuels every day. Therefore, commenters suggested that EPA delay further action on this rulemaking to regulate carbon dioxide from EGUs until after the 2015 Paris Conference of the Parties of the United Nations Framework Convention on Climate Change.139 Response 9: EPA has taken this action under 111(d) to meet the mandates of the Clean Air Act. In the RIA, EPA projects that if states use the flexibilities provided u nder the guidelines 1) there will not be a significant impact on electricity prices and that we will maintain fuel diversity in our electricity sector with renewable generation playing an increasing role, while natural gas, coal and nuclear continue to pla y important roles.

American leadership in cleaner generating technologies encouraged by the emission guidelines will not only help to ensure that we can continue to provide affordable electricity domestically while lowering emissions of greenhouse gases and other pollutants, it can help to continue the downward trend in prices and the upward trend in performanve for key technologies like wind, solar and energy storage. These technologies are likely to be even more cost effective in developing nations th at do not have as developed a grid system to provide electricity using the 20th century model of large central power stations.

While the guidelines are being promulgated to meet CAA requirements, they will also help ensure other countries (both developed and developing) take more aggressive targets.

With regards to the ozone standard, EPA believes that the timing of these two rules aligns quite well. States and sources will be able to consider both rules as they make their compliance decisions.

Commen t 10: Commenters stated EPA's building block assumptions regarding legal applicability, technical capability, and related factual assumptions are unfounded and arbitrary

making the various building blocks fatally flawed, individually and in combination. Co mmenters said the target emission rates proposed cannot be achieved. Commenters continued a core assumption of the proposed rule is that a state that fails to achieve targeted emission reductions in one building block will be able to achieve the overall em issions reductions goal by increasing the utilization of one or more of the other three; however, EPA thus makes no provision for adjusting any state's overall emission reduction target in the event that an assumption about a particular building block prov es to be wrong. Commenters stated the ability of any state or regulated entity to avail itself of any particular building block to reduce emissions is limited, as EPA recognizes. Commenters said requiring increases in the utilization of any of these buildi ng blocks in the face of the proposal’s limitations is infeasible.

Response 10: EPA disagrees with this comment. EPA has evaluated each of the building blocks with respect to the statutory factors for the BSER, including achievability, and has concluded that each building block is achievable through a variety of mechanisms. EPA has supported the data used in these evaluations. The evaluations of the individual building blocks and mechanisms to achieve them are discussed in sections V.C., V.D., and V.E. of the preamble and in the GHG Mitigation Measures TSD. Achievability and mechanisms for achievement with respect to all the building blocks and combinations of the building blocks, and EPA’s evaluation of the building blocks with respect to all statutory factors for the BSER, is further discussed in sections V.A. and V.B of the preamble and in the Legal Memorandum.

Comment 11: Commenters stated EPA's modeling and assumptions regarding the viability of lower emission natural gas generation supplanting coal

- fired generation under building block 2140 effectively penalizes states for pre

- existing RE and EE. Commenters said states that have substantially more coal generation in their energy mix, and higher carbon output per kWh, are nonetheless given lower compliance targets under the EPA rule than states with more balanced energy portfolios. Commenters said states that have already dive rsified their resource mix to include lower carbon emitting resources such as NGCC, hydro, nuclear, renewables and energy efficiency are penalized.

Response 11: The regional approach to setting emission performance standards in the final CPP addresses th e disparity in proposed state goals and recognizes the efforts states have already made to reduce the emission intensity of their generation. For additional information in how emission performance standards were calculated, please refer to section V of th e final preamble. EPA has revised its quantification of BSER in this final rule to include a regionalization of the building blocks. This change addresses some of the concerns addressed by the commenter below by no limiting building block two replacement potential to the state in which it is located. Moreover, as described in V.E, EPA no longer includes existing hydro when quantifying its building block three levels. This addresses the concern of commenters by no longer deriving a lower rate premised on their existing RE generation.

Comment 12: Commenters stated EPA's assumption of an interconnected grid is inapplicable at Newmont's mines, which are energy

- intensive and need a steady, reliable load of electricity

- and the TS Power Plant was constructed to provide electricity to those mines. Commenters said whether Nevada increases the use of solar power as part of an RPS, or achieves energy savings of 1.5% a year at the retail level, such outcome will not result in a substantial shift in electricity
gene rated at the TS Power Plant. Commenters said Nevada's emission limit is set at a level that is impossible to achieve by any fossil

- fuel fired EGU, either coal or natural gas, because EPA assumed reductions in CO2 emissions as a result of these other buildi ng blocks. Commenters said the application of these building blocks to the TS Power Plant is neither technically feasible nor reasonable from a cost perspective.

Response 12: EPA disagrees with the comment. The final rule has established performance rates and goals for states based on the best system of emission reduction (BSER) adequately demonstrated. This includes engineering and feasibility analysis of various methods for reducing CO2 emissions from the power sector. See section V for more discussion about BSER (technical basis and cost reasonableness), along with the GHG Mitigation Measures TSD that also supports the final rule. In addition, the final rule grants States ample flexibility to design and implement appropriate plans (preamble section VIII) in accordance with particular state climate and energy policy objectives. Section VIII also clearly discusses how states can use flexible mechanisms to achieve the perfor mance rates and/or state goals, such that particular electric operating parameters, constraints, or concerns can be adequately addressed as states develop plans to meet the state goals and/or performance rates. The final rule does not adopt facility level standards that can only, or must, be achieved through actions at the affected EGU. States will ultimately decide how best to meet the emission guidelines using the flexibility afforded to them in the final rule.

Comment 13: Commenters stated in the pro posed rule, the EPA decided all four blocks better represent the BSER "because it achieves greater emission reductions at a lower cost."141 Commenters said the claim that requiring existing plant retirements to build new RE plants that have a higher $/kWh is a "lower cost" is difficult to understand. Commenters said in trying to understand the EPA's calculation, they have only identified that the EPA did not fully consider costs, and therefore potentially made assumptive conclusions.

Response 13: EPA disagree s with this comment. In the final rule, EPA concludes that the combination of all three building blocks is capable of achieving greater emission reductions at reasonable costs than the individual building blocks or combinations of fewer than all three buil ding blocks. The EPA considered cost extensively in determining the BSER, as discussed in sections V.A.4.d., V.C., V.D., and V.E. of the preamble and in the GHG Mitigation Measures TSD.

Comment 14: Commenters stated the EPA failed to justify the designat ion "BSER" for natural gas and nuclear power. Commenters said in the case of natural gas, EPA has relied on outdated and incomplete information to conclude that increased use of natural gas would reduce carbon emissions.

Response 14 : EPA disagrees with t his comment. As discussed in sections V.A.3.c. and V.A.2.d.(2)(b)(ii) of the preamble, respectively, EPA has not included emission reductions achievable through the use of nuclear generation or generation from new natural gas units in the BSER for the fin al rule. In sections V.A.4.b. and V.B. of the preamble and in the GHG Mitigation Measures TSD, EPA has supported its determination that the substitution of increased generation from existing natural gas units for reduced generation from higher

- emitting fo ssil fuel

- fired units can reduce CO2 emissions from the affected source category for reasons including of the lower share of energy provided by carbon in natural gas relative to coal, the greater efficiency of NGCC units at converting fuel energy input to electricity output relative to coal steam units, and the demonstrated ability to the interconnected electricity system to accommodate generation shifting from coal steam units to existing NGCC units.

Comment 15: Commenters stated the underlying goals in e ach building block are not required in a state's compliance plan, however the goals in each building block must be based on what is technologically achievable in each state. Commenters said EPA did not consider state

- specific constraints to increased utili zation of NGCC units (e.g., permit limits, electric transmission constraints, and natural gas delivery constraints) during its analysis of building block 2. (Commenters stated the underlying goals in each building block are not required in a state's compli ance plan, however the goals in each building block must be based on what is technologically achievable in each state. Commenters said EPA did not consider state

- specific constraints to increased utilization of NGCC units (e.g., permit limits, electric tra nsmission constraints, and natural gas delivery constraints) during its analysis of building block.

Response 15: EPA disagrees with this comment. EPA has quantified the emission limitations achievable through application of the building blocks on the regional scale of the interconnection in order to better represent the interconnected and integrated system in which affected EGUs operate and the fact that emission reduction opportunities available to individual EGUs do not stop at state borders just as electricity movements do not stop at state borders. EPA’s determination to quantify achievable emission reductions fr om all building blocks on a regional142 rather than state

- specific basis is discussed in section V.A.3.e. of the preamble. EPA’s analysis regarding the achievability of building block 2, including consideration of the types of constraints identified in the co mment, is discussed in section V.D. of the preamble and in the GHG Mitigation Measures TSD.

Comment 16: Commenters stated EPA's Notice of Data Availability ("NODA"), issued on October 28, 2014, also suggests an impermissible overreach of EPA's authority. Commenters said EPA notes that the anticipated emission rate reductions calculated under Building Block 2 are inconsistent from state to state because certain states have little or no NGCC affected EGUs. Commenters said EPA then asserts that one way to add ress this discrepancy would be to require a floor on the amount of re

- dispatch in each state. Commenters said this approach not only lacks merit, but also carries with it the unintended consequence of EPA's improperly entering the realm occupied by utiliti es on how to dispatch EGUs. Commenters said EPA argues that for states with little or no existing NGCC units, this floor could be achieved through the construction and utilization of new NGCC units. Commenters said EPA is overstepping, because decisions ab out the construction or utilization of new NGCC EGUs are well beyond EPA's jurisdiction or agency expertise. Commenters said there is nothing in the text of CAA 111(d) that even remotely suggests that EPA has the authority to set limits or require emission

. Response 16: EPA disagrees with this comment. In the final rule, EPA has established uniform CO2 emission performance rates for steam EGUs and for NGCC units that are consistent across all states in the contiguous U.S., as discussed in section V.A.3.f. of the preamble. EPA’s determination regarding the achievability of generation shifts of the magnitude established for building block 2 is discussed in section V.D. of the preamble and in the GHG Mitigation Measures TSD. The final rule does not establish a floor on the amount of redispatch for each state, does not impose emission limits or generation limits on any individual EGUs, does not base the BSER on the construction or utilization of new NGCC capacity, and does not alter existing institutional regime s for making dispatch decisions. As discussed in section VIII of the preamble, states have considerable flexibility in developing their state plans to implement the emission guidelines, and may choose to structure their plans in ways that place greater or lesser emphasis on achieving CO2 emission reductions through the substitution of increased dispatch from existing NGCC units for reduced generation from higher

- emitting affected EGUs.

Comment 17 : The Federal Energy Regulatory Commission (FERC) is the admi nistrative agency who has been properly vested by Congress with jurisdiction over interstate electricity issues and has voiced its concerns over the feasibility of implementing the Proposal: "Electricity Markets are 'interstate in nature' and the Proposed Rule's 'state

- by

- state approach results in an enforcement regime that would be awkward at best, and potentially very inefficient and expensive.'"[Written Testimony of Commissioner Phillip D. Moeller, Before the Committee on Energy and Commerce Subcommittee on Energy and Power United States House of Representatives, Hearing on FERC Perspective: Questions Concerning EPA' Proposed Clean Power Plan and other Grid Reliability Challenges at 3 (July 29, 2014) ("Moeller Testimony" ] As an organization that develops generation projects and has members in eight States, [Commenters] find it very troubling that its evaluation and development of new generation projects (such as small modular nuclear reactors or other carbon free generation projects) may be perversely inf luenced by state targets that are designated as part of this rulemaking. Historically,143 [Commenters], like other utilities with multi

- state footprints, has made resource decisions premised on the interstate nature of the electrical markets.

Response 17 : EP A staff and management has worked closely with FERC throughout this rulemaking. FERC held and EPA participated in four technical conferences about the design of the CPP and electric reliability. We are confident that the advice and counsel that we have

r eceived from FERC has helped to improve the final rule and to assure that the rule does not interfere with the electric power industry’s ability to maintain electric reliability. EPA notes that the electric industry has done an excellent job of maintainin g reliability, including when it has had to comply with environmental rules with much shorter compliance periods and much less flexibility than this final rule provides. In the final CPP EPA gives the states a number of ways that compliance can take into a ccount the regional character of the electric grid. Not only can states develop multi

- state plans but also there are opportunities for states to use either allowances or ERCs across state lines. Finally we are committed to maintaining an ongoing relation ship with FERC and DOE as this final rule is implemented to help ensure continued reliable electric generation and transmission.

Comment 18 : Commenters stated the use of these non

- BSER compliance options is an important flexibility mechanism that allows states to design compliance plans that reflect the reduction opportunities available in each state and requested that the final guidelines recognize this. The commenters said that the magnitude of the reduction required by the proposed guidelines ar e such that no non

- BSER option could ever fully replace a building block measure nor does it obviate the need for EPA to address the serious concerns about the interim average compliance period, and that using these measures will not make it feasible for s tates to achieve the significant reductions that the structure of the interim average goal requires before 2020. The commenters also requested that the final guidelines indicate that states are free to propose other

non

- BSER measures for inclusion in the s tate plans, regardless of whether they were explicitly recognized by EPA first. The commenters noted states and electric utilities should be encouraged to continue to pursue new, cost

- effective measures for reducing emissions. Commenters stated measures sh ould include co

- firing with natural gas or biomass, incremental hydro from existing facilities, new hydro, and increased utilization of electric storage technologies, as well as avoided emissions from supply

- side EE improvements and electrification of the transportation sector.

Response 18 : As discussed in sections VIII.J

- K, the EPA recognized in the final rule that state plans may incorporate a number of measures that were not included in the EPA’s determination of the BSER, provided that the measures mee t the general requirements in the emission guidelines. The preamble to the final rule specifically discusses several of the measures listed by the commenters, and also indicates that other actions not discussed in the preamble may also be used, provided th ey meet the general eligibility requirements of the final emission guidelines. As discussed in section VIII.K.1.c, the EPA does not agree that electrification of the transportation sector should be an eligible measure for use in a state plan, since the red uction in CO2 emissions occurs outside of affected EGUs.

Comment 19 : Commenters stated EPA's Block 2 biases natural gas generation and ignores Minnesota's "all in" integrated resources plan cost analysis which considers factors such as natural gas price volatility, price risk hedging and the types of electric generation needed to serve144 different customer classes and needs (i.e. reserves for serving metro area daily generation peak demand and intermittent renewable resource dispatch and needs for large ind ustrial process voltage support for 24/7 base load service). Commenters said EPA's CPP upsets the balance Minnesota policymakers have strived to achieve through weighing strong environmental protections with cost impacts and reliability.

Commenters said that the one clean approach would be to adopt a fifth emissions reduction building block under which states would be provided with credits for meeting emissions that have some multiple of per ton reduction if they are based on innovative technologies,

reco gnizing the environmental and economic importance and benefits of bringing those technologies to scale through measures that complement market incentives

-- but maintaining the principle of the EPA itself not choosing winners and losers.

Commenters stat ed that to ensure benefits are achieved locally, they support the proposed assessment of a plant or unit to identify and implement available control options "inside the fence" prior to use of "outside the fence" options. Commenters said this approach could include the establishment of a minimum performance level to be achieved by each affected EGU. Response: The final emission guidelines do not specify the measures that must be used in state plans. States have the flexibility to establish plans that are t ailored to the particular circumstances of the affected EGUs in the state and the state’s existing programs. States do not have to apply the building blocks in the same manner that they were applied by the EPA, they can use other approaches, such as provi ding market incentives for innovative technologies, and establishing unit

- specific standards based on “inside the fence” requirements.

Response 19 : The final emission guidelines do not specify the measures that must be used in state plans. States have the flexibility to establish plans that are tailored to the particular circumstances of the affected EGUs in the state and the state’s existing programs. States do not have to apply the building blocks in the same manner that they were applied by the EPA, th ey can use other approaches, such as providing market incentives for innovative technologies, and establishing unit

- specific standards based on “inside the fence” requirements.

Comment 20 : Commenters stated as outlined in comments submitted on September 2 9, 2014, his organization believes that the EPA should create a subcategory for small public and cooperative utilities that are disproportionately affected by the Proposed Rule. Commenters said based on feedback from other members of the cooperative family , his organization has refined its proposal, which now reads as follows: “Proposed 40 C.F.R. Section 60.5765(b) (b) In lieu of meeting the state

- wide goal established in 40 C.F.R. Section 60.5765(a) and Table 1, a small public or cooperative utility may re quest a State to establish an alternative rate

- based

or mass

- based emission performance goal for affected EGUs owned by a small public or cooperative utility on January 8, 2014, in accordance with this subsection. (1) For purposes of this subsection, a "sm all public or cooperative utility" is a governmentally

- or cooperatively

- owned non

- profit entity primarily engaged in the generation, transmission, and/or distribution of electric energy for sale with total electric output (including affiliates) of 4 milli on megawatt hours (MWh) or less during the baseline period.145 (2) A small public or cooperative utility qualifies for the alternative limit in this subsection if, after implementing all reasonably cost effective affected unit heat rate improvements ("HRI"), dispatching all existing NGCC affected units owned and operated by the entity at 70% annual net capacity or, in the case of units owned but not operated, offering for dispatch all existing NGCC affected units at the entity's proportionate share of 70% annu al net capacity, and accounting for any renewable resources (other than hydropower or existing nuclear generation) owned by the entity, the following are true: (i) one or more affected EGUs (the "non

- achieving unit(s)") owned by the small public or
coopera tive utility cannot achieve the interim goal on a rate basis using only the small public or cooperative utility's affected units and renewable resources and any existing state

- mandated energy efficiency requirements; (ii) the non

- achieving unit(s), individ ually or collectively, make up 20% or more of the small public or cooperative utility's net generation in the baseline period; (iii) shutting the non

- achieving unit(s) down will occur prior to the end of the remaining useful life as determined by the utili ty regulatory commission having jurisdiction, if any, or the permitting authority, if none; and (iv) the cost of building an equivalent sized NGCC, New Source Performance Standard ("NSPS")

- compliant, unit or units to replace the non

- achieving unit(s) plus servicing existing debt for the non

- achieving units would, in the judgment of the state, be excessive. (3) For each small public or cooperative utility that owned an affected EGU on June 18, 2014, and continues to own that non

- achieving unit satisfying the criteria in paragraph (b)(2) of this section, the State may exclude such non

- achieving unit(s) from calculating its state

- wide goal in Table 1 of this subpart and establish an alternative goal under its state plan as follows: (i) During the interim goal p eriod: (A) Each non

- achieving unit owned by the qualifying small public or cooperative utility must implement all reasonably cost effective measures to improve heat rate, which must include enforceable increments of progress, not to exceed five years from plan approval; (B) The qualifying small public or cooperative utility shall increase dispatch of all existing NGCC units it owns and operates to the maximum extent feasible, up to a 70% utilization rate and, for units it owns but does not operate, shall of fer such unit for operation up to the utility's pro rata share of 70% annual utilization; provided, however, that if the increased dispatch of NGCC units results in the non

- achieving unit being reduced below its reliability limit, the state plan may provid e for either periodic curtailment or earlier retirement of the non

- achieving unit so long as total carbon mass is not increased over what would be achieved by 70% utilization of NGCC units owned by the small public or cooperative utility during the interim goal period or appropriate pro rata share of units owned only in part by the small public or cooperative utility. (C) The qualifying small public or cooperative utility shall install renewable energy ("RE") capacity or obtain renewable energy credits (in a state plan recognizing such credits) equal to at least 10% of non

- achieving unit(s) capacity within five years of plan approval or 2025, whichever is later. (D) The qualifying small public or cooperative utility, if it has local distribution, shall achie ve at least one

- half of any applicable state energy efficiency requirements set forth in the state plan. (E) The qualifying small public or cooperative utility shall achieve a net reduction of its carbon intensity through the measures specified in paragrap h (b)(3)(i)(A) through (D), plus additional increments of process specified in the state plan for such small public or cooperative utility, equal to the lesser of the following (excluding nuclear and hydropower):146 (I) an amount that achieves for the small p ublic or cooperative utility an emission rate equal to the state Final Goal established in Table 1 of Subpart UUUU by 2030; or (II) an amount that achieves a 15% reduction from the baseline carbon intensity of the small public or cooperative utility. (III) for units that the small public or cooperative utility owns only in part, the calculations of this paragraph (b)(3)(E) shall be made based on its ownership share in the units. (F) The qualifying small public or cooperative utility must achieve at least 33 % of the reduction required in subsection (b)(3)(i)(E) by 2020 or three years after plan approval, whichever is later. (ii) During the Final Goal period, the state plan shall provide that the qualifying small public or cooperative utility must take one of the following actions: (A) Shutdown the non

- achieving unit(s) at the start of the Final Goal period;

or (B) If any non

- achieving unit(s) will remain in operation, then the qualifying small public or cooperative utility shall continue any measures imposed on the non

- achieving unit(s) and the utility by the state plan and shall install additional RE or obtain RE credits (in a state plan recognizing such credits) beyond the quantity required in subparagraph (b)(3)(i)(C), equal to at least 10% of the non

- achie ving unit(s)' capacity prior to the start of the final goal period. Additional renewable energy offsets equal to 10% of the non

- achieving unit(s)' capacity must be obtained prior to each fifth anniversary of the Final Goal plan effective date if the unit i s to be kept in operation beyond the anniversary date. These offsets are in addition to any other RE requirements in the state plan that are applicable to all utilities. (iii) Except as provided in paragraph (b)(3)(iv) of this section, a non

- achieving unit may not operate pursuant to this subsection (b) beyond the end of its remaining useful life established by the utility regulatory commission having jurisdiction, if any, or the permitting authority, if none. The shutdown date for each non

- achieving unit s hall be included in the state plan. (iv) A small public and cooperative utility that has non

- achieving units that would be able to achieve the state final goal set forth in Table 1 of this subpart on or before December 31, 2039, may transition from this su bcategory back to the State Plan by obtaining a revision to the state plan approved by EPA. A non

- achieving unit that transitions back prior to December 31, 2039, shall not be subject to the mandatory shutdown provision of paragraph (b)(3)(iii), but shall comply with all requirements of the state plan applicable to that unit. (4) A state may establish more stringent requirements for a qualifying small public or cooperative utility.”

Response 20 : The EPA disagrees with this comment. As discussed in sections V.A.2.i. and V.B.2. of the preamble, the EPA has established distinct CO2 emission performance rates for two subcategories of affected EGUs: affected steam EGUs (including IGCC units) and affected stationary combustion turbines. We have not exercised our discretion to further subcategorize based on ownership, as suggested by the commenter. Traditionally, our subcategorization decisions under section 111 have been based on consideration of physical and operational characteristics, not ownership characteris tics. As described in sections V.A.4. and V.A.5., all types of affected EGUs, regardless of ownership, have means for accessing the building blocks and are capable of achieving the emission limitations that reflect the BSER. Under the rule, a state has fl exibility in assigning standards of performance to its affected EGUs and can impose different emission reduction obligations on its sources (as long as the overall level of emission limitation is at least as stringent as the emission guidelines). The rule does not prevent a state147 from exercising that flexibility with consideration to the ownership characteristics of its affected EGUs if the state is persuaded that treating its EGUs differently on that basis is appropriate.

Comment 21 : Commenters identified additional jurisdictional issues with municipality

- owned utilities and member

- owned rural electric cooperatives in the individual states. Commenters indicated that the "munis" and "coops" would need to be incorporated into any state

- specific compliance pl an, but that state Public Utilities Commission exercises very limited authority over these entities. Commenters also pointed out that the "munis" and "coops" have long resisted enhanced oversight by individual states and EPA's CPP would likely cause a poli tical battle.

Response 21 : Response: EPA disagrees with this comment. CAA section 111(d) requires state plans to establish standards of performance for “any” existing source, including sources owned and operated by municipal and cooperative utilities wit hin a state. The commenter does not identify any jurisdictional limitation that prevents a state from following this statutory requirement and EPA is not aware of any such limitation. The rule does not mandate any particular role for a state’s public uti lity commission in the state’s plan. The nature of any such role is left to the discretion of the state.

Comment 22 : Commenters stated that the CPP confuses Oklahoma's, Texas’s and Minnesota’s participation in multistate power grids, explaining that thei r targets are based on an assumption that all natural gas combined cycle power plants will be "re

- dispatched" to operate 70 percent of the time. Commenters remarked that multistate grid operators performs dispatch for these states, yet these grid operators are not a regulatory body, and the CPP seems to require the State to somehow deputize these multistate power grids as part of its State Implementation Plan. Commenters stated it is unclear how this could be accomplished.

Response 2 2 : Response: EPA disagr ees with this comment. Under CAA section 111(d), state plans establish standards of performance for affected EGUs. The rule contemplates that sources will work within the context of existing institutional arrangements to comply with their standards of per formance, just as sources work within the existing institutional arrangements to comply with other environmental and contractual requirements. The rule does not require state plans to impose regulations on grid operators.

Comment 23 : Commenters stated that to be reasoned, well

- considered and effective, the EPA's final rule must be based on a better, more accurate and realistic understanding of the relationship between key factors essential to the short

- run and long

- run performance of the BES. Commenters said that, in particular, EPA's rule must reflect a better understanding of the relationship between (a) the short

- run dispatch of power plants, (b) the long

- run retirement and development of power plants and needed energy delivery infrastructure, and (c) the complex system of BES constraints, market dynamics, multi

- jurisdictional regulation, and private sector investment and risk management that are all involved in delivering long

- run energy solutions.

However, commenters noted that the Mandatory Goals f or Virginia cannot be considered a valid "standard of performance" under this statutory provision for many reasons. Commenters asserted, among other things, the Proposed Regulation establishes Mandatory Goals for Virginia that: (A) impose more stringent re quirements.... in fact, substantially more stringent.... for148 affected, existing generating units than the standard for new units, yet to be built; (B) will require the retirement of a significant level of base load generation that must be replaced at a cos t that is unreasonable and in a timeframe that compromises reliability; (C) fail to recognize significant and recent investments that (1) have substantially reduced carbon dioxide and other emissions in Virginia; and (2) if stranded, will also contribute t o higher costs and higher bills for Virginia residents and businesses; (D) fail to recognize Virginia's significant investment in and utilization of zero

- carbon nuclear generation and, in fact, effectively penalize Virginia by including "at risk" nuclear g eneration in the calculation of Virginia's goals; (E) incorporate generic and unsupported expectations of levels of renewable generation and energy efficiency that, when applied to Virginia, are extremely ambitious, almost certainly unachievable, and uneco nomic under traditional standards; and (F) are based on an unprecedented and unsupportable legal interpretation that the "best system of emissions reduction" for existing sources can include homeowners and other retail customers that do not generate any po wer or produce any emissions.

Commenters stated that EPA creates an unwarranted hurdle in rate

- based states when it appears to exclude from compliance calculations any "new" EGU and the zero emissions of a retired unit, and that this is unwarranted. For commenters’ customers, this is a n acute problem. Commenters stated, (verbatim) under its IRP, [commenters] intended to retire four coal

- fired units at its Meramec facility. Commenters said such units would not be replaced, reducing the plant's CO2 emissions to zero. Commenters said the e nvironmental benefit associated with such retirements is clear. Commenters noted, under EPA's methodology, however, the beneficial impact is practically ignored. Commenters stated that only operating EGU CO2 emissions and MWhrs are included in the state's rate

- based compliance calculation; the calculation is not altered to account for such closures (see example below). Commenters suggested that EPA must allow states to recognize in rate

- base compliance calculations the full benefit of coal plant retirements

. Similarly, commenters noted that EPA's proposed rule ignores and disincentivizes the development of new natural gas combined cycle ("NGCC") units to replace or displace MWHRs generated by

- or that may in the future need to be generated by

- existing coa l

- fired EGUs in states that opt to utilize rate

- based goals (we will refer herein to such new MWhrs from new NGCC units as "Fungible MWhrs"). As with EPA's proposed approach to addressing modified or reconstructed units, commenters suggested that EPA shoul d allow NGCCs subject to regulation under CAA section 111(b) to function as compliance sources under section 111(d). Commenters said this will allow states and affected EGUs to account for the Fungible MWhrs provided by new NGCC capacity that replaces a re tired unit or displaces utilization of existing higher carbon

intensity units. To accomplish this, commenters suggested that EPA should specifically include new NGCCs as a type of affected entity. Commenters said this would allow states to use those Fungib le MWhrs as a compliance mechanism both for affected EGUs (substituting Fungible MWhrs for the higher CO2 emission rates generated by retired or reduced output coal

- fired EGUs) and to achieve both the state's interim and final emission rate goals. Commente rs noted that EPA has the option to determine whether this would specifically impact BSER for affected EGUs. Commenters said, in building block 2, increased utilization of NGCC units, EPA recognized the CO2 reduction benefits that could be realized with ex isting generation from the increased utilization of natural gas. Commenters stated, indeed, EPA recognized that a sound mechanism for "a state plan [to] reduce utilization and emissions from affected existing EGUs would be through construction of new NGCC ... " Id. at 34,923 (emphasis added). Commenters149 stated EPA observed that an "obvious alternative" to converting existing coal EGUs to natural gas is "instead to use natural gas to generate electricity at a different affected EGU with a better heat rate

- notably a [NGCC]

- and to substitute that electricity for electricity from the coal

- fired steam EGU, thus resulting in lower emissions from the coal

- fired steam EGU and lower emission from the set of affected EGUs overall." See Id. At 34,857 (emphasis adde d). To effectuate this goal of reducing utilization of higher emitting existing EGUs, commenters suggested that EPA must specifically recognize new NGCCs under the proposed rule as eligible to constitute an affected entity. Commenters said EPA recognizes t hat the increased utilization of NGCC units will naturally factor into compliance in states with mass

- based goals. See id. at 34,923. Commenters stated, however, to allow for new NGCCs to factor into compliance in states with rate

- based goals, EPA must eli minate the ambiguity created by exempting from the definition of affected EGUs any new unit that would be subject to proposed subpart TTTT. See Proposed 60 C.F.R. section 5800, 79 Fed. Reg. 34,954. Commenters noted EPA suggests in the preamble that only ex isting NGCC would "displace" a coal

- fired unit. Commenters stated, in reality, coal displacement will be achieved in large part by the construction of new NGCC. Commenters said states using rate

- based performance goals should not be disadvantaged by the

un usual math problem created by the difference between mass

- or rate

- based performance goals. Further, commenters stated that they do not believe that the rule as proposed will create "the necessary incentives," as EPA suggests, to "add new NGCC capacity... to reduce CO2 emissions." Id. at 34,876 n.192. Commenters said shifting generation from coal

- fired EGUs with higher CO2 emission rates to NGCC EGUs with lower CO2 emission rates may reduce state

wide mass CO2 emissions. Commenters said, however, as further discussed below, unless all states are permitted by rule the option of accounting for new NGCCs in their section 111(d) state plans, the present exemption practically ensures that greenfield NGCCs will have little to no impact on state average CO2 emissio n rates. Commenters said a simple example demonstrates the challenge of incentivizing new NGCCs in states with rate

- based compliance goals. Commenters said to suppose the state contains four existing coal

- fired units, each with a CO2 emission rate of 2000 lbs/MWh. The average emission rate for those four units is 2000 lbs/MWh. One of the four units is then retired; however, the retired unit is replaced (or will be replaced in the near future) with a new NGCC unit. Then, due either to increases in demand or to achieve interim state rate

- based goals, an additional new NGCC unit is constructed, while generation from an existing coal

- fired unit is decreased. Both new NGCC units have lower CO2 emission rates of 1000 lbs/MWh. Commenters stated, under the rule as p roposed, in a rate

- based state, the retirement of the coal

- fired unit has no effect on the average CO2 emission rate. Nor does the addition of new NGCCs have a significant

- if any

- effect (a moderate decrease in CO2 emission rate may be realized if the o utput of one coal unit is reduced due to the increase in generation from the new NGCC). See Scenario A below. Commenters said, however, if the emission rates from the new NGCC units are accounted for in the state plan, a substantial improvement in the
stat e's average emission rate is realized. Commenters said in order for states with rate

- based goals to benefit from the Fungible MWhrs generated by the utilization or increased utilization of new, low

- carbon EGUs, commenters suggested that the rule must allow states to provide a mechanism to account for MWhrs from new units that otherwise are not subject to regulation under this rule. Commenters noted that the easiest mechanism to accomplish this goal is for the rule to recognize that all new units, and specif ically new NGCCs, can be included as compliance sources in the state plans, in other words, will qualify as affected entities. Commenters stated that EPA's proposed rule distinguishes between affected EGUs and affected entities. Commenters150 said an affected entity broadly includes entities with "obligations under this subpart for the purpose of meeting the emissions performance goal requirements in these emission guidelines." See Section 60.5820, 79 Fed. Reg. 34,955

- 56. Commenters said new NGCCs satisfy this condition. Commenters stated that new NGCCs may be used by retired or reduced

- output affected EGUs as the compliance mechanism for those EGUs to meet the emission performance goals of the state. Similarly, commenters said Fungible MWhrs from new NGCCs may be used to achieve the state emission rate goals to address predicted increases in demand. See 79 Fed. Reg. at 34,909 ("anticipated electricity demand growth after 2029"). To accomplish this, commenters proposed that EPA permit states to include in their state compliance plans the addition of new units to replace MWhrs that would have been generated by existing affected EGUs and/or to add capacity to the state that effectively decreases the proportion of generation from higher

- emitting existing affected EG Us. Commenters said state rate

- based goals would still be based upon emission rates of the existing affected EGUs during the baseline period, but the measurement of state performance towards achieving those goals would incorporate the emission rates of all Fungible MWhrs. Commenters said this is entirely consistent with the existing requirement under the proposed rule that states "identify any other affected entities ... with responsibilities for implementation and enforceable obligations under the plan." S ee Id. at 34,911. Stated differently, commenters said the new unit could serve as the compliance mechanism to reduce the emission rate from retired affected EGUs (potentially under Building Block 2) or from affected EGUs that continue to operate at reduced utilization. Importantly, commenters asserted that allowing states discretion to designate a new unit as an affected entity under the proposed rule would not conflict with the exception under section 60.5800, which applies only to affected EGUs. Commenter s suggested that state plans must establish "standards of performance" for its affected EGUs. Commenters said the use of new NGCC as a means for a state to achieve its performance standards at its affected EGUs is consistent with this requirement. Commente rs did not propose that EPA designate a new NGCC as an affected EGU. By limiting the applicability of new NGCCs to affected entities, commenters stated that the Fungible MWhrs generated by these new units act merely as a compliance mechanism for the
state to achieve its rate

- based goal for purposes of CAA Section 111(d). Commenters noted that the new NGCCs would still need to meet all applicable requirements under CAA section 111(b). See generally 79 Fed. Reg. 1,430 (Jan. 8, 2014). Commenters said subjectin g new EGUs to the requirements of both CAA Sections 111(b) and 111(d) is consistent with EPA's proposed handling of modified or reconstructed sources under the proposed rule. Generally, commenters said that existing units that are modified or reconstructed constitute "new units" under CAA Section 111(a) and are subject to the regulatory requirements under CAA Section 111(b), much like a greenfield unit. Commenters said, however, as proposed, modified or reconstructed existing sources would remain subject to the state's CAA Section 111(d) plan largely to "assure the integrity of the CAA section 111(d) plan." See 77 Fed. Reg. at 34904 (emphasis added).67 Commenters stated that the same logic should apply to greenfield units constructed to replace MWhrs from ex isting coal

- fired units subject to a state's 111(d) plan. Commenters said, as noted above, in states with rate

- based goals, the mere retirement of high

- carbon MWhrs is insufficient to achieve the performance goals. Without the ability under a state's 111(d ) plan to account for Fungible MWhrs that replace MWhrs at existing units, commenters asserted that the rule as proposed jeopardizes the integrity of any existing rate

- based plan by ignoring the benefit of new low

- carbon generation. Moreover, commenters st ated that it creates the unintended and absurd result of treating existing units reconstructed to fire natural gas differently from newly151 constructed and more efficient greenfield NGCC units by permitting only the former to be incorporated into a state's e xisting 111(d) compliance plan. Commenters suggested that EPA should incentivize the development of Fungible MWhrs from new NGCC units to replace MWhrs from existing coal

- fired units by including new NGCC in the rule as a specific compliance option for aff ected EGUs.

Response 23 : In Section VIII of the preamble, EPA has explained why it has determined that new NGCC may not be used for compliance in a rate based program. It should however be noted that there are in fact mechanisms for which retired units can be accounted for in either a rate or a mass based program. Under a mass based based program, retiring an affected unit will result in less overall emissions, thus crediting the unit for the retirement. In a rate based program, credit is achieved in two ways. First, when a higher emitting unit retires, there is less need for lower or zero emitting generation. Second, in many cases the replacement generation can be credited. This includes new renewables, new nuclear, or redispatch to existing NGCC

. Commenters other points regarding existing nuclear, EE and availability of RE are addressed in Section V of the preamble.

Comment 2 4 : Commenters described the jurisdictional conflict that would arise between the state utility commissions and the state environmental agencies. Commenters stated that the CPP does not indicate which agency should take the implementation lead. Commenters also stated that there is not a simple solution to the jurisdictional conflict because the CPP is at once both an environ mental regulation and an energy regulation.

Response 2 4 : The emission guidelines do not prescribe which state agency is to take the implementation lead, as different choices may make sense in different states. See section VIII.E for a discussion of the s tate plan submittal process and timing.

Comment 2 5 : Commenters stated that one solution for demand side power management is to couple renewable energy projects with electric boilers installed at industrial facilities that produce and consume large quantit ies of steam for process needs other than electrical generation.

Commenters said that one solution for demand side power management is to couple renewable energy projects with electric boilers installed at industrial facilities that produce and consume la rge quantities of steam for process needs other than electrical generation. Commenters stated that typical examples of these types of facilities are food plants, ethanol plants, oil refineries, and paper mills. If existing base load steam production is gen erated from carbon sources (i.e. gas, oil, coal), commenters said that electric boilers could be tied into an existing steam plant. Commenters stated electric boiler load could be managed using a wattage setpoint from the electric utility. As renewable pow er becomes available, commenters said, the electric boilers wattage would be increased producing more steam which would displace production from base load carbon fuel generation. Conversely as renewable power availability decreases, commenters added, elect ric boiler wattage would decrease and base load steam generation would increase to meet steam demand. By allowing electrical load to be managed by the utility, commenters concluded that increased flexibility would lead of greater stability of grid operatio n.152 Response 2 5 : The commenter s are correct that this could be part of an affected EGU’s strategy to reduce its carbon emissions. See section VIII.I for a discussion of the measures that me undertaken by affected EGUs under the 111(d) guidelines.

Comment 26 : Commenters said EPA has yet to evaluate mini

- grid solar and wind systems focusing on applicability of a decentralized distribution of grid AC, and under which a new concept of the evaluation, would look at daytime and night time peaks separatel y. Commenters said the goal should be to phase out the most carbon

- intensive affected EGUs. Commenters said the phase

- in period for non

- hydro RE should not be subject to a state's flexibility or scaled only per that individual state's (or multiple states') demonstrated EGU

- emissions

- reduction opportunities.

Response 26 : The EPA includes in building block 3 all utility

- scale, zero

- emitting RE technologies that have deployed at significant commercial levels over the past five years. This does not limit or e xclude the technologies that are creditable under compliance, including distributed generation resources. The phase

- in period for incremental RE is consistent across each interconnection. Please refer to section V of the final preamble for additional info rmation.

Comment 27 : Commenters stated EPA is proposing that Minnesota's existing natural gas combined cycle units increase their capacity factor from 24% to 70%, resulting in Minnesota's existing coal units reducing their cumulative output by about half by 2020. Commenters said Minnesota has already given consideration to CO2 costs through the Integrated Resource Planning process. Commenters said proposed coal unit environmental control retrofits were reviewed by Minnesota regulators considering all weigh ting factors involved with resource decisions, including but not limited to CO2 emissions. Commenters said electric generation markets practice least cost dispatch of permitted generation resources. Commenters said EPA's Block 2 dispatch biasing as propose d for Minnesota negates the viability of competitive power markets while "double dipping" consideration of CO2 cost for Minnesota. Commenters said for Minnesota, Block 2 biasing from existing coal to NGCC natural gas should normally be "zero", not the 46% suggested by EPA as a Minnesota target (70% CF vs. 24% CF actual in 2012). Commenters said when natural gas pricing is competitive, markets will deliver shifts in coal vs. natural gas generation without EPA interference that would require redesign or price fixing of the United States' least cost electricity dispatch marketing system.

Commenters stated the Minnesota NGCC unit capacity factor in 2012 was only about half what EPA referred to as the national average in their TSD analysis. Commenters said this lower existing NGCC utilization in Minnesota reflects the duty cycle for peak demand support near the Twin Cities, intermittent renewables reliability support needed for Minnesota Renewables Portfolio Standard implementation, distance of Minnesota NGCC gen eration from Northeast Minnesota industrial load centers and how surface mine, Powder River Basin coal delivered to Minnesota carries lower costs than eastern coal. Commenters said 2012 historic low natural gas pricing might be expected to have resulted in more market driven switching from coal to natural gas in the East compared to that in Minnesota. Commenters said this should not give cause for EPA to set aside the designed outcome from Minnesota Integrated Resource Planning by EPA's overlay of a propose d Clean Power Plan Block 2, NGCC capacity factor that carries over EPA TSD assumptions that don't apply in Minnesota.153 Response 27 : The EPA disagrees with this comment. The application of building block 2 does not require a redesign or price fixing of the electricity dispatch marketing system, as the commenter suggests. Instead, under rate

- based compliance, the bid prices of affected EGUs would reflect the incremental cost or benefit associated with the difference between that unit’s emissions rate and it s standard of performance. In regards to actions already taken by Minnesota, the BSER is forward

- looking in identifying cost

- effective opportunities for emission reductions from 2012; however, the cost and availability of these emission reduction opportuni ties is the result of many factors, including previous actions. For more information on building block 2, refer to section V of the final preamble.

Comment 28 : Commenters stated that the Proposal also seems to overlook and fails to address how a utility t hat owns generation assets in more than one State will need or be able to comply with the Proposal as an owner of an affected EGU. [Commenters], for example, is a part owner of a coal plant located in Utah, which is an affected EGU subject to this rulemaki ng. [Commenters] also have rights to the entire output of a wind farm located in Idaho. These plants are interconnected on the same transmission system, despite not resting within the same state boundaries. Absent agreement between Utah and Idaho on the tr eatment of interstate emission effects, it is unclear that [commenters] will be able to utilize its Idaho wind farm for compliance purposes of the CPP. In the absence of coordination by the States on interstate emission effects, the Proposal could result i n the absurd result of building new carbon free generation in Utah as a compliance measure that may not be as cost

- effective, or as resource

- efficient, as other alternatives available to [commenters].

Response 28 : A multi

- state agreement is not necessary for affected EGUs to procure out

- of

- state incremental RE. This is true whether a state adopts a trading

- ready approach or not. For more information please refer to section VIII of the final preamble.

Comment 29 : Commenters stated the final rules should b e cognizant of state mandates that may conflict or cause inconsistencies with federal mandates. Commenters specifically provided that Missouri's Renewable Energy Standard places a limitation such that any renewable mandate shall not raise IOU retail rates by an average of more than one percent in any year, and all the costs associated with such mandate shall be recoverable in the retail rates of that IOU.

Response 29 : The EPA disagrees with this comment. There is no conflict between the CPP and a state’s R ES because the final CPP is not a mandate for a specific amount of RE. Instead, the final CPP sets standards of performance for affected EGUs and affords those EGUs the opportunity to flexibly comply across both time and a variety of emission reduction mea sures, including non

BSER measures. For more information on the BSER, refer to section V of the final preamble.

Comment 30 : Commenters stated, under the Clean Air Act, EPA must identify the "best" system of emission "reduction." Commenters said, in order to evaluate what is the "best" the U.S. can do, EPA should start by evaluating international programs for GHG emission reductions and then evaluate whether those targets are also achievable in this country. Commenters said, the CPP, however, does not inclu de such a discussion.154 Response 30 : While climate change is an international environmental challenge, the Clean Air Act does not require or suggest that EPA evaluate international programs to determine the Best System of Emission Reduction (BSER) under Se ction 111. BSER has been determined on the basis of the unique interconnected and interdependent manner in which the power system operates in the U.S., and the actions, strategies, and policies states and utilities have already been undertaking that are r esulting in CO2 emission reductions.

Comment 31 : Commenters stated that EPA should coordinate the rule with other international policy actions. Commenters stated that the Clean Power rule is premature in the context of ongoing international negotiations for a "global" climate agreement in Paris in 2015, and the likelihood of a revised domestic ozone standard potentially requiring retrofits or closures of many fossil

- fueled generating units. Commenters stated that the U.S. should not risk higher electrici ty prices and diminished fuel diversity in the absence of legally binding commitments from major developing nations to pursue meaningful emission reductions over a defined timetable that is not contingent upon the completion of industrial nations' commitme nts. Commenters stated that any commitments by industrial nations to reduce emissions in advance of major developing nations would increase domestic job losses and accelerate the off

- shoring of
energy

- sensitive industries. Commenters stated that the deadli nes of the rule should accommodate the uncertainty associated with the U.N. FCCC negotiations, such as by providing a trigger mechanism in the form of an Executive Order to determine the effective date of the rule following the successful negotiation of a global climate agreement. Commenters stated that adjustment of the rule's deadlines in this manner also would allow for regulatory coordination with a revised ozone standard, which is scheduled to be promulgated in late 2015.

Commenters stated that the EP A and the Administration cannot gauge the extent to which other nations, particularly large developing nations, will be willing to bind themselves to a truly global program of GHG reductions

- a policy requisite in order to have efficacy. Commenters stated that the United States should not expect that our actions will have any meaningful climate impact in a world economy that is using more coal and other fossil fuels every day. Therefore, commenters suggested that EPA delay further action on this rulemaking to regulate carbon dioxide from EGUs until after the 2015 Paris Conference of the Parties of the United Nations Framework Convention on Climate Change.

Response 3 1 : The Clean Power Plan is not premature in the context of the United Nations Framework Con vention on Climate Change. The U.S. has been a Party to the treaty since 1994 and has a commitment to “Formulate, implement, publish and regularly update national and, where appropriate, regional programmes containing measures to mitigate climate change b y addressing anthropogenic emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol” (Article 4.1.b

- http://unfccc.int/files/essential_background/background_publications_htmlpdf/application/pdf/co nveng.pdf ). The goal of the current round of UNFCCC discussions, which will conclude in Paris in December 2015, and as expressed through the Ad Hoc Working Group on the Durban Platform for Enhanced Action, is to “to launch a process to develop a protocol, another legal instrument or an agreed outcome with legal force under the Convention applicable to all Parties” (Decision 1/CP.17 http://unfccc.int/resource/docs/2011/cop17/eng/09a01.pdf#page=2).155 Most major economies, including a number of large developing emittin g countries, have announced or previewed their Intended Nationally Determined Contributions (INDC’s) as of the completion of the Clean Power Plan, including the European Union, Mexico, the United States, the Russian Federation, Canada, China, Japan, and Br azil (http://unfccc.int/focus/indc_portal/items/8766.php). In November 2014, President Obama and President Xi made the announcement of their post

- 2020 climate targets. China committed to limit its greenhouse gas emissions, with a commitment to peak emiss ions around 2030 and to make best efforts to peak early, and to increase its share of non

- fossil energy consumption to around 20 percent by 2030. The finalization of the Clean Power Plan in advance of the Paris meeting is expected to provide a demonstratio n of the U.S. commitment to addressing climate change, and as a result help produce a more robust global agreement involving other major economies.

Comment 3 2 : Commenters stated EPA ensures that the final rule adequately and properly considers the complex ities of any interaction among the four building blocks in establishing Emission Guidelines, and preserves real flexibility to the states in devising plans to achieve those targets. Commenters said the Proposed Rule includes certain provisions that are not fully consistent with these standards, but can be adjusted or clarified in the manner discussed in these comments in order to adhere to the relevant statutory requirements. Commenters said the NODA raises issues that would take the Proposed Rule in the en tirely opposite direction, promoting the determination of state emission targets based upon the exaggerated displacement of fossil generation through the wholly theoretical, maximum aggregate effect of the four building blocks, in the absence of any record support for such position. Commenters said they oppose any suggestion through the NODA or otherwise that the final rule should establish state

- specific emission targets based on further assumed displacement of fossil generation through electricity generat ion or consumption scenarios that are not "demonstrated," nor related to control of the regulated sources.

Response 3 2 : EPA disagrees with these comments. As discussed in section V.A.3.d., demand

side EE is not included in the final BSER. As discussed in section VI of the preamble, changes made to the proposed computation procedures allow the final computation procedures to mathematically better reflect the ability of building block 3 to achieve improved CO2 emission performance rates and emissions than th e proposed computation procedures. EPA’s determinations that the individual building blocks and the combination of all three building blocks perform well with respect to all the statutory factors for the BSER, including the requirement that the BSER must b e adequately demonstrated, are based on an extensive record, as discussed throughout section V of the preamble and the GHG Mitigation Measures TSD and in the Legal Memorandum. Aspects of EPA’s approach to determination of the BSER at a level of stringency that provides ample headroom and thereby facilitates both achievability and compliance flexibility are discussed in numerous locations in the preamble including sections V.A.2.d.(3), V.A.3.f., V.A.4., V.C., V.D., and V.E. Interactions among the three bui lding blocks included in the final BSER are discussed in section V.A.4.d.

Comment 3 3 : Commenters stated EPA's "building blocks" analysis of the BSER is not based on accurate or reasonably demonstrated assumptions in Wyoming and is inconsistent with the realities of the electric grid.156 Commenters stated EPA falsely assumes that it is universally true that "increments of generation are to some extent interchangeable, [and] dispatch decisions are based on electricity demand at a given point in time, the var iable costs of available generating resources, and system constraints." Commenters said the demand calculus may be relevant for a utility unit generating electricity for the grid, but it is not relevant for the operation of the TS Power Plant. Commenters s aid Newmont's mines rely on power generated at the TS Power Plant and require a constant and reliable load that could not be provided by natural gas generation elsewhere in the State. Commenters said in the case of the TS Power Plant, "increments of genera tion" are not interchangeable. Commenters said EPA's unrealistic assumption that Natural Gas Combined Cycle ("NGCC") capacity in Nevada can increase to 50% by 2020 is unreasonable and would result in an emission rate that does not allow for any coal

- fired generation

- regardless of the flexibilities that EPA claims exist in the other Building Blocks.

Response 3 3 : As described in preamble section VI and the CO2 Emissions Performance Rate and Goal Computations TSD, EPA quantification of BSER is premised on the average regional potential. That is, there are no unit

- level assumptions regarding the building blocks. EPA recognizes, and its compliance modeling verifies, that many affected EGUs continue to operate at 2012 levels or higher.

Comment 3 4 : Commenter s stated that the Proposed Rule should allow states to meet their rate

based targets by replacing older, more carbon intensive units with newer units, particularly NGCC units. Commenters continued, (verbatim) EPA appears to agree with this compliance metho d, and says as much both in the June 18 Proposed Rule and its October 28 NODA. Commenters asserted that EPA's Proposed Rule, however, could be read to exclude Section 111(b) sources like new NGCC from the definition of "affected entity." Commenters stated, by doing so, the Proposed Rule disincentivizes both the replacement of existing coal

- fired EGUs with new NGCC units and the addition of new NGCC units to provide substitute generation or meet future demand (hereinafter, collectively referred to as "New NG CC") in states that opt to utilize rate

- based targets. Commenters noted, similar to EPA's proposal to include modified or reconstructed units

- units otherwise subject to Section 111(b) standards

- within Section 111(d) plans, EPA should allow New NGCCs su bject to regulation under CAA section 111(b) to function as compliance sources under section 111(d). To accomplish this, commenters suggested that EPA should specifically state in the Final Rule that states may include New NGCCs as "affected entities," or, at a minimum, should amend the definition of "affected entities" so that it does not exclude New NGCC. Commenters said the states then would be able to use New NGCC as a compliance mechanism both for affected EGUs (by allowing the substitution of CO2 emis sion rates from retired or lesser

- utilized coal

- fired EGUs with lower rates from new NGCC capacity) and to meet or maintain state emission rate targets if additional capacity is need for future demand. Commenters stated that EPA has the option to determine whether this would specifically impact BSER for affected EGUs and allow the flexibility to include this option in individual state programs. Commenters said, in EPA's Proposed Rule Building Block 2, increased utilization of NGCC units, EPA recognized the CO2 reduction benefits that could be realized with existing generation from the increased utilization of natural gas. Commenters said EPA has recognized that the increased utilization of NGCC units will naturally factor into compliance. Commenters said, ho wever, EPA suggests in the preamble that only existing NGCC157 would "displace" a coal

- fired unit. Commenters stated, in reality, coal displacement will be achieved in large part by the construction and operation of new NGCC. Further, commenters said if the r ules are read to exclude New NGGC capacity from state targets, this creates disincentives to adding new NGCC capacity. Commenters stated, unless all states are permitted by rule the option of accounting for New NGCCs in their section 111(d) state plans, th e present exemption practically ensures that newly constructed NGCCs will have little to no impact on state average CO2 emission rates. And because many states will choose to adopt a rate

- based approach and most NGCC units will not be constructed until aft er the Proposed Rule is effective, commenters stated that the majority of New NGCCs will not be a factor towards achieving compliance with the Proposed Rule. Commenters said a simple example demonstrates the challenge of incentivizing New NGCCs in states w ith rate

- based compliance targets. Commenters said to suppose the state contains 4 existing coal

- fired units that generate equal amounts of electricity, each with a CO2 emission rate of 2000 lbs/MWh. The average emission rate for those 4 units is 2000 lbs/ MWh. One of the 4 units is then retired; however, the retired unit is replaced (or will be replaced in the near future) with a New NGCC unit. Then, due to increases in demand, an additional New NGCC unit is constructed in the state. Both New NGCC units hav e a lower CO2 emission rate of 1000 lbs/MWh. Commenters noted, under the rule as proposed, in a rate

- based state, the retirement of the coal

- fired unit has no effect on the average CO2 emission rate. Commenters said nor does the addition of New NGCCs (whet her replacement, substitution or additional capacity). Commenters said the average rate remains 2000 lbs/MWh (now averaged over 3 units). See Scenario A below. Commenters said only if the emission rate from the New NGCC units are accounted for would the st ate's average emission rate decrease to 1600 lbs/MWh ((2000 lbs/MWh *3 units + 2000 MWh) / 5 units). Commenters suggested that new NGCCs should be regarded as satisfying the definition of an affected entity if used by retired affected EGUs as the complianc e mechanism to meet the emission performance targets of the state. Commenters noted, similarly, new NGCCs may be used to achieve the state emission rate target, accounting for a growth in future demand, which as EPA has acknowledged, is a practical reality that states and regulators alike must prepare for, by increasing the proportion of generation from low

- carbon EGUs. Commenters said, as illustrated above, under either scenario, the growth of New NGCCs has a positive net benefit on lowering the overall ra te of carbon emissions in the state, while maintaining the reliability of the electric system. To accomplish this, commenters suggested that EPA should permit states to include in their state compliance plans the addition of New NGCCs to replace capacity o f existing affected EGUs and/or to add capacity to the state that effectively decreases the proportion of generation from higher

- emitting existing affected EGUs. Commenters said state rate

- based targets would still be based upon emission rates of the exist ing affected EGUs during the baseline period, but the calculation and verification of state performance towards achieving those targets would incorporate the emission rates of all New NGCCs. Commenters stated that this is entirely consistent with the exist ing requirement under the Proposed Rule that states identify any other affected entities with responsibilities for implementation and enforceable obligations under the plan. Commenters said states would only receive credit for any new capacity from New NGC Cs. Commenters asserted, importantly, designating New NGCC as an affected entity under the Proposed Rule would not conflict with the exception under section 60.5800, which applies only to affected EGUs. Commenters suggested, under the Proposed Rule, state plans must establish "standards of performance" for its affected EGUs. Commenters noted that the use of New NGCC as a means for a state to achieve its performance standards at its affected EGUs is consistent with this requirement. Commenters158 did not propos e that EPA designate a New NGCC as an affected EGU. Commenters stated, by limiting the applicability of New NGCCs to affected entities, the new units act merely as a compliance mechanism for the state to achieve its rate

- based target for purposes of CAA Se ction 111(d). Commenters noted that the New NGCCs would still need to meet all applicable requirements under CAA Section 111(b). Commenters said subjecting New EGUs to the requirements of both CAA Sections 111(b) and 111(d) is entirely consistent with EPA' s proposed handling of modified or reconstructed sources under the Proposed Rule. Commenters said, generally, existing units that are modified or reconstructed constitute "new units" under CAA Section 111(a) and are subject to the regulatory requirements u nder CAA Section 111(b), much like a newly constructed unit. However, commenters said modified or reconstructed existing sources would remain subject to the state's CAA Section 111(d) plan. Commenters noted that the same logic should apply to any new NGCC units constructed to replace existing coal

- fired units subject to a state's 111(d) plan or to add capacity and lessen the overall proportion of state generation from higher

- emitting coal

- fired units. Commenters stated, to hold "new" units, modified or reco nstructed, to burn natural gas as eligible compliance mechanisms for a section 111(d) plan but not more efficient New NGCC is to find a distinction without a practical difference. Commenters said, as noted above, in states with rate

- based targets, the addi tion of New NGCC units is a reasonable and effective compliance mechanism to reduce CO2 emission rates while ensuring that those states have sufficient capacity to meet expected increases in demand. Without the ability under a state's 111(d) plan to accoun t for emission rate reductions from New NGCC units, commenters asserted that the rule as proposed jeopardizes the integrity of any existing rate

- based plan by ignoring the benefit of increasing the proportion of generation from low

- emitting NGCC units. Com menters suggested that EPA should incentivize the construction of New NGCC units by including New NGCC in the rule as affected entities to allow for such units' use as a specific compliance option.

Response 3 4 : EPA’s authority under this rulemaking exte nds to existing EGUs which includes under construction natural gas turbines that commenced construction prior to 1/08/2014. These units are included in EPA’s baseline and the quantification of BSER and building block two and their potential to replace hig her emitting fossil steam. In regards to new natural gas combined cycle units that commence construction post 1/08/14, their generation and its replacement potential is not part of the BSER quantification. However, EPA believes that states/EGUs may still utilize this option for compliance as the replacement generation will lower the fossil steam generation (and emissions) of existing units and thus helps states/EGUs better reach their rate and mass goals.

Comment 3 5 : Commenters stated Building Block 2 mu st be adjusted to allow for preservation of 10% to 12% of coal

- fired steam generation in each state because such generation could otherwise be completely displaced by re

- dispatch to NGCC units and is necessary for ensuring reliable and affordable electrici ty.

Response 3 5 : The EPA has taken a regionalized approach to quantifying BSER in this final rulemaking. The Eastern Interconnect informs the fossil steam rate for all states/EGUs in all years. Even at full deployment of the building blocks in 2030, the resulting fossil steam rate is premised on fossil steam (coal steam) generation levels that represent a generation share significantly greater than the 10% or 12% minimums identified below.159 Comment 3 6 : Commenters stated EPA employed flawed assumptions in the modeling that produced the individual state compliance targets. Commenters said EPA utilized averages without considering the actual potential improvements possible for each state. Commenters continued EPA's building block 2 does not apply adequate ana lysis to determine the feasibility of altering operational profiles for dispatch of lower carbon emitting resources. Commenters said EPA did not consider the ownership of such facilities, existing contracts for output, or access to adequate fuel supplies i n order to operate at a higher capacity factor nor whether the type of gas generator operates efficiently at the necessary capacity factors to offset the lost coal generating units that will be shut down for environmental dispatch. Commenters said these is sues impact the viability of building block 2 as a compliance measure. Commenters said EPA also made unjustified assumptions about the viability of RE and EE for attaining compliance with the interim and final goals. Commenters said many states have rules or statutes that require the adoption of some amount of RE or installation of a set degree of EE; however, these requirements also establish timeframes for compliance and sunset thereafter. In crafting the goals, state utility commissions considered that p rogram adoption would likely favor "low hanging fruit" in the earlier stages and then gradually dissipate as diminishing returns set in.

Response 3 6 : Please see preamble section V.D, and V.E. EPA is taking a regionalized approach to quantifying BSER in this final rule. The source

- category rates reflect the average fossil steam and NGCC emission rates attainable upon full deployment of the building blocks. As described in sections V and VIII, states are permitted to acquire credits and harvest reduction potential from out of state sources.

Comment 3 7 : Commenters stated, in the context of the NODA, EPA identifies comments and related issues that could have the effect of magnifying the concerns implicated by the Proposed Rule, virtually ensuring that the ultimate standards would (a) not meet the statutory requirement that the standards reflect demonstrated technology, (b) eliminate the flexibility necessary in the development of state plans, and (c) dissociate the regulation from EPA's underlying statutory authority. Commenters said the NODA seeks comment on the opportunity for the displacement of fossil generation by RE and EE in a manner that could materially reduce certain state emission goals. Commenters said any such suggestion ignores the statutory co ncepts underlying section 111(d) that require Emission Guidelines to reflect the BSER that has been adequately demonstrated for the category of regulated sources. Commenters said theoretical implications for fossil generation are wholly unsupported by the record established by EPA in support of the Proposed Rule, and contrary to available facts from the energy sector. Commenters said for these reasons, the suggestion through the NODA of further reducing state targets by effectively requiring RE sources and EE to reduce fossil generation cannot be reconciled with the statutory directive that a system of emission reduction upon which the emission guidelines are based must be adequately demonstrated. Commenters said reliance on such theoretical displacement wou ld all but eliminate any flexibility otherwise available to states in developing state plans because there can be no alternative compliance measures sufficient to achieve the required state level targets.

Commenters stated EPA ensures that the final rule adequately and properly considers the complexities of any interaction among the four building blocks in establishing Emission160 Guidelines, and preserves real flexibility to the states in devising plans to achieve those targets. Commenters said the Proposed Rule includes certain provisions that are not fully consistent with these standards, but can be adjusted or clarified in the manner discussed in these comments in order to adhere to the relevant statutory requirements. Commenters said the NODA raises issue s that would take the Proposed Rule in the entirely opposite direction, promoting the determination of state emission targets based upon the exaggerated displacement of fossil generation through the wholly theoretical, maximum aggregate effect of the four building blocks, in the absence of any record support for such position. Commenters said they oppose any suggestion through the NODA or otherwise that the final rule should establish state

- specific emission targets based on further assumed displacement of fossil generation through electricity generation or consumption scenarios that are not "demonstrated," nor related to control of the regulated sources.

Response 3 7 : The EPA took comment and received significant support for its building block three treatme nt in the final rule discussed in section VI of the preamble. That is, that incremental renewable generation can and will replace existing fossil generation. This is consistent with the concept of the best system of emissions reductions from existing sou rces and the premise of building blocks two and three to offer lower emitting generation to offset higher emitting generation.

Comment 38 : Commenters stated the EPA is incorrect in stating: "In the large and highly integrated electricity market, where ele ctricity is fungible, and the demand can be met in many ways." Commenters said the assumption of integration on a state level is incorrect when applied to Michigan, a state of two peninsulas. Commenters said electricity is fungible but our market is not hi ghly integrated between peninsulas. Commenters gave examples of how the energy supply and networks are very different within their state, even being 2 different MISO zones and being interconnected to different states. Commenters added not all generating ca pacity in the state is available to Michigan customers nor regulated by the Commission; therefore, the assumption of integration and fungibility simply does not hold true. Commenters said this leads to the conclusion that the four building blocks are not " fungible" and there must be some accommodation to the calculation of goals to address the reality of the energy supply market and transmission constraints in Michigan. Commenters stated the USEPA needs to recognize the complexities of the existing electric market structure and allow states the time and flexibility in crafting a viable approach to meet reduction targets. Commenters said while the EPA states that integrated generation, transmission, and distribution networks create this fungibility, fungibili ty could occur with major capital improvements but will require adequate time not provided for in the proposal.

Response 39 : With regards to whether electricity is fungible, as the EPA has explained in Section V of the preamble, fungibility occurs both wi thin states and across state borders. Even though electricity may not be fungible between the two peninsulas of Michigan, it is nonetheless fungible between each of the peninsulas and the portion of the region wide grid that it is connected to. Therefore b oth portions of Michigan do in fact have access to all three building blocks through direct grid connections. They also have access through other mechanisms like trading. While all units may not be regulated by Michigan’s Public Utility Commission, this fa ct is not relevant to whether the state may require emission reductions from those units. Finally,161 with regards to allowing states time and flexibility, the EPA has adjusted the final rule to move the compliance date from 2020 to 2022, providing states mor e time.162 APPENDIX A: CROSS

- REFERENCED COMMENTS

Many commenters requested that the remarks of other commenters be incorporated into their own comments on the proposed rule. The table below lists the commenters who have been referenced, followed by the number of commenters who asked to incorporate the referenced commenters’ remarks. Specifically, the first column in Table A

- 1 is a list of commenters who were referred to by other commenters. The second column gives the docket ID number for the
commenters who were referenced. The third column provides the number of commenters who referred to each of the referenced commenters.

Table A

- 1. Cross

- Referenced Comments

Referenced Commenter Name Referenced Commenter Docket ID Number of Times Referenced

17

- state attorneys general EPA

- HQ

- OAR

- 2013

- 0602

- 23949 3

ACC, CIBO, ERCOT and other Associations EPA

- HQ

- OAR

- 2013

- 0602

- 22581 7

Alliance for Fuel Options, Reliability and Diversity (AFFORD) EPA

- HQ

- OAR

- 2013

- 0602

- 22914 3

American Chemistry Council (ACC) EPA

- HQ

- OAR

- 2 013

- 0602

- 23517 2
American Council for an Energy Efficient Economy (ACEEE) EPA

- HQ

- OAR

- 2013

- 0602

- 22810 1

American Electric Power (AEP) EPA

- HQ

- OAR

- 2013

- 0602

- 24030 1

American Farm Bureau Federation (AFBF) EPA

- HQ

- OAR

- 2013

- 0602

- 23787 2

American Forest and Paper Association (AFPA) and American Wood Council (AWC) EPA

- HQ

- OAR

- 2013

- 0602

- 23012 5

American Gas Association (AGA) EPA

- HQ

- OAR

- 2013

- 0602

- 23014 1
American Municipal Power, Inc. (AMP) EPA

- HQ

- OAR

- 2013

- 0602

- 23366 11

American Public Power Association (APPA) EPA

- HQ

- OAR

- 2013

- 0602

- 22871 28163 Referenced Commenter Name Referenced Commenter Docket ID Number of Times Referenced
American Wind Energy Association (AWEA) EPA

- HQ

- OAR

- 2013

- 0602

- 23067 3

Arizona Department of Environmental Quality (ADEQ) EPA

- HQ

- OAR

- 2013

- 0602

- 23938 1

Arizona Electric Power Cooperative (AEPCO) EPA

- HQ

- OAR

- 2013

- 0602

- 18866/22972 4

Arizona Public Service (APS) EPA

- HQ

- OAR

- 2013

- 0602

- 23482 3
Arizona Utilities Group (AUG) EPA

- HQ

- OAR

- 2013

- 0602

- 23415 3

ASE EPA

- HQ

- OAR

- 2013

- 0602

- 21161 2

Association of Illinois Electric Cooperatives (AIEC) EPA

- HQ

- OAR

- 2013

- 0602

- 22866 1

Basin Electric Power Cooperative (BEPC) EPA

- HQ

- OAR

- 2013

- 0602

- 23574 16

Biomass Power Association (BPA) EPA

- HQ

- OAR

- 2013

- 0602

- 17788 1
Buckeye Power EPA

- HQ

- OAR

- 2013

- 0602

- 22751 17

Business Council for Sustainable Energy (BCSE) EPA

- HQ

- OAR

- 2013

- 0602

- 22605 1

California Air Resources Board (CARB) EPA

- HQ

- OAR

- 2013

- 0602

- 23433 1

Center on Race, Poverty and the Environment (CRPE) EPA

- HQ

- OAR

- 2013

- 0602

- 24104 1

Cities of Hamilton, OH and Orrville, OH EPA

- HQ

- OAR

- 2013

- 0602

- 22809 1

Class of 85 Regulatory Response Group EPA

- HQ

- OAR

- 2013

- 0602

- 23421/23423 4

Clean Air Task Force (CATF) EPA

- HQ

- OAR

- 2013

- 0602

- 22612 1

Coal Utilization Research Council (CURC) EPA

- HQ

- OAR

- 2013

- 0602

- 23186 1164 Referenced Commenter Name Referenced Commenter Docket ID Number of Times Referenced

Coalition for Innovative Climate Solutions (CICS) EPA

- HQ

- OA R

- 2013

- 0602

- 22583 3

Combined Heat and Power Association (CHPA) EPA

- HQ

- OAR

- 2013

- 0602

- 22798 3

Connecticut Green Bank EPA

- HQ

- OAR

- 2013

- 0602

- 24080 1
Duke Energy EPA

- HQ

- OAR

- 2013

- 0602

- 23983 1
East River Electric Power Cooperative (EREPC) EPA

- HQ

- OAR

- 2013

- 0602

- 25988 16

Edison Electric Institute (EEI) EPA

- HQ

- OAR

- 2013

- 0602

- 23224 19
Electric Cooperatives of South Carolina EPA

- HQ

- OAR

- 2013

- 0602

- 23227 1

Electrical Power Research Institute (EPRI) EPA

- HQ

- OAR

- 2013

- 0602

- 21697 13

Energy Northwest EPA

- HQ

- OAR

- 2013

- 0602

- 23266 1
Florida Electric Power Coordinating Group (FEPCG) EPA

- HQ

- OAR

- 2013

- 0602

- 22811 2

Florida Municipal Electric Association (FMEA) EPA

- HQ

- OAR

- 2013

- 0602

- 23135 1

Florida Office of the Public Counsel (OPC) EPA

- HQ

- OAR

- 2013

- 0602

- 23385 1

Generation and Transmission Fossil Cooperative Group (GTFCG) EPA

- HQ

- OAR

- 2013

- 0602

- 23164 2

Georgetown Climate Center EPA

- HQ

- OAR

- 2013

- 0602

- 23597 1

Global Thermostat EPA

- HQ

- OAR

- 2013

- 0602

- 22956 1

Governor of Idaho EPA

- HQ

- OAR

- 2013

- 0602

- 26838 1
Group of ESCOs (coalition): Ameresco, Honeywell, etc. EPA

- HQ

- OAR

- 2013

- 0602

- 24161 2

Gulf Coast Lignite Coalition (GCLC) EPA

- HQ

- OAR

- 2013

- 0602

- 23394 3
Hoosier Energy Rural Electric Cooperative EPA

- HQ

- OAR

- 2013

- 0602

- 23554 7165 Referenced Commenter Name Referenced Commenter Docket ID Number of Times Referenced
Indiana Department of Environmental Managem ent (IDEM) EPA

- HQ

- OAR

- 2013

- 0602

- 24292 1

Indiana Electric Cooperatives (IEC) EPA

- HQ

- OAR

- 2013

- 0602

- 23371 7
Institute for Energy and Environmental Resources EPA

- HQ

- OAR

- 2013

- 0602

- 24050 1

International Emissions Trading Association EPA

- HQ

- OAR

- 2013

- 0602

- 23993 1

Iowa Association of Municipal Utilities (IAMU) EPA

- HQ

- OAR

- 2013

- 0602

- 24222 1

Iowa Department of Natural Resources (IDNR) EPA

- HQ

- OAR

- 2013

- 0602

- 23271 2

Kentucky Energy and Environment Cabinet EPA

- HQ

- OAR

- 2013

- 0602

- 22574 2

Large Public Power Council (LPPC) EPA

- HQ

- OAR

- 2013

- 0602

- 23209 6
Lignite Energy Council EPA

- HQ

- OAR

- 2013

- 0602

- 24306 1
Lincoln Electric System (LES) EPA

- HQ

- OAR

- 2013

- 0602

- 23252 1
Louisiana Department of Environmental Quality (LDEQ) EPA

- HQ

- OAR

- 2013

- 0602

- 23991 1

Michigan Municipal Electric Association (MMEA) EPA

- HQ

- OAR

- 2013

- 0602

- 23297 1

MidAmerican Energy Company (MEC) EPA

- HQ

- OAR

- 2013

- 0602

- 23235 1
Midcontinent Independent System Operator, Inc. (MISO) EPA

- HQ

- OAR

- 2013

- 0602

- 22547 4

Minnesota Chamber of Commerce (MCC) EPA

- HQ

- OAR

- 2013

- 0602

- 23577 1

Minnesota Pollution Control Agency (MPCA) EPA

- HQ

- OAR

- 2013

- 0602

- 23509 1

Minnesota Utility Investors (MUI) EPA

- HQ

- OAR

- 2013

- 0602

- 25058 1166 Referenced Commenter Name Referenced Commenter Docket ID Number of Times Referenced
Missouri River Energy Services (MRES) EPA

- HQ

- OAR

- 2013

- 0602

- 23810 19

National Alliance of Forest Owners (NAFO) EPA

- HQ

- OAR

- 2013

- 0602

- 22958 1

National Association of Manufacturers Coalition (NAMC) EPA

- HQ

- OAR

- 2013

- 0602

- 27341 5

National Association of Regulatory Utility Commissioners (NARUC) EPA

- HQ

- OAR

- 2013

- 0602

- 22791 3

National Climate Coalition EPA

- HQ

- OAR

- 2013

- 0602

- 22910 1
National Hydropower Association (NHA) EPA

- HQ

- OAR

- 2013

- 0602

- 24258 3

National Mining Association (NMA) EPA

- HQ

- OAR

- 2013

- 0602

- 24094 3
National Rural Electric Cooperative Association (NRECA) EPA

- HQ

- OAR

- 2013

- 0602

- 33118 175

Natural Resources Defense Council (NRDC) EPA

- HQ

- OAR

- 2013

- 0602

- 23325 1

Nebraska Department of Environmental Quality (NDEQ) EPA

- HQ

- OAR

- 2013

- 0602

- 22533 1

Nebraska Power Association (NPA) EPA

- HQ

- OAR

- 2013

- 0602

- 22927 1

Nebraska Power Review Board (NPRB) EPA

- HQ

- OAR

- 2013

- 0602

- 29642 1

Nebraska Public Power District (NPPD) EPA

- HQ

- OAR

- 2013

- 0602

- 23956 1

Nebraska Rural Electric Association (NREA) EPA

- HQ

- OAR

- 2013

- 0602

- 22802 1

Northeast Energy Efficiency Partnerships (NEEP) EPA

- HQ

- OAR

- 2013

- 0602

- 24215/31918 1

Northeast States for Coordinated Air Use Management (NESCAUM) EPA

- HQ

- OAR

- 2013

- 0602

- 23503 1167 Referenced Commenter Name Referenced Commenter Docket ID Number of Times Referenced
Northwest Energy Efficiency Alliance (NEEA) EPA

- HQ

- OAR

- 2013

- 0602

- 23849 1

Nuclear Energy Institute (NEI) EPA

- HQ

- OAR

- 2013

- 0602

- 24216 1
Oglethorpe Power Corporation EPA

- HQ

- OAR

- 2013

- 0602

- 23794 11
Omaha Public Power District (OPPD) EPA

- HQ

- OAR

- 2013

- 0602

- 22921 1
Oregon Department of Environmental Quality EPA

- HQ

- OAR

- 2013

- 0602

- 20678 1

Otter Tail Power Company EPA

- HQ

- OAR

- 2013

- 0602

- 22527 1
Owners/operators of nuclear units under construction EPA

- HQ

- OAR

- 2013

- 0602

- 24250 3

Pennsylvania Department of Environmental Protection (PADEP) EPA

- HQ

- OAR

- 2013

- 0602

- 22739 1

Pennsylvania Public Utility Commission (PAPUC) EPA

- HQ

- OAR

- 2013

- 0602

- 24099 1

Prairie State Generating Company, LLC (PSGC) EPA

- HQ

- OAR

- 2013

- 0602

- 22867 1

Public Utilities Commission of Ohio (PUCO) EPA

- HQ

- OAR

- 2013

- 0602

- 22762 1

Regional Greenhouse Gas Initiative (RGGI) EPA

- HQ

- OAR

- 2013

- 0602

- 22395 5

Salt River Project Agricultural Improvement and Power District (SRP) EPA

- HQ

- OAR

- 2013

- 0602

- 22788 1

Santee Cooper (South Carolina Public Service Authority) EPA

- HQ

- OAR

- 2013

- 0602

- 24166 2

Sargent & Lundy EPA

- HQ

- OAR

- 2013

- 0602

- 22797 1
SCANA Corporation EPA

- HQ

- OAR

- 2013

- 0602

- 23308 1

Sierra Club EPA

- HQ

- OAR

- 2013

- 0602

- 24029 1
Solar Energy Industries Association (SEIA) EPA

- HQ

- OAR

- 2013

- 0602

- 23091 1168 Referenced Commenter Name Referenced Commenter Docket ID Number of Times Referenced

South Carolina Chamber of Commerce EPA

- HQ

- OAR

- 2013

- 0602

- 23314 1
South Carolina Department of Health and Enviro nmental Control (DHEC) EPA

- HQ

- OAR

- 2013

- 0602

- 22584 1

Southern Alliance for Clean Energy (SACE) EPA

- HQ

- OAR

- 2013

- 0602

- 24961 1

Southwest Energy Efficiency Project (SWEEP) EPA

- HQ

- OAR

- 2013

- 0602

- 23962 1

Southwest Power Pool (SPP) EPA

- HQ

- OAR

- 2013

- 0602

- 20757 7

State of Kansas EPA

- HQ

- OAR

- 2013

- 0602

- 23255 1
State of Michigan (Department of Environmental Quality) EPA

- HQ

- OAR

- 2013

- 0602

- 24334 1

State of Utah, Office of the Governor EPA

- HQ

- OAR

- 2013

- 0602

- 23100 1
Tennessee Valley Authority (TVA) EPA

- HQ

- OAR

- 2013

- 0602

- 22272 1

Texas Commission on Environmental Quality (TCEQ) EPA

- HQ

- OAR

- 2013

- 0602

- 23305 1

Tri

- State Generation & Transmission Association EPA

- HQ

- OAR

- 2013

- 0602

- 23095 11

US Chamber of Commerce EPA

- HQ

- OAR

- 2013

- 0602

- 6743 1
Utility Air Regulatory Group (UARG) EPA

- HQ

- OAR

- 2013

- 0602

- 22768 21
Virginia Department of Environmental Quality EPA

- HQ

- OAR

- 2013

- 0602

- 23258 1

Virginia State Corporation Commission EPA

- HQ

- OAR

- 2013

- 0602

- 20767 1
Wabash Valley Power Association (WVPA) EPA

- HQ

- OAR

- 2013

- 060 2

- 22813 3

WEST Associates EPA

- HQ

- OAR

- 2013

- 0602

- 23973 3
Wisconsin Utilities Association (WUA) et. al. EPA

- HQ

- OAR

- 2013

- 0602

- 22746 1

Wyoming Industrial Energy Consumers (WIEC) EPA

- HQ

- OAR

- 2013

- 0602

- 23116 1169 Referenced Commenter Name Referenced Commenter Docket ID Number of Times Referenced
Wyoming Public Service Commission EPA

- HQ

- OAR

- 2013

- 0602

- 23932 1