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TABLE OF CONTENTS

CHAPTER 1 LEGAL................................................................................................................... 2

1.1 Authority to regulate carbon dioxide.................................................................................... 2

1.2 Authority to regulate EGUs................................................................................................. 63

1.3 Authority to regulate states' energy markets................................................................... 178

1.4 Combined categories and codification in the CFR .......................................................... 232

1.5 Affected sources and applicability..................................................................................... 244

1.5.1 EGU sources..................................................................................................................... 247

1.5.2 Non-EGU sources............................................................................................................. 247

1.5.3 Affected entities under Building Block 2 ....................................................................... 322

1.5.4 Affected entities under Building Block 3 ....................................................................... 328

1.5.5 Affected entities under Building Block 4 ....................................................................... 332

1.5.6 Other ................................................................................................................................. 337
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CHAPTER 1 LEGAL

1.1 AUTHORITY TO REGULATE CARBON DIOXIDE

Comment 1: EPA authority to regulate GHG

Commenters stated that EPA's proposals for major expansions of state energy efficiency and 

renewable energy programs interfere with traditional state authority in energy planning and 

appear to be well beyond the agency's authority under the CAA. The commenters stated that the 

Supreme Court's recent decision on the GHG permitting rule contains strong cautionary language 

that the court would take a skeptical view of an overly expansive interpretation of EPA's 

authority to regulate GHG.

Response 1: We disagree with this comment. In section V. of the preamble, we explain that the 

EPA’s approach in this rulemaking does not interfere with traditional state authority in energy 

planning and is not inconsistent with the Supreme Court’s recent decision on the GHG 

permitting rule.

Comment 2: Commenters stated that EPA has the legal mandate and the authority to limit the 

emission of GHG and it certainly has the moral responsibility to do so. Commenters stated that 

first, the Supreme Court has made it quite clear that EPA does have authority to regulate CO2 

emissions and greenhouse gas emissions under the Clean Air Act. But, the commenters added,

the Supreme Court has not given EPA a roving mandate to do whatever it thinks best. 

Commenters stated that in a recent case the Supreme Court again reminded EPA that anything it 

does to reduce greenhouse gases must fit within the statutory structure. Commenters stated the 

provision that EPA is now relying on is very clearly designed to get individual plants to reduce 

their emission rates. That's the way it's been used for almost 40 years. Commenters stated that's 

the only way to read the statute. Commenters added that by adopting this very aggressive and 

expansive interpretation of its own power the courts are almost certainly likely to strike that 

down. Commenters stated that people will spend an enormous amount of time and effort trying 

to figure out and comment on this proposal, and at the end of the day it is highly unlikely that it

will ever be implemented. Commenters stated the Supreme Court has upheld the authority of the 

EPA to regulate carbon emissions on three separate occasions since 2007. Commenters stated the 

Clean Power Plan is a major policy decision, and ideally, EPA would have a legislature 

addressing that issue. Nonetheless, it's clear the EPA has the authority to regulate greenhouse 

gases and pollutants under the Clean Air Act and under the Massachusetts versus EPA case since 

the endangerment filing in December, 2009. Commenters stated they support the Environmental 

Protection Agency's authority to implement standards that limit carbon pollution from existing 

sources. Commenters stated the EPA is well within its right to take such action. It can set 

standards to reduce carbon pollution from power plants. Commenters stated that they support 

EPA's authority to regulate greenhouse gases under the Clean Air Act, as determined by the 
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Supreme Court in Massachusetts v. EPA (2007) and subsequently affirmed in AEP v. 

Connecticut (2011). 

Response 2: Some of these statements are supportive of the rule and we appreciate them. We 

disagree with commenters’ statements that section 111(d) is limited to getting individual sources 

to reduce their emission rate. We explain in section V. of the preamble our authority under 

section 111(d) and (a)(1) to include building blocks 2 and 3 as part of the BSER. We also 

disagree with commenters’ statements that EPA should recommend a preferred path to meet the 

emission guidelines, such as a revenue neutral carbon tax. The states’ obligation is simply to 

meet the emission guidelines, and they enjoy broad discretion in choosing the means to do so.

Comment 3: Commenters stated that EPA has authority to regulate air pollution, including 

GHG. Commenters cited Massachusetts v. EPA, and commenters stated that after 

that decision, it was determined that the EPA has the authority under the Clean Air Act (CAA) to 

regulate greenhouse gases, including CO2. Commenters continued, stating that pursuant to the 

Supreme Court's ruling of Massachusetts v. EPA, it is clear that the EPA has the authority to 

regulate greenhouse gases since they fit well within the CAA's definition of an "air pollutant."

Commenters added a number of States, including Massachusetts, petitioned the EPA to begin 

regulating CO2 and other greenhouse gases because they argued climate change was a problem 

likely to endanger the public health. However, commenters stated, the EPA contended that they 

lacked the authority to regulate greenhouse gases because they were not pollutants as defined 

under the CAA. Further, commenters stated the EPA argued that even if they did have the 

authority to regulate greenhouse gasses, it was within the EPA's discretion to choose which 

pollutants to regulate, and those they chose not to. Finally, commenters stated, the EPA argued 

that the Petitioners lacked standing to sue because they could not show that greenhouse gases 

had harmed them. Commenters stated despite the EPA's assertions, the Supreme Court held that 

Massachusetts did have standing because, as a sovereign they had a special duty to protect their 

citizens. Additionally, the commenters added, the Supreme Court found that the Clean Air Act 

does indeed give the EPA the authority to regulate greenhouse gases and greenhouse gases fit 

well within the CAA's "capacious definition of air pollutant"(127 S. Ct. 1438 (2007)).

Commenters stated that EPA has the legal authority to regulate GHG emissions, explaining that 

Massachusetts v. EPA (2007) SCOTUS directs EPA to determine whether GHGs endanger 

public health and welfare, and if so, to regulate them pursuant to the Clean Air Act; 

Endangerment Finding (2009); Supreme Court has upheld EPA's authority and obligation to 

regulate GHGs pursuant to the Clean Air Act in every subsequent challenge to date.

Response 3: These comments are supportive of this rule and we appreciate them. 

Comment 4: Commenters stated that the Clean Air Act provides a comprehensive scheme for 

regulating air pollutants from stationary sources. See So. Coast Air Quality Mgmt. Dist. v. EPA, 

472 F.3d 882, 886 (D.C. Cir. 2006). Section 111(d) of the Act, 42 U.S.C. 7411(d), plays an 

important role by enabling EPA and states to control existing-source pollution not regulated 

under the National Ambient Air Quality Standards (NAAQS) program (sections 108-110, 42 
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U.S.C. 7408-7410) or the National Emissions Standards for Hazardous Air Pollutants (NESHAP) 

program (section 112, id. 7412). Under this scheme, commenters stated, EPA must regulate 

existing power plant CO2 emissions under section 111(d) of the Act because (1) such emissions 

are not regulated as a NAAQS pollutant or as a hazardous air pollutant; and (2) EPA has moved 

forward with regulating CO2 emissions from new power plants. Commenters remarked that 

some critics of the Proposed Rule contend that EPA lacks the authority under section 111(d) of 

the Act to regulate non-hazardous pollutants (such as CO2) from power plants because EPA is 

regulating hazardous pollutants (such as mercury) from power plants under a section 112. (See, 

e.g., Pet. for Review at 1, 23, 28, West Virginia et al. v. EPA, No. 14-1146 (D.C. Cir. Aug. 1, 

2014); see also Br. for Amici West Virginia et al. at 4-15, In Re: Murray Energy Corp., No. 14-

1112 (D.C. Cir. June 25, 014); see also, e.g., William J. Haun, The Clean Air Act as an Obstacle 

to the Environmental Protection Agency's Anticipated Attempt to Regulate Greenhouse Gas 

Emissions from Existing Power Plants, The Federalist Soc'y (Mar. 2013); Brian H. Potts, The 

President's Climate Plan for Power Plants Won't Significantly Lower Emissions, 31 Yale J. Reg. 

Online 1, 9 (Aug. 22, 2013). Commenters stated not only does such an interpretation defy 

common sense, it is based on a reading of only part of the 1990 amendments to section 111(d). 

Commenters stated the flawed nature of this incomplete reading is further demonstrated by the 

fact that it effectively would nullify section 111(d), given that section 112 regulates emissions of 

hazardous pollutants from over one hundred source categories. Even the language these critics 

rely on, when read in proper context, supports EPA's authority to promulgate the Clean Power 

Rule. See Whitman v. Am. Trucking Ass'n, 531 U.S. 457, 471 (2001) (concluding Clean Air Act 

provision unambiguous in light of statutory and historical context); see also, e.g., Zuni Pub. Sch. 

Dist. No. 89 v. Dep't of Educ., 550 U.S. 81, 89-100 (2007) (considering legislative history and 

purpose of statute to discern legislative intent)." A. A Proper Interpretation of the Statute 

Requires Giving Effect to Both of the 1990 Amendments to Section 111(d). Commenters stated

that when Congress amended the Clean Air Act in 1990, it enacted two differently worded 

amendments to section 111(d)-including one that clearly authorizes the regulation proposed here. 

Commenters stated both amendments appear in the Statutes at Large, but the U.S. Code language 

erroneously does not reflect the fact that two amendments were enacted into law. Commenters 

stated EPA's proposal to regulate CO2 from existing power plants is lawful under the 1990 

amendments, as enacted. Commenters stated understanding the two amendments requires a brief 

background on section 111(d)'s place in the Clean Air Act's comprehensive scheme. Commenters 

stated Section 111(d) is one of the Act's three primary avenues to regulate existing stationary 

sources. Commenters stated the two other avenues-the NAAQS of section 108 and 110; and the 

hazardous-air-pollutants program of section 112-address emissions of certain listed 

pollutants. Commenters stated Section 111(d), by contrast, more broadly authorizes EPA to 

establish standards for any emissions from existing sources that endanger public health or 

welfare but that are not regulated under the other two programs. (Section 111(b) mandates 

standards for new and modified sources, and section 111(d) mandates standards for existing 

sources if those standards "would apply if [the existing sources] were a new source." 42 U.S.C. 

7411(b), (d).) Thus, commenters added, these provisions collectively "establish[] a 

comprehensive program for controlling and improving the nation's air quality." See Luminant 

Generation Co. v. EPA, 675 F.3d 917, 921 (5th Cir. 2012) (internal quotation omitted). 
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Commenters stated before the 1990 amendments, section 111(d)(1) required that state plans 

address "any air pollutant which is not included on a list published under Section 7408(a)," i.e.,

NAAQS, "or 7412(b)(1)(A) of this title," a cross-reference to the previous version of section 

112's hazardous-air-pollutants program. See 42 U.S.C. 7411(d) (West 1977). Commenters stated 

Section 111(d) thus functioned to mandate the regulation of air pollutants from existing 

stationary sources that were not otherwise covered by the NAAQS or the hazardous-pollutants 

program. Commenters stated in 1990, after EPA's delays in listing (and thereby regulating) 

hazardous air pollutants "proved to be disappointing," Sierra Club v. EPA, 353 F.3d 976, 979-80 

(D.C. Cir. 2004), Congress extensively amended section 112 to change its regulatory approach. 

Rather than relying on EPA's listing of hazardous air pollutants to trigger their regulation under 

section 112-something EPA had rarely done-Congress instead listed 189 hazardous air pollutants 

itself and directed EPA to list categories of major sources and area sources for each of these 

pollutants and then to establish emission standards for each source category. 42 U.S.C. 

7412(b)(1), (c)(1), (d)(1). (EPA retained the authority to list additional pollutants for regulation 

under section 112, either on its own or in response to a petition to modify the list. See 42 U.S.C. 

7412(b)(2), (3).) Commenters stated Congress amended section 111(d)'s preexisting reference to 

section 112 to conform it to these structural changes. However, commenter stated, different 

conforming language from the House and Senate bills amending section 111(d) was included in 

the final legislation without being reconciled in conference. Commenters stated both 

amendments were signed into law by the President and appear in the Statutes at Large, but only 

the House amendment appears in the U.S. Code. Commenters stated the Senate amendment 

simply replaces the former cross-reference to section 7412(b)(1)(A), which was eliminated by 

the 1990 amendments, with a new cross-reference to that section's replacement, section 7412(b): 

it thus requires section 111(d) standards for "any air pollutant (i) for which air quality criteria 

have not been issued or which is not included on a list published under section 108(a) or section 

112(b)." Pub. L. No. 101-549, S. 302(a), 104 Stat. 2399, 2574 (1990). Thus, commenters stated, 

the Senate amendment preserves section 111(d)'s longstanding role as a source of regulation for 

pollutants (such as CO2) that are not otherwise regulated under the NAAQS or the hazardousair-pollutants program. Commenters stated the House amendment replaces the section 112 crossreference with different language: it requires section 111(d) standards for "any air pollutant (i) 

for which air quality criteria have not been issued or which is not included on a list published 

under section 108(a) or emitted from a source category which is regulated under section 112 of 

this title." Pub. L. No. 101-549, S. 108(g), 104 Stat. 2399, 2467 (1990). As explained below, 

commenters stated that language, like the Senate amendment, can be read to preserve section 

111(d)'s application to non-NAAQS and non-hazardous air pollutants such as CO2. See infra 

Section II.C. Commenters stated that even if the House amendment were interpreted in the way 

opponents have urged, that language would not control. Commenters stated because both 

amendments were enacted into law, it is necessary to consider the effect of the Senate 

amendment, which, as EPA recognized in the Proposed Rule, would indisputably authorize the 

Rule. See 79 Fed. Reg. at 34,844; see also Citizens to Save Spencer County v. EPA, 600 F.2d 

844, 872 (D.C. Cir. 1979) (where Congress "drew upon two bills originating in different Houses 

and containing provisions that, when combined, were inconsistent in respects never reconciled in 

conference...it was the greater wisdom for [EPA] to devise a middle course...to give maximum 
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possible effect to both"). Commenters stated it is well-established that the text of the Statutes at 

Large (which contains both amendments enacted by Congress and signed by the President) 

governs when it is inconsistent with the U.S. Code. United States Nat'l Bank of Or. v. Indep. Ins. 

Agents of Am., 508 U.S. 439, 448 (1993) ("[D]espite its omission from the Code [a provision] 

remains on the books if the Statutes at Large so dictates.").(See also United States v. Welden, 

377 U.S. 95, 98 n.4 (1964), and sources cited (unless codification enacted into positive law, 

where language of Statutes at Large and U.S. Code are inconsistent, "recourse must be had to the 

original statutes themselves" and discrepancy in U.S. Code "should be given no weight").)

Commenters stated the fact that the Office of Law Revision Counsel simply was unable to 

execute the Senate amendment because the House amendment, which appeared earlier in the 

legislation, had already resulted in striking the same text, (The House Amendment appears one 

hundred and seven pages before the Senate amendment in the 1990 legislation. See Pub. L. No. 

101-549, S. 108, 302(a), 104 Stat. 2399, 2467, 2574 (1990)) does not change the longstanding 

principle of law that the Statutes of Large, not the U.S. Code, controls when the text of the two 

differs. Additionally, the commenters stated, there is no basis to treat one amendment as more 

substantive than another. As explained above, the commenters stated the substantive changes 

Congress made in 1990 were to section 112, not to section 111(d). Commenters stated the 

amendments at issue here alter section 111(d)'s cross-reference to section 112 in response to the 

structural changes to section 112, and both amendments appeared under similar catch-all 

headings in the House Conference Report, adopted by the House and Senate (H.R. Conf. Rep. 

101-952, at 50, 122 (1990)): "Conforming Amendments" (Senate) and "Miscellaneous 

Guidance" (House). See Pub. L. No. 101-549, sections 108, 302(a), 104 Stat. 2399, 2467, 2574 

(1990). Commenters added the legislative history indicates that Congress intended the Senate's 

amendment to section 111(d) to be in the final bill. Commenters stated that after the House 

amended the Senate's bill and deleted the Senate's seven "Conforming Amendments" (including 

the revision to section 111(d)), the Conference Committee added the Senate's conforming 

amendments back in to the final bill. Compare S. 1630, 101st Cong. (as passed by House, May 

23, 1990) with Pub. L. No. 101-549, section 302(a), 104 Stat. 2399, 2574 (1990). Thus, 

commenters stated, both the House amendment and Senate amendment are law and both 

authorize the Clean Power Rule EPA has proposed here. B. Public Policy, EPA's Longstanding 

Practice, and Other Provisions of the Act Support an Interpretation of Section 111(d) That 

Authorizes the Clean Power Rule. Commenters noted that an interpretation that would prohibit 

regulation of CO2 from power plants and other existing stationary sources under section 111(d) 

would have far-reaching consequences that cannot be reconciled with the Clean Air Act's broad 

protective purposes. Commenters stated sources that emit hazardous air pollutants, and that thus 

could be regulated under section 112, also emit a broad range of other pollutants, including CO2. 

Commenters stated the implication of a reading that precludes 111(d) regulation of any pollutant 

(here, CO2) that may be emitted from a 112(c)-listed source category but is not actually 

regulated under section 112 demonstrates the fallacy of such an interpretation: EPA would have 

to either choose to use section 112 to address dangers associated with power plant hazardous air 

pollutants (such as harm caused by eating mercury-contaminated fish) or to use section 111(d) to 

address the "serious and well recognized" climate-change harms caused by CO2 emissions from 

power plants. See Massachusetts, 549 U.S. at 521; 79 Fed. Reg. at 34,833. Commenters stated 
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that under such an interpretation it could not choose to do both. (Such an interpretation could 

have adverse public health and environmental impacts apart from hampering efforts to curb CO2 

from the largest sources of that pollutant because EPA has used section 111(d) to regulate other 

harmful pollutants, such as sulfuric acid mist and fluoride compounds, that are emitted from 

sources regulated under section 112. See infra, note 23.) Commenters stated it makes no sense 

that Congress would have directed EPA to make such a choice in a statute designed to protect 

public health and welfare. Commenters stated the Act's principal purpose to "protect and enhance 

the quality of the Nation's air resources," 42 U.S.C. 7401(b)(1), would hardly be served if EPA 

were limited to regulating only one set of dangerous pollutants, but not another, from the most 

serious polluters in the country. In particular, commenters stated, such an interpretation would 

exclude the largest sources of CO2 from regulation under section 111(d) by virtue of the fact that 

those sources-such as power plants, petroleum refineries, and cement plants-are already 

regulated under section 112 due to their emission of hazardous air pollutants. Commenters stated 

this new gap in regulation would undermine an obvious function of section 111(d) that the 

Supreme Court recognized in AEP v. Connecticut: namely, to "provide[] a means to seek limits 

on emissions of carbon dioxide from domestic power plants." 131 S. Ct. at 2537-38. Commenter 

stated nothing in the legislative history of the 1990 amendments suggests that Congress intended 

such a radical result when it replaced section 111(d)'s cross-reference to the hazardous-airpollutant program. Commenters stated in both the House and the Senate, these minor changes to 

section 111(d) were made without any debate or discussion, strongly suggesting that the purpose 

of both amendments was to preserve section 111(d)'s role to fill the gap where emissions are 

unregulated under the other programs. Indeed, commenters stated, in compiling the legislative 

history of the 1990 amendments, the Congressional Research Service transcribed the Clean Air 

Act, as amended, by including both the House and Senate versions of the amendments to section 

111(d) with the notation that the amendments are "duplicative" and simply use "different 

language [to] change the reference to section 112." A Legislative History of the Clean Air Act 

Amendments of 1990, vol. 1 at 46 & n.1 (1993). Commenters stated silence in legislative history 

accompanying a subtle legislative change indicates that Congress did not intend to alter the 

preexisting scheme significantly. See United States v. Neville, 82 F.3d 1101, 1105 (D.C. Cir. 

1996).(See also Dir. of Revenue of Mo. v. CoBank ACB, 531 U.S. 316, 323 (2001) (declining to 

conclude conforming amendment substantively altered states' taxing power "because there is no 

indication Congress intended to change the taxation of banks for cooperatives with the 1985 

amendments")). Commenters added as the Supreme Court has stated, Congress "does not...hide 

elephants in mouse-holes." Whitman, 531 U.S. at 468. Thus, commenters stated, EPA's 

interpretation of section 111(d) properly rejects the "anomalous effect" of the reading proffered 

by the Proposed Rule's opponents, which would force EPA to select only one set of harmful 

pollutants to regulate based "simply on the fortuity that [these pollutants] share [] a source." 

Desert Citizens Against Pollution v. EPA, 699 F.3d 524, 527-28 (D.C. Cir. 2012) (rejecting 

petitioners' "linguistically possible" view of statute and upholding EPA's interpretation). 

Commenters stated reading section 111(d) to permit regulation of CO2 from power plants, where 

CO2 emissions from power plants are not regulated under section 112, also is consistent with 

EPA's longstanding regulation (both before and after the 1990 amendments) of source categories 

under section 111(d) and section 112.(See, e.g., 61 Fed. Reg. 9,905 (Mar. 12, 1996) & 40 C.F.R. 
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pt. 63, subpt. AAAA (regulating landfills under section 111(d) for methane and non-methane 

organic compounds and under section 112 for vinyl chloride, ethyl benzene, toluene, and 

benzene); 42 Fed. Reg. 12,022 (Mar. 1, 1977) & 40 C.F.R. pt. 63, subpt. BB (regulating fluorides 

from phosphate fertilizer plants under section 111(d) and regulating hydrogen fluoride and other 

pollutants under section 112)) Commenters stated EPA's practice is supported by the plain 

language of other provisions of section 112 as amended in 1990, which further evidences 

Congress' understanding that different emissions from the same source categories could be 

regulated under both sections 111 and 112.(The D.C. Circuit in New Jersey v. EPA, 517 F.3d 

574 (D.C. Cir. 2008), did not reach the question whether, if a source is listed under section 112, 

EPA lacks authority to regulate that source under section 111(d). Instead, because the court 

determined that EPA's delisting of power plants from section 112 was improper, and "under 

EPA's own interpretation" it could not use section 111(d) to regulate mercury (a section 112-

listed hazardous air pollutant) from this section 112-listed source category, the court concluded 

that the section 111(d) rule was invalid. Id. at 583.) For example, commenters stated, Congress 

directed EPA to keep its lists of source categories "consistent" between sections 111 and 112. 42 

U.S.C. 7412(c)(1); see also id. 7412(d)(7) ("No emission standard or other requirement 

promulgated under this section shall be interpreted . . . to diminish or replace the requirements of 

a more stringent emission limitation or other applicable requirement established pursuant to 

section 7411"). Commenters stated Congress' intent to avoid duplicative regulation is maintained 

fully by precluding the use of section 111(d) to regulate emissions from existing sources if those 

same emissions are being regulated under section 112. Commenters stated Congress simply did 

not intend to sacrifice comprehensive public health protections by forgoing regulation of harmful 

but non-hazardous air pollutants from source categories that happen to also emit a hazardous air 

pollutant. Commenters stated the House amendment does not strip EPA's authority to regulate 

CO2 emissions under Section 111(d). Commenters stated that the House amendment is subject to 

multiple interpretations and therefore even viewed in isolation would not preclude regulation of 

CO2 from power plants. Commenters stated, in light of the statutory context, it may be viewed as 

a shorthand way of preserving section 111(d)'s traditional role as a source of authority to regulate 

emissions not covered by the NAAQS or the hazardous-air-pollutant programs. Commenters 

stated for sources subject to regulation under section 111(b), the House amendment requires 

performance standards: "for any existing source for any air pollutant (i) for which air quality 

criteria have not been issued or which is not included on a list published under section 7408(a) or 

emitted from a source category which is regulated under section 7412 [i.e., the hazardous-airpollutants program]." Commenters stated the phrase "which is regulated under section 7412" 

could be read as modifying both "any air pollutant" and "source category," thus referring to those 

emissions that are actually subject to section 112 emissions standards because (a) the pollutant is 

"regulated under section 7412"-i.e. listed as a hazardous air pollutant, and (b) the source category 

for that pollutant is "regulated under section 112-i.e. listed as a source category subject to section 

112 regulation. Read this way, commenters added, the House amendment is a shorthand way of 

cross-referencing section 112 to clarify that section 111(d) only precludes regulation of a 

pollutant from a specific source category (e.g., mercury from power plants) if those emissions 

are actually regulated under section 112.(So read, the House amendment would even authorize 

section 111(d) standards for listed hazardous air pollutants, so long as they are emitted from 
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sources that are not regulated under section 112 for those pollutants.) Commenters stated 

consistent with the purpose of the Act and 1990 amendments overall, this interpretation of the 

House amendment would preserve section 111(d)'s role in the Act's comprehensive scheme by 

authorizing standards for emissions not otherwise regulated under the Act, and there would be no 

bar to EPA's promulgation of CO2 standards under section 111(d). Indeed, commenters stated, 

any reading of section 111(d) that is consistent with its gap-filling role in the Act's 

comprehensive scheme must authorize EPA to regulate CO2 emissions from existing power 

plants because those emissions are not otherwise regulated under the Act. Commenters

summarized, stating that because CO2 emissions from existing power plants are not regulated as 

criteria pollutants or hazardous air pollutants, and because EPA has moved forward with 

regulation of power plant CO2 emissions under section 111(b), EPA has authority to promulgate 

the Proposed Rule. 

Response 4: EPA agrees that it has the authority to promulgate regulations addressing CO2 

emissions from existing power plants under section 111(d). EPA’s discussion of this issue is in 

Section IV of the preamble.

Comment 5: Commenters stated that in light of the recent Supreme Court decision in the UARG 

v EPA case, they question EPA's authority for the proposed Clean Power Plan, which would 

"bring about an enormous and transformative expansion in EPA's regulatory authority without 

clear congressional authorization."(UARG v. EPA et al., 134 S. Ct. at 2444.)

Commenters stated EPA can regulate GHGs, but only within the narrow limits of what Congress 

has authorized under the CAA. Commenters explained that Congress created a number of 

different regulatory programs with carefully defined limit and some of these programs can be 

used to regulate GHGs, but EPA may only do so in a way that complies with the limits 

established by Congress. Commenters added the recent Supreme Court decision makes this point 

quite clearly, citing on June 23, 2014, the Court issued its UARG v. EPA decision.

Response 5: We disagree with these comments. We discuss our authority to promulgate this 

rule, including why this rule is not inconsistent with the U.S. Supreme Court’s decision in UARG 

v. EPA, in section IV of the preamble and Section XXII of the Legal Memo.

Comment 6: Commenters stated that the industry interpretation of Section 111(d) is textually 

and logically flawed, and must be rejected. Commenters explained that the structure and context 

of the 1990 Amendments signal the opposite concern: that EPA was not proceeding diligently 

enough to limit harmful air pollution, and in rejecting an interpretation put forth by some 

industry advocates that would prevent EPA from regulating under section 111(d) all "HAP or 

non-HAP emitted from a source category regulated under section 112," EPA has affirmed that

[s]uch a reading would be inconsistent with the general thrust of the 1990 amendments, which, 

on balance, reflects Congress' desire to require EPA to regulate more substances, not to eliminate 

EPA's ability to regulate large categories of pollutants like non-HAP. Furthermore, commenters

added, EPA has historically regulated non-HAP under section 111(d), even where those nonHAP were emitted from a source category actually regulated under section 112. See, e.g., 40 
10

CFR 62.1100 (California State Plan for Control of Fluoride Emissions from Existing Facilities at 

Phosphate Fertilizer Plants). Commenters stated they do not believe that Congress sought to 

eliminate regulation for a large category of sources in the 1990 Amendments and our proposed 

interpretation of the two amendments to section 111(d) avoids this result. (70 Fed. Reg. 16,032 

(Mar. 29, 2005) Commenters continued, stating that the Supreme Court has held that, where 

dealing with conflicting statutory provisions, it is appropriate to adopt a construction that is 

"more consonant with the functions sought to be served by the Act" and that does not "impute to 

Congress a purpose to paralyze with one hand what it sought to promote with the other." Clark v. 

Uebersee Finanz-Korp, 332 U.S. 480, 489 (1947); see also Motor Vehicle Mfrs. Ass'n of U.S., 

Inc. v. Ruckelshaus, 719 F.2d 1159, 1165 (D.C.Cir.1983) ("A statute should ordinarily be read to 

effectuate its purposes rather than to frustrate them."). Here, commenters stated, the ends that the 

Act seek to advance are the protection of public health and welfare from air pollution, a goal 

clearly disserved by an interpretation that would bar EPA from curbing harmful CO2 pollution 

under section 111(d). 42 U.S.C. S.7401(b)(1). Commenters stated to read the statute as 

foreclosing existing-source standards of performance for any pollutant emitted by a source 

category regulated under section 112 would, as a practical matter, render section 111(d) 

inoperative as to virtually all pollutants, since the sources regulated under section 112 emit 

virtually every pollutant imaginable that might be subject to section 111(d) standards. 

Commenters stated the industry reading would thwart the Act's - and section 111's - core purpose 

of protecting public health and welfare, see S. 7401(b)(1), 7411(b)(1)(A), since it would allow 

entire classes of pollutants (in this case, CO2) to go unregulated, no matter how harmful to the 

public health and welfare they may be. Commenters argued that to imply that Congress gave 

EPA the choice of regulating power plant emissions of either CO2 or mercury, but not both, 

makes a mockery of the statute and its goal of protecting the public health and welfare. 

Commenters continued, stating that the industry reading of section 111(d) would not even serve 

the purpose that some industry advocates have attributed to it "avoiding duplicative regulation of 

pollutants that are already being regulated under sections 108 or 112" because CO2 is not being 

regulated under either of those two other sections. Thus, commenters stated, the net result of 

such a misguided reading would be no regulation of CO2 emissions from existing power plants 

under any Clean Air Act program. Commenters stated to allow such a harmful pollutant to fall 

through the regulatory cracks based on the mere fortuity that EPA has decided to control 

emissions of some other pollutant from that source not only contravenes the Act's and section 

111's health-and-welfare protective purpose, but also makes no sense. Commenters stated time 

and again, the Supreme Court has declined to interpret statutes "including the Clean Air Act" in 

such a fashion. See e.g., Engine Mfrs. Assn. v. South Coast Air Quality Management District, 

541 U.S. 246, 255 (2004) (rejecting reading that "would make no sense"); Desert Citizens 

Against Pollution v. EPA, 699 F.3d 524, 527-28 (D.C. Cir. 2012) (EPA permissibly rejected 

interpretation that "would have the anomalous effect of changing the required stringency of nonS. 112(c)(6) HAPs at a given area source . . . simply on the fortuity that the non-S. 112(c)(6) 

HAPs in question shared a source with one or more S. 112(c)(6) HAPs") (emphasis added); 

Roberts v. Sea-Land Services, 132 S. Ct. 1350, 1359-60 (2012) ("Under Roberts' reading, two 

employees who earn the same salary and suffer the same injury on the same day could be entitled 

to different rates of compensation based on the happenstance of their obtaining orders in 
11

different fiscal years. Commenters closed, stating they can imagine no reason why Congress 

would have intended, by choosing the words "newly awarded compensation," to differentiate 

between employees based on such an arbitrary criterion."). 

Response 6: EPA agrees with these comments that the Section 112 Exclusion in section 111(d) 

is not properly read to preclude EPA from promulgating regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble.

Comment 7: Commenters stated that EPA's flexible, cost-minimizing approach to setting 

performance standards for existing power plants is consistent with over thirty years of EPA 

Clean Air Act practice, under administrations of both parties, and opponents of the Clean Power 

Plan have argued that EPA is taking unprecedented and unwarranted steps to regulate carbon 

dioxide under the Clean Air Act, including: instituting statewide limits on the rate of emissions, 

when the statute refers to limits on sources; imposing regulations that will result in a shift of the 

balance of fuels used to produce electricity; considering demand-side energy efficiency measures 

in analyzing how states can meet the requirements of the Act; applying performance standards to 

existing sources that are regulated under the hazardous air standards; and accounting for cobenefits, such as the reductions in harmful particulate matter that will occur in tandem with 

greenhouse gas reductions, in the rule's cost-benefit analysis. However, commenters provided

comments they believe will show EPA has repeatedly undertaken similar approaches to Clean 

Air Act regulation under both Republican and Democratic administrations, and the comments 

will also address why the EPA's flexible, cost-minimizing approach is preferable to a strict, 

technology-based standard and suggest some ways in which EPA could make the program even 

more efficient. Commenters listed 5 themes: I. Substantial precedent exists for statewide limits, 

including trading, where the statue refers to constraints on individual sources II. Substantial 

precedent exists for programs under Clean Air Act that influence the type of fuel used for the 

production of electricity III. Substantial precedent exists for Clean Air Act regulatory programs 

that incorporate energy efficiency, including demand-side efficiency, into compliance options 

IV. Substantial precedent exists to interpret the "Section 112 Exclusion" as consistent with the 

Clean Power Plan V. Consistent with longstanding regulatory best practices, EPA is justified in 

counting all significant co-benefits and qualitative benefits of the Clean Power Plan. 

Commenters continued, stating that EPA, scholars, and advocates offer a variety of compelling 

arguments based on the section's text, structure, and legislative history - as well as judicial 

principles of statutory interpretation and agency deference - that strongly support the agency's 

authority under Section 111(d) to regulate greenhouse gases from existing power plants, because 

greenhouse gases from power plants are not hazardous pollutants regulated under Section 

112.(See, e.g., Avi Zevin, Dueling Amendments: The Applicability of Section 111(d) of the 

Clean Air Act to Greenhouse Gases (Policy Integrity Working Paper, 2013) (reviewing the 

legislative history and implications of various approaches to statutory interpretation), available at 

http://policyintegrity.org/files/publications/2014-5_Zevin.pdf.) These comments build on those 

compelling arguments in support of the agency's authority, by exploring EPA's regulatory history 

of interpreting the dueling amendments in Section 111(d). Commenters added that President 
12

George H.W. Bush's EPA Viewed the Section 112 Exclusion as Focused on Pollutants, Not 

Source Categories. In a May 1991 proposal of emissions guidelines for municipal solid waste 

landfills - just six months after the passage of the 1990 Clean Air Act Amendments and their 

dueling provisions - EPA defined the scope of Section 111(d) as excluding only certain 

pollutants, not entire source categories: When an NSPS has been promulgated under section 

111(b) for a category of sources, section 111(d) of the CAA requires that States submit plans 

which establish emission standards for existing sources and provide for implementation and 

enforcement of emission standards for the designated pollutant. In general, commenters stated, a 

designated pollutant is one that may cause or contribute to endangerment of public health or 

welfare but is not hazardous within the meaning of section 112 of the CAA and is not controlled 

under sections 108 through 110 of the CAA.(Standards of Performance for New Stationary 

Sources and Guidelines for Control of Existing Sources: Municipal Solid Waste Landfills, 56 

Fed. Reg. 24,468, 24,469 (May 30, 1991)) Commenters stated the proposed rule never discusses 

the dueling amendments or any controversy around the scope of Section 111(d), even though it 

mentions the option of alternatively regulating landfills under Section 112. (Id. at 24,474 ("EPA 

was cognizant that section 112 of the CAA (which can be used to develop NESHAP) could have 

been used. However, given the uncertainty and difficulty in setting standards under section 112, 

EPA decided to proceed with standards development under section 111.")) Commenters stated 

under the Bush Administration's definition, EPA today would clearly have authority to regulate 

greenhouse gases from existing power plants, since greenhouse gases "contribute to 

endangerment of public health or welfare but [are] not 'hazardous' within the meaning of section 

112 of the CAA and [are] not controlled under sections 108 through 110." Commenters

continued, stating that President Clinton's EPA Continued Reviewing Section 111(d) Plans for 

categories also regulated under Section 112, and continued a pollutant-focused view of the 

exclusions. Commenters stated that in 1998, the Clinton EPA issued hazardous air pollutant 

standards under Section 112 for pulp and paper producers, including Kraft pulp mills.(National 

Emission Standards for Hazardous Air Pollutants for Source Categories: Pulp and Paper 

Production, 63 Fed. Reg. 18,504 (Apr. 15, 1998); see 40 C.F.R. pt. 63 subpt. S.) Commenters 

stated in the rulemaking, EPA did not indicate any potential conflict with its existing Section 

111(d) guidelines on total reduced sulfur from Kraft pulp mills, which EPA had issued in 

1979.(Kraft Pulp Mills; Final Guideline Document, 44 Fed. Reg. 29,828 (May 22, 1979).)

Commenters stated that moreover, President Clinton's EPA continued to review and approve 

state implementation plans for Kraft pulp mills and their total reduced sulfur emissions under 

Section 111(d), as evident by the approval of Maryland's plan in 1999, despite the separate 

Section 112 standards applicable to the source category for different pollutants.(Approval and 

Promulgation of State Air Quality Plans for Designated Facilities and Pollutants; Maryland; 

Proposed Revision to Section 111(d) Plan Controlling Total Reduced Sulfur Emissions from 

Existing Kraft Pulp Mills, 64 Fed. Reg. 59,718 (Nov. 3, 1999). The fact that the Section 111(d) 

regulations predated the Section 112 regulations, and not vice versa, could be significant, though 

the legal grounds for any such distinction are unclear.) Commenters stated President Clinton's 

EPA also continued work on the municipal solid waste landfill regulation first proposed by the 

previous administration, and continued to view the scope of Section 111(d) as excluding only 

certain pollutants, not entire source categories. Commenters stated that in a 1995 background 
13

report, EPA's Office of Air Quality Planning and Standards focused on the seemingly more 

limiting House amendment and initially concluded that future regulation of landfill gas under 

Section 112 could preclude the proposed regulation under Section 111(d). Importantly, though, 

commenters added, "landfill gas" is a complex mix of pollutants that includes hazardous 

substances. Commenters stated the report goes on to explain, "Some components of landfill gas 

are not hazardous air pollutants listed under section 112(b) and thus will not be regulated under a 

section 112(d) emissions standard," implicitly leaving such non-hazardous pollutants for Section 

111(d) regulation.(Office of Air Quality Planning and Standards, EPA-453/R-94-021, Air 

Emissions from Municipal Solid Waste Landfills' Background Information for Final Standards 

and Guidelines (1995).) Commenters stated when the emissions guidelines on landfill gas were 

finalized the following year, EPA did not discuss the scope of Section 111(d), even as the agency 

indicated that it might issue hazardous air pollutant standards for landfills in the 

future.(Standards of Performance for New Stationary Sources and Guidelines for Control of 

Existing Sources: Municipal Solid Waste Landfills, 61 Fed. Reg. 9905, 9906 (March 12, 1996) 

("[M]ercury might be emitted from landfills. The EPA is still looking at the possibility and will 

take action as appropriate in the future under [Section 112].")) Commenters stated when EPA 

finally proposed hazardous air pollutant standards for landfills in the final months of the Clinton 

administration, the rule explicitly indicated that the Section 111(d) emissions guidelines would 

continue to apply: "The additional [Section 112] requirements [are] above and beyond the 

[Section 111] EG/NSPS....[T]hese landfills continue to remain subject to the provisions of the 

EG/NSPS as applicable."(National Emission Standards for Hazardous Air Pollutants: Municipal 

Solid Waste Landfills, 65 Fed. Reg. 66,672, 66,674-75 (Nov. 7, 2000); see also Id. at 66,678 

("Landfills are already regulated in the EG/NSPS under authority of section 111. . . . Therefore, 

the proposed rule contains the provisions of the EG/NSPS, plus the provisions discussed above 

from section 112.")) Commenters stated the Clinton EPA even more directly continued taking a 

pollutant-focused approach to the Section 112 exclusion in proposing Section 111(d) guidelines 

for medical waste incinerators: [C]ontrol under section 111(d) is appropriate when the pollutant 

may cause or contribute to endangerment of public health or welfare but is not known to be 

'hazardous' within the meaning of section 112 and is ...not emitted from 'numerous or diverse' 

sources as required by section 108." (Proposed Standards of Performance for New Stationary 

Sources and Emission Guidelines for Existing Sources: Medical Waste Incinerators, 60 Fed. 

Reg. 10,654, 10,657 (Feb. 27, 1995). The rule was proposed jointly under sections 111(d) & 

129.) Commenters concluded that under any of the Clinton administration's interpretations, EPA 

today could regulate greenhouse gases from existing power plants under Section 111(d). 

Commenters stated, regarding President George W. Bush's EPA Continued the Clinton 

Administration's Approaches to Sections 111 and 112, that much like under President Clinton, 

President George W. Bush's EPA continued to review and approve states' Section 111(d) plans 

for Kraft pulp mills, even though pulp and paper plants were also regulated under Section 

112.(Approval and Promulgation of Air Quality Implementation Plans; Maine; Total Reduced 

Sulfur from Kraft Paper Mills, 68 Fed. Reg. 23,209 (May 1, 2003); Approval and Promulgation 

of State Air Quality Plans for Designated Facilities and Pollutants; Commonwealth of Virginia; 

Control of Total Reduced Sulfur from Pulp and Paper Mills, 72 Fed. Reg. 59,017 (Oct. 18, 

2007). Commenters stated under the Bush Administration's view, the continued applicability of 
14

pre-1990 Section 111(d) guidelines after subsequent regulation under Section 112 may present a 

different case than what EPA faces today with the Clean Power Plan, when Section 112 

regulation of power plants predates the proposal to use Section 111(d) for greenhouse gases. See 

Regulating Greenhouse Gases under the Clean Air Act, 73 Fed. Reg. 44,354, 44,493 (July 30, 

2008) (asking for comments on "the continued validity of the section 111(d) regulations" if "we 

were to promulgate a section 111(d) emission standard and then subsequently take action under 

sections 108 or 112 such that we could not promulgate a section 111(d) standard had we not 

already done so."). The grounds for any such legal distinction are unclear.) Commenters stated 

Bush's EPA also finalized hazardous air pollutant standards for landfills, which had been 

proposed in the Clinton administration's final days. Commenters stated that just as in the Clinton 

proposal, the final hazardous air pollutant standard indicated that the Section 111(d) emissions 

guidelines would continue operating.(National Emission Standards for Hazardous Air Pollutants: 

Municipal Solid Waste Landfills, 68 Fed. Reg. 2227, 2229 (Jan. 16, 2003) ("[Qualifying sources] 

would continue to be subject to the EG/NSPS as applicable, plus additional requirements 

imposed [under section 112].").) To that end, commenters added, after the final hazardous air 

pollutant standard was published, EPA continued reviewing state plans for landfill gas under 

Section 111(d), explaining that the approvals were "based on section 111(d) requirements of the 

Act, not sections 110 and 112."(Approval and Promulgation of State Air Quality Plans for 

Designated Facilities and Pollutants, Commonwealth of Pennsylvania; Control of Landfill Gas 

Emissions from Existing Municipal Solid Waste Landfills, 68 Fed. Reg. 74,868, 74,868 (Dec. 

29, 2003); see also 68 Fed. Reg. 37,421, 37,422 (June 24, 2003) ("A designated pollutant means 

any air pollutant . . . which is not included on a list published under section 108(a) or section 

112(b)(1)(A) of the Act.")) Commenters stated that in 2005, the George W. Bush administration 

decided to delist power plants from Section 112 and regulate their mercury emissions under 

Section 111(d) instead. Commenters stated though the D.C. Circuit eventually struck down the 

plan on unrelated grounds, the rulemakings show that EPA grappled with the dueling 

amendments and came down firmly in favor of harmonizing the amendments [Delisting Rule, 

Revision of December 2000 Regulatory Finding on the Emissions of Hazardous Air Pollutants 

From Electric Utility Steam Generating Units and the Removal of Coal- and Oil-Fired Electric 

Utility Steam Generating Units From the Section 112(c) List, 70 Fed. Reg. 15,994, 16,031 (Mar. 

29, 2005) ("The canon of statutory construction that calls for harmonizing conflicting statutory 

provisions, where possible, and adopting a reading that gives some effect to both provisions is 

not controlling here because that canon applies where two provisions of a statute are in conflict, 

not where two amendments to the same statutory provision are in conflict. Nevertheless, we have 

attempted to follow the general principles underlying this canon of construction. . . . While it 

appears that the Senate amendment to section 111(d) is a drafting error and therefore should not 

be considered, we must attempt to give effect to both the House and Senate amendments, as they 

are both part of the current law.") (emphasis added).] through a reasonable reading [Id. at 16,032 

("This is a reasonable interpretation of the amendments to section 111(d) because it gives some 

effect to both amendments. . . . [T]he question is not whether commenters have [also] identified a 

reasonable construction of section 112(d). Rather, the issue is whether our construction is a 

permissible one.").] of ambiguous language, [Id. at 16,031 ("Although we recognize that the 

phrase 'a source category' is susceptible to different interpretations, in that it could conceivably 
15

mean one or many source categories, we believe that our interpretation is a permissible 

construction.").] offering an interpretation that focuses on pollutants, not category-wide 

exemptions,[Id. at 16,031-32 ("Where a source category is being regulated under section 112, a 

section 111(d) standard of performance cannot be established to address any HAP listed under 

section 112(b) that may be emitted from that particular source category.").] and that respects 

both the "general thrust" of congressional intent [Id. at 16,032 ("[T]he general thrust of the 1990 

amendments . . . on balance, reflects Congress' desire to require EPA to regulate more 

substances, not to eliminate EPA's ability to regulate large categories of pollutants like nonHAP.").] and regulatory history.[Id. ("Furthermore, EPA has historically regulated non-HAP 

under section 111(d), even where those non-HAP were emitted from a source category actually 

regulated under section 112. See, e.g., 40 CFR 62.1100 (California State Plan for Control of 

Fluoride Emissions from Existing Facilities at Phosphate Fertilizer Plants).").] For example, the 

agency noted that, "EPA has historically regulated non-HAP under section 111(d), even where 

those non-HAP were emitted from a source category actually regulated under section 112."[Id.] 

Ultimately, EPA changed the definition of "designated pollutants" (i.e., those pollutants subject 

to Section 111(d)), finally replacing the pre-1990 version but maintaining its essential scope and 

confirming that Section 111(d) can regulate pollutants emitted by source categories regulated 

under Section 112 so long as those particular pollutants are not listed under Section 

112.[Standards of Performance for New and Existing Stationary Sources: Electric Utility Steam 

Generating Units, 70 Fed. Reg. 28,649 (May 18, 2005).] Commenters concluded that applying 

that definition today, EPA would be authorized to regulate greenhouse gases from existing power 

plants. Commenters stated as a coda to the Bush administration's work on Section 111(d), in its 

advanced notice of proposed rulemaking on greenhouse gases in 2008, EPA explained that 

Section 111(d) "provides a 'regulatory safety net' for pollutants not otherwise subject to major 

regulatory programs under the CAA. Section 111 provides EPA and states with significant 

discretion concerning the sources to be regulated."[Regulating Greenhouse Gases under the 

Clean Air Act, 73 Fed. Reg. 44,354, 44,418 (July 30, 2008); see also Id. at 44,421 ("[L]isting an 

air pollutant as a HAP under section 112(b) generally precludes regulation of that air pollutant 

from existing sources under section 111(d).")] Commenters stated that President Obama's EPA 

Continues a Pollutant-Focused Reading of the Section 112 Exclusion and explains that President 

Obama's EPA already settled on its view of the scope of Section 111(d), back in 2012. 

Commenters stated in returning to Section 112 for regulation of mercury from power plants, 

EPA changed the definition of "designated pollutants" but again kept the focus of the exemptions 

on particular pollutants, and not entire source categories.(National Emission Standards for 

Hazardous Air Pollutants From Coal- and Oil-Fired Electric Utility Steam Generating Units and 

Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-CommercialInstitutional, and Small Industrial-Commercial-Institutional Steam Generating Units, 77 Fed. 

Reg. 9304, 9447 (Feb. 16, 2012) ("(a) Designated pollutant means any air pollutant, the 

emissions of which are subject to a standard of performance for new stationary sources, but for 

which air quality criteria have not been issued and that is not included on a list published under 

section 108(a) or section 112(b)(1)(A) of the Act."). Note this reverts back to the pre-1990 

definition, and as such refers to a section of the statute (section 112(b)(1)(A)) that in fact no 

longer exists.) Commenters stated this focus is consistent with how each of the previous three 
16

presidential administrations - going back to just months after the dueling amendments were 

passed - have interpreted the scope of the Section 112 exclusion.

Response 7: EPA agrees that the Section 112 Exclusion in section 111(d) is not properly read to 

preclude EPA from promulgating regulations addressing CO2 emissions from existing power 

plants under section 111(d). EPA’s discussion of this issue is in Section IV of the preamble.

Comment 8: Commenters stated that EPA has the authority to regulate greenhouse gas 

emissions from existing power plants under section 111(d) of the Clean Air Act, explaining that 

Section 111 of the Clean Air Act (CAA or Act) authorizes EPA to promulgate regulations for the 

categories of stationary sources that EPA determines contribute significantly to "air pollution 

which may reasonably be anticipated to endanger public health or welfare."(42 U.S.C. S. 

7411(b)(1) Commenters cited the Supreme Court in Massachusetts v. EPA held that greenhouse 

gases (GHGs) are an "air pollutant" under the CAA.(549 U.S. 497 (2007)) Commenters also 

cited where American Electric Power Co. v. Connecticut, the Court declined to find a common 

law of nuisance for power plants upon the recognition that EPA was moving forward to exercise 

its authority to regulate GHGs from power plants under the appropriate authority of section 111 

of the Act.(131 S. Cr. 2527 (2011)) Commenters stated that the Court also affirmed EPA's 

authority to regulate sources of GHGs in Utility Air Regulatory Group v. EPA.(134 S. Cr. 2427 

(2014)) Under the Act, commenters explained, once EPA promulgates standards of performance 

for new sources under section 111(b), section 111(d) requires EPA to establish a procedure 

similar to the State Implementation Plan (SIP) process, under which each state is required to 

submit a plan to EPA that "establishes standards of performance for any existing source for any 

air pollutant (i) for which air quality criteria have not been issued or which is not included on a 

list published under section 7408 (a) of this title or emitted from a source category which is 

regulated under section 7412 of this title but (ii) to which a standard of performance under this 

section would apply if such existing source were a new source."(42 U.S.C. section 7411(d)(1).) 

Commenters contended that the plan must also provide for the implementation and enforcement 

of such standards of performance. (Id.)

Response 8: EPA agrees that it has the authority to promulgate regulations addressing CO2 

emissions from existing power plants under section 111(d). EPA’s discussion of this issue is in 

Section IV of the preamble.

Comment 9: Commenters stated that Section 111(d) requires action on GHG emissions from 

EGUs, regardless of whether EGUs are subject to hazardous air pollutant ("HAP") regulations.

Commenters' explanation for this position follows:

a) The 1990 Clean Air Act Amendments contained two different amendments providing 

for changes to the same statutory language in section 111(d)(1). Prior to 1990, section 111(d) 

clearly mandated action to control dangerous air pollutants from existing sources if those 

emissions were not already regulated under section 108 or section 112, for source categories 

regulated under section 111(b): "The Administrator shall prescribe regulations which shall 

establish a procedure similar to that provided by section 7410 of this title under which each State 
17

shall submit to the Administrator a plan which (A) establishes standards of performance for any 

existing source for any air pollutant (i) for which air quality criteria have not been issued or 

which is not included on a list published under section 7408(a) or 7412(b)(1)(A) of this title, but 

(ii) to which a standard of performance under this section would apply if such existing source 

were a new source. In 1990, Congress enacted two amendments to section 111(d)(1)(A)(i) 

addressing the same issue-when regulation under section 112 would supplant regulation under 

section 111(d). Some amendment to section 111(d) was necessary because the 1990 amendments 

deleted section 112(b)(1)(A), which was the subsection of section 112 that section 111(d)'s had 

cross-referenced since 1970. Bills originating in each chamber amended section 111(d)'s crossreference to section 112(b)(1)(A) in different ways, and Congress ultimately enacted, and the 

President signed, a conference bill containing both amendments. The amendment originating in 

the House revised section 111(d)(1)(A)(i) by striking the words "or 112(b)(1)(A)" and inserting 

in their place the following phrase: "or emitted from a source category which is regulated under 

section 112." Congress also enacted an amendment originating in the Senate that revised the 

same subsection by striking the reference to "112(b)(1)(A)" and inserting in its place "112(b)."

The House amendment is located in section 108 of the Statutes at Large (under "Miscellaneous 

Guidance"); the Senate amendment is found in section 302 (under "Conforming Amendments"). 

The text and structure of the Act in the Statutes at Large (104 Stat. 2399) are the same as in the 

public law passed by both chambers and signed by President George H.W. Bush (101 P.L. 549).

The Office of the Law Revision Counsel codified only the House amendment in the United 

States Code, 42 U.S.C. 7411(d)(1)(A)(i). The codifier's notes to this section state that the Senate 

amendment "could not be executed." Regardless, the Statutes at Large - not the United States 

Code - controls here. The Statutes at Large constitute the legal evidence of the laws for code 

titles that have not been enacted into positive law. Because Title 42 of the United States Code 

has not been enacted into positive law, the legal evidence of the relevant law is the statutes at 

large, which contains both amendments. 

b) The Senate amendment clearly requires 111(d) regulation of CO2 from EGUs. The Senate 

amendment is clear and consistent with the historic role of section 111(d) as a "backstop" to 

ensure protection of public health from existing-source emissions not regulated under section 

112 or section 110. Read with the rest of section 111(d), the Senate amendment continues the 

longstanding policy of covering all non-HAP, non-criteria pollutants under section 111(d). The 

amendment was necessary to conform to the conference committee's amendments to section 

112(b). Previously, section 112(b)(1)(A) required EPA to publish a list of HAPs it intended to 

regulate under section 112. The 1990 amendments removed subsection 112(b)(1)(A) entirely. 

The new section 112(b)(1) establishes an initial list of over 180 HAPs and section 112(b)(2)-(3) 

gives EPA authority to both add new HAPs to the list and to de-list certain HAPs. The Senate 

amendment simply updated EPA's section 111(d) authority to reflect the amended list of HAPs 

regulated under section 112. 

While some have argued that EPA should disregard the text of the Senate amendment because its 

status as a "conforming amendment" renders it a poor indication of congressional intent and a 

likely scrivener's error, the Senate amendment cannot be disregarded. The D.C. Circuit has 
18

looked to conforming amendments in other statutes and given full effect to "the plain meaning of 

the statutory language in which Congress has directly expressed its intentions." Washington 

Hospital Center v. Bowen, 795 F.2d 139, 149 (D.C. Cir. 1986); see also CBS v. FCC, 453 U.S. 

367, 381 ("Perhaps the most telling evidence of congressional intent, however, is the 

contemporaneous [conforming] amendment"). Further, the Senate amendment does not resemble 

a scrivener's error at all. A scrivener's error is "a mistake made by someone unfamiliar with the 

law's object and design," United States Nat'l Bank v. Independent Ins. Agents of Am., 508 U.S. 

439, 462 (1993), and produces language with "no plausible interpretation," Williams Cos. v. 

FERC, 345 F.3d 910, 913 n.1 (D.C. Cir. 2003). The Senate amendment is plainly not a 

scrivener's error. In keeping with the same protective statutory structure that Congress first 

crafted in the 1970 Clean Air Act, the Senate amendment has the entirely coherent purpose and 

effect of updating the section 111(d) cross-reference in light of amendments to section 112 that 

rendered the previous cross-reference meaningless by deleting previous sub-paragraph 

112(b)(1)(A). Furthermore, because the text of the Senate amendment is unambiguous, EPA "can 

remain agnostic on the question whether Congress intentionally left [that] particular language in 

[the] statute or simply forgot to take it out. The suggestion that Congress may have 'dropped a 

stitch,' is not enough to permit [EPA] to ignore the statutory text." See United States ex rel. 

Totten v. Bombardier Corp., 380 F.3d 488, 496 (D.C. Cir. 2004) (quotations and citation 

omitted). There is no exception here to the rule requiring EPA "to give effect, if possible, to 

every word Congress used." See Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979). 

c) The House amendment is most reasonably read to require regulation of CO2 emissions from 

EGUs. In contrast to the Senate amendment, the House amendment is subject to multiple 

interpretations. The ambiguous House amendment would require EPA's expert interpretation 

even if Congress had not also amended identical language in section 111(d) through the Senate 

amendment. See Chevron, U.S.C., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843 

(1984). Because the Senate amendment unambiguously commands regulation of non-HAP 

pollutants such as CO2, and because the House amendment is reasonably interpreted (even 

without reference to the Senate Amendment) to permit such regulation, EPA plainly has 

authority to regulate CO2 emissions under section 111(d), and the agency need not resolve here 

whether there are scenarios in which some pollutant or source might be regulable under one 

amendment but not the other, and how to resolve that problem. i. The House amendment 

provides for regulation of emissions that are not controlled under the hazardous air pollution 

program. The House amendment is subject to multiple readings that would require regulation of 

CO2 from sources like EGUs. As changed by the House Amendment, section 111(d) requires 

EPA to prescribe existing source regulations "for any air pollutant (i) for which air quality 

criteria have not been issued or which is not included on a list published under section 7408(a) or 

emitted from a source category which is regulated under section 112 of this title." (emphasis 

added). The most reasonable interpretation of the House amendment is to construe it to not 

authorize regulation under 111(d) as to particular pollutants that are actually regulated under 

Section 112(n) as to the source category in question. On this interpretation, Congress intended to 

safeguard section 111(d)'s gap-filling role by expanding the scope of the section to cover HAP 

emissions that would otherwise be unregulated under sections 112 or section 111(d). Readings of 
19

the House amendment offered by parties seeking to block regulation of CO2 under Section 

111(d) have asserted that the provision necessarily bars regulation of any and all pollutants 

emitted by any source that is regulated under Section 112, even if it the specific pollutant in 

question is not a HAP and is therefore not regulated under 112. But the text of section 112 is 

readily susceptible to reasonable interpretations under which the section 112-related exclusion 

from section 111(d) regulation is pollutant-specific. EPA may interpret the House amendment by 

resolving ambiguity in the phrase "emitted from a source category which is regulated under 

section 112." A source category is "regulated" under section 112 not in the abstract, but with 

respect to particular pollutants. The term "regulated" can therefore be read to mean "regulated 

with respect to that pollutant under section 112," rather than "regulated as to any pollutant under 

section 112." In other words, the House text could reasonably be understood to mean either (1) 

that EPA may not use section 111(d) when the source category is "regulated under section 112 

for the pollutant in question," i.e., the same pollutant that is the candidate for regulation under 

section 111(d), or (2) that EPA may not use section 111(d) when the source category is 

"regulated under section 112 for any pollutant." The former is a sensible interpretation of the 

ambiguous term "regulated," and one that fits with a context that includes pollutant-specific 

phrasing of section 111(d) and a reference to a statutory provision, section 112, that "regulates" 

only hazardous pollutants. While the latter interpretation is plausible as a matter of ordinary 

understanding, it is not inevitable - and, as explained below, its practical consequences are 

starkly discordant with the statutory structure and purpose. Furthermore, it is common and 

proper under the Clean Air Act to construe potentially broad statutory language in light of the 

context in which the language appears, in order to produce a result that fits with the purpose and 

mechanics of the particular program in question. See Utility Air Regulatory Grp. v. EPA, 134 S. 

Ct. 2427, 2440 (2014) ("UARG") (citing numerous instances in which EPA has narrowed term 

"any air pollutant" to fit with context). A pollutant-specific reading of the Section 111(d) 

exclusion is easily permissible given the context here. The House language may also be read to 

authorize EPA to regulate any air pollutant which is not a criteria pollutant and "any air pollutant 

[which is regulated under section 112] . . . which is not . . . emitted from a source category which 

is regulated under section 112." Under Young v. Community Nutrition Institute, an agency has 

discretion under Chevron to determine which terms are the object of a dangling modifier. 476 

U.S. 974, 891 (1986) (granting Chevron deference to FDA's interpretation concerning which 

term was modified by a dangling participle in the Federal Food, Drug, and Cosmetic Act, even 

though a contrary "reading of the statute may seem to some to be the more natural 

interpretation"). Here, EPA can effectuate legislative intent by reading "which is regulated under 

section 112" to modify both "any air pollutant" and "source category." Alternatively, the 

language "any air pollutant . . . emitted from a source category which is regulated under section 

112" could be read to refer to hazardous air pollutants. This reading derives from the statutory 

context, in which hazardous air pollutants are the only pollutants regulated under section 112. As 

noted above, the Supreme Court has recently emphasized that the broad term "any air pollutant" 

as used in the Clean Air Act can take meaning from the context in which it is used. See UARG, 

134 S. Ct. at 2440 (citing instances in which EPA has narrowed term "any air pollutant" to fit 

with context, such as EPA's having construed various provisions of section 111 that reference 

"any air pollutant" as limited to pollutants "for which EPA has promulgated new source 
20

performance standards"). Here, it is logical to understand Congress to have wanted to preclude 

section 111(d) regulation based on section 112 regulation only as to pollutants that are actually 

(or at least potentially) regulated under section 112. Moreover, under this interpretation, the 

House amendment would have essentially the same meaning as the Senate amendment and 

continue Congress' longstanding policy of using section 111(d) to control dangerous pollution 

that is not controlled under the criteria pollution provisions or section 112 ii. The legislative 

history of the House amendment supports a narrow reading of the section 111(d) exclusion. 

Reading the House version of the section 111(d) exclusion in a pollutant-specific way is not only 

consistent with the language of the statute, but also promotes the purpose that EPA has 

reasonably attributed to the House amendment, namely, expand[ing] EPA's authority under 

section 111(d) for regulating pollutants emitted from particular source categories that are not 

being regulated under section 112, -thereby protecting against a regulatory gap that would 

provide no controls against HAP emissions from certain sources not regulated under section 112. 

The version of the 1990 Clean Air Act Amendments that initially passed the House clarifies the 

purpose of the House amendment to section 111(d). As EPA has explained, the House 

amendment first passed the House in a bill that included several new opportunities for EPA to 

exercise discretion in whether to regulate HAP emissions under section 112. That bill would 

have provided EPA significant additional discretion regarding when to promulgate regulations 

under section 112. Perhaps most importantly, the House bill would have allowed EPA to decline

to regulate source categories under section 112 if EPA determined they were "already adequately 

controlled under this Act or any other Federal statute or regulation." Furthermore, the House bill 

would have made regulation of non-major sources under section 112 entirely discretionary. In 

this context, EPA reasonably noted the likelihood that "the House did not want to preclude EPA 

from regulating under section 111(d) those pollutants emitted from source categories which were 

not actually being regulated under section 112." Even under the conference bill that became law, 

the prospect of certain HAP emissions not being regulated under section 112 may have 

motivated the expansion of section 111(d) to cover certain dangerous HAP emissions that might 

otherwise escape regulation, and that would not have been subject to section 111(d) standards as 

it was framed prior to 1990. The purpose of the House amendment is further illuminated by its 

context in the House bill as introduced. The House had initially proposed an overhaul of section 

112 under which EPA would only be required to promulgate regulations for half the source 

categories it determines to be major and area sources of HAPs. EPA would have been required to 

review the remaining fifty percent of listed source categories, and "designate the additional 

categories and subcategories [the EPA Administrator] finds, in his discretion, warrant regulation 

under this section." This proposed system clearly entailed the potential for major sources of 

HAPs to escape regulation under section 112. Aware of this looming gap, the House proposed 

expanding section 111(d) to avoid leaving HAP emissions from numerous major sources 

unregulated. Interpretations that allow section 111(d) to continue providing for non-HAP 

regulation where needed to protect public health and welfare are true to the Clean Air Act's 

overarching structure for existing-source regulation. In addition to precluding any gaps in the 

regulatory framework for dangerous pollution from existing sources, these readings of the House 

amendment effectuate Congress desire to make the CAA more protective through each revision. 

If EPA interprets the House amendment in this fashion, there will be no conflict in how the 
21

House and Senate amendments apply to the present rulemaking. These readings have the benefit 

of not creating a bizarre and harmful gap in coverage of harmful pollutants that is entirely out of 

step with the tenor of the Act's regime and of the 1990 amendments. These interpretations are 

true to the Clean Air Act's overarching structure for existing-source regulation, as they allow 

section 111(d) to continue providing for coverage of non-HAP emissions where needed to 

protect public health and welfare. These pollutant-specific readings of the House amendment are 

also consistent with the Supreme Court's observations about section 111(d) in American Electric 

Power Company v. Connecticut, 131 S. Ct. 2527 (2011). The Court described section 111(d)'s 

exclusions by stating: "There is an exception: EPA may not employ section[111(d)] if existing 

stationary sources of the pollutant in question are regulated under the national ambient air quality 

standard program, sections[108,110], or the hazardous air pollutants program, section [112]. Id. 

at 2537, n.7. This statement reflects the understanding that the exclusion for emissions regulated 

under section 112 works in parallel with the exclusion for emissions regulated under the NAAQS 

program. Indeed, the Court indicated that these exclusions comprise a single exception to section 

111(d). There is no question that sources subject to regulation for criteria pollutant emissions 

under the NAAQS program are also subject to regulation for other emissions under section 

111(d). Similarly, there should be no question that sources are subject to regulation for pollution 

that is not controlled by the HAPs program, even where sources are also regulated under section 

112. iii. In context, the House amendment cannot plausibly be read to end section 111(d)'s 

application to dangerous pollution that happens to be emitted by source categories regulated 

under section 112. Although the House amendment might be read-acontextually-to diminish the 

scope of section 111(d), such a reading is inconsistent with the structure, purpose, and legislative 

history of the Clean Air Act. Although, as demonstrated above, there are multiple ways to read 

the House amendment to continue 111(d)'s role as a backstop against unregulated, dangerous 

pollution, other readings of this ambiguous amendment have been proposed that would 

fundamentally alter the role of section 111(d). The most expansive reading of the House 

amendment would exclude from section 111(d) all pollutants emitted by sources that are 

regulated by section 112-even when those pollutants are emitted by a source not regulated under 

section 112. This reading would effectively nullify section 111(d) because there are few (if any) 

non-HAP pollutants that are not emitted by sources in one of the dozens of source categories 

regulated under section 112. More vitally, this would leave a host of dangerous air pollutants 

wholly unaddressed by the Clean Air Act. This is made clear by the fact that none of EPA's pre1990 emission guidelines could now be promulgated under such a regime, leaving communities 

vulnerable to pollutants such as sulfuric acid mist, reduced sulfur compounds, and fluoride. 

Some have argued that the House amendment must be read to exclude any regulation of all 

source categories regulated under section 112. Even EPA has opined that "a literal" reading of 

the House amendment would exclude non-HAPs from regulation under section 111(d). But no 

party has offered a plausible explanation for how Congress could have intended to obliterate the 

scope of section 111(d) through the House amendment. There is no evidence that it was 

Congress' intent to drastically roll back the protections in section 111(d). If Congress had 

intended such a radical departure from the statutory structure of the CAA, Congress would have 

made it explicit in the statute or some member would have at least mentioned it in the extensive 

legislative history of the 1990 amendments to the CAA. See Chisom v. Roemer, 501 U.S. 380, 
22

396 n.23 (statutory interpretation that would work a sweeping and unorthodox change warrants 

skepticism). There is simply no evidence in the face of the statute or its legislative history that 

Congress intended such a major change in policy. Since Congress gave no indication regarding 

its intention to repeal the protections it established in 1970, reading such a repeal into an 

ambiguous statute would be strongly disfavored. Here, as noted above, there are other provisions 

of the 1990 amendments-including section 112(d)(7)-that affirmatively indicate that Congress 

did not intend for section 112 regulations to displace or alter section 111 standards and Clean Air 

Act permitting programs. A broad reading of the exclusion in the House amendment would 

create a hole in the Clean Air Act that is not only sweeping, but also highly anomalous. First, it is 

fanciful to believe Congress silently worked a major rollback of section 111(d) that is so 

jarringly discordant with the protective thrust of the 1990 Clean Air Act Amendments. It is 

simply not credible that Congress purposefully opened a major loophole-completely counter to 

the historic role of section 111(d)-that would leave dangerous air pollutants entirely unregulated, 

even as it strengthened environmental controls and systematically limited EPA's discretion to 

leave air pollution unregulated, purposely opened an unprecedented gap in the Clean Air Act's 

framework for stationary-source regulation. This reading also assumes that Congress created this 

unprecedented loophole surreptitiously, leaving major categories of pollutants wholly 

unregulated for the first time since 1970, at the same time that the supporters of the 1990 

amendments uniformly praised the bill for strengthening the Clean Air Act. Second, this reading 

of the House amendment would insert an exclusion into section 111(d) that is unlike any other in 

the Clean Air Act. Congress has never allowed sources to release unlimited quantities of some 

pollutants simply because they must control other pollutants. Cf. Desert Citizens Against 

Pollution v. EPA, 699 F.3d 524, 527-28 (D.C. Cir. 2012) (holding that EPA reasonably rejected 

petitioners interpretation of the Clean Air Act, which "would have the anomalous effect of 

changing the required stringency" for certain hazardous air pollutants at a given source "simply 

on the fortuity" of the source's other emissions). Third, any attempt to actually implement the 

broad exclusion reveals additional anomalies. Even under the most expansive reading of the 

House amendment, pollutants are only excluded from regulation under 111(d) if EPA happens to 

regulate a source under section 112 first. If EPA first regulates a source category under section 

111(d) and then regulates the same source category under section 112, section 112(d)(7) provides 

that the HAP regulation does not diminish or replace the existing 111(d) standards. It is 

inconceivable that Congress would prohibit section 111(d) standards "simply on the fortuity" of 

EPA's timing for promulgating standards under section 112. Accord Desert Citizens Against 

Pollution, 699 F.3d at 527-28. One company has developed a theory that attempts to explain how 

Congress could have intended to weaken section 111(d) in 1990: that Congress sought to 

strengthen section 112 without imposing "double regulation" on any source category. This 

account is entirely unfounded. First of all, the Clean Air Act is full of examples of instances in 

which Congress, in the interest of protecting public health and welfare, subject pollution sources 

to multiple, overlapping requirements for the same pollutants. See, e.g., 42 U.S.C. 7475(a) 

(noting that sources subject to stationary source permitting requirements (and "best available 

control technology" requirement) also must comply with applicable increments and air standards 

under, as well as any applicable performance standards under section 111); Id. section 7416 

(expressly preserving state regulation of stationary sources except where less stringent that Clean 
23

Air Act requirements). The 1990 legislative history makes clear that House members were aware 

that, under the House bill, stationary sources would continue to be regulated under multiple 

sections of the Clean Air Act. Most important, it is not double regulation for different pollutants 

from a single source category to be regulated under different regulatory programs. The notion 

that subjecting a source to regulation for some pollutant should immunize it from regulation as to 

other pollutants is odd and altogether alien to the CAA's protective design. The CAA framework 

often provides separate but complementary regulatory frameworks to address different types of 

pollution emitted by the same sources. Criteria pollutant standards also apply to the same sources 

whose emissions of hazardous air pollution are addressed by Section 112. For instance, the 

CAA's Prevention of Significant Deterioration program requires new major emitting facilities to 

use the "best available control technology: for criteria pollutants, in addition to any standards 

promulgated under section 111(b) or 112. Nor do any of the CAA's stationary source provisions 

exclude sources from regulation because they are regulated under other federal environmental 

laws. In summary, there is no reason to believe that the House amendment should be read to 

eviscerate section 111(d) and the House amendment can easily be read to preserve the gap-filling 

role of section 111(d) in the Clean Air Act's regulatory framework. 4. EPA can reasonably 

harmonize the two amendments to section 111(d) by adopting one of several reasonable 

interpretations of section 111(d), all of which require EPA to regulate non-HAP pollutants like 

CO2. a. Where one amendment clearly requires regulation of CO2 emissions from EGUs and 

another amendment's treatment of such emissions is ambiguous, EPA must interpret the two 

amendments harmoniously. The two amendments to section 111(d)(1)(A)(i) created a statutory 

ambiguity regarding the pollutants regulated under section 111(d). This ambiguity requires 

EPA's expert interpretation. See Chevron, 467 U.S. at 837. EPA's expert interpretation of section 

111(d) must be guided by the rule that "[t]he provisions of a text should be interpreted in a way 

that renders them, compatible, not contradictory. EPA can reconcile the two amendments and 

interpret section 111(d) to require standards to address CO2 emissions from EGUs. b) Any 

conflict in the section 111(d) can be resolved by reasonably harmonizing the House and Senate 

amendments. In the proposed rule, EPA has reasonably harmonized the text of the House and 

Senate amendments, through the following interpretation: "Where a source category is regulated 

under section 112, a section 111(d) standard of performance cannot be established to address any 

HAP listed under section 112(b) that may be emitted from that particular source category." This 

interpretation follows the case law regarding when and how to harmonize conflicting statutory 

provisions. The D.C. Circuit has given EPA detailed instructions on "its responsibility to 

harmonize the statutory provisions" of the Clean Air Act when two provisions conflict and the 

statute does not plainly indicate which provision shall prevail. See generally Citizens to Save 

Spencer Cnty v. EPA, 600 F.2d 844 (D.C. Cir. 1979) (upholding EPA's harmonization of 

sections 165 and 168 of the 1977 Clean Air Act, which were drawn from "two bills originating in 

different Houses and containing provisions that, when combined, were inconsistent in respects 

never reconciled in conference); explained in NRDC v. Thomas, 805 F.2d 410, 436 n.39 (D.C. 

Cir. 1986) ("[T]his court held that the agency had broad latitude to harmonize two Clean Air Act 

provisions that facially dealt with the same issue differently."); see also Appalachian Power Co. 

v. EPA, 249 F.3d 1032, 1043-44 (D.C. Cir. 2001) ("Lest it obtain a license to rewrite the statute 

an agency alleging a scrivener's error "may deviate no further from the statute than is needed to 
24

protect congressional intent.") (quotations and citation omitted). The court explained that the 

maximum possible effect should be afforded to all statutory provisions . . .if the inconsistent 

provisions point generally in a common direction.- Spencer Cnty, 600 F.2d at 870-71; cf. United 

States v. Colon-Ortiz, 866 F.2d 6 (1st Cir. 1989) (reading language out of a statute, where 

language inserted through a drafting error directly required the opposite outcome from what 

Congress had mandated elsewhere in the text). Harmonization of the House and Senate 

amendments to section 111(d) is appropriate because the two amendments point in a common 

direction. EPA has previously interpreted the House amendment to reflect the "House's apparent 

desire to increase the scope of EPA's authority under section 111(d) and to avoid duplicative 

regulation of HAP for a particular source category." As EPA explained in its proposal for the 

Clean Air Mercury Rule, the House amendment can be reasonably interpreted to reflect a desire 

to expand the pollutants that EPA could regulate under section 111(d) so that EPA had authority 

to regulate HAPs emitted from source categories that were not actually being regulated under 

section 112 (such as existing area sources of HAPs that did not meet the statutory criterion in 

section 112(c)(3)). Similarly, the Senate amendment serves the general purposes of preserving 

EPA's authority to regulate non-HAPs under section 111(d) and avoiding duplicative regulation 

of HAPs. That is, the Senate's conforming amendment was necessary to give EPA authority to 

regulate any delisted HAP under section 111(d). In addition, the Senate amendment avoids 

duplicative regulation of HAPs because it prevents EPA from regulating any HAP that is listed 

for regulation under section 112. In harmonizing the House and Senate amendments to section 

111(d), "it is appropriate for the agency . . .to look for guidance to the statute as a whole and to 

consider the underlying goals and purposes of the legislature in enacting the statute, while 

avoiding unnecessary hardship or surprise to affected parties." Spencer County, 600 F.2d at 871 

(footnote omitted). In the proposed rule, EPA has properly adhered to these principles in 

interpreting section 111(d). First, EPA concluded that it would be unreasonable to allow an 

expansive reading of the House amendment to prevail over the Senate amendment because such 

an interpretation would be inconsistent with "Congress' desire in the 1990 CAA Amendments to 

require the EPA to regulate more substances, and not to eliminate the EPA's ability to regulate 

large categories of air pollutants." Further, prohibiting the regulation of non-hazardous but 

dangerous pollutants from existing sources because hazardous emissions from those sources is 

appropriately regulated under Section 112 would expose American communities to health- and 

welfare-harming pollutants clearly in conflict with Congress' effort in the Clean Air Act to 

protect Americans from harmful pollution. Thus, EPA has properly effectuated Congress' 

underlying goals and purposes in the Clean Air Act and subsequent amendments. Second, EPA 

reasoned that reading section 111(d) to exclude any air pollutant from a source category 

regulated under section 112 would be inconsistent with "the fact that the EPA has historically 

regulated non-hazardous air pollutants under section 111(d), even where those air pollutants 

were emitted from a source category actually regulated under section 112." EPA's interpretation 

ensures the agency's continued ability to effectively protect public health and the environment, 

whereas interpreting the 1990 amendments to drastically curtail the agency's longstanding 

authority under section 111(d) would cause unexpected harm. EPA's interpretation of section 

111(d) is sound for several additional reasons. First, in accord with the interpretative canons 

against implied amendments and repeals, EPA has not read the 1990 amendments to repeal 
25

section 111(d)'s application to non-HAP emissions from sources regulated under section 112. 

Reading the House amendment as certain court challengers have urged would deprive section 

111(d) of most, if not all, of its traditional effect as a backstop that allows regulation of harmful 

pollution not covered under section 110 and 112. In the context of CO2 emissions, this 

interpretation would not only preclude regulation of CO2 emissions from the power sector; it 

would similarly bar any regulation in all other sectors of the nation's most significant sources of 

CO2, because, like power plants, these categories too are regulated under section 112. EPA data 

confirms that even outside the power sector-the chief emitters of CO2 among stationary sources 

are subject to HAP regulation under section 112. According to EPA's Facility Level Information 

on Greenhouse gases Tool (FLIGHT), the non-power subsectors of the economy that emitted 

more than 10 million metric tons of CO2 in 2013 were: Petroleum refineries; natural gas 

processing; natural gas transmission/compression; other petroleum and natural gas systems; 

petrochemical production; hydrogen production; ammonia production; other chemicals; iron and 

steel production, other metals; cement production; lime manufacturing; pulp and paper; other 

paper products; food processing; manufacturing; ethanol production; and other. All of the major 

CO2-emitting source categories in the defined subsectors on this list are regulated under section 

112. (The "other" category likely includes many source categories regulated under section 

112). Because of the sheer number of section 112-listed source categories, and the fact that they 

include most of the largest pollution sources, the suggested readings would likely have similarly 

dramatic effects on section 111(d)'s coverage as to other dangerous, but not hazardous, 

pollutants. "[I]t is well settled that amendments by implication (like repeals by implication) are 

disfavored." Natural Resources Defense Council, Inc. v. Hodel, 865 F.2d 288, 318 (D.C. Cir. 

1988). "[A]bsent a clearly expressed congressional intention, repeals by implication are not 

favored." See Branch v. Smith, 538 U.S. 254, 273 (2003); see also Natl Assn of Home Builders 

v. Defenders of Wildlife, 551 U.S. 644, 664 n.8 (2007) ("It does not matter whether this 

alteration is characterized as an amendment or a partial repeal."). Congress expressed no clear 

intention to drastically narrow the scope of section 111(d), given the plain text of the Senate 

amendment, the categorization of the House amendment as "Miscellaneous Guidance," the 

legislative history's silence on such a repeal, and the general thrust of the 1990 amendments to 

broaden regulation of air pollutants. EPA has properly refrained from interpreting the House 

amendment to require such a change because Congress "does not alter the fundamental details of 

a regulatory scheme in vague terms or ancillary provisions-it does not, one might say, hide 

elephants in mouseholes." Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 468 (2001). Guided 

by the canon against implied repeals, the Supreme Court has held that an agency may read a 

later-enacted provision to not override an existing, express statutory mandate. See Nat'l Ass'n of 

Home Builders, 551 U.S. at 666 (approving a harmonizing interpretation of the Endangered 

Species Act, where one of the act's provisions directly conflicted with a clear mandate in the 

Clean Water Act). If there is any conflict between the pre-1990 text of the CAA and the 1990 

amendments, EPA cannot assume Congress' intended to repeal longstanding mandates in the Act 

unless that intention is clearly expressed. In the 1990 amendments, Congress did not clearly 

signal its intent to repeal section 111(d)'s application to non-HAPs emitted by sources regulated 

under section 112, as the Senate amendment directs EPA to continue applying section 111(d) to 

these pollutants. EPA's interpretation of section 111(d) appropriately harmonizes the House and 
26

Senate amendments because it does not allow the House amendment to override the existing, 

express statutory mandate to regulate under section 111(d) any air pollutant that is not regulated 

under the NAAQS program or section 112. Similarly, Watt v. Alaska illustrates how the canon 

against implied repeals can guide EPA in its duty "to give effect to each [amendment] if [it] can 

do so while preserving their sense and purpose." See 451 U.S. 259, 267 (1981). That case 

examined two statutory provisions that, by their plain terms, gave conflicting instructions 

regarding the distribution of mineral revenue from all federal wildlife refuges. The Court 

examined the later-enacted statute (the 1964 amendments to the Wildlife Refuge Revenue 

Sharing Act) for "clearly expressed congressional intention" to repeal the prior law, and found 

none. 451 U.S. at 273. The Court harmonized the conflicting provisions by reading the latterenacted law to apply only to mineral revenues from the class of wildlife refuges that motivated 

congressional action in 1964. That is, the Court read the latter-enacted provision to establish the 

revenue-distribution formula for mineral revenues from lands acquired for wildlife refuges, 

reasoning that the purpose of the 1964 amendments was to facilitate acquisition of lands for 

wildlife refuges. 451 U.S. at 272. EPA's proposed interpretation of section 111(d) is entirely 

consistent with the Court's approach in Watts. EPA has interpreted the House amendment to 

refer to the class of pollutants that motivated the amendment: pollutants that were actually 

regulated under section 112. EPA has previously concluded that "the House's amendment to 

section 111(d) could reasonably reflect its effort to expand EPA's authority under section 111(d) 

for regulating pollutants emitted from particular source categories that are not being regulated 

under section 112." This conclusion is supported by reading the House amendments to section 

111(d) together with the House's proposed amendments to section 112. As discussed above, the 

House bill proposed giving EPA discretion to not regulate sources under section 112 in specific 

circumstances. While the House's proposed amendment to section 112 might have diminished 

the scope of regulation under that section, the House expanded the scope of section 111(d) and 

avoided creating a gap in the statutory framework for existing-source regulation. In this 

rulemaking, EPA has harmonized the House and Senate amendments to ensure the section 

111(d) exclusion only applies to pollution that is actually regulated under section 112, thus 

giving an effect to both the House and Senate amendments that serves their respective purposes. 

Second, EPA's proposed interpretation of section 111(d) is consistent with that section's role in 

the structure of the Clean Air Act. Section 111(d) provides for controlling dangerous existingsource pollution that would otherwise escape regulation, where EPA has regulated a source 

category under section 111(b) after finding that the category of sources causes, or contributes 

significantly to, air pollution which may reasonably be anticipated to endanger public health or 

welfare. In short, the section fills gaps in the Act's framework for existing stationary sources that 

cause or contribute significantly to harmful air pollution. Because section 112 does not require 

EPA to regulate HAPs from all sources, some sources may emit dangerous amounts of hazardous 

pollutants even after EPA fully implements section 112. EPA's harmonization of the conflicting 

amendments would allow section 111(d) to play its gap-filling role for uncontrolled sources of 

hazardous air pollution (as well as for non-hazardous but dangerous pollutants emitted by 

sources that are regulated under Section 112). Third, EPA's proposed approach is consistent with 

the canon that exemptions from regulation should be construed narrowly. See Comm'r v. Clark, 

489 U.S. 726 (U.S. 1989). ("In construing provisions . . . in which a general statement of policy 
27

is qualified by an exception, we usually read the exception narrowly in order to preserve the 

primary operation of the provision"); see Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945) ("To 

extend an exemption to other than those plainly and unmistakably within its terms and spirit is to 

abuse the interpretative process and to frustrate the announced will of the people."). Here, 

because the amendments exempt certain pollutants from regulation, any ambiguity in the 

amendments should be construed in favor of limiting the range of pollutants that are 

exempted As the expert agency responsible for implementing the Clean Air Act, EPA is uniquely 

aware that narrowing the scope of section 111(d) would significantly harm public health and 

welfare, and that these harms are contrary to the purposes of the Act. See 42 U.S.C. 7401(b)(1). 

A court would properly defer to EPA's regulatory expertise in determining whether EPA has 

reasonably harmonized the differing 1990 amendments to section 111(d). See Nat'l Ass'n of 

Home Builders, 551 U.S.at 666 (upholding EPA's expert harmonization of conflicting statutes, 

where the agency could not simultaneously obey the differing mandates set forth in [the two 

provisions and "the statutory language . . . does not itself provide clear guidance as to which 

command must give way"). c. There are additional ways to harmonize the amendments that are 

consistent with the language and purpose of 111(d).The most straightforward way of 

harmonizing the two amendments is to interpret the ambiguous House amendment to be 

consistent with the crystal-clear Senate amendment with respect to the question presented herei.e., EPA may, under section 111(d), regulate a non-HAP pollutant that is emitted from source 

category whose HAP emissions are regulated under section 112(d). As demonstrated above, 

there are multiple reasonable readings of section 111(d) as amended by the 1990 House language 

that would allow EPA to proceed with regulating CO2 emissions from EGUs. An alternative 

means of doing so would be to interpret the 1990 amendments as having included two different 

versions of 111(d), one reflecting the direction provided by House amendment and one the 

Senate amendment. Under this approach, the statute contains, with the Senate amendment, a 

separate, affirmative command to regulate all non-NAAQS, non-112(b)-listed pollutants. Each 

amendment mandates that EPA "shall prescribe regulations" for a set of air pollutants. 42 U.S.C. 

7411(d)(1) (emphasis added). Neither purports to negate regulatory obligations required by other 

provisions of the statute. Thus, even if the House amendment is read to exclude EGUs (and to 

direct regulation of sources not regulated under 112), the two amendments set out compatible 

and additive commands to regulate (EPA must issue guidelines for all non-NAAQS pollutants 

not on a 112 pollutant list, and for sources of all non-NAAQS pollutants not regulated under 

112). This reading allows EPA to "give effect to both" provisions, see Morton v. Mancari, 417 

U.S. 535, 551 (1974), by doing what is required by either of the amendments. Some 

commentators have suggested that the two 1990 amendments should both be given effect and 

that, if both are incorporated into the statute, the resulting language can be read to deny EPA 

authority to act here. The premise that both amendments can be combined together and read as a 

single statutory command is problematic, since both provisions direct that the same language in 

the preexisting legislation be stricken; and neither amendment refers to or purports to take 

account of the other. There is no evidence that either house of Congress, in fact, legislated with 

the expectation that its change to section 111(d) would be combined with another change. The 

statute does not provide any definitive guidance for how to incorporate the different chambers, 

instructions; efforts to combine the language of the two amendments into a workable whole have 
28

a kind of artificiality in light of the strong indications that Congress did not actually make any 

decision that the two amendments were meant to operate together. But, contrary to the premise 

of the some supporters of this approach, the proper way to combine the amendments yields an 

approach that is grammatical, that attempts to heed Congress' instructions closely as possible; 

and that yields a result that is consonant with the statute. The House and Senate amendments can 

be effectuated together as follows: First, both amendments would strike out the preexisting 

reference to "112(b)(1)(A)." The House amendment would then insert "or emitted from a source 

category" at the point in the text where "or 112(b)(1)(A)" was removed. The Senate amendment 

would require "112(b)" to be inserted at the point in the text where "112(b)(1)(A)" was removed, 

immediately after the original "or" that the House Amendment replaced. The combined section 

would read: "The Administrator shall [establish emission guidelines] for any existing source for 

any air pollutant . . . which is not included on a list published under section . . . 112(b) emitted 

from a source category which is regulated under section 112 of this title." The resulting amended 

statute would direct EPA to regulate all pollutants that are not criteria pollutants or emitted by 

source categories listed under section 112 and actually regulated under that section. Thus, 

reading the language added by the House and Senate amendments together yields a meaning that 

is coherent and maintains section 111(d)'s role in protecting human health and the environment. 

Any permissible harmonization of the House and Senate amendments must achieve the purpose 

of section 111(d), which is ensuring that dangerous pollution from existing industrial sources 

does not escape regulation. EPA cannot adopt an interpretation of section 111(d) that creates a 

gaping, inexplicable hole in the CAA's framework for regulating existing industrial sources. The 

commentators' alternative "harmonization" fails this basic requirement. 5. If harmonizing the 

amendments were not possible, any reasonable interpretation of section 111(d) would still allow 

EPA to regulate CO2 emissions from EGUs. If harmonizing the amendments were impossible, 

EPA could rely on several canons of statutory interpretation to resolve any conflict in section 

111(d). Under any available rule of construction, section 111(d) controls dangerous non-HAP 

emissions regardless of whether they come from source categories that are subject to regulation 

under section 112. EPA's application of these canons to interpret conflicting provisions would be 

entitled to deference. First, as EPA observed, "[t]he ambiguities stem from apparent drafting 

errors that occurred during enactment of the 1990 CAA Amendments." If conflicting language in 

section 111(d) is a result of a mistake, that mistake must have been the House amendment's 

exclusion of "sources" regulated under section 112 instead of "emissions" regulated under 

section 112. As described above, the apparent purpose of the House amendment to section 

111(d) was to avoid creating a gap in the statutory structure for controlling emissions from 

existing sources; if the conference committee had adopted the House's amendments to section 

112, an amendment to section 111(d) would have been necessary to ensure that EPA had 

authority to regulate existing-source HAP emissions that EPA chose to not regulate under section 

112. Giving effect to the narrow interpretation of the House amendment does not promote the 

House's (and Congress') manifest intention to control all dangerous air pollution from existing 

sources. In contrast, the Senate amendment clearly retains EPA's authority to ensure effective 

regulation of dangerous non-HAP pollutants from existing sources under section 111(d) as a 

complement to regulation of HAPs under section 112. Accordingly, if EPA's attempts at 

harmonizing the amendments had failed, EPA could have shown that "Congress did not mean 
29

what it appears to have said" in the House amendment and that "as a matter of logic and statutory 

structure, it almost surely could not have meant it." See Engine Mfrs. Ass'n v. EPA, 88 F.3d 

1075, 1089 (D.C. Cir. 1996). In such situations, EPA can interpret section 111(d) "by 

disregarding an obvious mistake. See Bohac v. Dept of Agric., 239 F.3d 1334, 1338 (Fed. Cir. 

2001); see also Am. Petroleum Inst. v. SEC, 714 F.3d 1329, 1336-37 (D.C. Cir. 2013) (refusing 

to interpret a scrivener's error as indication that Congress intended to depart from a longstanding 

statutory scheme). If the two amendments were deemed incompatible, EPA could then choose 

which amendment is controlling, the agency has discretion in reading section 111(d) to effectuate 

congressional intent. See Appalachian Power Co., 249 F.3d at 1044 n.3 ("[W]hen there are 

multiple ways of avoiding a statutory anomaly, all equally consistent with the intentions of the 

statute's drafters (and equally inconsistent with the statute's text), we accord standard Chevron 

step two deference to an agency's choice between such alternatives.") (quotation omitted); see 

also Abdelqadar v. Gonzales, 413 F.3d 668, 673 (7th Cir. 2005) (noting that judges cannot 

generally engage in "repair work" to rescue Congress from its drafting errors, "but agencies 

charged with superintending a comprehensive scheme traditionally have been afforded additional 

latitude"). In the context of the CAA's carefully crafted framework for controlling all dangerous 

emissions from existing sources, it would be implausible to read section 111(d) to let certain 

dangerous pollution go unregulated simply because EPA controlled other pollution from the 

same sources. Second, if one of the amendments must prevail over the other, the canons against 

implied repeal and amendment hold that the Senate amendment must control. EPA cannot 

presume that Congress intended to repeal its authority to regulate non-HAPs from sources 

regulated under section 112 unless Congress intention to do so is clear and manifest. See Watt, 

451 U.S. at 267. Where there are two amendments to the same language, and those two 

amendments point in different directions, there is no "clear and manifest" intention. The Senate 

amendment is substantively similar to prior law and, therefore, should be given effect if EPA 

cannot discern Congress' clear and manifest intent to substantively change section111(d). Third, 

"[t]he established rule is that if there exists a conflict in the provisions of the same act, the last 

provision in point of arrangement must control." Lodge 1858, American Fed. of Govt Employees 

v. Webb, 580 F.2d 496 (D.C. Cir. 1978). This rule applies regardless of whether the conflicting 

provisions are in the same statutory section. See, e.g., Merchants' Natl Bank v. United States, 

214 F. 200, 205 (2d Cir. 1914); Mobile v. GSF Properties, Inc., 531 So. 2d 833, 837-38 (Ala. 

1988). Under this rule, the Senate amendment controls over the House amendment because it 

appears later in the Statutes at Large. Finally, giving effect to the Senate amendment would 

allow EPA to avoid an absurd result. See American Water Works Assn v. EPA, 40 F.3d 1266, 

1271 (D.C. Cir. 1994) ("where a literal reading of a statutory term would lead to absurd results, 

the term simply has no plain meaning and is the proper subject of construction by the EPA and 

the courts) (quoting Chemical Mfrs. Assoc. v. Natural Resources Defense Council, 470 U.S. 116, 

126 (1985)). Reading section 111(d) to exclude from control the dangerous (though not 

hazardous) emissions from all sources regulated under section 112 would exclude myriad of the 

country's most significant sources of air pollution and profoundly undermine one of the Clean 

Air Act's basic mechanisms for protecting human health and the environment. Regardless of 

whether this broad exclusion is a "more natural reading" of the House amendment, EPA cannot 

give 111(d) a meaning that is at odds with Congressional intent. See id. (citing Young v. 
30

Community Nutrition Inst., 476 U.S. 974, 980 (1986)). EPA cannot give effect to a reading of 

the House amendment that would render the Senate amendment ineffective in nearly any 

situation. See United States v. Coatoam, 245 F.3d 553, 557-58 (6th Cir. 2001) (refusing to adopt 

a defendant's literal reading of a statutory provision, which would have rendered another 

subsection surplusage in the vast majority of cases, where the government asserted that Congress 

made a drafting error when it amended the statute). (References 322 Pub. L. 101-549, section 

108, 104 Stat. at 2467. Id., section 302, 104 Stat. at 2574. Some commentators have suggested 

that codification decisions of the House Office of the Law Revision Counsel are entitled to some 

form of deference. However, the Office is not the expert agency charged with administering the 

CAA, and therefore not entitled to Chevron deference regarding the interpretation of that statute. 

Chevron, 467 U.S. at 844 ("We have long recognized that considerable weight should be 

accorded to an executive department's construction of a statutory scheme it is entrusted to 

administer, and the principle of deference to administrative interpretations has been consistently 

followed by this Court whenever decision as to the meaning or reach of a statute has involved 

reconciling conflicting policies, and a full understanding of the force of the statutory policy in 

the given situation has depended upon more than ordinary knowledge respecting the matters 

subjected to agency regulations."). Accordingly, the Office does not even purport to interpret or 

amend the law in the codification process: "The translations and editorial changes made to 

sections of non-positive law titles are purely technical and do not change the meaning of the 

law." Office of the Law Revision Counsel, Detailed Guide to the United States Code Content and 

Features, available at http://uscode.house.gov/detailed_guide.xhtml. Even where there are plain 

errors in grammar, punctuation, or spelling, the Office does not correct them in the text of the 

code, but merely inserts a footnote indicating the probable error. Id. The Office of the Law 

Revision Counsel could not purport to determine the text of section 111(d) without running afoul 

of the Supreme Court's jurisprudence on the separation of powers. Expunging the text of the 

Senate amendment from section 111(d) is a legislative act that can only be accomplished through 

the legislative process. See INS v. Chadha, 462 U.S. 919, 952-54 (1983) ("Amendment and 

repeal of statutes . . . must conform with [the bicameralism and presentment requirements of] 

Art. I.") "Congress must abide by its delegation of authority until that delegation is legislatively 

altered or revoked." Id. at 955. 1 U.S.C. sections 112, 204(a); U.S. Nat. Bank of Oregon v. Indep. 

Ins. Agents of Am., Inc., 508 U.S. 439, 448 (1993); United States v. Welden, 377 U.S. 95, 98 n.4 

(1964). Stephan v. United States, 319 U.S. 423, 426, (1943). See Office of Law Revision 

Counsel, United States Code, listing titles that have been enacted into positive law with an 

asterisk, http://uscode.house.gov/browse.xhtml. See, supra, note 325; Clean Air Act 

Amendments, 104 Stat. 2399, 2467, 2474 (1990). See also Owner-Operator Indep. Drivers Assn 

v. Landstar Sys., 622 F.3d 1307, 1327 (11th Cir. 2010) ("There is no reason for this Court to 

rewrite a statute because of an alleged scrivener error unless a literal interpretation would lead to 

an absurd result."); Lewis v. Alexander, 685 F.3d 325, 351-51 (3d Cir. 2012) (regardless of 

whether statutory text was the result of a drafting error, it was not a mere scrivener's error fit for 

judicial correction because Congress could have rationally chosen to enact the text at issue); 

Nijjar v. Holder, 689 F.3d 1077, 1084 (9th Cir. 2012) (same). Pet. for Extraordinary Writ, 6, 

Murray Energy Corp. v. EPA, No. 14-1112, (D.C. Cir. June 18, 2014) (Doc. 1498341); Brief of 

Amici Curiae West Virginia, et al., 2, Murray Energy Corp. v. EPA, No. 14-1112 (D.C. Cir. June 
31

25, 2014) (Doc. 1499435). Revision of December 2000 Regulatory Finding on the Emissions of 

Hazardous Air Pollutants From Electric Utility Steam Generating Units and the Removal of 

Coal- and Oil-Fired Electric Utility Steam Generating Units From the Section 112(c) List, 70 

Fed. Reg. 1594, 16031 (Mar. 29, 2005). Id. HR 3030, section 301, reprinted in 1990 CAA Leg. 

Hist. 3737 at 3933. "The Administrator may designate a category or subcategory of area sources 

that he finds, based on actual or estimated aggregate [sic] emissions of a listed pollutant or 

pollutants in an area, warrants regulation under this section." Id., 1990 CAA Leg. Hist. 3737 at 

3933. In contrast, the conference bill required EPA to regulate certain "area source emissions of 

the 30 hazardous air pollutants that present the greatest threat to public health in the largest 

number of urban areas." Pub. L. 101-549, section 301, 104 Stat. at 2537 (codified at 42 U.S.C. -

7412(c)(3). 70 Fed. Reg. at 16031. Section 112 does not mandate controls for all source 

categories that emit HAPs. For instance, section 112 does not provide for the regulation of HAPs 

from oil and gas wells outside of certain metropolitan areas, unless those sources meet the 

statutory definition for "major sources." 42 U.S.C. section 7412(n)(4)(B). Also, section 112 

requires EPA to regulate non-major sources "representing 90 percent of the [non-major] source 

emissions of the 30 hazardous air pollutants that present the greatest threat to public health in the 

largest number of urban areas," but otherwise only provides for regulation of non-major sources 

of HAPs if EPA determines they present[] a threat of adverse effects to human health or the 

environment (by such sources individually or in the aggregate) warranting regulation under this 

section. Id. section 7412(c)(3). Major sources are generally stationary sources with the potential 

to emit "10 tons per year or more of any hazardous air pollutant or 25 tons per year or more of 

any combination of hazardous air pollutants." Id. 7412(a)(1). H.R. 3030, - 301 (introduced July 

27, 1989, and referred to the Committee on Energy and Commerce), reprinted in 1990 CAA Leg. 

Hist. at 3936-37. Id. at 1990 CAA Leg. Hist. at 3937. It may also be noteworthy that neither the 

House bill nor conference bill posed any equivalent need to expand section 111(d) to cover 

criteria pollutants. This is likely due to the different nature of HAPs and criteria pollutants. Very 

small doses of HAPs can cause adverse impacts on public health and sources of HAPs impose 

the greatest burdens on nearby communities. Consequently, addressing HAP impacts requires 

controlling all major sources of HAPs. In contrast, the NAAQS program gives states discretion 

over which sources of criteria pollutants should be subject to regulation because states can 

adequately protect public health so long as they ensure ambient concentrations do not exceed the 

NAAQS. See EPA, National Emission Standards for Hazardous Air Pollutants (NESHAP), 

http://www.epa.gov/ttn/atw/mactfnlalph.html (listing the nearly 200 source categories and 

subcategories affected by standards set under section 112). When Congress enacted the 1990 

Clean Air Act Amendments, EPA had only issued four 111(d) emission guidelines, addressing 

total reduced sulfur from kraft paper mills, fluoride emissions from aluminum reduction plants, 

fluoride emissions from phosphate fertilizer plants, and sulfuric acid mist from sulfuric acid 

production units. Each of these source categories is now regulated under section 112 except for 

sulfuric acid production units. Yet sulfuric acid mist is emitted by other sources regulated under 

section 112, such as EGUs. See 76 Fed. Reg. 24976, 25,064 (May 3, 2011). Pet. for 

Extraordinary Writ, 6, Murray Energy Corp. v. EPA, No. 14-1112, (D.C. Cir. June 18, 2014) 

(Doc. 1498341). Proposed National Emissions Standards for Hazardous Air Pollutants; and, in 

the Alternative, Proposed Standards of Performance for New and Existing Stationary Sources: 
32

Electric Utility Steam Generating Units, 69 Fed. Reg. 4652, 4685 (Jan. 30, 2004). In fact, 

however, a "literal" reading of section 111(d), both before and after the 1990 amendments would 

require section 111(d) regulation even for HAPs. That is because the exclusions for criteria 

pollutants and HAPs are structured as a mandate to regulate various classes of pollutants 

separated by an "or" in the alternative for which air quality criteria have not been issued or which 

is not included on a list published under section 7408(a) or 7412(b)(1)(A) of this title. The canon 

disfavoring implied repeals is discussed in section I.N.4.b. See, e.g., Remarks of Rep. Dingell 

during the House Debate on the Conference Report, reprinted in 1990 CAA Leg. Hist. at 1187 

("America already has the toughest air quality laws in the world. With this act, we will be raising 

our standards even higher. We will also be fulfilling our responsibility to the American people 

who have told us that they are willing to make some sacrifices in pursuit of a cleaner 

environment."); Remarks of Rep. Green during House Debate on the Conference Report, 

reprinted in 1990 CAA Leg. Hist. at 1180 ("Mr. Speaker, the conference report before us today 

will help us to fulfill our promise to the American people of a clean, safe environment. Although 

some . . . may argue that the costs of enacting this bill are too great, I contend that the costs of 

not enacting clean air legislation this year are greater still."). Pet. for Extraordinary Writ, 6, 

Murray Energy Corp. v. EPA, No. 14-1112, (D.C. Cir. June 18, 2014) (Doc. 1498341). "Under 

H.R. 3030, states would be required to submit to EPA comprehensive permit programs for 

regulating stationary sources. The permitting requirements would extend to sources that are 

subject to new source performance standards, emission standards for hazardous air pollutants, 

requirements for preventing significant deterioration (PSD) of air quality, nonattainment new and 

existing source review, and acid deposition controls under Title V. They also apply to all sources 

of air pollution emitting over 100 tons a year. House Debate on H.R. 3030 (May 21, 1990), 

reprinted in 1990 CAA Leg. Hist. at 2566. 42 U.S.C. - 7475(a)(4). For certain sources regulated 

under other acts, the 1990 amendments required EPA to consider the efficacy of those 

regulations before issuing regulations under section 112. As amended in 1990, section 112 does 

not require EPA to regulate sources and substances regulated by the Nuclear Regulatory 

Commission if "the regulatory program established by the Nuclear Regulatory Commission 

pursuant to the Atomic Energy Act for such category or subcategory provides an ample margin 

of safety to protect the public health." 104 Stat. at 2542 (codified at 42 U.S.C. section 

7412(d)(9)). In addition, Congress provided that "In the case of any category or subcategory of 

sources the air emissions of which are regulated under subtitle C of the Solid Waste Disposal 

Act, the Administrator shall take into account any regulations of such emissions which are 

promulgated under such subtitle and shall, to the maximum extent practicable and consistent 

with the provisions of this section, ensure that the requirements of such subtitle and this section 

are consistent." 104 Stat. at 2560 (codified at 42 U.S.C. - 7412(n)(7)). See also Scialabba v. 

Cuellar de Osorio, 134 S. Ct. 2191, 2203 (2014) (plurality opinion); Id. at 2219 n. 3 (Sotomayor, 

J., joined by Breyer, J., dissenting). Antonin Scalia and Bryan A. Garner, Reading Law: The 

Interpretation of Legal Texts (2012) at 180; id. ("The imperative of harmony among provisions is 

more categorical than most other canons of construction because it is invariably true that 

intelligent drafters do not contradict themselves (in the absence of duress). Hence there can be no 

justification for needlessly rendering provisions in conflict if they can be interpreted 

harmoniously."); see also Ricci v. DeStefano, 557 U.S. 557, 579-83 (2009) (where provisions of 
33

Title VII 'could be in conflict absent a rule to reconcile them," Court adopted construction that 

"allows the [provision at issue] to work in a manner that is consistent with other provisions of 

Title VII"); Watt v. Alaska, 451 U.S. 259, 267 (1981) (construing potentially discordant statutory 

provisions "to give effect to each if [it] can do so while preserving their sense and purpose"). 

EPA, Legal Memorandum for Proposed Carbon Pollution Emission Guidelines for Existing 

Electric Utility Generating Units' (2014) at 26. Over the span of a decade, EPA has interpreted 

the House and Senate amendments to section 111(d) consistently in each of the two rulemakings 

where they were at issue. Courts should give significant weight to EPA's unwavering 

interpretation of section 111(d). See Good Samaritan Hospital v. Shalala, 508 U.S. 402, 417 

(1993) ("[T]he consistency of an agency's position is a factor in assessing the weight that 

position is due."). 69 Fed. Reg. at 4685. EPA, "Legal Memorandum for Proposed Carbon 

Pollution Emission Guidelines for Existing Electric Utility Generating Units" at 26-27. Id. See 

EPA FLIGHT, available at http://ghgdata.epa.gov/ghgp/main.do. 40 CFR sections 63.640 et seq 

& 63.1560 et seq (NESHAPs for petroleum refineries, including units used for hydrogen 

production); sections 63.760 et seq (NESHAP for oil and natural gas production facilities, 

including facilities that process natural gas and certain compressors); sections 63.1270 et seq 

(NESHAP for natural gas transmission and storage facilities); subparts F, G, H & I (NESHAPs 

for the synthetic organic chemical manufacturing industry, including manufacturing of certain 

petrochemical products); sections 63.11400 et seq (NESHAP for carbon black production area 

sources, which manufacture "petrochemical products); sections 63.2430 et seq (NESHAP for 

miscellaneous organic chemical manufacturing, which includes units classified under 1997 

NAICS code 325, such as ammonia manufacturing); sections 63.11494 et seq (NESHAP for 

chemical manufacturing area sources, which includes units classified under 1997 NAICS code 

325); sections 63.7680 et seq (NESHAP for iron and steel foundries); sections 63.7780 et seq 

(NESHAP for integrated iron and steel foundries); 63.10880 et seq (NESHAP for iron and steel 

foundries area sources); sections 63.1340 et seq (NESHAP for the Portland cement 

manufacturing industry); sections 63.7080 et seq (NESHAP for lime manufacturing plants); 

sections 63.440 et seq (NESHAP for the pulp and paper industry); sections 63.7480 et seq 

(NESHAP for industrial, commercial, and institutional boilers and process heaters that are major 

sources of HAPs); sections 63.11193 et seq (NESHAP for industrial, commercial, and 

institutional boilers and process heaters that are area sources of HAPs); sections 63.6080 et seq 

(NESHAP for stationary combustion turbines); sections 63.6580 et seq (NESHAP for 

reciprocating internal combustion engines). Boilers, turbines, engines, and process heaters are 

the main sources of CO2 emissions from the food processing, manufacturing, and ethanol 

subsectors. See EPA, Who Reports,

ttp://www.ccdsupport.com/confluence/pages/viewpage.action/pageId=93290546 (explaining that 

facilities in the food processing, manufacturing, and ethanol subsectors are required to report 

emissions from stationary combustion if they meet an emissions threshold); 40 CFR section 

98.30 ("Stationary fuel combustion sources include, but are not limited to, boilers, simple and 

combined-cycle combustion turbines, engines, incinerators, and process heaters."). For instance 

sources in the "other chemicals" category may be regulated under section 112 as part of the 

Chemical manufacturing Industry (area sources) source category, subpart VVVVVV or 

Miscellaneous Organic Chemical Production and Processing source category, subpart FFFF. 
34

Public Law 101,549, 4108(g), 104 Stat. at 2467 (Nov. 15, 1990). Under the Mineral Leasing Act 

of 1920, ninety percent of federal oil and gas revenue goes to the states and ten percent to the 

U.S. Treasury, whereas 1964 amendments to the Wildlife Refuge Revenue Sharing Act require 

twenty-five percent of the revenue from refuge resources (including "minerals") to goes to 

counties and seventy-five percent to the Department of Interior. The Court explained that the 

purpose of the 1964 amendments was to distribute more revenue to counties "as compensation 

for loss of taxable properties that have been acquired by the Federal wildlife refuge system." 451 

U.S. at 270. The Court observed that "Congress might be expected to have mentioned a change" 

that would have increased federal revenues, especially when Congress was concerned that the 

Department have sufficient funds to make the increased payments mandated by the 

amendments." 451 U.S. at 271. 70 Fed. Reg. at 16031. As discussed above, section 112 does not 

provide for regulation of certain area sources in the oil and gas sector and regulation of HAPs 

from many area sources is discretionary under section 112. Indeed, the savings clause enacted as 

part of the 1990 amendments indicates that Congress recognized the importance of section 

111(d) in controlling dangerous pollutants and did not want such regulation to be ousted lightly 

or by mere implication. That savings provision provides that "[n]o emission standard or other 

requirement promulgated under this section [112] shall be interpreted, construed, or applied to 

diminish or replace the requirements of a more stringent emission limitation or other applicable 

requirement established pursuant to Section 111 [and other programs]." 42 U.S.C. 7412(d)(7). 

See William J. Haun, The Clean Air Act As an Obstacle to the Environmental Protection 

Agency's Anticipated Attempt to Regulate Greenhouse Gas Emissions from Existing Power 

Plants 10-11 (Federalist Society 2013), available at http://www.fedsoc.org/library/doclib/20130311_HaunEPAWP.pdf. In contrast, the approach urged by Haun, 

supra, results in a formulation that would restrict section 111(d) to "any air pollutant . . . which is 

not included on a list published under section 7408(a) or 112(b) [Senate amendment] or emitted 

from a source category which is regulated under section 112 [House amendment] of this title[.]" 

Haun at 10 (emphasis added by Haun). However such an interpretation would be properly 

interpreted, it clearly does not faithfully implement the amendments, since it results in smuggling 

in an extra "or" that Congress did not enact. The House Amendment struck one "or" (by striking 

"or section 112(b)(1)(A)"), and the Senate Amendment did not add any "or's." Yet the Haun 

approach manages to yield a new "or," by disregarding the instruction in the House amendment 

to strike the preexisting "or". See Scialabba, 134 S. Ct. at 2203 (plurality opinion); Id. at 2219 n. 

3 (Sotomayor, J., joined by Breyer, J., dissenting) (agreeing with plurality that where agency 

cannot "simultaneously obey" two statutory commands, "it is appropriate to defer to the agency's 

choice as to which command must give way"). 79 Fed. Reg. at 34853. If the inclusion of the 

House amendment did not create ambiguity in the statutory text, the plain language of the statute 

would control despite any errors in the drafting process. See Lamie v. United States Trustee, 540 

U.S. 526, 542 (2004) ("If Congress enacted into law something different from what it intended, 

then it should amend the statute to conform it to its intent. It is beyond our province to rescue 

Congress from its drafting errors, and to provide for what we might think . . . is the preferred 

result."). But here, it is impossible for EPA to give effect to the House amendment without 

violating the mandate in the Senate amendment. As explained above, EPA may also respond to 

this scrivener's error by interpreting the House amendment in a way that gives it some effect but 
35

avoids an absurd result. See United States ex rel. Holmes v. Consumer Ins. Group, 318 F.3d 

1199, 1209 (10th Cir. 2003) ("Under the doctrine of scrivener's error, a court may give an 

unusual (though not unheard-of) meaning to a word which, if given its normal meaning, would 

produce an absurd and arguably unconstitutional result."). These canons are discussed supra, 

section I.N.4.b, because they demonstrate that-if harmonization is possible-EPA's harmonization 

is reasonable. Both the Senate amendment and then-effective law excluded the current list of

HAPs from regulation under section 111(d). The rationale for giving effect to the last provision 

in order of arrangement is that the last expression of the legislative will must prevail: "[O]ne, for 

being earlier or later in position, must be deemed to render the other nugatory, or repeal it. The 

decisions are to the effect that the provision which is latest in position repeals the other. Being 

later in position, the prevailing provision is deemed a later expression of the legislative will. This 

rule and the reason for it have been criticized, because, all the provisions of an act being adopted 

at the same time, there is no priority in point of time on account of their relative positions in the 

statute. This is strictly true; but, in the reading of a bill, matter near the close may be presumed to 

revive the last consideration, and, if assented to, is a later conclusion." Sutherland, Statutes and 

Statutory Construction (2d ed. 1904) vol. 2, section 349. This rationale applies despite the fact 

that the two relevant sections of the Statutes at Large amend the same statutory provision.

Response 9: EPA agrees that it has the authority to promulgate regulations addressing CO2 

emissions from existing power plants under section 111(d). EPA’s discussion of this issue is in 

Section IV of the preamble.

Comment 10: Commenters stated that the EPA has no statutory authority, granted by Congress, 

to regulate CO2 or any other "greenhouse gas" as a pollutant.

Response 10: We disagree with this comment. In section IV of the preamble for this rule, we 

explain EPA’s authority under the CAA to regulate CO2 and other greenhouse gases.

Comment 11: Commenters stated the proposal is outside the bounds of the Clean Air Act itself 

and adds that this proposal must be withdrawn.

Response 11: We disagree with this comment. In other parts of the record for this rulemaking, 

we explain that this rule’s impacts on electricity consumers are limited, the benefits of this rule 

in reducing the adverse impacts on climate change of CO2 emissions, and the legal authority for 

this rule.

Comment 12: Commenters stated that EPA’s attempt to reduce CO2 emissions from existing 

coal-fired EGUs under Section 111(d) violates the plain language of that section. As recorded in 

the official United States Code, Section 111(d) prohibits EPA from regulating "any pollutant . . . 

from a source category which is regulated under Section 112." (42 U.S.C. - 7411(d) (2006); see 

also 1 U.S.C. - Section 204(a) (2006) (providing that the Code of Laws of the United States 

current at any time "shall . . . establish prima facie the laws of the United States . . . .").)The 

Supreme Court has expressly recognized this prohibition, stating definitively in American 

Electric Power Co. v. Connecticut that "EPA may not employ Section [111](d) if existing 
36

stationary sources of the pollutant in question are regulated under the national ambient air quality 

standard program, S. [108-110], or the 'hazardous air pollutants' program, Section [112]. See 

Section [112](d)(1).(131 Supreme Court 2527, 2537 n.7 (2011)) This definitive statement from 

the Supreme Court effectively resolves the matter. In 2012, EPA promulgated the Mercury and 

Air Toxics Standard,(Fed. Reg. 9304 (February 16, 2012)) which regulated emissions of mercury 

and other hazardous pollutants from new and existing coal- and oil-fired EGUs under Section 

112 of the Clean Air Act. According to the plain language of the statute, then, once EPA 

promulgated the Mercury and Air Toxics Standard, the Agency relinquished its authority to 

subject existing coal- and oil-fired EGUs to regulation under Section 111(d). The Proposed Rule 

is thus facially invalid because it seeks to regulate sources - existing coal-fired EGUs - that are 

already subject to regulation under Section 112. To the extent EPA argues that the Supreme 

Court's definitive statement regarding Section 111(d) is dictum because that issue was not 

directly before the Court in American Electric Power, we note that under the law of the D.C. 

Circuit, even "dicta of the United States Supreme Court should be [considered] very persuasive." 

(Gabbs Exploration Co. v. Udall, 315 F.2d 37, 39 (D.C. Cir. 1963); see also Bangor Hydro-Elec. 

Co. v. FERC, 78 F.3d 659, 662 (D.C. Cir. 1996) (stating that "Supreme Court dicta ten[d] to 

have somewhat greater force" that dicta from other courts)) EPA would be bound by the plain 

language of the Clean Air Act's prohibition even if the Supreme Court had not yet so clearly 

recognized it. EPA itself correctly acknowledges that the Proposed Rule is invalid under a 

"literal reading" of Section 111(d).(Legal Memorandum for Proposed Carbon Pollution Emission 

Guidelines for Existing Electric Utility Generating Units ("Legal Memo") 26 (June 18, 2014), 

available at http://www2.epa.gov/sites/production/files/2014-06/documents/20140602-legalmemorandum.pdf.) Nevertheless, EPA apparently believes the Section's explicit prohibition is 

made ambiguous by a clerical mistake in the 1990 Amendments to the Clean Air Act. Before the 

1990 Amendments, Section 111(d) barred EPA from regulating, under that Section, ": any air 

pollutant . . . included on a list published under . . . [Section] 112(b)(1)(A)." (42 U.S.C. 

S.7411(d) (1987)) Two provisions in the 1990 Amendments purported to alter that language. The 

first provision, drafted in the House, replaced the cross-reference to S.112(b)(1)(A) with the 

language that now appears in the U.S. Code and that is cited by the Supreme Court in American 

Electric Power, forbidding EPA from regulating emissions of "any pollutant . . . from a source 

category which is regulated under Section 112." (Pub. L. No. 101-549, S. 108, 104 Stat. 2399 

(1990)) The second provision, drafted in the Senate, struck S.[112](b)(1)(A) and inserted "in lieu 

thereof S. [112](b)." (Id. at S. 302(a)) Rushing to file its conference report after an all-night 

meeting, the House-Senate Conference Committee included both amendments in the version of 

the 1990 Amendments that was ultimately passed by both houses of Congress and signed into 

law by the President. The House provision of Section 111(d) prohibiting double regulation of 

sources is the law under longstanding rules for resolving drafting inconsistencies and clerical 

errors in federal legislation. A longstanding rule of legislative draftsmanship dictates that 

conforming amendments be applied after substantive amendments. Congress placed the Senate 

amendment with other amendments expressly designated as "Conforming Amendments." 

Congress's decision to label the Senate amendment as a "conforming amendment," and to lump 

the amendment with a host of other conforming amendments, conclusively demonstrates that the 

Senate amendment was a clerical revision, not intended to affect the substance of Section 111(d). 
37

The House amendment, on the other hand, is clearly substantive. A close analysis of the text of 

the amendment reinforces the conclusion that the Senate amendment is clerical. Conforming 

amendments are, by definition, non-substantive. They are: amendment[s] of a provision of law 

that [are] necessitated by the substantive amendments or provisions of the bill. The designation 

includes amendments, such as amendments to the table of contents, that formerly may have been 

designated as clerical amendments.(Senate Legislative Drafting Manual S. 126(b)(2)(A); see, 

e.g., I.N.S. v. Stevic, 467 U.S. 407, 428 (1984) ("The amendment . . . was explicitly recognized 

to be a mere conforming amendment, added "for the sake of clarity," and was plainly not 

intended to change the standard."); Dir. of Revenue of Mo. v. CoBank ACB, 531 U.S. 316, 323 

(2001) (conforming amendment was "merely . . . technical," rather than substantive)) The 

function of the Senate amendment was to update Section 111(d)'s existing language to reflect 

changes made by other provisions of the 1990 Amendments. A few of those provisions replaced 

Section 112(b)(1)(A) "the subsection cross-referenced in Section 111(d)" with Sections 

112(b)(1), 112(b)(2), and 112(b)(3). The Senate amendment sought to accommodate those 

changes by "striking" Section 111(d)'s cross-reference to Section 112(b)(1)(A) and inserting "in 

lieu thereof S. [112](b)." (Pub. L. No. 101-549, S. 302(a)) It is thus plainly clerical or 

conforming. The House amendment significantly and deliberately alters the scope of Section 

111(d). Whereas the pre-amendment version of Section 111(d) allowed EPA to regulate certain 

emissions from source categories regulated under Section 112,(See 42 U.S.C. - Section 7411(d) 

(1987)) the House amendment expressly precludes EPA from using Section 111(d) to regulate 

any emissions from source categories regulated under Section 112. (Pub. L. No. 101-549, S. 108, 

104 Stat. 2399 (1990)) The substantive character of the House amendment is confirmed by its 

placement amidst a series of other obviously substantive amendments in the Statutes at 

Large.(See Beecham v. United States, 511 U.S. 368, 371 (1994) ("That several items in a list 

share an attribute counsels in favor of interpreting the other items as possessing that attribute as 

well.")) The House's substantive amendment eliminates the statutory cross-reference that the 

Senate's conforming amendment was intended to update, because it replaces the cross-reference 

with an entirely new substantive limitation on EPA's authority. Without a cross-reference to 

update, the Senate amendment is superfluous, enacting nothing. The U.S. Code version of 

Section 111(d) accordingly notes that the Senate's clerical change "could not be executed." 

Inclusion of the Senate amendment in the final version of the 1990 Amendments was thus a 

mistake. EPA itself has described the Senate amendment as a drafting error" that "should not be 

considered." (70 Fed. Reg. 15,993, 16,031 (Mar. 29, 2005)) Longstanding judicial and legislative 

practice support this plain text reading of the U.S. Code. In Chickasaw Nation v. United States, 

for example, the Supreme Court concluded that "a failure to delete an inappropriate crossreference" in a statute was "simply a drafting mistake" that "d[id] not warrant rewriting the 

remainder of the statute's language."(534 U.S. 84, 90-91 (2001); see also U.S. Natl Bank of Or. 

v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439, 462 (1993) (unanimous court disregarded 

placement of quotation marks in statute when, after reviewing in detail the statute's "structure, 

language, and subject matter," it concluded that the statute's "true meaning" was "clear beyond 

question," and that "the placement of the quotation marks in the [statute] was a simple scrivener's 

error, a mistake made by someone unfamiliar with the law's object and design")) Circuit courts 

across the country have similarly held that, where a mistake in correcting a cross-reference 
38

conflicts with the statute's substantive provisions, the mistake should be treated as "the result of a 

scrivener's erro[r] and not construed as "creating an ambiguity." (Am. Petroleum Inst. v. SEC, 

714 F.3d 1329, 1336-37 (D.C. Cir. 2013); see also United States v. Coatoam, 245 F.3d 553, 557 

(6th Cir. 2001) (declining to give effect to erroneous statutory cross-reference); In re Chateaugay 

Corp., 89 F.3d 942, 954 (2d Cir. 1996) (same); King v. Hous. Auth., 670 F.2d 952, 954 n.4 (11th 

Cir. 1982) (same).) On the dozens of occasions where simultaneously-enacted substantive and 

conforming amendments have applied to the same statutory language, the Office of the Revisor 

of Statutes has refused to give effect to the conforming amendment, without exception. Indeed, 

even though such errors are relatively common in complicated pieces of legislation, Congress 

and the courts appear not to have ever given effect to one. Nevertheless, EPA insists the Senate 

amendment must be given effect on the ground that federal agencies are obligated to give 

substantive effect to all language in the Statutes at Large.(Legal Memo 26) EPA does not attempt 

to square its reading with the judicial and legislative precedents that preclude giving effect to 

drafting errors.(See supra notes 12-15 and accompanying text ) Nor does EPA suggest a 

principled means of distinguishing between the Senate amendment and the hundreds of other 

drafting errors interspersed throughout the U.S. Code.(See supra note 14 and accompanying 

text.) Although no court or agency has ever given effect to such errors, EPA would require courts 

and agencies to do so for each of the hundreds of erroneous clerical amendments heretofore 

denied effect. In light of the foregoing, EPA's attempt to give meaning to both amendments is 

misguided. Only the House's has any effect. Even accepting there is something to reconcile, 

EPA's attempt goes badly astray, because under any proper harmonization of the two versions, 

the existence of the House amendment explicitly forecloses adoption of the Proposed Rule.(Pub. 

L. No. 101-549, S. 108) It is undisputed that the plain text of the House amendment curtails 

EPA's authority to regulate pollutants emitted by sources regulated under Section 112. Put 

another way, Section 111(d) cannot provide a statutory basis for the Proposed Rule unless EPA 

demonstrates both that the Senate amendment must be given effect (which, as we have shown, 

cannot be done), and that giving effect to the Senate amendment makes it impossible to give full 

effect at the same time to the House amendment's plain language. EPA has not made this 

showing, and it cannot make this showing, because the two amendments can be harmonized in 

way that gives full effect to both. The limitations in the House and Senate amendments are 

entirely compatible with one another.(See, e.g., William J. Haun, The Clean Air Act as an 

Obstacle to the Environmental Protection Agency's Anticipated Attempt to Regulate Greenhouse 

Gas Emissions from Existing Power Plants, THE FEDERALIST SOC'Y (Mar. 2013); Brian H. 

Potts, The President's Climate Plan for Power Plants Won't Significantly Lower Emissions, 31 

YALE J. REG. ONLINE 1, 9 (Aug. 22, 2013).) The House amendment forbids EPA from 

regulating, under Section 111(d), any pollutants emitted from sources in a source category 

already regulated under Section 112 (Pub. L. No. 101-549, S. 108); the Senate amendment 

forbids EPA from regulating, under Section 111(d), any hazardous air pollutants, whether or not 

they are emitted from a source in a category regulated under Section 112.(Id. at Section 302(a))

Nothing in either restriction on EPA's authority forecloses full enforcement of the other. Rather, 

EPA may give maximum effect to both limitations by reading the two amendments as jointly 

prohibiting EPA from regulating under Section 111(d) any hazardous air pollutants already 

regulated under Section 112, as well as any emissions of any pollutants from a source in "a 
39

source category which is regulated under Section 112." (42 U.S.C. - 7411(d)) A venerable 

maxim of statutory construction requires courts and agencies to give effect, whenever possible, 

to all of the language in a statute.(Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979); United 

States v. Menasche, 348 U.S. 528, 538 (1955); Ward v. Race Horse, 163 U.S. 504, 508 (1896)) 

EPA's reading gives meaning only to the Senate amendment (and then only to portions thereof, 

as we explain next), entirely ignoring the House's. Because it is possible to give concurrent effect 

to all of the language in the House and Senate amendments, as we have shown above, EPA must 

do so. Of course, giving effect to the House amendment's express terms renders the Proposed 

Rule invalid, because the Proposed Rule purports to regulate, under Section 111(d), emissions of 

pollutants from sources (coal-fired EGUs) in a source category (the category of coal- and oilfired EGUs) already regulated under Section 112 by virtue of the Mercury and Air Toxics 

Standards. Rather than adopt this straightforward reading of the two amendments, EPA has 

propounded its own, novel interpretation of Section 111(d). Under EPA's interpretation, Section 

111(d) would prohibit regulation of 'any [hazardous air pollutants] listed under Section 112(b) 

that may be emitted from a particular source category . . . regulated under Section 112." (Legal 

Memo 26) Somewhat remarkably, EPA's interpretation ignores the explicit limitations set out in 

both of the amendments it purports to construe. Contrary to the House's substantive amendment -

which explicitly bars any regulation under Section 111(d) of any existing sources already 

regulated under Section 112 - EPA's interpretation would allow such regulation so long as the 

pollutant is not regulated under Section 112. Contrary to the Senate's conforming amendment -

which appears to forbid regulation of any hazardous air pollutant under Section 111(d) - EPA's 

reading would permit such regulation of the hazardous air pollutant so long as the emitting 

source is not regulated by Section 112. Without any support, EPA suggests the express 

limitations in the House and Senate amendments negate one another. But, as the Supreme Court 

very recently made clear, "an agency may not rewrite clear statutory terms to suit its own sense 

of how the statute should operate." (Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2446 

(2014) Because it is possible to read Section 111(d) in a way that gives maximum effect to both 

the House and Senate amendments, EPA must do so. The unambiguous effect of such a reading 

is to prohibit EPA from regulating, under Section 111(d), emissions of any air pollutant from 

sources in a category that is already regulated under Section 112. The Proposed Rule violates this 

prohibition, and thus Section 111(d) cannot supply the statutory basis for enacting it. As there is 

no other source of authority, EPA must abandon the Proposed Rule to the extent that it purports 

to regulate sources already regulated under Section 112 - here, coal-fired EGUs. To determine 

whether an agency's interpretation of a statute is valid, courts employ the familiar framework 

from Chevron, U.S.A. v. Natural Resources Defense Council, Inc.(467 U.S. 837, 842-43 (1984) 

and its progeny. The first step in that framework asks "whether Congress has spoken to the 

precise question at issue." (Id. at 842) If so, the agency must give effect to Congress's expressed 

intent.(Id.) If the statute is ambiguous or silent on the question at issue, however, courts ask 

whether the ambiguity or silence is the product of an implicit delegation of interpretive authority 

to the agency by Congress.(United States v. Mead Corp., 553 U.S. 218, 226-27 (2001)) If not, 

courts will afford the agency's interpretation of the statute only the modest deference outlined in 

Skidmore v. Swift & Co.(Id. at 234-35 (citing Skidmore, 323 U.S. 134, 139-40)) If the ambiguity 

or silence is the product of an implicit delegation of authority to the agency, then and only then, 
40

under the second Chevron step, will courts defer to the agency's interpretation if that 

interpretation is reasonable.(Chevron, 467 U.S. at 843) EPA's interpretation of Section 111(d) 

fails at each step in the Chevron analysis. Even if the House and Senate amendments render 

Section 111(d) ambiguous, the Proposed Rule is still invalid. To justify the Proposed Rule, EPA 

has adopted an interpretation of Section 111(d) that departs substantially from Section 111(d)'s 

text. For that reason, the validity of EPA's interpretation of Section 111(d) hinges on its receiving 

the substantial deference afforded under Chevron. Such deference, however, is unwarranted here 

and almost certainly will not be accorded by the reviewing courts. Not every statutory question 

gives rise to Chevron deference. As Chief Justice Roberts stated just this past Term, "Direct 

conflict [between statutory provisions] is not ambiguity, and the resolution of such a conflict is 

not a statutory construction but legislative choice. Chevron is not a license for an agency to 

repair a statute that does not make sense." ( Scialabba v. Cuellar de Osorio, 134 S. Ct. 2191, 

2214 (2014) (Roberts, C.J., concurring)) Rather, Chevron deference is appropriate only when it 

is clear Congress meant for the alleged ambiguity in the statute to "be resolved, first and

foremost, by the agency, and desired the agency (rather than the courts) to possess whatever 

degree of discretion the ambiguity allows." (Smiley v. Citibank (S.D.), N.A., 517 U.S. 735, 740-

41 (1996); see also Am. Bar Assn v. F.T.C., 430 F.3d 457, 469 (D.C. Cir. 2005) ("The deference 

mandated by Chevron comes into play . . . only if the reviewing court finds an implicit 

delegation of authority to the agency.")) In other words, Chevron deference only applies where 

there is intent to delegate to the agency the authority to interpret. In Section 111(d), there is no 

evidence that Congress drafted and passed the House and Senate amendments with the intention 

of creating an ambiguity that it meant for EPA to interpret. Rather, as EPA has acknowledged, 

inclusion of the Senate amendment was an inadvertent "drafting error." (70 Fed. Reg. 15,993, 

16,031 (Mar. 29, 2005).) A drafting error cannot supply a basis for affording Chevron deference, 

since, by definition, a mistake conveys no congressional intent at all "delegatory or 

otherwise.(See Appalachian Power Co. v. EPA, 249 F.3d 1032, 1043-44 (D.C. Cir. 2001) ("Lest 

it obtain a license to rewrite the statute, however, we do not give an agency alleging a scrivener's 

error the benefit of Chevron step two deference, by which the court credits any reasonable 

construction of an ambiguous statute.")) Without Chevron deference, EPA's interpretation of 

Section 111(d), which either concededly conflicts with the statute's plain language or simply 

ignores one house's amendment in favor of another's, cannot survive. Cases like National 

Association of Home Builders v. Defenders of Wildlife (551 U.S. 644 (2007)) and Citizens to 

Save Spencer County v. EPA(600 F.2d 844 (D.C. Cir. 1979)) are not to the contrary. National 

Association of Homebuilders involved separate statutes addressing separate problems through 

"seemingly categorical" and, at first glance, irreconcilable "legislative commands." (551 U.S. at 

661) The Court ultimately deferred to an agency interpretation reconciling the two statutes, 

largely because of the interpretive canon disfavoring repeal by implication.(Id. at 662-69) That 

canon is not applicable in these circumstances, so neither is the deference afforded under 

National Association of Homebuilders. Spencer County involved two distinct Sections of the 

Clean Air Act that appeared to set out different effective dates affecting construction of major 

pollution-emitting facilities.(600 F.2d at 852-53) Not only has the D.C. Circuit subsequently 

cabined that decision,(See Georgetown Univ. Hosp. v. Bowen, 821 F.2d 750, 757 n.11 (D.C. Cir. 

1987) ("The decision in Spencer County is not only extremely limited, but the narrow exception 
41

that it purports to recognize has never been accepted by any other panel of this court.")) but 

Spencer County, like National Association of Homebuilders, addressed circumstances 

fundamentally dissimilar to those surrounding Section 111(d). With Section 111(d), two separate 

versions of a single section of a public law purport to address, in vastly different ways, the very 

same language in a single subsection of a statute. Those facts bear little resemblance to the facts 

in National Association of Homebuilders and Spencer County, both of which involved 

ambiguities created by different sections of the U.S. Code. There is, in short, no basis for 

affording EPA's interpretation of Section 111(d) Chevron deference. Without such deference, 

EPA's interpretation of Section 111(d) cannot be sustained, as it is manifestly contrary to the 

statute's express terms. Deference under step two of Chevron would be inappropriate here even 

had Congress delegated to EPA authority to interpret any alleged ambiguity in Section 111(d), 

because EPA's interpretation is profoundly unreasonable. "Under the second step of Chevron, 

[courts] will only defer to [an agency's] interpretations if they are reasonable and consistent with 

statutory purpose."(GTE Serv. Corp. v. F.C.C., 205 F.3d 416, 422 (D.C. Cir. 2000); see also 

FDIC v. Philadelphia Gear Corp., 476 U.S. 426, 439 (1986) (agency interpretation "may 

certainly stand" where it "is consistent with congressional purpose")) Yet EPA's construction of 

Section 111 contravenes even EPA's own understanding of congressional intent. As EPA admits, 

a central purpose of the 1990 Amendments was "to change the focus of Section 111(d) by 

seeking to preclude [Section 111(d)] regulation of those pollutants that are emitted from a 

particular source category that is actually regulated under Section 112," so as to preclude 

"duplicative or overlapping regulation." (70 Fed. Reg. 15,993, 16,031 (Mar. 29, 2005)) Despite 

this understanding, EPA now proffers a reading of Section 111(d) that contravenes that 

congressional intent. Section 111(d)'s prohibition against double-regulation of existing sources is 

part of a carefully considered regulatory scheme concerning emissions from stationary sources. 

The existing scheme avoids subjecting existing sources to both new national standards for 

emissions under Section 112 and new state-by-state standards under Section 111. Unlike newlyconstructed sources, which may be designed and constructed in compliance with both Section 

111 and Section 112, the imposition of additional regulatory burdens on existing sources 

sacrifices fairness and all but ensures creation of a huge stranded asset problem. The problems 

presented by double regulation of existing sources are starkly illustrated by this Proposed Rule. 

As we discuss in Section I.D.3 below, many coal-fired EGUs have invested hundreds of millions 

of dollars in pollution controls to comply with the Mercury and Air Toxics Standard, which was 

promulgated just two years ago pursuant to Section 112. It has been estimated that 

implementation of that rule will cost those plants more than $9 billion annually.(EPA, 

Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards 3-13 (Dec. 2011), 

available at http://www.epa.gov/ttn/ecas/regdata/RIAs/matsriafinal.pdf) Under the double 

regulation threatened by this Proposed Rule, however, many of these facilities will be forced to 

shut down entirely, or curtail their generation so significantly that their continued operation is no 

longer economically viable. There will be no opportunity to recover the substantial investments 

made in state-of-the-art pollution controls. This defies all reason and fairness, and is plainly 

contrary to congressional intent. Additionally, existing sources that were built under a different 

regulatory regime may lack the technological or financial flexibility to comply with two separate 

sets of rules - one under Section 111(d) cost of compliance against maximum achievable 
42

reductions.(42 U.S.C. - 7411(a)(1), 7411(d), 7412(d)) By requiring that regulation of existing 

sources occur either under Section 112 or under Section 111(d), Congress deliberately avoided 

imposing two independent regulatory regimes on existing sources, recognizing that such 

duplicative efforts could transform these assets into liabilities. EPA's proposal to impose double 

regulatory burdens on existing sources is contrary to existing law and public policy. Section 

111(d)(1)(A) directs that EPA require States to establish standards of performance for "any 

existing source for any pollutant . . . to which a standard of performance would apply if such 

source were a new source." (42 U.S.C. - 7411(d)(1)(A) (emphasis added)) EPA therefore may 

not issue regulations under Section 111(d) to regulate emissions from existing sources until it has 

adopted standards of performance under Section 111(b) for pollutants from new sources within 

the same source category. 

Response 12: EPA disagrees that it may not promulgate regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble. Further, EPA’s views on arguments presented by the commenters, including 

commenters’ discussion of the AEP opinion and of the Senate amendment, are also discussed in 

EPA’s briefs in the Murray Energy and West Virginia cases, No. 14-1112, No. 14-1146, and No. 

14-1151 (D.C. Cir.).

Comment 13: Because no valid predicate Section 111(b) rule exists for CO2 emissions from 

coal- or gas-fired power plants, the Proposed Rule exceeds EPA's authority under Section 

111(d). EPA claims that two new proposed rules will independently satisfy Section 111(d)'s 

predicate rule requirement if they are finalized.(Legal Memo 12-13) The first of the proposed 

rules (the Proposed New Source Rule) would establish standards of performance for greenhouse 

gas emissions from new electric utility generating units.(Standards of Performance for 

Greenhouse Gas Emissions from new Stationary Sources: Electric Utility Generating Units, 79 

Fed. Reg. 1,430 (Jan. 8, 2014)) The second proposed rule (the Proposed Modified and 

Reconstructed Source Rule) would set standards of performance for emissions of greenhouse 

gases from certain modified and reconstructed electric utility generating units.(Carbon Pollution 

Standards for Modified and Reconstructed Stationary Sources: Electric Utility Generating Units, 

79 Fed. Reg. 34,960 (June 18, 2014)) These two proposed rules for new and modified and 

reconstructed sources, however, are themselves invalid. EPA first claims that its Proposed New 

Source Rule is a sufficient Section 111(b) predicate rule because the Proposed New Source Rule 

sets standards of performance governing CO2 emissions from new coal- and gas-fired power 

plants. But EPA's analysis on this point is fatally flawed, because the Proposed New Source Rule 

does not establish a valid: standard of performance" for coal-fired EGUs. Instead, it proposes to 

require the implementation of a technology "carbon capture and storage (CCS)" that has not been 

adequately demonstrated as required by statute. Section 111(a)(1) of the Clean Air Act defines 

"standard of performance" as: A standard for emissions of air pollutants which reflects the 

degree of emission limitation achievable through the application of the best system of emission 

reduction which (taking into account the cost of achieving such reduction and any non-air quality 

health and environmental impact and energy requirements) the Administrator determines has 

been adequately demonstrated.(42 U.S.C. - 7411(a)(1) (emphasis added)) A system of emission 
43

reductions is "adequately demonstrated" when it "has been shown to be reasonably reliable, 

reasonably efficient, and . . . reasonably expected to serve the interests of pollution control 

without becoming exorbitantly costly in an economic or environmental way." (Essex Chem. 

Corp. v. Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973)) An emissions standard based on 

technology not fitting within that definition cannot be a "standard of performance" and, thus, 

cannot serve as a valid Section 111(b) predicate rule. EPA's Proposed New Source Rule relies on 

partial implementation of CCS, a system that has not been "adequately demonstrated," at coalfired EGUs. That means the Proposed New Source Rule does not set out a valid standard of 

performance, and thus the whole Proposed New Source Rule is invalid. Because an invalid rule 

cannot serve as the necessary Section 111(b) predicate for the Proposed Rule, the Proposed Rule 

cannot be sustained. EPA must develop a new NSPS before it may proceed with any existing 

source emission guideline. Commenters stated that with its proposed regulation of CO2 

emissions from existing fossil fuel-fired EGUs, EPA has grossly overstepped its lawful authority 

under CAA Section 111(d). Fundamentally, EPA has erred in three ways: first, by attempting to 

define BSER to include things other than technological or operational measures that can be 

applied to each affected facility in the designated category; second, by going well beyond its 

statutorily-specified, limited role of defining BSER; and third, by usurping the States' role of 

establishing and applying the standards of performance and thereby eviscerating the cooperative 

federalism principles enshrined in CAA Section 111(d).

Response 13: We disagree with these comments. We have valid bases for the section 111(b)

rulemaking for CO2 emissions from newly constructed, modified, and reconstructed affected 

EGUs, as we explain in that rulemaking. In section V. of the preamble for this rule, we explain 

our authority for the BSER we are adopting in this rulemaking, including our and the states’ 

respective roles. Furthermore, this rule is consistent with the principles of cooperative federalism 

embodied in portions of the Clean Air Act, for reasons discussed in section 1.2 of this response 

to comments, as well as in the Legal Memorandum accompanying the final rule.

Comment 14: Commenters contended that EPA lacks authority to regulate CO2 under Section 

111(d)., explaining that previous EPA rules and court decisions define the limits of EPA's 

rulemaking authority under section 111(d), and the Clean Power Plan ignores these limits. First, 

the commenters argued that UARG v. EPA sets guideposts for the CPP: In UARG v. EPA, the 

Supreme Court addressed the validity of a series of rules issued by EPA in regard to its 

regulation of greenhouse gas ("GHG") under the CAA. (The Supreme Court held in 2007 that 

EPA could regulate GHG under the CAA. See Massachusetts v. EPA, 549 U.S. 497 (2007). 

Commenters stated EPA then issued four rules to regulate GHGs from motor vehicles and large 

stationary sources. First, EPA ruled that GHGs may reasonably be anticipated to endanger public 

health or welfare (the "Endangerment Finding"). See 74 Fed. Reg. 66,496 (Dec. 15, 2009). 

Second, EPA issued emission standards to regulate GHG emissions from motor vehicles (the 

"Tailpipe Rule"). Third, EPA ruled that regulating GHGs from motor vehicles triggered the PSD 

and Title V permitting requirements for stationary sources (the "Triggering Rule"). Fourth, EPA 

limited the Triggering Rule requirement to larger stationary sources (the "Tailoring Rule"). 

Commenters stated the Court held that EPA cannot regulate CO2 in a way that is inconsistent 
44

with the CAA. Commenters said that according to the Court, neither the CAA nor Massachusetts 

v. EPA requires the regulation of GHGs at stationary sources, and a source cannot trigger certain 

permitting requirements solely because of GHG emissions. Commenters stated the Court held 

that EPA could not "bring about an enormous and transformative expansion in EPA's regulatory 

authority without clear congressional authorization." (134 S. Ct. 2427, 2444 (2014)) Commenters 

stated the direct holding of UARG was that the CAA does not compel EPA to regulate CO2 as a 

pollutant for all purposes and any regulation must comport with the statute. Commenters stated 

the Court decided it would be unreasonable for EPA to exercise its interpretive authority to 

regulate CO2 in a way that is inconsistent with the statute. (Id at 2443-44) Commenters stated 

the Court identified the New Source Performance. Commenters stated standards in section 

111(b) as an example of when limitations on the scope of pollutants subject to the program are 

needed to enable sensible regulation and avoid a radical transformation in the program that 

renders it unworkable as written.(Id. at 2440, 2442). Second, commenters stated, the CPP 

violates the limits of statutory interpretation established in UARG v. EPA: EPA's Proposed Rule 

violates the limits of statutory interpretation annunciated in UARG because it exceeds any level 

of authority that can be supported by a fair reading of section 111(d). Commenters stated that in 

UARG, the Supreme Court addressed a situation-similar to EPA's efforts to promulgate the CPP 

through a distorted interpretation of section 111(d)-in which EPA attempted to "tailor" an 

unambiguous provision in the CAA to accommodate EPA's regulation of CO2 as a pollutant. 

Commenters stated finding that congressional authorization was needed for this expansion of 

EPA's authority, the Court further noted that it greets "with a measure of skepticism" an agency's 

attempt" to discover in a long-extant statute an unheralded power to regulate a significant portion 

of the American economy." (Id.) Commenters stated the CPP represents a similar effort to 

expand EPA's authority that should be greeted with an even greater measure of skepticism.

Third, commenters stated, the absence of previous section 111(d) regulations is telling: Section 

111(d) is a little used provision of the CAA. Commenters stated that although S. 111 was part of 

the CAA as originally adopted, EPA has regulated pollutants under the provision on only five 

occasions in the past forty-four years. (EPA has promulgated six regulations pursuant to S. 129 

of the Clean Air Act pertaining to existing solid waste incinerators. Section 129 directs EPA to 

utilize the procedures set forth in section 111(d) to set emission standards for a specific list of 

pollutants, not including carbon dioxide, that otherwise could not be regulated under section 

111(d). See 42 U.S.C. 7429.) Commenters stated four of these regulations were promulgated 

within the Act's first ten years, and the most recent regulation was adopted nearly two decades 

ago in 1996. (See 40 C.F.R. 60.30c et seq. (Dec. 19, 1995) (regulating landfill gases from 

municipal solid waste landfills); 45 Fed. Reg. 26,294 (Apr. 17, 1980) (not codified) (regulating 

fluoride emissions from primary aluminum plants); 44 Fed. Reg. 29,828 (May 22, 1979) (not 

codified) (regulating total reduced sulfur from kraft pulp mills); 40 C.F.R. 60.30d et seq. (Dec. 

19, 1995) (regulating sulfuric acid mist from sulfuric acid plants); 42 Fed. Reg. 12,022 (Mar. 1, 

1977) (not codified) (regulating fluoride emissions from phosphate fertilizer plants).) Moreover,

commenters added, all of these existing section 111(d) regulations were based on measures 

achievable by individual units. Commenters stated the performance standards for each of these 

five regulations focus on stack emission limits, expressly limiting emissions per unit of input or 

output. Commenters added none of the standards include "outside-the-fence" measures or 
45

industry-wide "building blocks." Commenters stated none of them imposed state-wide emission 

targets or were based on a requirement for existing sources to cease or reduce operations. 

Commenters concluded, stating that this history of EPA's use of its section 111(d) authority 

shows that the CPP represents an extraordinary expansion of the authority actually exercised by 

EPA under section 111(d).

Response 14: We disagree with these comments. We discuss our authority to promulgate this 

rule, including why this rule is not inconsistent with the U.S. Supreme Court’s decision in UARG 

v. EPA, in section IV of the preamble. Moreover, for the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history.

Comment 15: Commenters stated, it appears that legal issues remain regarding the EPA's 

authority to regulate CO2 from existing power plants under the Clean Air Act (CAA), section 

111(d).

Response 15: This comment is not specific enough to merit a response.

Comment 16: Commenters stated that while greenhouse gases ("GHGs") are pollutants for some 

purposes, they fall outside that term at other points in the statutory scheme. Commenters stated 

as for the current rulemaking, GHGs are not pollutants for purposes of Section 111(d) New 

Source Performance Standards. Commenters explained *(verbatim) that Section 111 is home to 

the New Source Performance Standards ("NSPS") regulatory scheme. Commenters stated it 

requires that States submit to the EPA "a procedure for implementing and enforcing standards of 

performance for new sources located in such State." 42 U.S.C. section 7411(c)(1). Commenters 

stated the procedure for existing sources is analogous but follows "a procedure similar to that 

provided by section 7410," under which the States develop performance standards and 

implementation plans for a covered "air pollutant," taking into account the "remaining useful life 

of the existing source." Id. section 7411(d)(1). Commenters stated Section 111's procedures are 

inconsistent with the regulation of GHGs. Specifically, commenters stated, the focus on Stateby-State regulation is an important indication that Section 111 is best interpreted as applicable 

only to pollutants with localized effects. Commenters stated this feature is especially apparent in 

Section 111's cross-reference to Section 110. Commenters stated as the District of Columbia 

Circuit has explained, Section 110 "provides the framework" for States to adopt plans for 

implementing National Ambient Air Quality Standards ("NAAQS"). Texas v. EPA, 726 F.3d 

180, 183 (D.C. Cir. 2013). Commenters stated that framework is inherently and pervasively 

focused on localized harms. Id. (citing Section 110 to explain how States "determine, based on 

local conditions and needs, how to implement the NAAQS and related requirements" (emphasis 

added)). Elsewhere, commenters stated, Section 111 confirms the analogy to the NAAQS 

structure and its focus on localized pollutants. In describing the process for prioritizing 

pollutants, commenters stated, Section 111 instructs EPA to consider "the extent to which each 

such pollutant may reasonably be anticipated to endanger public health or welfare." 42 U.S.C. 

section 7411(f)(2)(B). Commenters stated this language mirrors the charge in Section 109 to 
46

consider "anticipated" harm to "public health or welfare" in setting NAAQS standards. Id. 

section 7409(b). Commenters stated given the textual parallel between Sections 109 and 111, 

which is more meaningful than the CAA's "profligate use" of "air pollutant," UARG, 134 S. Ct. 

at 2441, the two provisions should be read to address the same type of pollutant. Commenters 

stated as the NAAQS guidelines make plain, those are pollutants with localized impact on health 

and welfare, not globally-dispersed pollutants like greenhouse gases. Commenters stated reliance 

on structure to clarify which pollutants fall within a CAA provision is a technique drawn directly 

from UARG. 134 S. Ct. at 2240-41 (citing examples of EPA narrowing the meaning of 

"pollutant," including in the context of NSPS regulations under Section 111). Commenters stated 

after UARG, the Agency cannot simply rely on its existing GHG regulations promulgated under 

Section 202(a)(1) to assert a similar scope of authority under Sections 110 or 111. Commenters 

stated the UARG decision is also relevant in several further respects. First, commenters stated, 

UARG held that EPA cannot invoke the general Prevention of Significant Deterioration ("PSD") 

provisions of the Act to regulate "millions" of existing facilities that simply draw electricity from 

the grid. Id. at 2444 (holding that such expansive regulation "falls comfortably within the class of 

authorizations that we have been reluctant to read into ambiguous statutory text."); Id. at 2448 

(explaining that regulation under the PSD program "may not be used to require reductions in a 

facility's demand for energy from the electric grid."). Commenters stated this holding regarding 

the PSD program is important for establishing structural limitations on the regulation of 

pollutants under Section 111 as well. Commenters stated PSD permits are required for pollutants 

regulated under the NAAQS provision in Section 110, and Section 111 expressly borrows from 

the NAAQS provision. Commenters stated given this statutory family tree, the UARG Court's 

"reluctan[ce]" to authorize bold new regulatory structures should apply with equal or even 

greater force to the current proposed rulemaking. Second, commenters stated, the UARG Court 

identified several obstacles based on factual differences between global pollutants like GHGs 

and traditional localized pollutants. Commenters stated the Court quoted the Agency's 

recognition that regulating GHGs would effect an "unprecedented expansion of EPA authority'" 

due to the gases' ubiquity. Id. at 2436 (quoting 79 Fed. Reg. at 44,355). Moreover, the 

commenters added, because the Agency's factual premise for regulating greenhouse gases is that 

they operate on a global scale-combining from sources around the world and with effects on the 

entire planet's climate-the Court highlighted the Agency's recognition that regulation would be 

"relatively ineffective at reducing greenhouse gas concentrations.'" Id. (quoting 79 Fed. Reg. at 

44,355). Commenters stated as a result, the Court noted the difficulty of applying the Best 

Available Control Technology ("BACT") provisions of the CAA to greenhouse gases, based on 

the requirement that the regulator consider "ambient air quality at the proposed site and in areas 

which may be effected by emissions." Id. at 2449 n.9 (quoting 42 U.S.C. section 7475(e)(1); 

emphasis added). Commenters stated while the Court reserved judgment on that topic, the 

obstacle it identified is at the forefront of this case, and it weighs heavily against stretching the 

location-specific program in Sections 110 and 111 to include a pollutant that is inherently global, 

not local, in character. Commenters posited that the Agency's proposal does not to explain how 

Section 111(d) allows the regulation of greenhouse gases at all. Commenters stated while GHGs 

are a pollutant under the Act's most general definition, UARG's central holding is that they do 

not therefore automatically fall within every other use of the term "pollutant" in the statute. 
47

Commenters stated because Section 111 specifically refers to the location-specific scheme for 

enforcing NAAQS standards, which expressly involves the States in regulating the conventional 

pollutants to which it applies, it is best interpreted to exclude all regulation of GHGs. 

Commenters closed, stating that these features confirm that the Supreme Court's reluctance to 

discover an "unheralded power to regulate a significant portion of the American economy" in 

long-standing statutes prevents the cornerstone statutory discovery underlying the current 

proposal. UARG, 134 S.Ct. at 2444 (quotation omitted).

Response 16: We disagree with these comments. We discuss our authority to promulgate this 

rule, including why this rule is not inconsistent with the U.S. Supreme Court’s decision in UARG 

v. EPA, in section IV of the preamble. Moreover, for the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history.

Comment 17: Commenters stated with the CPP, EPA has issued what really is another ANPR 

because the brief proposed rule - 9 pages of the thousands of pages of preamble, legal 

justification, and technical support documents - does not provide notice to electric generators as 

to what this rule requires. Commenters added that for example, nowhere in the rule does EPA 

mention "building blocks" or "heat rate improvement" or "redispatch", yet these concepts are key 

to the CPP, intended to be used and incorporated by states into state plans, and integral to an 

understanding of what states and the existing EGU source category are expected to do. Relying 

solely on the proposed rule language, no one could possibly understand the CPP as EPA has 

defined it. 

Response 17: The discussion in the preamble provides the adequate notice.

Comment 18: Commenters stated that the 1990 Clean Air Act Amendments did not change the 

gap-filling nature of Section 111(d), so as to preclude EPA's actions here. Commenters explained 

that Section 111(d) of the Clean Air Act before 1990 authorized EPA to regulate "any air 

pollutant which is not included on a list published under section 7408(a) or 7412(b)(1)(A) 

[112(b)(1)(A)] of this title."(See 42 U.S.C. - 7411(d).) Commenters stated when Congress 

amended the Act in 1990, it made a significant overhaul to section 112, to provide for more 

effective regulation of hazardous air pollutants emitted by stationary sources. Specifically, 

commenters stated, Congress, dissatisfied with EPA's delay in regulating toxic air pollutants, 

restructured section 112. Commenters stated that among other changes, Congress replaced 

section 112(b)(1)(A), which had required EPA to list hazardous air pollutants that it intended to 

regulate, with new section 112(b), in which Congress listed 189 substances as hazardous air 

pollutants.( See Pub. L. 101-549, S 301, 104 Stat. 2531 (1990); see generally White Stallion 

Energy Ctr., LLC v. E.P.A., 748 F.3d 1222, 1229 (D.C. Cir. 2014) (discussing 1990 amendments 

to section 112)) Commenters stated that after this amendment, the original reference to section 

112(b)(1)(A) in section 111(d) no longer made sense, thereby necessitating a technical 

update.(See Id.) Commenters stated both Houses of Congress proposed housekeeping 

amendments to section 111(d). Commenters stated the Senate bill struck S.112(b)(1)(A) and 
48

replaced it with S. 112(b), the new section providing the list of hazardous air pollutants. (S. 

1630, as passed by the Senate on April 3, 1990, S. 305(a), reprinted in U.S. SENATE COMM. 

ON ENVT. & PUB. WORKS, LEGISLATIVE HISTORY OF THE CLEAN AIR ACT 

AMENDMENTS OF 1990, at 4534 (1993))) Commenters stated the House bill struck 

S.112(b)(1)(A) and replaced it with the phrase "emitted from a source category which is 

regulated under section 112." (S. 1630, as passed by the House of Representatives on May 23, 

1990, S. 108(f), reprinted in VOLUME I: LEGISLATIVE HISTORY OF THE CLEAN AIR 

ACT AMENDMENTS OF 1990, at 1979 (1993)) Commenters continued, stating that the Senateoriginated language requires EPA to regulate air pollutants subject to regulation under section 

111(b), excluding air pollutants regulated under section 112(b). Commenters stated the 

amendment from the House excludes any pollutants "emitted from a source category which is 

regulated under section 112." Commenters stated the amendments were not discussed in 

committee hearings, floor debates, or in conference. Commenters stated that subsequently, both 

were enacted and signed into law, and only the House amendment appears in the U.S. Code, but 

Supreme Court precedent accords the codification "no weight." (United States v. Welden, 377 

U.S. 95, 98 n.4 (1964)) Thus, commenters stated, the Statutes at Large, which include both 

amendments, control in this situation. (See Stephan v. United States, 319 U.S. 423, 426 (1943) 

(finding that "the [United States] Code cannot prevail over the Statutes at Large when the two 

are inconsistent); U.S. National Bank of Oregon v. Independent Insurance Agents of America, 

Inc., 508 U.S. 439, 448 (1993)(the Statutes at Large are "legal evidence of the laws)) 

Commenters stated this legislative oddity does not preclude EPA regulation of greenhouse gases 

under section 111(d). Commenters stated both amendments must be given effect unless there is 

some demonstrable significant defect, such as scrivener's error. Commenters stated the Senate 

amendment - which plainly permits greenhouse gas regulation - cannot be ignored. Commenters 

stated while language may be disregarded as a scrivener's error where it has "no plausible 

interpretation", (Williams Companies v. FERC, 345 F.3d 910, 912 n.1 (D.C. Cir. 2003).) or 

"produce[s] a result demonstrably at odds with the intentions of its drafters," (Griffin v. Oceanic 

Contractors, Inc., 458 U.S. 564, 571 (1982)) the Senate amendment bears neither of those 

characteristics, as it reasonably retains EPA's longstanding authority under section 111(d) to 

regulate non-criteria and non-hazardous pollutants. Moreover, commenters remarked, excluding 

greenhouse gases (or any other pollutant that is neither regulated under section 112 nor sections 

108-109) is in conflict with the plain language of the statute, as it would render the Senate 

amendment meaningless.(New York v. EPA, 443 F.3d 880, 887 (D.C. Cir. 2006) ([C]ourts must 

give effect to each word of a statute.)) Commenters stated the Senate amendment mandates EPA 

to regulate greenhouse gases, as they do not fall under section 108 or section 112(b) of the Clean 

Air Act. Commenters stated even if the two amendments are interpreted as inconsistent, EPA 

must attempt to give effect to both, rather than simply discarding one.(See Morton v. Mancari, 

417 U.S. 535, 551 (1974) (quoting United States v. Borden Co., 308 U.S. 188, 198 (1939)) 

(finding that absent "clear and manifest" congressional intention to contrary, the rule is to give 

effect to both provisions). Commenters stated in Citizens to Save Spencer County v. EPA, the 

agency was confronted with seemingly inconsistent amendments in the Clean Air Act, and that 

also were never reconciled in conference. 600 F.2d at 872. Commenters stated the D.C. Circuit 

explained that EPA's task, under Chevron, v. NRDC, 467 U.S. 837, 842 (1984), was "to pursue a 
49

middle course that vitiates neither provision but implements to the fullest extent possible the 

directives of each," and courts needed only to assess whether the agency had "effected an 

appropriate harmonization of the conflicting provisions while remaining within the bounds of 

that agency's statutory authority." Spencer County, 600 F.2d at 871. Commenters said the court 

also noted that "maximum possible effect should be afforded" to both provisions and "none of 

those provisions rendered null and void". (Id. at 870. Section 111(d)'s two amendments also 

create the type of ambiguity that EPA may reasonably resolve.) Commenters continued, stating 

that the House amendment can be read as consistent with the Senate amendment, to preclude a 

source category from regulation under section 111(d) for a pollutant only when that source 

category is regulated under section 112 for that same pollutant. Thus, commenters stated, 

because section 112 is not used to regulate sources for their greenhouse gases, EPA is free to 

regulate those emissions under section 111(d).(Even if the Senate amendment were disregarded, 

the House amendment by itself has several different readings that would permit greenhouse gas 

regulation. The House amendment excludes pollutants "emitted from a source category which is 

regulated under section 112." The only reading that bars greenhouse gas regulation is one that 

presumes any source category already regulated under section 112 for any type of pollutant is 

foreclosed from regulation under section 111(d). Because EPA already regulates the sources that 

emit greenhouse gases for hazardous air pollutant emissions under section 112, this reading of 

the House amendment would preclude section 111(d) regulation for those sources. But such a 

reading leads to a puzzling result: it wholly exempts sources from being regulated for dangerous 

pollutants based on those sources already being regulated for other unrelated pollutants. See 

Desert Citizens Against Pollution v. EPA, 699 F.3d 524, 527-28 (D.C. Cir. 2012) (rejecting 

petitioners' interpretation of statute that would have had the "anomalous effect of changing the 

required stringency" for a given source's emissions "simply on the fortuity" of other emissions 

from that source). More troubling still, this reading would essentially strip section 111(d) of any 

real effect, because many large industrial sources are regulated for hazardous air pollutants under 

section 112. In theory, then, those sources would be outside the scope of section 111(d), which 

would raise the question of what exactly the provision is supposed to regulate. Cf. Davis County 

Solid Waste Management v. EPA, 101 F.3d 1395, 1404 (D.C. Cir. 1996) ([I]t is of course a wellestablished maxim of statutory construction that courts should avoid interpretations that render a 

statutory provision superfluous.)) Commenters stated the House amendment therefore can be 

read merely to state in different terms the same meaning as the Senate amendment. Commenters 

stated the overall structure of the Clean Air Act and the legislative history of the 1990 

Amendments support this reading. Commenters stated the 1990 Amendments - particularly the 

significant changes made to section 112 - were part of an effort to strengthen and update the air 

pollution regulatory scheme, marked by increased controls, gap-filling, and decreased EPA 

authority to allow regulatory evasion; certainly not a legislative attempt to scale back on 

regulation, or to create holes or gaps in the regulatory structure for some pollutants. Commenters 

stated in revising section 111(d), Congress most likely meant only to update the language to 

comport with the overhaul of section 112. Indeed, the House amendment is found under the 

heading "Miscellaneous Provisions" and the Senate amendment under "Conforming 

Amendments."(Pub. L. No. 101-549, S. 108, 302(a), 104 Stat. 2399, 2467, 2547 (1990).)

Commenters stated coupled with the signed bill containing an explanatory footnote describing 
50

the two amendments as "duplicative," both changes to section 111(d) appear to be simply 

different versions of the same technical edit. (ENVIRONMENT AND NATURAL RES. 

POLICY DIV., LIBRARY OF CONGRESS, A LEGISLATIVE HISTORY OF THE CLEAN 

AIR ACT AMENDMENTS OF 1990, at 46 (1998).) Commenters stated that edit was to ensure 

continued application of section 111(d) to regulate air pollutants that are neither criteria 

pollutants nor hazardous pollutants under the new section 112(b). Commenters stated that in any 

event, construing the two amendments as prohibiting greenhouse gas regulation under section 

111(d) is the least rational approach as well as the least reflective of congressional intent. 

Commenters stated Congress surely could not have desired to effect a sweeping, substantive 

change to the provision by exempting a large class of pollutants in an otherwise stylistic updating 

effort, all without the benefit of any debate or discussion. Commenters stated this would be 

especially inconsistent with the general drafting of the Clean Air Act, given that Congress did 

make a number of major, substantive changes to the statute in the 1990 Amendments, like 

section 112, but when it did so, those changes were not quietly tacked on to a housekeeping bill. 

Commenters stated Congress "does not, one might say, hide elephants in mouseholes." 

(Whitman v. Am. Trucking Assns, 531 U.S. 457, 468 (2001)) Commenters closed, EPA's 

interpretation maintains the longstanding purpose of section 111(d) in controlling dangerous 

pollutants not otherwise regulated under other sections of the Clean Air Act. EPA's resolution of 

this ambiguity sufficiently harmonizes the two amendments and is a permissible construction 

that merits Chevron deference.

Commenters added that Congress' systematic approach to Sections 110, 111(d), and 112 allows 

these sections to sections to form an orderly framework. Sections 110 and 112 focus on specific 

classes of pollutants and section 111(d) acts as a gap-filler, addressing dangerous pollution not 

regulated under the sections tailored to address hazardous and ambient air pollution problems. 

Commenters explained that the legislative history of the 1970 Clean Air Act confirms that this 

complementary framework was deliberate: It should be noted that emission standards for 

pollutants which cannot be considered hazardous (as defined in section 115 [the precursor to 

section 112]) could be established under section 114 [the precursor to section 111(d)]. Thus, 

commenters stated, there should be no gaps in control activities pertaining to stationary source 

emissions that pose any significant danger to public health or welfare.

Response 18: EPA agrees that it has the authority to promulgate regulations addressing CO2 

emissions from existing power plants under section 111(d). EPA’s discussion of this issue is in 

Section IV of the preamble.

Comment 19: Commenters stated that while their agency takes no position on whether EPA 

should establish a NAAQS for greenhouse gas emissions, the agency is concerned that a CAA 

Section 111 (d) action is prohibited because GHGs have constructively been listed under CAA 

Section 108. As a result of the EPA's Title II rulemaking, commenters concluded, all of the 

conditions precedent to list greenhouse gases under CAA Section 108 appear to have already 

been met. Commenters agreed with arguments made by the Sierra Club in NRDC v. Train (1976) 

when the Sierra Club succeeded in forcing EPA to define a NAAQS for lead under substantially 

similar facts, explaining that in that case, as is the case now, EPA has made an endangerment 
51

finding under Title II of the CAA; second, EPA found then for lead, and found now for GHGs, 

that both are emitted from numerous or diverse mobile or stationary sources. Commenters added

that the court in NRDC v. Train (1976) found that once the first two provisions under Section 

108(a)(1) are met, the third provision is constructively satisfied. Commenters concluded that 

because all three criteria under Section 108 are satisfied, EPA is prohibited from regulating 

GHGs under Section 111(d).

Commenters stated that carbon dioxide is not listed as a criteria pollutant for regulation under 

Clean Air Act section 108. Commenters remarked that NCDENR next argues that "[s]ection 

111(d) also prohibits regulating pollutants listed under section 108," and "all of the conditions 

necessary to list greenhouse gases under section 108 have already been met."(D. van der Vaart

Testimony at 6, Attachment 4.), but NCDENR's argument is premised on a flawed syllogism and 

notes that NCDENR has explained its assumption that EPA's 2009 finding that carbon dioxide 

(in combination with other greenhouse gasses) endangers public health and welfare 

automatically resulted in a section 108 listing in this way: (1) "[s]ection 111(d) prohibits 

regulating pollutants listed under section 108"; (2) "[a] pollutant must be listed under section 108 

when three criteria are satisfied"; and (3) "[t]hose criteria were satisfied when EPA published its 

endangerment finding under section 202." (Id.) NCDENR is incorrect legally and factually.

Commenters argued that the 2009 "endangerment" finding was made under the mobile source 

provisions of section 202 of the Clean Air Act as a necessary first step toward regulating motor 

vehicle emissions of greenhouse gasses, and the "endangerment" finding by itself does not cause 

a pollutant to be listed under section 108, even if all of the other prerequisite criteria necessary 

for listing a criteria pollutant have been met. (On the other hand, the endangerment finding 

satisfies one of the criteria for developing new source performance standards which is a 

prerequisite to development of standards of performance for existing sources. See Carbon 

Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 

79 Fed. Reg. 34,829, 34,841-34,844 (June 18, 2014).) Commenters stated that a listing decision 

requires a distinct, affirmative action by EPA subject to all of the public participation and review 

requirements of the Administrative Procedures Act, and in this instance, EPA has not, in fact, 

listed or even proposed listing carbon dioxide or other greenhouse gases as criteria pollutants 

under Clean Air Act section 108. Contrary to NCDENR's argument, Commenters argued, there 

is no legal or factual impediment to EPA's proposal to establish performance standards for power 

plant carbon dioxide emissions.

Response 19: EPA agrees with the commenters who state that listing a pollutant under section 

108 is a distinct step that cannot occur “constructively” but only through an affirmative action of 

the EPA which would be published in the Federal Register. This is in fact confirmed by the case 

cited by the commenters who believe constructive listing has occurred. In NRDC v. Train, 545 

F.2d 320 (2d Cir. 1976), the court concluded that the requirements for listing lead as a pollutant 

under section 108 had been met, and therefore directed EPA to take the additional step of listing 

lead. Current circumstances are further distinguishable from those of NRDC v. Train because the 

prerequisites for listing GHG as a pollutant under Section 108 have not been met. For example, 

the existing endangerment finding for GHG is specifically for emissions from motor vehicles 
52

under CAA section 202. See 74 FR 66496 (Dec. 15, 2009),1 although the scientific record 

underlying that endangerment finding may be relevant to future endangerment findings under 

other statutory provisions. An endangerment finding cannot be made “constructively” but rather 

is entrusted to the judgment of the Administrator. See Zook v. EPA (D.C. Cir. No. 14-5187, April 

24, 2015).

We discuss our authority to promulgate this rule in section IV of the preamble.

Comment 20: Commenters stated that EPA's proposal to regulate emissions of carbon dioxide 

from existing coal-fired power plants is a permissible interpretation of Clean Air Act section 

111(d). Commenters stated that in the months leading up to and following EPA's June 2, 2014 

announcement of the proposed Clean Power Plan, representatives from North Carolina's 

Department of Environment and Natural Resources ("NCDENR") have questioned the legal 

basis for the proposal in presentations to various federal and state legislative and executive 

committees and in oral and written statements to EPA. Commenters explained that in its legal 

critiques, NCDENR has raised three basic arguments: (1) EPA cannot regulate power plant 

carbon dioxide emissions under Clean Air Act section 111(d) because EPA has promulgated 

emission standards for power plant hazardous air emissions under section 112; (2) EPA cannot 

use section 111(d) to limit carbon dioxide emissions because it already is listed as a criteria 

pollutant under section 108; and (3) section 111(d) requires controls on emission sources only, 

and does not authorize "beyond the fence line" compliance flexibility. [NCDENR also has 

argued that EPA cannot establish guidelines for regulating existing power plant sources of 

carbon dioxide under section 111(d) because EPA's proposed standards of performance for new 

power plant sources under section 111(b) are unlawful. We do not address this mistaken 

contention here, but incorporate by reference our comments in the rulemaking docket for the new 

source standards under section 111(b).] Commenters stated that each of these arguments is 

flawed and describes how EPA interprets section 111(d) to limit development of standards of 

performance for specific pollutants regulated under section 112, rather than for entire categories 

of sources regulated under that section and that EPA's interpretation is a permissible construction 

that, in fact, is the most natural reading of the statute and best effectuates each of the statutory 

provisions. Commenters continued, stating that NCDENR's argument that carbon dioxide is 

listed under section 108 is false EPA has not listed carbon dioxide as a criteria pollutant. And 

EPA's broad interpretation of "best system of emission reduction" to include beyond-the-fenceline compliance approaches is a logical and permissible reading of these generically defined 

statutory terms. To demonstrate the flaws in NCDENR's legal critique, Commenters briefly 

outlined the applicable statutory and regulatory framework for section 111 before addressing 

NCDENR's specific criticisms: A. Statutory and regulatory framework. Commenters stated that 

Clean Air Act section 111 directs EPA to establish "standards of performance" limiting 

emissions of harmful air pollutants in three phases. First, commenters stated, EPA must identify 

categories of stationary sources that cause or contribute significantly to "air pollution which may 

 

1 In addition, EPA recently proposed an endangerment finding for emissions from certain aircraft 

engines under CAA section 231. See 80 FR 37758 (July 1, 2015).
53

reasonably be anticipated to endanger health or welfare." 42 U.S.C section 7411(b). Second, 

commenters stated, EPA must establish national standards of performance for new sources in 

each such category. Finally, commenters stated, once EPA has developed standards of 

performance for new sources in a category, it must then prescribe regulations under which states 

develop standards of performance for existing sources in the same source category. Id. section 

7411(d). Commenters noted that Section 111(d) provides that EPA "shall prescribe regulations 

which shall establish a procedure . . . under which each State shall submit [to EPA] a plan which 

. . . establishes standards of performance for any air pollutant . . . to which a standard of 

performance under this section would apply if such existing source were a new source." Id. 

(emphasis added). Commenters stated Congress exempted two categories of air pollutants from 

this mandate: any air pollutant (1) for which air quality criteria have been issued or which is 

listed under section 108(a); or (2) which is emitted from a source category covered under the 

hazardous air pollutant provisions of section 112. Id. Commenters stated neither exemption 

applies here. Commenters stated that the guidelines set minimum required emissions limitations 

based on the best adequately demonstrated systems of emission reductions. Id. at section

60.22(b). Commenters said states then have flexibility to tailor their own plans to implement the 

standards of performance, so long as they meet or are equivalent to EPA's emission guideline. Id. 

Commenters stated EPA's implementing regulations also provide for case-by-case variances 

from an emission guideline to allow for "significantly more reasonable" compliance options, 40 

C.F.R. section 60.24(f)(3), such as where necessary to take into account the remaining useful life 

of an existing source that would be subject to the performance standard. 42 U.S.C. section 

7411(d)(1)(B). Commenters remarked that although EPA promulgated its guidelines for 

implementing section 111(d) in 1975, the agency has issued few performance standards for 

existing sources. Thus, commenters stated, while this is EPA's default approach, it has not been 

extensively elaborated or refined through a long history of prior rulemakings, and nothing in the 

Clean Air Act requires EPA to adhere rigidly to this approach for each air pollutant or each 

existing source category. In fact, commenters stated, EPA may adopt any reasonable approach to 

develop, issue, and implement existing source standards, so long as they meet the minimum 

requirements of the Clean Air Act and the agency adequately explains its approach and rationale 

through appropriate notice and comment rulemaking. See, e.g., FCC v. Fox Television Stations, 

Inc. 566 U.S. 502, 515 (2009) (an agency may change its position so long as it provides "good 

reasons" for doing so). Commenters contended that in this instance, EPA's rationale for using 

111(d) as a legal basis to establish guidelines of performance for existing power plant sources of 

carbon dioxide is fully consistent with the Clean Air Act, EPA's implementing regulations, and 

past practice.

Response 20: We generally agree with this comment.

Comment 21: Commenters stated the CPP is inconsistent with the statutory text of Section 

111(d), and that EPA cannot overlook the fact that Section 111(d) actually provides a very 

specific and unambiguous grant of authority to EPA. (Commenters quoted 42 USC section 

7411(d)1()(A) and (B).) Commenters continued, stating that EPA's reliance on this provision for 

implementing CO2 emissions from power plants is problematic for a few reasons. First, 
54

commenters stated, section 111(d)(1)(A) requires that the use of the language "any air pollutant" 

was intended to encompass carbon dioxide. Commenters stated in Massachusetts v. EPA, the 

United States Supreme Court held that greenhouse gas ("GHG") emissions from motor vehicles 

are "air pollutants" under section 202(g) of the Clean Air Act, going so far as to say that "air 

pollutant" included "all airborne compounds of whatever stripe."(549 U.S. 497 (2007)) 

Commenters stated Massachusetts triggered a heightened desire for EPA regulation of CO2 

emissions from the power sector and breathed new life into efforts to require EPA to undertake 

such regulation. Previously, commenters stated, this agency has declined to regulate GHG 

emissions, finding that none of the approaches to reducing CO2 were well-suited to regulation by 

the EPA specifically acknowledging as early as 2003 that the Department of Energy was better 

equipped to set efficiency standards for products such as air conditioners and appliances and that 

"Any widespread effort to switch away from fossil fuels in either sector would likewise require a 

wholesale transformation of our methods for producing power and transporting goods and 

people" and it is "hard to overstate the economic significance of making these kinds of 

fundamental and widespread changes in basic methods of producing and using energy."(68 Fed. 

Reg. 52,922) Commenters continued, stating that the Supreme Court's decision in Massachusetts 

and the subsequent "Endangerment Finding"(74 Fed. Reg. 66,496 (2009)) cannot stand for the 

proposition that the reduction of CO2 emissions is necessary at all costs. Commenters stated 

what Massachusetts did stand for was the proposition that EPA could not simply decide not to 

act for policy reasons but "must ground its reasons for action or inaction in the statute."(Ibid at 

535) Commenters stated in Massachusetts, the question was one of whether the EPA was 

fulfilling its duty under CAA section 202. By contrast, commenters stated, the pendulum has 

now swung in the other direction and EPA is attempting to enact rules that far exceed the 

statutory text or any statutory duty. Commenters added that relying on the expansive definition 

of air pollutant found in section 202(g) ("all airborne compounds of whatever stripe"), the EPA 

attempted to require best available control technology ("BACT") and "major source" permits on 

the basis of CO2 emissions pursuant to several enforcement provisions that referenced "any air 

pollutant". Commenters stated in Utility Air Regulatory Group v. EPA (573 U.S.__ (2014)) the 

Court upheld the EPA's authority to require "anyway sources" to obtain PSD and Title V permits 

but declined to give EPA the wide latitude it had assumed in "tailoring" those statutory 

provisions to suit its policy objectives. Commenters stated that in light of UARG, EPA is 

required to give a "reasonable, context-appropriate meaning" to the regulation it wishes to 

enforce. (Id.) Commenters remarked it is worthy of note that similar to its BSER analysis 

conducted by EPA in the proposed CPP, the UARG Court acknowledged EPA's intention that 

improvements in EE would be the foundation of GHG BACT pursuant to section 7602. 

Commenters stated the Court acknowledged this but did not decide whether BACT could be used 

to force improvements in EE, stating only that BACT was already limited to control technology 

that "did not require a fundamental redesign of the facility" and that the record did not reflect that 

EPA's demands would be of a significantly different character than those traditionally associated 

with PSD review or that BACT is "incapable of being sensibly applied to greenhouse gases. (Id.) 

Commenters stated LPSC submits that this is indication that EPA's deference is not unlimited on 

these issues and BSER in section 111(d), likewise, cannot force the type of fundamental changes 

proposed herein. Commenters stated that assuming for arguments sake that CO2 meets the 
55

definition of any air pollutant for the purposes of section 111(d), EPA still has to overcome a 

number of statutory hurdles to make the CPP fit within the plain text of the statute. Specifically, 

commenters stated, section 111(d)(1)(A)(i) explicitly prohibits the regulation of source 

category[ies] regulated under section 112. Commenters said the Supreme Court in Am. Elec. 

Power, Inc. v. Connecticut, 131 S. Ct. 2527, 2537 n.7 (2011), stated "EPA may not employ 

[section 111(d)] if existing stationary sources of the pollutant in question are regulated under . . . 

the 'hazardous air pollutants' program, [section 112]. Nevertheless, commenters stated, on 

February 16, 2012, EPA finalized section 112 regulations on "stationary sources" that included 

coal-fired power plants. See 77 Fed. Reg. 9,304 (Feb. 16, 2012). Commenters stated those very 

same plants are included in the CPP despite their being explicitly prohibited and that such 

explicit prohibition has been acknowledged by the United States Supreme Court. Commenters

closed, stating that even if EPA could overcome the aforementioned statutory prohibition, which 

we do not think it can, there is yet another requirement: that the source category is one regulated 

under the new source performance standards found in section 111(b).

Response 21: We disagree with these comments. We discuss our authority to promulgate this 

rule, including why this rule is not inconsistent with the U.S. Supreme Court’s decision in UARG 

v. EPA, in section IV of the preamble. Moreover, for the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history.

Comment 22: Commenters stated that according to a study by NERA Economic Consulting 

(NERA), nineteen states have passed or are considering laws or resolutions expressing 

opposition to the EPA's Clean Power Plan. Commenters explained that attorneys general from 

twenty states are on record opposing EPA's proposal, and fifteen governors, including the 

Governor of North Carolina, have sent letters to the President stating that the EPA does not have 

the legal authority to regulate CO2 emissions from coal-fired plants, and it is reported that 

thirteen states have joined in litigation to challenge the EPA's proposal. Commenters, which 

represented and protected the energy interests of scores of manufacturers with plants throughout 

North Carolina, shared NC DENR's and Duke's views, as well as the opposition expressed by the 

aforementioned attorneys general and governors. Commenters remarked that due to the legal 

flaws of the EPA's plan, court challenges are anticipated, and commenters explained that states 

shouldn't be forced to act until all court challenges are over.

Response 22: For the reasons explained in the preamble, the deadlines established by the 

Agency are reasonable.

Comment 23: Commenters stated that they do not believe that CAA Section 111 provides EPA 

with the authority to authorize requirements for such measures under standards set pursuant to 

that section.

Commenters stated that this proposal is an unprecedented use of an [uncommon] provision of the 

CAA.
56

Commenters added the unprecedented nature and expansive scope of the Proposal demonstrate 

how far from EPA's delegated authority the Agency has attempted to travel. Commenters stated 

Section 111(d) does not authorize EPA to regulate entire sectors of the economy. Commenters 

said as the U.S. Supreme Court recently noted "[w]hen an agency claims to discover in a longextant statute an unheralded power to regulate 'a significant portion of the American 

economy,' ... we typically greet its announcement with a measure of skepticism. We expect 

Congress to speak clearly if it wishes to assign to an agency decisions of vast 'economic and 

political significance.'" 

Response 23: We disagree. We discuss our authority to promulgate this rule, including why this 

rule is not inconsistent with the U.S. Supreme Court’s decision in UARG v. EPA, in section IV of 

the preamble. For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 24: Commenters stated that EPA claims its authority to reduce CO2 emission is 

unlimited.

Commenters stated that the Proposed Rule is the first time EPA has ever attempted to broaden 

jurisdiction under the CAA using this 'entity with obligations' legal term and concept. - Emission 

standard means in addition to the definition in Section 60.21, any requirement applicable to any 

affected entity other than an affected source that has the effect of reducing utilization of one or 

more affected sources, thereby avoiding emissions from such sources, including, for example, 

renewable energy and demand-side energy efficiency measures requirements. Similarly, 

commenters remarked, this is the first time EPA has ever applied such a broad meaning to the 

term emissions so as to include 'any standard.' Commenters stated that under these proposed 

definitions, EPA's authority under the CAA is absolutely unlimited, and anything involved in 

electric generation and use would be regulated by the CAA, and any requirement for such 

'affected entity' constitutes an 'emission limitation' over which EPA purports to have authority. 

Commenters closed, stating that overall, the proposal converts the Section 111(d) requirement 

that standards of performance be established by states by source category for affected emitting 

sources, into a mechanism to regulate a combination of emitting sources and non-emitting 

facilities/entities by means of standards that go far beyond limiting emissions.

Response 24: We disagree. As we explain in section V. B. of the preamble and in the Legal 

Memorandum, we have refined our analysis of the BSER, and we do not believe our 

interpretation will lead to unreasonable future actions for this or any other source category. In 

accordance with our interpretation, we undertake a pollutant- specific and source- category -

specific evaluation. As a result, the BSER is unique to each industry and even may be different 

for new and existing sources.
57

Comment 25: Commenters stated that the CAA is designed to protect the environment and 

promote a strong economy. (See CAA Purposes 42 U.S.C. section 7401), and Congress set forth 

several clear regulatory paths in the CAA for regulating stationary sources, and power plants are 

stationary sources. The primary regulatory paths for stationary sources are to: 1. Set ambient air 

quality standards, requiring each state to address in whatever way makes sense for its local 

economy the achievement of the ambient standard; and 2. Set source-specific technology-based 

limits for industry sectors that contribute significantly to air pollution. Commenters remarked

that the source specific standards support the attainment and maintenance of NAAQS, but the 

two programs are administered quite differently and that neither pathway can perfectly regulate 

GHGs but aspects of both can provide a useful framework for constructing a new pathway. 

Commenters stated that EPA is legally constrained to act within those two pathways, separate 

though they are, and cannot administratively create a hybrid program not authorized by Congress 

by simply borrowing what "makes sense" for GHGs. Commenters posited that the CPP is legally 

flawed because it attempts to regulate a transition to a lower carbon economy by blending two 

separate regulatory pathways in the CAA, and by trying to regulate in this way, EPA has created 

a rule without the needed legal underpinnings. Commenters explained that the source of GHG 

reductions is irrelevant, and a rule that simply targets one sector, without appropriate offsets and 

true flexibility, cannot pass legal muster. Commenters stated that allowing states to choose their 

regulatory pathway supports the rightful balance of power Congress granted in the CAA and 

protects global resources, allowing for a gradual transformation to a lower carbon economy 

without unnecessarily jeopardizing a long history of providing reliable, affordable electricity to 

power our economy. (The CAA, as amended, gave the Administrator ... the authority to 

promulgate national ambient air quality standards (NAAQS). Primary air quality standards were 

to be set at a level to protect public health ... . Each state then had to adopt a SIP that provided 

for the "implementation, maintenance, and enforcement" of the primary standard ... For 

stationary sources, states were expected to set emissions limits to be enforced by civil and 

criminal sanctions. Although the 1970 Amendments emphasized that air pollution prevention and 

control remained the "primary responsibility of states and local governments, and made the states 

fully responsible for directing and coordinating all intrastate control activities, EPA was to be in 

charge of the air pollution control program... The 1970 CAA Amendments required the federal 

government to promulgate standards for new stationary sources but the states could regulate 

existing sources in order to meet SIP requirements. Reitze, Arnold W. Jr., Air Pollution Control 

Law: Compliance and Enforcement. (Environmental Law Institute. September 2001), p. 16. The 

CAA Amendments of 1977 made major changes to the CAA while retaining the fundamental 

approach of the 1970 statute. Under the 1970 Amendments, SIPs were required to include 

emission limitations and other measures necessary to attain and maintain primary air quality 

standards... CAA section111, dealing with new source performance standards (NSPS), was 

modified to require the use of the "best technological system of continuous emissions reduction" 

... . This requirement applied to "new sources" [including modifications]. Because new sources 

are regulated more stringently than existing sources, the point at which a repair becomes a 

modification and triggers the more stringent regulations became important. Id. at 18. While the 

1977 Amendments made the CAA significantly longer and more complex, it continued to use the 

ambient air quality standards approach. However, the mandated use of end of the stack 
58

technology-based controls made the CAA a philosophical hybrid with overlapping environmentbased and technology-based requirements. Id. at 19.) Commenters stated EPA's 2013 

Greenhouse Gas Inventory Report, 

http://epa.gov/climatechange/ghgemissions/usinventoryreport.html, notes the following five 

broad sectors and the percentage of U.S. GHG emissions: Transportation, 32%; Industry, 20%; 

Commercial and Residential, 10%; Agriculture, 10%; and Electricity, 32%. Globally, GHG 

emissions are similarly split among multiple broad sectors: Forestry, 17%; Waste and 

wastewater, 3%; Energy supply, 26%; Transportation, 13%; Commercial and Residential, 8%; 

Industry, 19%; and Agriculture, 14%. http://epa.gov/climatechange/ghgemissions/global.html. In 

short, commenters said, all sectors contribute and control of only one sector, without broad offset 

options, simply tips a blind eye to the physical reality of the carbon cycle. Commenters

added that unlike the criteria pollutants, EPA has never claimed that CO2 has a direct toxic effect 

on human health, and although EPA's strategy is bold, creating a hybrid of NAAQS regulation 

and source-specific Section 111 regulation, such creativity is without legal authority. 

Response 25: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble 

and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the 

scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and 

legislative history. Moreover, to the extent this comment objects to the portfolio approach, the 

EPA is not finalizing the proposed “portfolio” approach and will not accept state plans that 

attempt to impose emission standards or other CAA compliance obligations on entities other than 

affected EGUs. The state measures approach provides a path for a state to achieve the emission 

performance level as expressed as a state goal in a way that avoids placing enforceable emission 

standards on affected EGUs (unless and until the backstop is triggered). States will have a wide 

range of flexibility in choosing how to demonstrate their affected EGUs are meeting a state goal.

Comment 26: Commenters stated CAA Section 111(d) prohibits EPA from issuing regulations 

governing a pollutant that is "emitted from a source category which is regulated under Section 

7412 of this title, ." and because CO2 is emitted from coal-fueled EGUs, and because coal-fueled 

EGUs are regulated by EPA under Section 112 through EPA's Mercury Air Toxics (MATS) 

regulation, EPA may not regulate CO2 emissions from coal-fueled EGUs under CAA Section 

111(d).

Response 26: We disagree. We discuss our authority to promulgate this rule, including why this 

rule is not inconsistent with the U.S. Supreme Court’s decision in UARG v. EPA, in section IV of 

the preamble and section XXII of the Legal Memo.

Comment 27: Commenters stated the proposed regulations are almost contrary to the Clean Air 

Act, which requires the EPA to establish a "procedure" under which each state shall develop a 

plan for establishing and implementing standards of performance for existing sources within the 

state. Commenters elaborated, stating that existing EPA regulations provide that states may adopt 

"less stringent emissions standards" based on factors such as "unreasonable cost of control" 

among other factors, and the Clean Air Act and the EPA's own existing regulations recognize 

that the States are best suited to address carbon dioxide emissions. Commenters urged EPA, in 
59

developing guidelines for regulating carbon dioxide emissions from existing power plants, to 

respect Pennsylvania's primacy and to rely on Pennsylvania regulators to develop performance 

standards for carbon dioxide emissions that take into account the unique policies, energy needs, 

resource mix, and economic priorities of our state.

Response 27: We disagree with this comment. In section V of the preamble for this rule and 

section VII of the Legal Memo, we discuss the respective roles of the EPA and states under CAA 

section 111(d).

Comment 28: Commenters stated that even if EPA has the authority to issue CAA section 111 

(d) regulations governing CO2 emissions from coal-fueled EGUs, the Proposed Rule 

impermissibly intrudes upon Colorado's express authority under CAA section 111 (d) to 

"establish" state-specific standards of performance. Commenters stated under CAA section 

111(d), EPA's authority is limited to adopting a "procedure" under which "each State shall 

submit to the Administrator a plan which (A) establishes standards of performance".

Commenters stated the Proposed Rule is far more than procedural. Rather, commenters stated, 

the Proposed Rule would usurp Colorado's CAA and state law authority to "establish" 

performance standards by dictating what the standards must be. Additionally, commenters stated, 

EPA has structured the Proposed Rule in a way that would prevent Colorado from considering 

"the remaining useful life of the existing source" in applying a state-established performance 

standard. [CAA 111(d)(1)(B); 79 Fed. Reg. at 34,925] Commenters stated that the Proposed Rule 

is not consistent with the language, context, legislative history, and consistent past administrative 

interpretation of CAA section 111(d). Instead, commenters added, the Proposed Rule is built on 

new and redefined terminology never before used in the CAA section 111 (d) program. 

Commenters stated that for the first time, EPA seeks to set state-by-state "goals," which equate 

to or carry the burden of legally enforceable mandates for states, including Colorado. However, 

commenters stated, EPA lacks the authority under either CAA section 111(d) or EPA's CAA 

section 111(d) regulations to set binding statewide "goals." Notably, commenters stated, the term 

"goal" is not even used in the CAA or EPA's implementing regulations. Similarly, commenters 

stated, for the first time, EPA defines a "system" of emission reduction in the form of a mandate 

which governs the amount of time EGUs within the regulated source category are allowed to 

operate. Forcing coal-fueled EGUs to retire prematurely or to reduce operation is not a "system" 

of emission reduction under CAA section 111 (d). Commenters added that the new 

"interpretation" of CAA section 111(d) set forth in the Proposed Rule encourages Colorado to 

submit a plan that contains what EPA calls "portfolio" measures. Commenters stated these 

measures would be used, for instance, to dramatically increase the use and deployment of 

renewable energy and EE throughout the state, targeting Colorado citizens and businesses as 

necessary agents in the reduction of electric consumption. However, commenters stated upon 

EPA approval of a Colorado CAA section 111(d) Plan, these measures would become "federallyenforceable" against those agents (citizens and businesses) required to implement them. 

Commenters argued that the CAA section 111 (d) does not provide EPA the authority to create 

federally enforceable obligations on entities that do not own or operate facilities within the 

regulated source category but rather, CAA section 111 authorizes standards to be set for facilities 
60

within EPA-listed source categories. Commenters urged CAA section 111 does not apply to, nor 

can it permissibly reach, any other facilities or entities that are not part of the listed source 

category.

Response 28: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble 

and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the 

scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and 

legislative history. Moreover, to the extent this comment objects to the portfolio approach, the 

EPA is not finalizing the proposed “portfolio” approach and will not accept state plans that 

attempt to impose emission standards or other CAA compliance obligations on entities other than 

affected EGUs. The state measures approach provides a path for a state to achieve the emission 

performance level as expressed as a state goal in a way that avoids placing enforceable emission 

standards on affected EGUs (unless and until the backstop is triggered). States will have a wide 

range of flexibility in choosing how to demonstrate their affected EGUs are meeting a state goal. 

Comment 29: Commenters stated EPA has provided little or no information regarding what 

authority it's relying on to institute such an expansive regulatory regime and how it intends to 

proceed if it is not approved in individual states' implementation plans.

Response 29: We disagree with this comment. As explained in the preamble, we discuss in 

detail our legal authority for this rule, and we explain that we are not authorizing a portfolio 

approach. We also explain our process concerning a federal plan, and, separately, we have 

proposed a federal plan.

Comment 30: Commenters stated EPA has the ability to require a contingency plan in 

accordance with Section 172(c)(9) of the Clean Air Act. According to Section 172(c)(9) of the 

Clean Air Act, EPA shall require nonattainment plans to include "implementation of specific 

measures to be undertaken if the area fails to make reasonable further progress [in obtaining a 

NAAQS]." Commenters requested EPA to identify the specific authority that allows EPA to 

require a contingency plan under Section 111(d) of the Clean Air Act. Commenters stated 

although EPA does not describe this measure as a "contingency plan," it appears that "corrective 

measures" are functionally identical to the contingency plans provided under Section 172(c)(9) 

of the Clean Air Act, which is inapplicable to plans under Section 111(d).

Response 30: The EPA disagrees that corrective measures in this rule are functionally identical 

to part D contingency measures. Under Part D, contingency measures are not expected to fully 

bring the area into attainment. In fact, this would not be possible given the difficulty of 

predicting in advance exactly what measures would be needed to fully attain. A better analogue 

in Part D for the corrective measures in these guidelines is the primary way Part D addresses 

failure to attain: the state is required to revise its plan in various ways within a certain time in 

order to bring about attainment. See, e.g., section 179(d). This is analogous to what we are 

requiring for corrective measures.
61

Comment 31: Commenters stated EPA should be aware that any plan developed by LDEQ or 

the state of Louisiana must be consistent with and will be constrained by Act 726 of the 2014 

Regular Legislative Session. 

Response 31: We appreciate this information. Under the CAA, Louisiana and all other states and 

other affected jurisdictions are subject to the requirements of this rule notwithstanding any state 

laws that may limit a state’s ability to comply with this rule.

Comment 32: Commenters stated EPA has not clearly identified it's authority to require, 

mandate, or otherwise implement and enforce renewable energy standards or demand-side 

energy efficiency standards, i.e., Building Blocks 3 and 4 of EPA's proposed Clean Power Plan. 

Commenters stated these building blocks are clearly beyond the fence line of any given electric 

generating unit, and EPA also has not clearly identified for Nebraska where these authorities lie; 

therefore, it is unclear under what authority pursuant to the Clean Air Act EPA is using to 

develop the Best System of Emission Reduction using all of the building blocks. Commenters

explained that in Nebraska, the NDEQ does not have the authority to mandate renewable energy 

standards or demand-side energy efficiency standards. Commenters stated implementing these 

measures would require action by the Nebraska Legislature granting the NDEQ this authority, 

and there is no guarantee this authority would be granted. In fact, commenters stated, the 

members of the 103rd Nebraska Legislature, Second Session, approved Legislative Resolution 

482, requesting that the EPA issue emission reduction goals based only on measures achievable 

within the fence line of regulated sources. [LR 482 http://nebraskalegi lature.gov/] Commenters 

stated the proposed Clean Power Plan therefore establishes goals that would be unachievable by 

the NDEQ and the State of Nebraska. 

Response 32: We disagree with this comment. As we explain in the preamble, we are not 

requiring, mandating, or otherwise implementing or enforcing renewable energy standards or 

demand-side energy efficiency standards. 

Comment 33: Commenters stated the authority of FERC is strictly limited to transmission and 

wholesale sales of electricity in interstate commerce, and the State of Utah retains broad and 

exclusive regulatory authority over retail sales and service, local distribution service, and the 

need for, and siting of, generation facilities. Commenters added Utah exercises that authority by 

(1) direct regulation of the investor owned utility's facilities, services, and rates, and (2) 

providing for the creation of state or local public power utilities and electric cooperatives that are 

largely self-governed and accountable to the customers in the communities they serve.

Commenters remarked that although without clear authority, and in conflict with existing 

governance and regulatory matters, EPA would assume total autonomy in the electric utility 

industry with the finalization of the proposed rule, and EPA would be asserting newfound 

authority to become the primary regulator of electric power within the United States, including 

regulating (i) the dispatch of electric generation, (ii) the amount of renewable power to be 

constructed and integrated, and (iii) requiring customers to limit their electricity consumption.

Commenters contended that the EPA's proposal does not appreciate that Utah's utility regulatory 
62

commission lacks the authority to implement several building blocks with respect to public 

power utilities and undermines the governance policies of public power and local control.

Response 33: We disagree with commenters. CAA section 111(d)(1) requires the EPA to 

promulgate regulations under which states submit state plans regulating “any existing source” of 

certain pollutants “to which a standard of performance would apply if such existing source were 

a new source” and “provides for the implementation and enforcement of such standards of 

performance.” Affected EGUs, including municipalities and electric cooperatives, are subject to 

air quality requirements, including meeting such standards of performance that a state may 

establish to meet emissions performance levels that the EPA determines are achievable under 

CAA 111(d). We give states and affected EGUs flexibility in determining how they meet these 

requirements. No state or affected EGU must implement the precise measures included in the 

building blocks in order to do so. The agency recognizes that states must have legal authority to 

implement approvable state plans. In the event that states lack the necessary state-law authority 

to implement a plan, the EPA will implement a federal plan for that state under section 

111(d)(2). Further, we note that we are not including building block 4, demand-side energy 

efficiency in the final rule. Finally, for reasons that we fully explain in preamble section V.B. 

and the legal memo, we are within our legal authority and the final rule is consistent with past 

EPA practice and interpretation in setting standards of performance.

Comment 34: Commenters stated that EPA's inclusion of EE and RE measures is inconsistent 

with the principle of "cooperative federalism," that the CAA establishes a cooperative framework 

whereby EPA and the states work in partnership to achieve air quality objectives, and that the 

CAA's "cooperative federalism structure is a defining feature of the statute." See, e.g., GenOn 

REMA, LLC v. EPA, 722 F.3d 513, 516 (3d Cir. 2013). (internal quotations emitted). 

Commenters added that when enacting this law, Congress found that "air pollution prevention ... 

and air pollution control at its source is the primary responsibility of states and local 

governments" and that federal financial assistance and leadership is essential for the

development of cooperative federal, state, regional, and local programs to prevent and control air 

pollution." 42 U.S.C. Section 7401(a)(3); 42 U.S.C. Section 7401(a)(4). Commenters argued that 

EPA, in the CPP, does more than encourage or promote state actions- it federalizes them, and 

EPA is building bold assumptions regarding EE and RE, beyond-the-unit measures traditionally 

regulated at the state or regional level, into each state goal calculation, effectively requiring 

states to utilize these beyond-the-unit measures to achieve the standard. Commenters stated 

besides being simply unnecessary, another major problem exists with it - by requiring states to 

include their state-regulated EE and RE programs into its federally-enforceable state plan, EPA 

effectively subjects state programs to federal enforcement. Commenters stated the EE programs 

and many of the RE programs have to date been wholly state programs, and by regulating staterun EE and RE programs, which it argues affect CO2 emissions from the source category by 

reducing demand of electricity generated from fossil-fuel fired EGUs, EPA is not respecting the 

state's explicit authority to regulate its own retail electricity demand.

Response 34: We disagree with this comment. In section V of the preamble for this rule, we 

discuss the respective roles of the EPA and the states under CAA section 111(d). In addition, 
63

under this rule, the EPA would not exert CAA enforcement authority over any entity other than 

affected EGUs and would be limited to enforcing the emission standards applicable to the 

affected EGUs, and thus this rule does not require that states make their EE or RE programs 

federally enforceable.

With regard to the inclusion of EE and RE programs in BSER, we first note that we are no longer 

including building block 4, demand-side EE, in the BSER. While affected EGUs can utilize EE 

as a compliance measure to meet required emission reductions, it is not a component of BSER. 

Next, we reiterate that states and affected EGUs are not required to implement the building 

blocks in order to meet the required emission reductions. States have considerable flexibility in 

how they design state plans. As we explain in sections V.A. and V.B. of the preamble, our 

emission guidelines simply reflect an achievable emissions limit through the application of the 

BSER and do not in themselves require states or sources to implement the BSER. That is, EPA is 

responsible for determining the level of emission limitation from the source category, while 

states have the responsibility of assigning emission requirements to their sources that will ensure 

their achievement of that level of emission limitation. States may fulfil their responsibility by 

establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER. For the reasons discussed in section 1.2 of this response 

to comments, as well as in the Legal Memorandum accompanying the final rule, this approach is 

consistent with the principles of cooperative federalism embodied in some portions of the Clean 

Air Act.

1.2 AUTHORITY TO REGULATE EGUS

Comment 1: Commenters stated, EPA correctly concludes that section 111(d) requires the 

regulation of carbon pollution from any existing EGU that would, if it were "new", be covered 

by any 111(b) rulemaking establishing carbon pollution standards for EGUs. Commenters said, 

notwithstanding the unambiguous statutory language supporting EPA's conclusion, some 

industry commenters question whether the section 111(b) standards for modified and 

reconstructed EGUs would independently require regulation of carbon pollution from existing 

EGUs under section 111(d). Commenters said, in a joint comment filed in this docket, a number 

of trade and business associations claim that the structure of section 111 demonstrates that 

Congress intended that existing sources would not be regulated unless EPA first established 

standards of performance for all new sources (newly constructed, modified, and reconstructed). 

Commenters said, these commenters further assert that such an interpretation of the statute is 

necessary to avoid the "nonsensical outcome" where existing sources become subject to 

regulation before EPA finalizes standards for newly constructed sources. 

Commenters stated, such arguments ignore the text of section 111(d), which compels EPA to 

regulate existing sources that would be covered by a section 111(b) standard if they were "new 

sources" - a term that expressly encompasses modified or newly constructed sources, and 

encompasses "reconstructed" sources under EPA's well-settled interpretation of the term 
64

"construction" in the statutory definition of "new source." Commenters said, nothing in the text 

of section 111(d) states or implies that EPA must defer regulation of existing sources that would 

be subject to a section 111(b) standard if they undertook modification or reconstruction until 

such time as EPA has established a section 111(b) standard for newly constructed sources in the 

same category. Commenters said, on the contrary, the text and structure of section 111 

demonstrate that Congress was urgently concerned with identifying and regulating categories of 

sources contributing significantly to air pollution reasonably "anticipated to endanger public 

health or welfare." Commenters said, delaying regulation of existing sources until after the 

promulgation of standards for all possible forms of "new" sources within a category would be 

inconsistent with ensuring that all sources of dangerous pollution-even existing sources-are 

controlled once identified. Commenters said, finally, the regulation of existing sources under 

111(d) while 111(b) standards for newly constructed sources are pending does not produce a 

"nonsensical outcome."

Commenters stated, the text and structure of section 111 demonstrate that a category of sources 

must be subject to 111(d) regulation if the category would be subject to any 111(b) standard. 

Commenters said, as noted above, section 111(a) explicitly provides that a "new source" includes 

"any stationary source" that undertakes "construction or modification" after the proposal date of 

a standard of performance applicable to that source. Commenters said, section 111(d), in turn, 

directs EPA to ensure that state plans establish standards of performance for "any existing source 

. . . to which a standard of performance . . . would apply if [that] existing source were a new 

source." Commenters said, this structure clearly contemplates that the regulation of existing 

sources in a category is triggered by the potential applicability of section 111(b) standards to 

either newly constructed or modified sources in that same category. Commenters said, although 

Congress did not expressly include reconstructions in the definition of "new source," it is 

nonetheless clear that Congress contemplated more than one type of "new" source would be 

subject to 111(b) standards, and therefore that 111(d) standards for a category could be required 

as a result of EPA establishing 111(b) standards for any of the multiple possible types of "new 

source." Commenters said, consequently, now that EPA has proposed standards of performance 

for modified and reconstructed EGUs, existing EGUs would satisfy the statutory and regulatory 

definitions of a "new source" if they were to undertake modification or reconstruction. 

Commenters said, the modified and reconstructed source standards thus serve as a separate and 

wholly sufficient predicate for the 111(d) standards for existing sources.

Commenters stated, by contrast, the statutory text provides no support for the alternative view 

advanced by some industry commenters, which is that state plans may only regulate existing 

EGUs after promulgation of standards for new, modified, and reconstructed sources of the same 

type. Commenters said, if Congress had intended that section 111(d) requirements only apply to 

sources for which all possible section 111(b) standards have been promulgated, it would have so 

stated. Commenters said, instead, Congress provided that a "new source" is one that undertakes 

"construction or modification" after the proposal of an applicable standard of performance, and 

did not require that EPA establish a single standard of performance for the different 

contemplated forms of "new" sources. Commenters said, on the contrary, the statute expressly 
65

provides EPA with discretion to establish different standards under section 111(b) for the 

multiple possible types of "new" sources, by authorizing EPA to distinguish between different 

types and classes of sources within a category. Commenters said, thus, because Congress clearly 

established that there are multiple avenues through which a source may be "new" for the purpose 

of applicability of a 111(b) standard, the mandate in section 111(d) to regulate existing sources 

that would be subject to 111(b) standards if they are "new" is triggered by an applicable standard 

of performance for either newly constructed, reconstructed, or modified sources.

Commenters stated, EPA's position is also fully consistent with the purpose of section 111, 

whereas the position advanced by industry commenters would undermine the statutory purpose. 

Commenters said, the purpose of section 111, as demonstrated by its text and structure, is 

curbing the emission of harmful pollutants from categories of stationary sources identified as 

significantly contributing to dangerous pollution; this purpose is fulfilled through a statutory 

structure that ensures that air pollution emitted by both new and existing sources in those 

categories are regulated. Commenters said, to address pollution from the category effectively, 

and to fulfill Section 111's technology-forcing mandate, EPA must promptly establish standards 

under section 111(b) for newly constructed, reconstructed, and modified sources in each listed 

category. Commenters said, yet where existing sources are responsible for the vast majority of 

the pollution generated by the category, as is the case with respect to carbon pollution from 

power plants (and many other source types), establishing section 111(d) regulation is an even 

more urgent task to fulfill the Act's fundamental purpose of protecting human health and welfare. 

Commenters said, for this reason, section 111(d) requires EPA to ensure that standards of 

performance under section 111(d) are established for existing sources, which are defined as "any 

stationary source other than a new source." Commenters said, because the goal of this statutory 

framework is ultimately to ensure that Americans are protected from dangerous air pollution 

through standards addressing the entire category, it would frustrate that purpose to delay the 

regulation of existing sources until standards of performance have been established for all forms 

of new sources. Commenters said, conversely, interpreting section 111(d) as requiring the 

regulation of existing sources that would be subject to a 111(b) standard of performance if they 

were any form of "new source" is consistent with section 111's clear purpose of ensuring that 

emissions from the entire category become subject to pollution standards.

Commenters stated, contrary to industry assertions, the regulation of existing sources under 

111(d) while 111(b) standards for newly constructed sources are pending does not produce a 

"nonsensical outcome." Commenters said, EPA's approach ensures that existing sources, 

responsible for the vast majority of the carbon pollution generated by this category of sources, 

would be subject to standards requiring the abatement of that pollution once there is a section 

111(b) standard for any "new source" of the same type. Commenters said, this approach is 

wholly consistent with the unambiguous text of section 111(d) and comports with the Act's 

fundamental purpose of protecting Americans from dangerous air pollution.

Commenters stated, the text, structure, and purpose of Section 111 unambiguously require state 

plans to cover any existing EGU that would be subject to a section 111(b) standard if it were to 
66

be newly built, modified, or reconstructed. Commenters said, industry commenters' misguided 

view that EPA is barred from issuing emission guidelines for existing EGUs until it promulgates 

standards for all new sources is inconsistent with the statute and would frustrate the core 

purposes of section 111.

Commenters stated, because EPA' interpretation that 111(d) requirements continue to apply to 

sources that later modify or reconstruct does not rely on defining those sources as continuing to 

be "existing" sources, the proposed 111(b) standards of performance for modified and 

reconstructed EGUs are in no way standards for "existing" sources. Commenters said, thus, 

because the proposed standards are clearly standards of performance for "new" sources, fitting 

the definition of section 111(a)(2), the standards for modified and reconstructed EGUs are a 

sufficient predicate for the regulation of existing sources under section 111(d).

Response 1: EPA agrees that a standard of performance for either modified sources or 

reconstructed sources may serve as a sufficient predicate for regulation under section 111(d). 

This issue is discussed more fully elsewhere in this Chapter in response to comments stating that 

such standards are not a sufficient predicate. 

Comment 2: Commenters stated that the statutory language of Section 111(d) is a product of 

differing House and Senate versions and that under the Senate version, unless a particular air 

pollutant emitted by existing sources was regulated by one of several other listed CAA 

provisions, existing sources emitting that pollutant could be regulated under Section 111(d). The 

commenters stated that in contrast, the House version prohibits existing sources from being 

regulated under Section 111(d) if the existing sources are regulated under Section 112; under 

prevailing rules of legislative construction and case law regarding harmonization of conflicting 

statutory provisions, the House provision controls. The commenters stated that effective in 2012, 

EPA already regulates coal-fired power plants under section 112 in the Mercury and Air Toxics 

Standard; therefore, EPA has no authority to regulate existing coal-fired power plants a second 

time under Section 111(d). The commenters stated that, also, section 111(d) requires EPA to 

issue a valid new source performance standard under Section 111(b) before issuing an existing 

source standard.

Response 2: We disagree with this comment. We respond to the two arguments made by 

commenters in our responses to other comments in this section and in section 1.1 of the RTC.

Comment 3: EPA prohibited from setting ESPS for sources regulated under section 112 

Several commenters stated that 111(d) prohibits EPA from promulgating existing source 

performance standards for source categories that have already been regulated under Section 112.

Commenters stated that despite the clarity provided in a literal reading of 111(d), EPA argues 

that the statute's prohibition is ambiguous due to a clerical mistake in the 1990 CAA 

Amendments. The commenters stated that although both the House and Senate versions were 

included in the 1990 Amendments, the Senate's version contained the error and it was the House 
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version that was published in the U.S. Code. The commenters stated that the House version 

controls over the Senate's because of longstanding and well-established rules for resolving 

legislative drafting inconsistencies and clerical errors in federal legislation. The commenters

stated that in direct conflict with the House amendment version that bans any regulation under 

Section 111(d) of existing sources already regulated under Section 112, EPA's interpretation 

would permit regulation as long as the pollutant itself is not regulated under Section 112 because 

CO2 was not itself regulated under the Mercury and Air Toxics Standard, only hazardous air 

pollutants from coal- and oil-fired EGUs. The commenters stated that additionally, in direct 

conflict with the Senate's version, which prohibits regulation of any HAP under Section 111(d), 

EPA's interpretation would permit regulation of a HAP under Section 111(d) if Section 112 does 

not regulate the HAP and the emitting source. The commenters stated that despite EPA's 

erroneous attempt at claiming that the limitations in these amendments negate each other, it is 

possible, and therefore mandatory, to read the versions as prohibiting EPA from regulating 

emissions of any pollutant from sources in a category that is already regulated under Section 112 

under its authority in Section 111(d).

Commenters stated that 111(d) prohibits EPA from promulgating existing source performance 

standards for source categories that have already been regulated under Section 112. Commenters

stated that in 2012, EPA issued the Mercury and Air Toxics Standards under section 112 to 

regulate emissions from coal-fired EGUs; thus, the CPP attempts to unlawfully and duplicatively 

regulate coal-fired EGUs.

Response 3: EPA disagrees that it may not promulgate regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble. 

Comment 4: Commenters disagreed that EPA has the authority to enforce emission rate goals at 

individual affected sources. The commenters stated that the Act reserves to the States the 

authority to establish, implement, and enforce standards of performance at individual affected 

sources. [42 USC 7411(d)(1)(A),(B)] The commenters stated that the EPA only has the authority 

to "prescribe" and "enforce" a State plan when a State fails to submit a "satisfactory" plan. [42 

USC 7411(d)(2)(A),(B)]

Response 4: We disagree with this comment. CAA sections 111(d)(2)(B) and 113(a) – (h) 

authorize the EPA to enforce the provisions of a state plan, regardless of whether the state fails to 

submit a satisfactory plan or fails to enforce that plan. Section 113 does not distinguish between 

implementation plans under Sections 110 and 111(d). Section 304 of the CAA provides similar 

enforcement authority to citizens.

Comment 5: Commenters stated that the regulatory framework the EPA has established is very 

workable and that the regulations are on solid technical and legal footing.

Response 5: We appreciate this comment.
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Comment 6: Commenters stated that the Clean Power Plan is clearly legal. The 1970 Clean Air 

Act, as interpreted by the Supreme Court in both 2007 and 2014, clearly gives the EPA, you all, 

the authority to regulate carbon pollution from existing power plants. Commenters added that 

although the two versions of CAA section 111 passed by the House and Senate introduce 

potential ambiguity, the EPA is entitled to substantial deference in interpretation of that 

ambiguity, and Commenters agreed with the EPA's interpretation that it can regulate CO2 

emissions from EGUs under section 111(d) given that CO2 is not listed as a HAP or otherwise 

regulated under section 112.

Commenters stated that the EPA reasonably interprets the provisions identifying which air 

pollutants are covered under Section 111(d) to authorize the EPA to regulate carbon emissions 

from fossil fuel-fired EGUs, that the drafting errors that occurred during enactment of the 1990 

CAA Amendments do not call EPA's legal authority into question. Commenters said both houses 

of Congress passed an amendment to Section 111(d) (166 Pub. L. No. 101-549, 108(g), 104 Stat. 

at 2467 (Nov. 15, 1990)) and the two versions differed from and conflicted with each other, 

creating ambiguity. Commenters stated as they were not reconciled during the House-Senate 

Conference Committee, both were approved by both houses and enacted into law - one in title I 

of the bill, the other in title III of the bill (both amendments were to be codified in Section 

111(d)).(167 The Senate version would exclude the regulation of any pollutant which is included 

on a list published under [Section] 112(b). Pub. L. No. 101-549, 302(a), 104 Stat. at 2574 (Nov. 

15, 1990)) Commenters agreed with the EPA that the enacted law, with both conflicting and thus 

ambiguous amendments, signed by the President (as recorded in the U.S. Statutes at Large) is 

controlling, not the U.S. Code that inaccurately presents only one of the two amendments. 

Commenters said under such circumstances, the EPA may reasonably construe the provisions of 

Section 111(d) to authorize regulation of carbon thereunder. Commenters stated before the 1990 

CAA Amendments, Section 111(d)(1) read: The Administrator shall prescribe regulations . . . for 

any existing source for any air pollutant for which air quality criteria have not been issued or 

which is not included on a list published under Section 7408(a) or 7412(b)(1)(A) [S. 

112(b)(1)(A)] of this title, but to which a standard of performance under this Section would 

apply if such existing source were a new source. . .(168 42 U.S.C. 7411(d) (1970)) Commenters

stated that in this version, there was a provision (Section 112 Exclusion) excluding from 

regulation, pollutants that were provided in Section 112. Commenters said the 1990 CAA 

Amendments altered the Section 112 Exclusion ambiguously because there were two different 

versions both enacted into law. Commenters stated as presented in the U.S. Code, the House 

written version of Section 111(d)(1) reads: The Administrator shall prescribe regulations . . . for 

any existing source for any air pollutant for which air quality criteria have not been issued or 

which is not included on a list published under Section 7408(a) of this title or emitted from a 

source category which is regulated under Section 7412 [Section 112] of this title but to which a 

standard of performance under this Section would apply if such existing source were a new 

source, and provides for the implementation and enforcement. . .(169 42 U.S.C. 7411, 111(d)(1)) 

Commenters continued, stating that the conflict in interpreting the statute comes from the 

revision of the Section 112 Exclusion defining one category of air pollutants that are emitted 

from a source category which is regulated under [Section 112] as excluded from regulation. 
69

Commenters said this alters the Section 112 Exclusion from applying to Section 112 pollutants to 

categories of sources that emit those pollutants. Commenters stated therefore, the U.S. Code 

version can be constructed to read that the provision (Section 112 Exclusion) precludes GHGs 

because they are emitted from EGUs and those regulated entities are a source category regulated 

under Section 112. ("Electric utility steam generating unit - The term "electric utility steam 

generating unit" means any fossil fuel fired combustion unit of more than 25 megawatts that 

serves a generator that produces electricity for sale.) Commenters stated a unit that cogenerates 

steam and electricity and supplies more than one-third of its potential electric output capacity and 

more than 25 megawatts electrical output to any utility power distribution system for sale shall 

be considered an electric utility steam generating unit." 42 U.S.C. 7412(8) (1970)) Commenters

said that under this construction, the Section 112 Exclusion would be read to exclude almost 

every pollutant from regulation under Section 111(d), as it would be challenging to identify any 

pollutant that is not emitted from at least one source category that is regulated under Section 112. 

Commenters stated this circular construction of Section 111(d) would render itself ineffective, 

and as such, can be neither a reasonable construction nor the intent of Congress. Commenters

said such an unreasonable construction can only be derived by looking at only the text of Section 

111(d) as presented in the U.S. Code, but this does not accurately reproduce the Section 112 

Exclusion as enacted by Congress and signed by the President in the 1990 CAA Amendments. 

Commenters said the Senate written version reads as follows: The Administrator shall prescribe 

regulations . . . for any existing source for any air pollutant for which air quality criteria have not 

been issued or which is not included on a list published under Section 7408(a) or 7412(b) 

[Section 112(b)] of this title, but to which a standard of performance under this Section would 

apply if such existing source were a new source. . . S.1630.ENR, 101st Cong. (1990). 

Commenters believed this version simply revises the list of pollutants to which it refers because 

in the 1990 CAA Amendments, Congress amended Section 112 to include a statutory list of 

hazardous air pollutants for EPA to regulate, as opposed to relying on the EPA to develop its 

own list and states that as shown, these two versions conflict and are thus ambiguous. 

Commenters said the controlling statement of the Section 112 Exclusion, found in the U.S. 

Statutes at Large, has both conflicting versions (each passed by each house of Congress) and is 

thus ambiguous. Commenters stated under these circumstances, the EPA may reasonably 

construe the Section 112 Exclusion to allow for and authorize the regulation of GHGs under 

Section 111(d). Commenters stated in doing so, it would not be reasonable to give little or no 

effect to the Senate version and instead defer entirely or almost entirely to the House version 

because a strict reading of the House version would mean that the EPA could not regulate any air 

pollutant from a source category regulated under Section 112 and would render Section 111(d) 

ineffective, which was not the intent of Congress. Commenters stated moreover, Congress 

desired the 1990 CAA Amendments to require the EPA to regulate more substances, and not 

eliminate the EPA's ability to regulate large categories of air pollutants.(See 70 Fed. Reg. 16031-

32) Commenters further said, the EPA has historically regulated non-hazardous air pollutants 

under Section 111(d), even where those air pollutants were emitted from a source category 

actually regulated under Section 112. Commenters remarked that the EPA reasonably interprets 

the provisions identifying which air pollutants are covered under Section 111(d) to authorize the 

EPA to regulate carbon emissions from fossil fuel-fired EGUs, and the EPA has reasonably 
70

interpreted the ambiguous Section 112 Exclusion in a manner to give effect to both amendments, 

and thus the apparent intent of Congress. Commenters stated specifically, the EPA has 

interpreted the Section 112 Exclusion to mean that [w]here a source category is regulated under 

Section 112, as Section 111(d) standard of performance cannot be established to address any 

hazardous air pollutants listed under Section 112(b) that may be emitted from that particular 

source category. Commenters concluded, stating that EGUs are a source category that is 

regulated under Section 112, but GHGs are not a hazardous air pollutant regulated under Section 

112, and accordingly, the Section 112 exclusion in Section 111(d) does not apply to GHGs, and 

111(d) does not preclude the EPA from establishing guidelines covering GHGs from EGUs, and, 

therefore, this interpretation authorizes the EPA to establish Section 111(d) guidelines for GHG 

emissions from EGUs, and this interpretation is reasonable and entitled to deference. 

Commenters stated this authority is not divested by the fact that the EPA has regulated EGU 

emissions of mercury and other hazardous air pollutants under Section 112 under the agency's 

established construction of the ambiguous provisions in Section 111(d)(1)(A)(i) that identify air 

pollutants subject to Section 111(d).

Response 6: EPA agrees that it has the authority to promulgate regulations addressing CO2 

emissions from existing power plants under section 111(d). EPA’s discussion of this issue is in 

Section IV of the preamble.

Comment 7: Commenters stated that while section 111(d) gives states broad flexibility in 

implementing standards applicable to existing sources, the EPA is ultimately responsible for 

ensuring that state programs will achieve the standards of performance specified in the section 

111(d) emission guideline document. Commenters said Section 111(a) of the CAA defines the 

term "standard of performance" as: "[A] standard for emissions of air pollutants which reflects 

the degree of emission limitation achievable through the application of the best system of 

emission reduction [(BSER)] which (taking into account the cost of achieving such reduction and 

any non-air quality health and environmental impact and energy requirements) the Administrator 

determines has been adequately demonstrated."42 U.S.C. S. 7411(a)(1). Commenters explained 

that this definition applies to both new sources (governed by section 111(b)) and existing sources 

(governed by section 111(d)), and thus, while there are no judicial decisions interpreting the term

"standard of performance" in the context of section 111(d), case law interpreting it in the context 

of section 111(b) is instructive. Commenters cited the D.C. Circuit's interpretation of section 

111(a), summarizing that "the system [] must be adequately demonstrated, and the standard [] 

must be achievable." Essex Chemical Corp. v. Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973), 

cert. denied, 416 U.S. 969 (1974). In determining whether a system of emission limitation is 

"adequately demonstrated," the D.C. Circuit has clarified that "[s]ection 111 looks toward what 

may fairly be projected for the regulated future, rather than the state of the art at present . . . ." 

Portland Cement Assn v. Ruckelshaus, 486 F.2d 375, 391 (D.C. Cir. 1973). Commenters stated 

"'Adequately demonstrated;' does not mean that existing [plants] must be capable of meeting the 

standard." Nat'l Asphalt Pavement Assn v. Train, 539 F.2d 775, 785 (D.C. Cir. 1976) (citing 

Portland Cement Assn, 486 F.2d at 391). Commenters said the standard "does not require that a 

[facility] be currently in operation which can at all times and under all circumstances meet the 
71

standards." Essex Chemical Corp., 486 F.2d at 433, 436 (identifying BSER as a technology that 

had only been implemented at one plant in the U.S. at the time of testing, but that found support 

in literature and in foreign implementation). Commenters concluded that the EPA may specify a 

standard of performance which is not routinely in use within the industry, provided the 

effectiveness of the system may reasonably be expected based on the performance of its 

component parts in other settings.

Response 7: These comments are supportive of this rule, we appreciate them, and to the extent 

we agree with the points made, we have incorporated those points into our rationale.

Comment 8: Commenters stated that the proposed Clean Power Plan is consistent with Section 

111(d) and other applicable provisions of the CAA, along with the EPA's implementing 

regulations at 40 CFR 60.22(a). Commenters stated that recent court cases, including rulings by 

the U.S. Supreme Court in Massachusetts v. EPA and American Electric Power Co. v. 

Connecticut, affirm that the EPA has the authority to regulate GHG emissions from EGUs. 

Commenters stated Congress also gave the EPA authority under Section 111(d) to determine the 

BSER and directed the EPA to evaluate whether state implementation plans are "satisfactory." 

Commenters stated that the EPA makes it clear in the preamble that the proposed rule only 

establishes a state emission target rate and that the states have flexibility to implement any 

combination of the measures that constitute BSER, or include measures that were not part of the 

EPA's BSER determination, as long as the state can demonstrate that the applicable target rate 

will be met or exceeded with equivalent measures. Commenters stated that the proposed Clean 

Power Plan satisfies the emission guideline requirements contained in the existing regulations by 

including information for states to develop compliance plans, analysis of the building blocks that 

comprise BSER, state goals based on BSER, the time in which compliance can be achieved, as 

well as other information. Commenters referred to a more detailed discussion of NEE's views on 

the consistency of the proposed Clean Power Plan with the EPA's authority under the CAA in 

their comments.

Commenters stated that in earlier comments to the EPA, Alabama's Governor's office and the 

Alabama Department of Environmental Management (collectively, "the Administration") 

questioned the legal basis for the proposal.(See, e.g., Alabama's Opposition to U.S. EPA's Clean 

Power Plan, Testimony by Blaine Galliher, Senior Advisor to Governor Robert Bentley,

available at http://governor.alabama.gov/newsroom/2014/07/governor-bentley-sends-senioradvisor-testify-epas-public-hearing-clean-power-plan-regulations/). Commenters remarked that 

Alabama is one of 12 states that brought suit against the proposal, notwithstanding the legal 

hurdles to challenging a non-final rule.(Neela Banerjee, 12 States sue the EPA over proposed 

power plant regulations, L.A. Times (Aug. 4, 2014), available at 

http://www.latimes.com/business/la-fi-epa-lawsuit-20140805-story.html, and that the 

Administration's legal critique involves two basic arguments: (1) the EPA cannot regulate power 

plant carbon dioxide emissions under Clean Air Act section 111(d) because the EPA has 

promulgated emission standards for power plant hazardous air emissions under section 112; and 

(2) section 111(d) requires controls on emission sources only, and does not authorize "beyond 

the fence line" compliance flexibility. (Id.) Commenters stated first, the EPA interprets section 
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111(d) to limit development of standards of performance for specific pollutants regulated under 

section 112, rather than for entire categories of sources regulated under that section. Commenters

stated the EPA's interpretation is a permissible construction that, in fact, is the most natural 

reading of the statute and best effectuates each of the statutory provisions, and second, that the 

EPA's broad interpretation of "best system of emission reduction" to include beyond-the-fenceline compliance approaches is a logical and permissible reading of these generically defined 

statutory terms. Commenters explained that Section 111(d) provides that the EPA "shall 

prescribe regulations which shall establish a procedure . . . under which each State shall submit 

[to the EPA] a plan which . . . establishes standards of performance for any air pollutant . . . to 

which a standard of performance under this section would apply if such existing source were a 

new source."(Id.) Commenters continued, explaining that Congress exempted two categories of 

air pollutants from this mandate: any air pollutant (1) for which air quality criteria have been 

issued or which is listed under section 108(a); or (2) emitted from a source category covered 

under the hazardous air pollutant provisions of section 112.(Id.), and neither exemption applies 

here.

Commenters continued, stating that the EPA has for some time encouraged states to include 

energy efficiency programs that reduce emissions into their State Implementation Plans 

(SIPs).(See the EPA Roadmap for Incorporating Energy Efficiency and Renewable Energy 

(EE/RE) Policies and Programs in State Implementation Plans (SIPs) and Tribal Implementation 

Plans (TIPs). Incorporating and explaining a number of previous EPA guidance documents: "SIP 

Credits for Emission Reductions from Electric-Sector Energy Efficiency and Renewable Energy 

Measures" (August 2004), which explains how to quantify and include emission reductions from 

EE/RE measures in SIPs; "Incorporating Emerging and Voluntary Measures in State 

Implementation Plans" (September 2004), which encourages the development of voluntary and 

emerging measures that can be included in SIPs; and "Incorporating Bundled Measures in a State 

Implementation Plan" (August 2005), which explains how states can identify individual 

voluntary and emerging measures and "bundle" them in a single SIP submission.), and these SIPapproved programs are an example of an outside the fence tool used by states across the country 

to cost effectively reduce not only greenhouse gases, but other pollutants as well. Commenters

said state and regional programs, such as the Regional Greenhouse Gas Initiative, which create 

CO2 budget trading programs are another example of outside the fence line programs that have 

been incorporated in the EPA-approved SIPs. Commenters said clearly states have the authority 

to adopt and implement these kinds of programs and the EPA has the authority to recognize these 

SIP programs under the concept of best system of emission reduction. Commenters stated 

furthermore, utilities and ratepayers should embrace these programs as a lower cost alternative to 

within the fence line regulation. 

Response 8: These comments are supportive of this rule, we appreciate them, and to the extent 

we agree with the points made, we have incorporated those points into our rationale.

Comment 9: Commenters stated case law interpreting the term 'standard of performance' is thus 

far limited to cases involving new source performance standards, and the commenters agree with 

the EPA's assessment that standards for existing sources must be sensitive to the relatively 
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greater costs that existing facilities may face in implementing pollution control technology, as 

compared to new sources. Nonetheless, the commenters believed that the EPA would be within 

its statutory authority to promulgate more stringent limits than those contained in the Proposed 

Rule while allowing industry sufficient flexibility to absorb costs.

Response 9: We appreciate this comment. We have determined that the limits promulgated are 

consistent with the BSER, as discussed in the preamble for this rule.

Comment 10: Commenters stated that the EPA is faced with a conundrum. Commenters said it 

cannot, in one fell swoop, regulate the grid. Commenters stated that first, the Agency's authority 

under the regulatory framework of the CAA focuses on 'new' sources and 'existing' sources. 

Commenters stated the EPA provides no statutory support or Congressional directive for its 

affirmative action energy policies. Commenters said also undefined is how such incentive 

encouragement becomes legally enforceable. (Presumably, the state would financially penalize 

certain activities so as to encourage the EPA-favored activities, or the state would have to 

financially incentivize the EPA-favored activities, which is certainly beyond the scope of the 

CAA, let alone Section 111(d).) 

Commenters stated that further, the EPA sets aside all of the historic Section 111 concepts, 

principles, rules, and interpretations reached over 45 years of practice. Commenters said under 

the CPP, emission units are not subject to a source-specific emissions standard; states are. 

Commenters stated that such enforcement would effectively 'federalize' state initiatives and 

policy decisions that are beyond the EPA's direct reach under the CAA. Commenters stated the 

actions of non-emitting unit owners and consumers 'reduce' emissions from emitting units. 

Commenters said the 'standard of performance' becomes a suite of actions mandated by the states 

to change behavior of the general public rather than a rate or mass cap imposed on specific 

existing units or even a technology, which one might expect from a 'standard of performance.' 

Commenters said in short, the EPA cannot find in its historic practice a way to turn the entire 

'integrated grid' into a single source category. Commenters stated so it just creates a new way of 

thinking. Commenters stated as the Supreme Court noted in Utility Air Regulatory Group v. 

EPA, 573 U.S. 2427 (2014), new regulatory powers are simply not discovered in a 45-year-old 

statute.

Commenters stated that when the CAA was promulgated in 1970 or even, perhaps, in 1990, 

when Congress amended the CAA, Congress did not foresee the perceived need to define and 

regulate greenhouse gas emissions, a global pollutant, and did not draft a statute to accommodate 

such a rule. Commenters said this unforeseen circumstance does not allow the EPA to bend the 

Act to suit its needs nor to expand the congressionally-mandated scope of the agency's authority.

Commenters stated in evaluating the validity of the Federal Reserve's interpretation of the Bank 

Holding Company Act in Dimension Financial, the Supreme Court observed that:
74

Congress defined with specificity certain transactions that constitute banking subject to 

regulation. The statute may be imperfect, but the [Federal Reserve] Board has no power to

correct flaws that it perceives in the statute it is empowered to administer. Its rulemaking power 

is limited to adopting regulations to carry into effect the will of Congress as expressed in

the statute. If the Bank Holding Company Act falls short of providing safeguards desirable or 

necessary to protect the public interest, that is a problem for Congress, not the Board or the

courts, to address.

Commenters stated that similarly here, just because the Clean Air Act is an imperfect vehicle for 

the regulation of greenhouse gases does not give the EPA the right to expand its authority to 

include wholesale energy market regulation that is the sole domain of FERC. Commenters said 

by granting itself this authority, it is essentially "fixing" the statute so that it may shoehorn a 

regulatory policy into an act that Congress did not design for such a policy. Commenters stated 

that according to the Supreme Court in Dimension Financial, if the Clean Air Act "falls short of 

providing safeguards desirable or necessary to protect the public interest, that is a problem for 

Congress," not for the EPA to address.

Response 10: We disagree. We discuss our authority to promulgate this rule, including why this 

rule is not inconsistent with the U.S. Supreme Court’s decision in UARG v. EPA, in section IV of 

the preamble and section XXII of the Legal Memo. For the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history. To the extent this comment objects to the 

portfolio approach, which the EPA is not finalizing, the comment is moot.

We also disagree that we are expanding our authority to include wholesale energy market 

regulation. Our emission guidelines simply reflect an achievable emissions limit through the 

application of the BSER and do not in themselves require states or sources to implement the 

BSER. Moreover, these emission guidelines provide states with the flexibility to establish, 

implement, and enforce standards of performance and do not intrude on the regulatory domain of 

FERC or the states. It cannot be said that because environmental requirements may have an 

effect on the wholesale energy market that the EPA is therefore intruding into energy regulation. 

Certainly, in the legislative history of the 1970 CAA Amendments, Congress expressly identified 

power plants as a priority source category for regulation under CAA section 111.

Comment 11: Commenters stated that the CAA gives the EPA power to regulate new sources; 

however, the proposed rule is establishing jurisdiction over existing sources and by extending its 

jurisdiction over existing sources, the EPA is violating the Tenth Amendment of the U.S. 

Constitution, which reserves powers not delegated to the U.S. to the States. Commenters added

that since the existing sources were not regulated by the federal government originally, then the 

States are protected by the Constitution from regulation now, and therefore, the proposed rule 

violates the 5 U.S. Code - 706(2)(B) because it is contrary to a constitutional right.
75

Commenters stated that the Proposed Rule relies upon states to implement far-reaching emission 

reduction measures that the EPA itself has no authority to implement, and that the EPA is forcing 

states to adopt these emission reduction measures in two ways: 1) the EPA proposes to impose 

state goals that are so stringent that states will have no choice but to implement beyond-the-fence 

emission reduction measures to attain the goals, and 2) if a state submits a plan that the EPA 

finds unsatisfactory, the EPA proposes to impose a federal plan on the state. 79 Fed. Reg. at 

34,900. Commenters remarked that because of the stringency of the state goals, the federal plans 

will require state legislative action to establish the beyond-the-fence emission reduction 

measures necessary to achieve the state goals. Commenters stated both scenarios constitute an 

unlawful commandeering of state resources, rendering the Proposed Rule illegal. Commenters

explained that it is well-established that the Tenth Amendment prohibits federal agencies from 

usurping the authority of states, Printz v. United States, 521 U.S. 898, 925 (1997); states also 

may not be forced to administer federal programs. New York v. United States, 505 U.S. 144, 188 

(1992). Indeed, commenters stated, courts have rejected a previous attempt by the EPA to hijack 

state action. Commenters stated that in the 1970s, EPA attempted to commandeer states into 

implementing federal transportation control plans. Commenters said courts rejected the EPA's 

regulations, holding that the EPA could not require states to prescribe auto emissions testing, 

monitoring and retrofit programs, or to designate preferential bus and carpool lanes. Commenters

stated the U.S. Courts of Appeals for the Fourth and Ninth Circuits invalidated the EPA's 

regulations on statutory grounds to avoid constitutional issues(EPA's interpretation of the CAA 

is contrary to the doctrine of constitutional avoidance, dictating that federal statutes should not 

be interpreted so broadly as to raise constitutional concerns about Congress' authority under the 

Commerce Clause. See Solid Waste Agency of Northern Cook County v. United States Army 

Corps of Engineers ("SWANCC"), 531 U.S. 159, 173 (2001)) see Maryland v. EPA, 530 F. 2d 

215, 226 (4th Cir. 1975); Brown v. EPA, 521 F. 2d 827, 838-42 (9th Cir. 1975); and the U.S. 

Court of Appeals for the District of Columbia Circuit ("D.C. Circuit") invalidated the regulations 

on both constitutional and statutory grounds, see District of Columbia v. Train, 521 F. 2d 971, 

994 (D.C. Cir. 1975).(Commenters stated after the U.S. Supreme Court granted certiorari to 

review the statutory and constitutional validity of the regulations, the EPA declined to defend 

them. Commenters said instead, the EPA rescinded some of the regulations and conceded the 

invalidity of those that remained. Commenters stated accordingly, the Supreme Court vacated the 

opinions below and remand for consideration of mootness. See EPA v. Brown, 431 U. S. 99 

(1977)). Commenters stated that in striking down the EPA's transportation regulations, which 

were promulgated as Federal Implementation Plans under Section 110 of the CAA, the D.C. 

Circuit observed that, "[h]ad Congress intended to adopt the novel approach of empowering a 

federal agency to order unconsenting states to enact state statutes and regulations, thereby 

converting state legislatures into arms of the EPA, it most likely would have made that intent 

clear in the statute." Train, 521 F.2d at 984. Commenters said just as Congress authorized no 

such approach under Section 110, it authorized no such approach under Section 111. 

Commenters said to the contrary, the EPA's authority under Section 111(d) is based on its 

authority under Section 110: the EPA must "establish a procedure similar to that provided by 

section 7410 of this title under which each State shall submit to the Administrator a plan which 

(A) establishes standards of performance and (B) provides for the implementation and 
76

enforcement of such standards of performance," 42 U.S.C. section 7411(d)(1) (emphasis added), 

and "prescribe a plan for a State in cases where the State fails to submit a satisfactory plan as he 

would have under section 7410(c) of this title in the case of failure to submit an implementation 

plan." Id. section 7411(d)(2)(A) (emphasis added). Commenters stated that not only would the 

Proposed Rule commandeer state action as a result of the stringency of the goals, courts already 

have specifically rejected the EPA efforts to effectuate state legislative and regulatory action 

through the imposition of a state plan under Section 110, upon which EPA's Section 111(d) plans 

would be modeled. Commenters stated that the Proposed Rule is an improper and illegal 

commandeering of state authority, and cannot be finalized as proposed. 

Commenters stated that applying Section 111(d) to these source categories will impose 

unprecedented burdens on State permitting agencies given the large number of existing sources. 

The Section 111(d) program would be implemented primarily by the States, which would have to 

address all covered sources within their jurisdiction. Commenters stated that this would be a 

significant undertaking, as the EPA envisions that States will adopt a "portfolio approach" that 

extends far beyond the regulated source categories, and, in addition to regulating existing fossil 

fuel-fired EGUs, States will be obligated to develop implementation plans that address the entire 

electricity sector, including renewable energy, nuclear energy, and even consumer choices 

through demand-side energy efficiency programs. By doing so, commenters remarked, the EPA 

would effectively be commandeering States programs such as RPSs and EERSs that are based on 

traditional powers exercised by the States, and it is fundamentally inconsistent with the 

principles of cooperative federalism on which the CAA is based -as well as the Tenth 

Amendment - for the EPA to effectively mandate the manner in which States exercise their own 

authority. See Sections VI.B.-C., infra. Commenters added that even putting this aside, State 

permitting agencies are already struggling under the administrative burdens of existing federal 

programs including GHG permitting programs, NESHAPs, and revised NAAQS and, in many 

cases, the agencies lack the capacity and resources to implement an additional complex and 

expansive permitting program such as that envisioned by EPA in the proposed Section 111(d) 

standards. Commenters contended that it would be irresponsible for the EPA to impose such a 

regulatory burden on the States, particularly without a clear mandate from Congress to do so. 

Commenters stated even if the EPA has the authority to regulate existing electric generating units 

("EGUs") under Section 111(d) of the Clean Air Act, the proposed rule is a complicated system 

of various implementation measures that makes the development of a legally enforceable state 

plan difficult, if not impossible.

Commenters stated if the EPA were granted legislative authority by Congress to preempt state 

regulation of these matters, the method of implementation presented within the Proposed Carbon 

Rule would be deficient because it thrusts the burden of regulation back upon the states.

Response 11: The EPA disagrees with these commenters’ assertions that this action violates the 

federal-state balances embodied in either the U.S. Constitution or the Clean Air Act. As an initial 

matter, to the extent this comment objects to the portfolio approach, which the EPA is not 

finalizing, the comment is moot.
77

With respect the constitutional issue, for reasons discussed in the Legal Memorandum, this rule 

does not violate constitutional principles of federalism embodied in the Tenth Amendment.

Additionally, a federal plan would not unconstitutionally “commandeer” state policies such as 

RPSs because the existence of a federal plan does not inherently require state governments to 

continue implementing those policies. Furthermore, commenters are incorrect in their claim that 

regulation of CO2 emissions of affected EGUs—or of existing EGUs at all—is beyond the 

constitutional reach of the federal government.

2

With respect to comments that this rule violates principles of cooperative federalism under the 

Clean Air Act, the EPA believes that commenters are similarly mistaken. The EPA agrees that 

the CAA—particularly section 110—establishes a state-federal partnership based on cooperative 

federalism. The EPA has explained its view of the cooperative-federalism structure of the CAA 

in other actions.3 EPA also believes that many of the principles embodied in section 110 are 

reflected in section 111(d). For example, both sections provide states the initial opportunity to 

develop a plan that satisfies applicable requirements, and for EPA to review the sufficiency of 

those plans and prescribe a federal plan applicable in states where the state plan is insufficient. 

In the context of section 110, the D.C. Circuit has described the Train-Virginia line of cases as 

erecting a “federalism bar” that constrains EPA’s authority with respect to evaluation of SIPs.4

Some of the commenters selectively quote Train for the proposition that under section 110, the 

EPA is relegated to a secondary role with little ability to ensure that SIPs meet statutory 

requirements. Setting aside the fact that Train predated substantive revisions to the CAA that 

altered the Act in ways relevant to that case’s interpretation of section 110,5 the Train Court

noted that EPA has the authority under section 110 to ensure a SIP complies with CAA 

 

2 See, e.g., FERC v. Mississippi, 456 U.S. 742, 757–58, 766–67 (1982) (citing Nat’l League of 

Cities v. Usery, 426 U.S. 833, 845 (1976)) (noting that private businesses “necessarily are 

subject to the dual sovereignty of the government of the Nation and of the State in which they 

reside,” and upholding the federal government’s Commerce Clause authority against a Tenth 

Amendment challenge); Hodel v. Va. Surface Mining & Reclamation Ass’n, 452 U.S. 264, 282 

(1981) (“the power conferred by the Commerce Clause [is] broad enough to permit 

congressional regulation of activities causing air . . . pollution . . . that may have effects in more 

than one State”); United States v. Lopez, 514 U.S. 549 (1995) (“[w]here economic activity 

substantially affects interstate commerce, [federal] legislation regulating that activity will be 

sustained”).

3 See, e.g., 80 FR 33840, 33876–79 (June 12, 2015).

4 See, e.g., Michigan v. EPA, 213 F.3d 663, 687 (D.C. Cir. 2000). The Train-Virginia line of 

cases are named for the U.S. Supreme Court case Train v. Natural Resources Defense Council, 

Inc., 421 U.S. 60 (1975), and the D.C. Circuit case Virginia v. EPA, 108 F.3d 1397 (D.C. Cir. 

1997).

5 See 80 FR at 33877 & n.82.
78

requirements.6 Furthermore, interpreting the current version of CAA section 110, the U.S. 

Supreme Court recently noted that the cooperative federalism embodied in section 110 is not a 

free-floating principle, but rather is grounded in the text of section 110 itself.7 The Court 

affirmed EPA’s authority to reasonably interpret the requirements of SIPs contained in the Act, 

and to evaluate the sufficiency of those SIPs against the relevant requirements.8

The touchstone of the cooperative-federalism concept outlined in the Train-Virginia line of cases 

is that, under the authority of section 110, the EPA may not legally or functionally require a state 

to adopt a “specific” control measure in its SIP.9 The cases do not stand for the broader 

proposition that 110 imposes no limits on state discretion, or that EPA is prohibited from 

interpreting basic requirements of the Act or reviewing SIP submissions for compliance with 

those requirements.

This view of what cooperative federalism requires under section 110 is consistent with Train, 

where the U.S. Supreme Court stated that the EPA “is relegated by the [1970] Act to a secondary 

role in the process of determining and enforcing the specific, source-by-source emission 

limitations which are necessary if the national standards it has set are to be met.”10 It is also 

consistent with the Virginia decision, where the D.C. Circuit held that the EPA cannot under 

section 110 functionally require states to “adopt[] particular control measures” in a SIP but must 

rather ensure that states have a meaningful choice among alternatives.11 Moreover, it is 

consistent with the D.C. Circuit’s view in Michigan v. EPA, interpreted and applied those 

precedents to require that the budgets established by EPA in an emission trading program must

provide “the covered states real choice with regard to the control measure options available to 

them to meet the budget requirements.”12 It is similarly consistent with the D.C. Circuit’s 

 

6 See 80 FR at 33877–78 (discussing Train, 421 U.S. at 79).

7 EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1600–01 (2014).

8 See id. at 1593 (2014) (citing Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 

837 (1984)); see also Mich. Dep’t of Envtl. Quality v. Browner, 230 F.3d 181, 184–85 (6th Cir. 

2000) (“Although states are given broad authority to design programs, the EPA has the final 

authority to determine whether a SIP meets the requirements of the CAA.”).

9 See 78 FR 12460 at 12489 & nn.89–90.

10 421 U.S. at 79 (emphasis added). 

11 Virginia v. EPA, 108 F.3d 1397, 1415 (D.C. Cir. 1997) (holding that functionally, in that case,

“EPA’s alternative is no alternative at all”); see also Appalachian Power Co. v. EPA, 249 F.3d 

1032, 1047 (D.C. Cir. 2001) (citing Virginia, 108 F.3d at 1406, 1410) (“We did not suggest [in 

Virginia] that under § 110 states may develop their plans free of extrinsic legal constraints. 

Indeed, SIP development . . . commonly involves decisionmaking subject to various legal 

constraints.”). 

12 213 F.3d 663, 687 (D.C. Cir. 2000) (emphasis added). 
79

opinion in Appalachian Power Co. v. EPA, that Virginia “disapproved the EPA’s plan to reject 

SIPs that did not incorporate particular limits upon emissions from new cars.”13

Setting aside the different focuses of sections 110 and 111(d), it is clear that this rule would does 

not transgress those cooperative federalism principles. As described throughout the final rule 

preamble of the CPP, the types of state plans described in this rule provide each state significant 

flexibility in assigning the emission performance obligations to its affected EGUs in the form of 

standards of performance as long as the required emission performance level is met. This 

flexibility allows states to take local circumstances and state policy goals into account in 

determining how to reduce emissions from their affected sources, provided the plan meets 

minimum federal requirements. Each state has discretion to determine the appropriate measures 

to rely upon for its plan. The state may adopt measures that assure achievement of the requisite 

CO2 emission performance rate or state goal by the affected EGUs, and is not limited to the 

measures that the EPA identifies as part of the BSER.

Simply put, this rule does not establish specific emission standards for sources, and leaves states 

“real choice” in how to apply the broad goals of section 111(d) to the specific sources in their 

states. Far from encroaching upon or trampling the principles of cooperative federalism 

underlying the CAA, this rule provides a paradigmatic example of cooperative federalism. This 

issue is further addressed in VIII of the Legal Memorandum accompanying the final rule.

Comment 12: Commenters stated that regulated performance standard can only be imposed on 

the "sources" that actually emit a regulated pollutant. Commenters said emissions from any 

aspect of the source are to be controlled by performance standards at the source. Commenters

stated that the approach in the Proposed Plan diminishes demand, prematurely terminates 

operational useful life of a generating facility, imposes performance standards on the entire 

energy supply chain and does not lie within the authority of the EPA, but rather the legislative 

and regulatory of the United States Congress.

Response 12: The final rule addresses concerns of this comment by limiting regulatory 

requirements to affected EGUs. The final rule does not include demand-side energy efficiency as 

part of the BSER, and takes steps, described in the proposal preamble, to minimize the problem 

of stranded assets.

Comment 13: Commenters stated Congress intended Section 111(d) to be a state-driven process, 

rather than be the subject of federal command-and-control dictate. Commenters said the Section 

111(d) proposal is unlawful because it abrogates states' right under Section 111(d) to state-driven 

emission standards.

Commenters stated section 111(d) grants states the prerogative of 'submit[ting] to the 

Administrator a plan which . . . . establishes standards of performance for . . . existing source[s] . 

. . .' C.A.A. 7411(d)(1)(A), 42 U.S.C. 7411(d)(1)(A). Commenters said in so doing, Congress 

unquestionably intended for states to be the regulators exercising discretion in establishing 

 

13 249 F.3d 1032, 1047 (D.C. Cir. 2001) (citing Virginia, 108 F.3d at 1410) (emphasis added).
80

emission standards, specifically authorizing states to consider such factors as the remaining 

useful life of a given source in the standard-setting process. See Id. Commenters stated in 

contrast, Congress limited the EPA's role to a subsidiary procedural role 'prescrib[ing] 

regulations which shall establish a procedure' for plan submission and determining whether a 

state's submitted plan is satisfactory. See Id.; see also C.A.A. 111(d)(2), 42 U.S.C. 7411(d)(2).

Commenters stated the proposal exceeds the proper scope of the EPA's authority by proposing 

binding, inflexible emission rate limits in the aggregate for a state's entire power sector. 

Commenters said pursuant to the Section 111(d) proposal, once these 'goals' are finalized, states 

will have no authority to change them, despite Section 111(d)'s express grant of authority to the 

states to consider factors such as the remaining useful life of sources in establishing standards. 

Commenters said the EPA does not and cannot identify anything in Section 111(d) or elsewhere 

in the text of the Clean Air Act that authorizes it to displace states' legal authority to establish 

emission standards. Commenters stated as a result, the Section 111(d) proposal cannot be 

reconciled with the EPA's limited statutory authority and the statutory rights specifically 

afforded to states.

Response 13: We disagree with this comment. In the preamble for this rule, we discuss the 

respective roles of the EPA and the states under CAA section 111(d), the application of the 

“remaining useful life” provision in section 111(d)(1), and the state goals.

Comment 14: Commenters stated the proposed rule exceeds Congress' authority under the 

commerce clause, citing in Sebelius, the United States argued that an individual mandate to buy 

health insurance falls within the Commerce Clause power because "the uninsured as a class are 

active in the market for health care, which they regularly seek and obtain," and the mandate 

regulates how individuals finance their participation in that market. 132 S.Ct. at 2589. 

Commenters continued verbatim, the Court disagreed, finding that the federal government 

cannot regulate such individuals as a class because most individuals subject to the mandate "are 

not currently engaged in any commercial activity involving health care." Sebelius at 2590; see 

also Id. at 2589 ("[t]he Framers gave Congress the power to regulate commerce, not to compel

it.") (emphasis in original). Commenters stated that in another case, the Court explained that 

"[w]here economic activity substantially affects interstate commerce, legislation regulating that 

activity will be sustained." United States v. Morrison, 529 U.S. 598, 610 (2000) (emphasis 

added) (citation and punctuation omitted). Commenters stated there is a substantial difference 

between regulating activities underway and compelling new investments. Commenters stated 

EPA may regulate emissions from new or existing sources, but EPA may not constitutionally 

require companies to build new generation not otherwise planned. Commenters stated although 

EPA argues that affected EGUs may be compelled to participate in the markets for redispatch, 

renewable energy and demand-side efficiency because the electric power industry is integrated, 

79 Fed. Reg. at 34836; EPA Legal Memorandum at 71, this is the same argument rejected in 

Sebelius that Congress may compel individuals to participate in the health insurance market 

because those individuals do or will participate in the health care market. Commenters stated that 

as the Court in Sebelius explained, "that does not mean the compelled purchase of the first is 

properly regarded as a regulation of the second. No matter how "inherently integrated" health 
81

insurance and health care consumption may be, they are not the same thing . . ." Sebelius, 132 

S.Ct. at 2591. Commenters stated that just as health care and health insurance are different 

activities, the construction, operation or funding of NGCC, renewable generation facilities, and 

demand-side efficiency programs are different activities than operating an affected facility. The 

Proposed Rule compels [commenters] to engage in commerce by effectively requiring it 

to install new generating units or purchase additional capacity from NGCC, nuclear or renewable 

sources. Commenters stated they are obligated by their requirements contracts with their 

members to provide certain amounts of electricity, and they have sufficient generation capacity 

to do so. By restricting commenters' ability to operate fossil fuel- based generation units, the rule 

impairs their ability to satisfy their contractual obligations. Commenters stated they may not

have sufficient NGCC, nuclear or renewable capacity to replace generation that becomes 

unavailable as a result of the pending rule, and, as noted in Section IV of these comments, the 

commenters may be constrained in their ability to redispatch those resources across the eastern 

and western connections. Commenters stated to have no plans to add capacity serving the 

western connection because they have excess fossil fuel-based capacity there. Commenters may 

nonetheless be forced to engage in compelled commerce to avoid breaching its contracts, which 

Congress has no authority to compel and EPA has no authority to impose. The fact that 

commenters already have some NGCC, nuclear and renewable capacity does not bring the 

compelled purchase of additional capacity within the bounds of the Commerce Clause because 

participation in the markets for NGCC, nuclear and renewable electricity would not be triggered 

by commenters' activity in those markets but rather because of their activity in the markets for

fossil fuel-based generation. 

In addition to unlawfully compelling commerce, commenters stated the proposal to regulate 

beyond the fence line lacks a reasonable connection between the regulatory means selected by 

EPA and the asserted goal of reducing pollution from existing sources, and this presents a 

separate violation of the Commerce Clause. FERC v. Mississippi, 456 U.S. 742, 754 (1982).

Response 14: We disagree with this comment. With respect to commenters’ first argument that 

the proposed rule “exceeds Congress’ authority under the Commerce Clause,” we reiterate that 

CAA section 111(d) emission guidelines do not require affected sources to implement any 

particular system of emission reduction, let alone the BSER. As we explain in section V. of the 

preamble for this rule, an emission guideline reflects the degree of emission limitation achievable 

through the application of the BSER and is provided to states for the development of state plans. 

State plans establish standards of performance for existing sources and may take into account 

(among other factors) the remaining useful life of an existing source when applying a standard of 

performance to any particular source. Even if a particular control technology, such as a scrubber, 

were identified as the BSER, the EPA could not require affected sources to install that particular

control technology as a requirement of an emission guideline. The same is true here. The final 

rule does not compel affected sources to implement any one of the building blocks, let alone all 

three.

We also disagree that the situation in National Federation of Independent Business v. Sebelius, 

132 S. Ct. 2566 (2012), is analogous to regulation under CAA section 111. Sebelius concerns the 
82

scope of Congress’ authority under the Commerce Clause to enact legislation that requires, in 

part, most individuals to maintain “minimum essential” health insurance coverage. Id. at 2580. 

Importantly, the Court observed that “[t]he individual mandate, however, does not regulate 

existing commercial activity. It instead compels individuals to become active in commerce by 

purchasing a product, on the ground that their failure to do so affects interstate commerce.” Id. at 

2587. This, the Court explained, was not granted to Congress through the Commerce Clause. Id. 

at 2589. 

The Court also rejected the Government’s argument that health insurance and health care 

financing are “inherently integrated,” which the Government argued justified the individual 

mandate as within the scope of regulation of health care markets. The Court explained that “[t]he 

proximity and degree of connection between the mandate and the subsequent commercial 

activity is too lacking to justify an exception of the sort urged by the Government. The individual 

mandate forces individuals into commerce precisely because they elected to refrain from 

commercial activity.” Id. at 2591. Therefore, “[s]uch a law cannot be sustained under a clause 

authorizing Congress to ‘regulate Commerce.’” Id.

The regulation of air pollution under the CAA, on the other hand, is well within the scope of 

Congress’ powers to authorize. See, e.g., Miss. Comm’n on Envtl. Quality v. EPA, No. 12-1309, 

pp. 74-80 (D.C. Cir. June 2, 2015) (“[t]here is no doubt that the general regulatory scheme of the 

Clean Air Act has a substantial relation to interstate commerce.”). Further, whereas the Court in 

Sebelius was concerned about compelling individuals to “become active in commerce,” each of 

the affected sources subject to regulation in accordance with this rule are already engaged in 

existing commercial activity – specifically, it is not their failure to engage in interstate commerce 

that is at issue here, rather it is the manner in which they engage in it that is subject to regulation

under CAA section 111(d).

As an additional matter, the fact that the utility power sector is physically interconnected is not 

used to justify the scope of Congress’ Commerce Clause authority; instead, the unique 

characteristics of the industry are relevant in evaluating whether the building blocks are 

adequately demonstrated for this source category. Nothing in Sebelius precludes the EPA from 

considering the physical interconnectedness of the utility power sector when evaluating pollution 

reduction measures that are available to sources for purposes of CAA section 111(d). With 

respect to commenters’ second argument that the proposal to regulate beyond the fence line lacks 

a reasonable connection between the regulatory means selected by EPA and the asserted goal of 

reducing pollution from existing sources, in section V. of the preamble for this rule we explain 

how the BSER is related to emission reductions from the affected EGUs. Finally, for the reasons 

stated in section V of the preamble for this rule, the regulatory means identified by EPA and 

permitted by Congress under section 111(d) (establishing state-specific CO2 goals reflecting CO2

performance rates based on the BSER) are more than reasonably connected to the ends of

reducing CO2 emissions. As a matter of federal constitutional authority, it is sufficient to note 

that CAA section 111(d) is directed at reducing emissions, and that CO2 emissions in particular 

have substantial interstate impacts as described in section II.A of the final rule preamble. See 

Hodel v. Va. Surface Mining & Reclamation Ass’n, 452 U.S. 264, 282 (1981) (“the power 
83

conferred by the Commerce Clause [is] broad enough to permit congressional regulation of 

activities causing air . . . pollution . . . that may have effects in more than one State”). 

Accordingly, there is clearly a rational basis for concluding that the BSER as defined in section 

V of the preamble will reduce CO2 emissions from affected EGUs. Even assuming arguendo

that some individual component of the emission guidelines was not directly related to a valid 

congressional goal—a concern not actually present here—“[i]t is enough that the challenged 

provisions are an integral part of the regulatory program and that the regulatory scheme when 

considered as a whole satisfies this test.” FERC v. Mississippi, 456 U.S. 742, 757 n.22 (1982) 

(quoting Hodel v. Indiana, 452 U.S. 314, 329 n.17 (1981)); Miss. Comm’n on Envtl. Quality v. 

EPA, No. 12-1309, pp. 74-80 (D.C. Cir. June 2, 2015) (“[t]here is no doubt that the general 

regulatory scheme of the Clean Air Act has a substantial relation to interstate commerce.”).

Comment 15: Commenters stated case law interpreting section 110 of the Act, which governs 

the requirements of state implementation plans (SIPs) to attain and maintain national ambient air 

quality standards (NAAQS), helps illustrate why the Proposed Rule exceeds the Agency's 

authority. Commenters continued, stating that courts have explained that states are "given wide 

discretion in formulating" their SIPs under section 110, Union Elec. Co. v. EPA, 427 U.S. 246, 

250 (1976), and made clear that EPA's role is "confine[d] - to the ministerial function of 

reviewing [SIPs] for consistency with the Act's requirements," Luminant Generation Co. v. EPA, 

675 F.3d 917 (5th Cir. 2012). Commenters added that EPA, on the other hand has "no authority 

to question the wisdom of a State's choices of emission limitations if they are part of a plan 

which satisfies the standards of 110(a)(2)." Train v. NRDC, 421 U.S. 60, 79 (1975), and Section 

110 places more constraints on state discretion than does Section 111(d). Commenters stated yet 

not even Section 110 would allow EPA to establish state-specific CO2 emission goals as part of 

a SIP. Commenters concluded that the Agency certainly cannot establish such binding emission 

requirements for the states under Section 111(d), and believes the Proposed Rule is plainly 

inconsistent with the Act.

Response 15: We disagree with this comment for the reasons stated in our response in section 

1.2 regarding cooperative federalism under the CAA, as well as in section VIII of the Legal 

Memorandum accompanying the final rule. Furthermore, commenters are simply incorrect that 

section 110 categorically prohibits the EPA from interpreting the permissible end goals states 

must meet. See, e.g., EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1600–01 

(2014); Michigan v. EPA, 213 F.3d 663, 687 (D.C. Cir. 2000). However, the EPA agrees that 

CO2 is not a criteria pollutant regulated under section 110.

Comment 16: Commenters stated notwithstanding the EPA's apparent recognition (consistent 

with the statutory framework) of the determination of performance standards on the one hand 

and alternative compliance measures available to the states on the other, the EPA has suggested, 

particularly through the NODA, that any technology or other emission reduction strategies that 

may be relied upon by a state in meeting its compliance obligation must in turn be incorporated 

into the BSER determination. Commenters said such analysis (which may be reflective of 

distinct state policy objectives or compliance alternatives) cannot comport with the statutory 

requirements governing the determination of BSER for a source category based on the standards 
84

of performance that are achievable by the sources in that category on a national level. 

Commenters stated to ensure adherence to the framework mandated by Section 111(d), the EPA 

must ensure that the final CPP rule preserves to the states the flexibility to find creative solutions 

for curtailing GHG emissions without a corresponding adjustment to the initial BSER 

determination because of the availability of such strategies. Commenters stated therefore, it is 

essential that the EPA clarify through the CPP that states shall have the full range of flexibility 

afforded by the CAA in developing their state plans. Commenters said this flexibility should 

include an allowance for emerging measures involving the voluntary participation of sources of 

GHG emissions that are not affected sources under the CPP. Commenters acknowledged that 

Section 111(d) contemplates that state plans implementing the emission guidelines must 

establish regulatory obligations for the affected source category, and does not afford the states 

the flexibility to instead impose on distinct sources or source groups the obligation to satisfy the 

emission reduction burden intended for the sources subject to the BSER determination. 

Commenters stated however, Section 111(d) in no way limits the flexibility otherwise available 

to states under Title I of the CAA to allow regulated sources to satisfy their compliance 

obligations through voluntary emission reductions from non-regulated sources. Commenters said 

indeed, Section 111(d) of the CAA specifically references Section 110 of the statute, and notes 

that, once the EPA determines BSER for the given source category and establishes standards of 

performance reflective of the BSER, the states are to follow a "procedure similar to that provided 

by [CAA section 110] which each State shall submit to [EPA] a plan." 42 U.S.C. section 

7411(d)(1).

Response 16: EPA is not finalizing the proposed “portfolio” approach, and will not accept state 

plans that attempt to impose emission standards or other CAA compliance obligations on entities 

other than affected EGUs. The state measures approach provides a path for a state to achieve the 

emission performance level as expressed as a state goal in a way that avoids placing enforceable 

emission standards on affected EGUs (unless and until the backstop is triggered). States will 

have a wide range of flexibility in choosing how to demonstrate their affected EGUs are meeting 

a state goal.

Comment 17: Commenters stated EPA's proposal does not set forth guidelines applicable to 

existing sources at all but instead, EPA seeks to create a state-wide emission bubble by 

reviewing the generation mix in each state and establishing an emission rate limit applicable to 

each state, not to the sources themselves. As a result, commenters continued, EPA is actually 

proposing to regulate the state, not the source but states are not an "existing source" as defined 

by CAA section 111(a)(3) and (6). Commenters stated they are not a "building, structure, 

facility, or installation which emits or may emit any air pollutant..." 42 U.S.C. section 

7411(a)(3). Commenters stated EPA is attempting to "change the basic unit to which the 

[standard applies]...from a single building, structure, facility, or installation the unit prescribed in 

the statute" to a state-wide bubble. ASARCO Inc. v. EPA, 578 F.2d 319, 327 (D.C. Cir. 1978) 

but the "agency has no authority to rewrite the statute in this fashion." Id. Commenters stated in 

ASARCO, the Court expressly rejected EPA's attempt to regulate emissions from an entire plant 

by creating a bubble around it and placing a cap, rather than just the emitting source. 
85

Commenters continued, stating that now, in its Proposed Rule, EPA is attempting to expand the 

bubble concept rejected in ASARCO to encompass each state, and in fact the entire country 

under the assumed interconnection of the national grid, and this effort is unlawful under 

ASARCO, a case EPA does not mention, much less distinguish, in its Legal Memorandum. See 

EPA Legal Memorandum.

Response 17: We disagree. Commenters misconstrue the mechanisms by which standards of 

performance are applied to individual sources under CAA section 111(d). Pursuant to section 

111(d), the EPA develops emission guidelines that reflect the degree of emission limitation 

achievable through the application of the BSER determined in accordance with section 

111(a)(1). These guidelines do not impose any requirements on an existing source. Instead, they 

are used by the states to develop plans, which establish standards of performance for existing 

sources within a state’s jurisdiction and provides for the implementation and enforcement of 

such standards. In applying a standard of performance to any particular source, state plans may 

consider the remaining useful life, among other factors, of an existing source. States may also 

establish more stringent standards as authorized under section 116.

State plans are then provided to the EPA for review as indicated in section 111(d)(2). While 

section 111(d)(2) explains that such plans must be “satisfactory,” Congress did not provide any 

explicit criteria to guide our review. Nevertheless, we explained in the preamble to our section 

111(d) implementing regulations that “it seems clear that some substantive criterion was 

intended to govern not only the Administrator’s promulgation of standards but also [her] review 

of State plans.” 40 F.R. at 53342. We believe that providing each state with an emissions budget 

is consistent with ensuring maximum flexibility in assigning standards of performance to 

individual sources but also provides states with guidelines for submitting a satisfactory plan. In 

this way, a satisfactory state plan may adjust emission limits for each affected facility on a caseby-case basis so long as the overall state emissions budget is not exceeded. This ensures that the 

overriding purpose of section 111 to protect public health and welfare is properly balanced with 

the cooperative intent of section 111(d).

Commenters appeal to Asarco, Inc. v. EPA, 578 F.2d 319 (D.C. Cir. 1978), is also without merit. 

Asarco neither construed the definition of standard of performance nor did it address the 

regulation of existing sources under section 111(d). Specifically, in Asarco, the D.C. Circuit held 

only that the CAA precluded the EPA from allowing sources to avoid regulation under section 

111(b) by employing the so-called “bubble concept,” i.e., an approach that “treat[s] a 

combination of facilities as a single source” in order to “allow a facility whose emissions are 

increased by alterations to avoid complying with the applicable NSPS as long as emission 

decreases from other facilities within the same ‘source’ cancel out the increase from the altered 

facility.” Id., at 326. Asarco did not address whether an emission guideline promulgated in 

accordance with section 111(d) could include a state emissions budget. Moreover, this rule 

neither combines sources nor directly imposes any requirements on the sources themselves.

Furthermore, Asarco was decided before the Supreme Court’s decision in Chevron v. NRDC, 

which held that EPA’s plantwide definition is a permissible construction of the statutory term 
86

“stationary source.” In Chevron, the Court reversed the D.C. Circuit’s rejection of the bubbling 

concept in which the D.C. Circuit based its decision on two of its precedents, including Asarco. 

Accordingly, we do not agree that Asarco is persuasive in light of the Supreme Court’s decision 

in Chevron. Nevertheless, this rule does not combine sources or impose any requirements on 

other entities. The only entities subject to this rule are the individual sources themselves. 

Comment 18: Commenters stated that the proposed rule disregards the FPA, and therefore, an 

additional reason for rejecting EPA's expansive reading of Section 111(d) is the conflict it 

creates with other federal statutes. Commenters stated among those is the Federal Power Act 

("FPA"), which regulates the interstate electricity market and assigns responsibility for that 

market to either the Federal Energy Regulatory Commission ("FERC") or the States. 

Commenters stated that the FPA does not authorize EPA to regulate which producers may sell 

electricity and in what quantity, explaining that the FPA designates FERC as the agency 

responsible for regulating interstate trade in electricity. 16 U.S.C. section 824. Commenters

continued (verbatim) as the DC Circuit has explained, "[u]nder the Federal Power Act ... the 

[Federal Energy Regulatory] Commission is generally charged with regulating the transmission 

and sale of electric power in interstate commerce." Electric Power Supply Ass'n v. Fed. Energy 

Reg. Comm'n, 753 F.3d 216, 219 (D.C. Cir. 2014). Commenters said that it shares that authority 

only with the States, which retain authority to regulate retail transactions in electricity under the 

FPA. Id. at 221 ("States retain exclusive authority to regulate the retail market."). Accordingly, 

commenters stated the Supreme Court has recognized that FERC has "exclusive authority" over 

the wholesale power market, and its "exclusive jurisdiction applies not only to rates but also to 

power allocations that affect wholesale rates." Miss. Power & Light Co. v. Mississippi, 487 U.S. 

354, 371 (1988) (emphasis added). Commenters stated EPA's proposed rule disregards the FPA's 

assignment of authority. Commenters stated the focus of the proposed rule's so-called BSER is 

on changing the supply of energy, with the recognized effect of changing its price. Commenters 

stated the very premise for EPA's proposed rule is that "[t]he electricity system is physically 

interconnected ... and operated on an integrated basis," 79 Fed. Reg. 34,857, thus allowing the 

Agency to alter the entire supply of electricity through seemingly abstract rules imposed at the 

highest level of generality. Commenters stated that as the proposal's routine references to 

substitution between EGUs (including non-use) reveal, the proposed rule's essence is regulation 

of the entire "electricity system" of generation, transmission, and consumption. For example, 

commenters stated EPA anticipates that "construction and operation of new NGCC capacity will 

be undertaken as a method of responding to the proposal's requirements," Id. at 34,876 (emphasis 

added), and it also recognizes that this change to electricity generation will raise the cost of 

electricity, id. At 34,876-77. At the very least, commenters stated, FERC must confirm that 

EPA's proposed rule will not have a negative impact on grid reliability and the supply of 

electricity. EPA has attempted no such coordination, preferring instead to rely on an overly 

generous interpretation of Section 111(d). Commenters stated where federal statutes confer 

authority on one agency, others may not functionally usurp it through ambitious interpretations 
87

of their own governing statutes. See, e.g., Hunter v. FERC, 711 F.3d 155, 157-60 (D.C. Cir. 

2013) (rejecting FERC's attempt to regulate matters committed to the CFTC's exclusive 

jurisdiction); Chamber of Commerce v. Reich, 74 F.3d 1322, 1333-34 (D.C. Cir. 1996) (rejecting 

agency action purportedly based on the Procurement Act when it conflicted with the longerstanding and more topical National Labor Relations Act). Commenters stated this is particularly 

true where the assertion of new power allegedly lies in a later-enacted law that does not 

expressly repeal or curtail the older provision. Hunter, 711 F.3d at 160; see also Traynor v. 

Turnage, 485 U.S. 535, 547 (1988) (citing the "cardinal rule ... that repeals by implication are not 

favored"). In the current situation, commenters stated, the "cardinal rule" is in full effect: 

Congress enacted the FPA in 1920, and the CAA in 1955. Commenters stated the two laws can 

coexist peacefully, and they have for decades, and added that only EPA's new interpretation of 

Section 111(d) threatens to encroach on FERC's responsibility for regulating the electricity 

market. Cf. Hunter, 711 F.3d at 160 ("But [the latter-enacted statute's] text fails to answer the 

question whether FERC may intrude upon the CFTC's exclusive jurisdiction. Commenters said 

because FERC is free to prohibit manipulative trading in markets outside the CFTC's exclusive 

jurisdiction, there is no irreconcilable conflict between the two statutes and therefore no repeal 

by implication"). Commenters stated this unnecessary conflict within the federal government is 

further evidence that EPA lacks authority to administer a system of state-level regulations 

governing the production, transmission, and consumption of electricity. In addition, commenters 

stated that creating a different federal agency charged with regulating the nation's electricity 

supply, the FPA poses another obstacle to EPA's current proposal: it expressly preserves States' 

authority to regulate the consumer energy market. 16 U.S.C. section 824(a) (confining federal 

regulation of the electricity market "only to those matters which are not subject to regulation by 

the States"). Commenters stated that like the Clean Air Act, the FPA creates a federal-state 

partnership for the accomplishment of its goals. Commenters stated the FPA gives to the federal 

government (FERC) control of the wholesale market for electricity, while States retain authority 

to regulate consumer-level transactions. Id. (citing 16 U.S.C. section 824(b)(1)). Commenters 

stated that in Electric Power Supply, the federal government attempted to regulate consumers' 

decisions regarding electricity consumption by "luring" additional electricity to market with 

subsidies funded by additional charges during peak hours. Id. at 223. Commenters stated despite 

FERC's effort to fit within its regulatory mandate, the court concluded that the "lures" at issue 

were "part of the retail market" because they "involve[d] retail customers ... and the levels of 

retail electricity consumption." Id. Commenters stated the same reasoning applies to EPA's effort 

to regulate the actions of retail electricity customers by encouraging them to buy less electricity. 

Commenters stated that in fact, the proposed rule aims to accomplish its goals through the same 

mechanism as Electric Power Supply, namely creating regulatory burdens intended to entice 

energy producers to supply electricity from different EGUs. E.g., 79 Fed. Reg. 34,857. 

Commenters stated that while the earlier case involved luring additional energy onto the grid at 

certain times of day, the current rule attempts to lure energy from preferred sources. Commenters 

stated that in both instances, that conduct encroaches on States' regulatory domain under the 

FPA, and if not the domain of state regulators then certainly the domain of FERC. Indeed, EPA 

recognizes that its proposed rule duplicates measures already taken by the States. E.g., Id. at 

34,858 (admitting that "[m]ore than half the states already have established some form of state-
88

level renewable energy requirements," 30 States have nuclear EGUs, and "[m]ore than 40 states 

already have established some form of demand-side energy efficiency polices"); Id. at 34,851 

(describing the purpose of "block 4" as "increasing state demand-side energy efficiency efforts" 

(emphasis added)). Commenters stated the proposed rulemaking therefore crosses lines not only 

between EPA and FERC but also between the federal and state governments. Commenters said 

where, as here, such lines are drawn by statute, they cannot be redrawn via agency regulations. 

Commenters stated under the Federal Power Act, States have the primary authority to regulate 

the generation and sale of electricity to consumers. Commenters stated where the federal 

government is involved, its authority runs through FERC, not EPA. Commenters stated the latter 

agency must confine itself to traditional end-of-stack BSER rather than imposing macro-level 

regulations that functionally usurp authority left to FERC and to the States.

Commenters stated that the EPA lacks the statutory authority to regulate electricity generation, 

transmission or distribution, explaining that Congress granted these authorities to the Federal 

Energy Regulatory Commission (FERC) and to the states under the Federal Power Act. 

Commenters stated EPA's statutory authorities under Title I of the CAA are limited to regulation 

of air pollutants, and by establishing mandatory goals that presume the application of state 

authority over non-emitting electric generators, EPA has overstepped the bounds of the CAA and 

encroached upon legal authorities the Congress has clearly left to the states.

Response 18: We disagree that we are expanding our authority to include wholesale energy 

market regulation or state retail regulation. Our emission guidelines simply reflect an achievable 

emissions limit through the application of the BSER and do not in themselves require states or 

sources to implement the BSER. Moreover, these emission guidelines provide states with the 

flexibility to establish, implement, and enforce standards of performance and do not intrude on 

the regulatory domain of FERC or the states. It cannot be said that because environmental 

requirements may have an effect on the wholesale energy or retail markets that the EPA is 

therefore intruding into energy regulation. Certainly, in the legislative history of the 1970 CAA 

Amendments, Congress expressly identified power plants as a priority source category for 

regulation under CAA section 111. Further, we note that the EPA is not including building block 

4, demand-side energy efficiency, as a component of BSER in the final rule. Additionally, this 

rule does not regulate renewable energy sources. It identifies the BSER for affected sources, 

which entails substitute generation to zero-emitting generators, but it does not impose emissions 

requirements on such sources. Finally, we note that the EPA has considered reliability issues in 

developing this final rule. For a more comprehensive discussion of reliability issues, as well as 

the EPA’s coordination with both FERC and DOE, please see preamble section VIII.G.2. 

Comment 19: Commenters stated the EPA's use of beyond-the-unit measurements appears to be 

outside the scope of Section 111(d). Commenters said for example, the rule would regulate 

renewable energy sources and energy efficiency although neither are a source category nor meet 

the definition of "stationary source" because they do not emit any air pollutant. Commenters

stated accordingly, the EPA should address these questions regarding the use of beyond-the-unit 

measures.
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Response 19: We disagree with this comment. In the preamble for this rule, we explain that this 

rule does not regulate renewable energy sources or energy efficiency, and that the BSER may 

include measures that are not subject to regulation.

Comment 20: Commenters said the EPA is not authorized by Congress under the CAA to pick 

winners and losers in the energy markets. 

Response 20: We disagree that we are expanding our authority to include wholesale energy 

market regulation nor are we picking winners or losers in energy markets. Our emission 

guidelines simply reflect an achievable emissions limit through the application of the BSER and 

do not in themselves require states or sources to implement the BSER. Moreover, these emission 

guidelines provide states with the flexibility to establish, implement, and enforce standards of 

performance and do not intrude on the regulatory domain of FERC or the states. It cannot be said 

that because environmental requirements may have an effect on the wholesale energy market that 

the EPA is therefore intruding into energy regulation. Certainly, in the legislative history of the 

1970 CAA Amendments, Congress expressly identified power plants as a priority source 

category for regulation under CAA section 111.

Comment 21: Commenters stated the Clean Air Act does not allow the EPA to regulate 

greenhouse gas emissions from existing coal-fired power plants under Section 111(d) because 

coal-fired power plants are already regulated by the EPA under Section 112 of the Clean Air Act. 

Commenters stated that recently, attorneys general from nine states filed an amicus brief to stop 

EPA's proposal for this very reason, saying that the proposal violates the literal terms of the 

Clean Air Act. Commenters added that even if the EPA believes it has the basic authority to 

regulate, Section 111(d) allows EPA to set emission standards based solely on emission 

reductions that can be achieved inside the fence; however, this proposal requires substantial 

reductions outside the fence. Commenters closed stating that last year, before the proposal 

was issued, attorneys general from 17 states warned EPA that the agency does not have authority 

to require emission reductions outside the fence.

Commenters stated EPA lacks the legal authority to adopt that Rule. . . . EPA offers only one 

legal basis for the Rule: the rarely invoked Section 111(d) of the Clean Air Act ("CAA"). See 42 

U.S.C; 7411(d). Commenters stated the problem is that Section 111(d) affirmatively excludes 

precisely what EPA is attempting to do in the Proposed Rule. Commenters explained that EPA 

lacks authority under the plain text of Section 111(d), as it appears in the US Code, to 

promulgate the Proposed Rule. Commenters stated Section 111(d) expressly prohibits EPA from 

regulating "any air pollutant... emitted from a[n] [existing] source category which is regulated 

under [the national emission regime in Section 112 of the CAA]." 42 U.S.C. 7411(d). 

Commenters stated given that EPA has imposed extensive and onerous regulations on existing 

coal-fired power plants under Section 112, the agency cannot now use Section 111(d) to require 

regulation of CO 2 emissions from those same existing plants. Commenters continued that this 

conclusion is apparent and EPA concedes in its Legal Memorandum that a "literal reading" of 

Section 111(d) prohibits the Proposed Rule. Mern. 26; see also 70 Fed. Reg. 15,994, 16,032 

(Mar. 29, 2005) (EPA making the same admission in a prior rulemaking). Commenters continued 
90

stating that the only textual justification that EPA's Legal Memorandum offers for departing 

from the "literal" terms of Section 111(d) is unpersuasive. Commenters explained that the 

Agency relies entirely on a one sentence clerical entry in the 1990 Amendments to the Clean Air 

Act that was not codified in the U.S. Code but appears in the Statutes at Large and that EPA has 

admitted that entry was clearly a mistake because it sought to make a technical correction 

rendered moot by another amendment. See 70 Fed. Reg. at 16,031 (describing the entry as a 

"drafting error"), Nevertheless, commenters said, EPA now claims that it must give meaning to 

this mistake and, as a result, has announced an interpretation of Section 111(d) that directly 

conflicts with the language in the U.S. Code. Commenters stated EPA's interpretation rewrites 

Section 111(d) from a prohibition on the regulation of "any air pollutant . . . emitted from a 

source category which is regulated under [Section 112]," as stated in the U.S. Code, to a more 

limited prohibition on the regulation of "any hazardous air pollutant" emitted from such a source 

category. Commenters explained that this sort of reasoning would be wrong under any 

circumstance, but it is particularly improper here, where it is being offered as the justification for 

what commenters stated is one of the most costly regulations in this Nation's history.

Commenters stated that the only authority invoked by EPA for the requirements in the Proposed 

Rule is Section 111(d) of the Clean Air Act, a little-used provision that grants EPA limited 

power to require States to regulate air pollutants from existing sources. Mem. 11-12. 

Commenters continued that as it appears in the U.S. Code, Section 111(d) requires the EPA 

Administrator under narrow circumstances to "prescribe regulations which shall establish a 

procedure . . , under which each State shall submit to the Administrator a plan which establishes 

standards of performance" for certain existing sources and certain air pollutants. Among other 

things, commenters stated, the statutory provision specifically excludes from the Administrator's 

authority the power to prescribe regulations relating to "standards of performance for any 

existing source for any air pollutant ... emitted from a source category which is regulated under 

section 7412 of this title [i.e., Section 112 of the CAA]." 42 U.S.C. 7411(d), EPA admits in its 

Legal Memorandum for the Proposed Rule that "a literal reading of that language" means that 

"EPA c[an] not regulate any air pollutant from a source category regulated under section 112" of 

the Clean Air Act. Mem. 26 (emphasis added); accord 70 Fed. Reg. at 16,032 (EPA reaching the 

same conclusion). Commenters stated that Section 111(d)'s plain text provides that if an existing 

source category is regulated under Section 112, that source category may not also be regulated 

under Section 111(d). Commenters added that the regime codified in Sections 112 and 111 is 

part of a measured, coherent approach to regulating air pollutants from new and existing 

pollution sources. Section 112 of the Clean Air Act concerns national emissions standards for 

hazardous air pollutants ("HAPs") emitted from any number of new and existing sources. See 42 

U.S.C. 7412. Whether a source category is regulated under Section 112 is generally dependent 

upon a number of factors. Id. 7412(c). With regard to coal-fired power plants, commenters

posited that Congress specially provided that those sources need only be regulated under Section 

112 if the Administrator finds such regulation to be "appropriate and necessary." Id. 7412(n). 

Commenters stated Section 111(d) in turn addresses the emission of air pollutants emitted from 

existing sources not regulated under Section 112. Specifically, commenters stated, when EPA 

has chosen not to regulate a source category nationally under Section 112, emissions from 
91

existing sources within that category must be subject instead to state-by-state emission standards 

under Section 111(d), assuming certain other predicates have been satisfied. Commenters stated 

the rest of Section 111, which is not at issue here, is not restricted by the scope of Section 112 

and concerns national emissions standards for air pollutants emitted from new sources. 

Commenters added that in the present case, it is clear that EPA has no authority under Section 

111(d) to regulate any "emission from coal-fired power plants, including CO2 emissions. EPA 

categorized coal-fired power plants as part of a "source category" under Section 112 in 2000, see 

65 Fed. Reg. 79,825, 79,826 (Dec. 20, 2000), and the D.C. Circuit in 2008 rejected EPA's 

attempt to withdraw that finding, see New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008). Then,

commenters stated that in 2012, EPA imposed significant Section 112 restrictions on coal-fired 

power plants, see 77 Fed. Reg. 9,304 (Feb. 16, 2012); 40 C.F.R. Part 63 subpart UUUUU, which 

the D.C. Circuit recently upheld, see also White Stallion Energv Ctr., LLC v. EPA, * F.3d._, 

2014 WL 1420294 (D.C. Cir. Apr. 15, 2014). Commenters stated that under the "literal" reading 

of Section 111(d), Mem. 26, these rules regulating existing coal-fired power plants under Section 

112 prohibit EPA from invoking Section 111(d) to adopt the Proposed Rule.

Commenters stated EPA's other policy argument is "the fact that the EPA has historically 

regulated non-HAPs under Section 111(d), even where those air pollutants were emitted from a 

source category actually regulated under section 112." Mem. 26. Commenters stated it is no 

answer to the unambiguous textual requirement in the 1990 Amendments to point to EPA's preamendment practice of regulating non-HAPs under Section 111(d), explaining EPA once had the 

power of regulating existing source categories on separate regulatory tracks, See Mem. 9-10 & n. 

17, and when Congress amended the Clean Air Act in 1990 to require EPA to regulate more 

HAPs under Section 112, it paired that increased power with a textual limitation----embodied in 

Section 111(d) against using that enhanced authority to impose duplicative regulations on the 

same existing source categories. Commenters stated that EPA's argument that the "literal" terms 

of Section 111(d) would prevent it from using a provision that it has only used to regulate "four 

pollutants from five source categories" in "forty years," Mem. 9, cannot provide a basis for 

disregarding the literal terms of the Clean Air Act.

Commenters questioned EPA's authority under 111(d) to undertake such drastic measures to alter 

the manner in which electric energy is produced in the US: this concern is heightened Section 

112 regarding regulation of major sources, such as power plants.

Commenters stated the Clean Air Act forbids regulating sources under Section 111(d) if they are 

regulated under Section 112 of the Act, and existing electric utility generating units are regulated 

under Section 112. 

Commenters stated the proposed rule is unlawful because EPA has chosen to regulate coal-fired 

power plants under Section 112 of the Clean Air Act, 42 U.S.C., 7412. Commenters stated 

Section 111(d) specifically prohibits EPA from invoking Section 111(d) where the "source 

category . . . is regulated under section [112]. . . ." 42 U.S.C., 7411(d)(1)(A)(i). Commenters 

stated EPA should abandon its cynical attempt to evade this specific prohibition on its authority 

found in the Clean Air Act's plain text.
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Commenters stated the Supreme Court has explained, "EPA may not employ [Section 111(d)] if 

existing stationary sources of the pollutant in question are regulated under . . . the hazardous air 

pollutants program, [Section 112]." Am. Elec. Power Co., Inc. v. Connecticut, 131 S. Ct. 2527, 

2537 n.7 (2011). Commenters stated this unambiguous statutory prohibition is grounded in 

Congress's understanding that existing sources - unlike new sources - should not be subject to 

double regulation, under two different regulatory regimes, in light of special concerns such as 

reliance and sunk costs. Commenters continued, stating that in 2000, EPA took the discretionary 

step of classifying power plants as part of a "source category" under Section 112. 65 Fed. Reg. 

79,825, 79,830 (Dec. 20, 2000). Then, in 2012, EPA imposed regulations on these power plants 

under Section 112. 77 Fed. Reg. 9,304 (Feb. 16, 2012). Commenters stated that given that 

existing coal-fired power plants are now extensively regulated under Section 112, what EPA has 

admitted are the "literal" terms of the Clean Air Act prohibit EPA's present effort to impose yet 

more onerous regulations on these same plants under Section 111(d). Mem. at 26. 

Commenters stated if one were to accept EPA's assertion that it must give meaning to an 

impossible-to-execute clerical amendment, Mem. at 26, the proposed rule would still be 

unlawful. Commenters stated that if the conforming amendment is executed separately from the 

substantive amendment, two different prohibitions on EPA's Section 111(d) authority would 

arise. Commenters stated that under one prohibition - in text of the Clean Air Act as reflected in 

the United States Code - EPA would be prohibited from regulating under Section 111(d) any 

emissions from any source categories actually regulated under Section 112. Commenters stated 

that under the "other" prohibition - the one embodied by the conforming amendment - Section 

111(d) could not be used to regulate pollutants subject to regulation under Section 112, even if 

EPA has chosen not to regulate the particular source category at issue. (Given that EPA is not 

required to regulate all sources of Section 112-regulated hazardous air pollutants under Section 

112, 42 U.S.C. - 7412(k)(3)(B)(ii), this category would almost certainly leave some sources of 

hazardous air pollutants unregulated. Indeed, a special provision of Section 112 permits EPA 

significant leeway not to regulate power plants at all under Section 112. Id. - 7412(n)(1)) Thus,

commenters added, if EPA "give[s] effect, if possible, to every word Congress used," Reiter v. 

Sonotone Corp., 442 U.S. 330, 339 (1979), it would be prohibited from invoking Section 111(d) 

both to regulate any source categories actually regulated under Section 112 and to regulate any 

pollutants subject to regulation under Section 112. Accordingly, commenters stated, even if 

EPA's approach of executing the conforming amendment into a separate "version" of Section

111(d) were permissible -which, to be clear, it is not - this would not salvage the proposed rule.

Commenters stated the Clean Air Act expressly prohibits EPA from regulating GHG emissions 

from fossil fuel-fired power plants under Section 111(d) because those source categories are 

already regulated under Section 112. Commenters stated Section 112 authorizes EPA to establish 

NEHSAPs to regulate hazardous air pollutants ("HAPs") from specific source categories. 

Commenters explained that the authority to regulate emissions from certain sources under 

Section 111(d) is, in turn, defined by the scope of Section 112., and the plain meaning of this 

provision prohibits EPA from promulgating emissions guidelines for existing sources under 

Section 111(d) if the source category is regulated under Section 112. Commenters stated this 
93

straightforward interpretation of Section 111(d) has been supported by the courts and 

consistently implemented by EPA. Commenters stated EPA is proposing to regulate through this 

action "existing electric generating units". Commenters closed, stating that these same units are 

already regulated under 40 CFR 63 Subpart UUUUU, and as such, EPA is not allowed to 

regulate those same affected units under the provisions of 111(d).

Commenters stated that the plain text of Section 111(d) expressly prohibits the agency from 

regulating any air pollutant emitted from a source category regulated under Section 112 of the 

CAA. "Given that EPA has imposed extensive and onerous regulations on existing coal-fired 

power plants under Section 112, the agency cannot now use Section 111(d) to require regulation 

of CO2 emissions from those same existing plants. This conclusion is so apparent," commenters 

wrote, "that even EPA concedes in its Legal Memorandum that a literal reading of Section 

111(d) prohibits the proposed rule."

Commenters stated first that the statutory language of Section 111(d) is a product of differing 

House and Senate versions. Commenters said under the Senate version, unless a particular air 

pollutant emitted by existing sources was regulated by one of several other listed Clean Air Act 

provisions, existing sources emitting that pollutant could be regulated under Section 111(d). 

Commenters stated in contrast, the House version prohibits existing sources from being regulated 

under Section 111(d) if the existing sources are regulated under Section 112. Commenters stated 

that under prevailing rules of legislative construction and case law regarding harmonization of 

conflicting statutory provisions, the House provision controls. Commenters said effective in 

2012, the EPA already regulates coal-fired power plants under Section 112 air toxics authority in 

the Mercury and Air Toxics Standard. Commenters stated that therefore, the EPA has no 

authority to regulate existing coal-fired power plants a second time under Section 111(d). 

Commenters said that second, Section 111(d) requires the EPA to issue a valid new source 

performance standard under Section 111(b) before issuing an existing source standard. 

Commenters stated that based on flaws in the proposed NSPS and modified/reconstructed source 

standard, it is doubtful that either of the provisions will be lawfully finalized. Commenters said 

that therefore, the EPA has not satisfied this prerequisite to issue the Section 111(d) rule.

Commenters stated Section 111(d) prohibits EPA from adopting emission guidelines for existing 

sources from a source category when the Agency has already regulated that source category 

under section 112, adding EPA listed coal- and oil-fired EGUs as a "source category" under 

section 112 in 2000, and regulated emissions from these sources in 2012 under the Mercury and 

Air Toxics Standards ("MATS"). Commenters stated Section 111 is not ambiguous, and EPA 

therefore is not entitled to deference in interpreting that provision. Commenters stated the plain 

language of the Act prevents EPA from regulating EGUs under section 111(d). Commenters

ended, stating a drafting error in the 1990 CAA amendments does not vest the Agency with the 

authority it claims.

Commenters stated because EPA has already promulgated a national emission standard for 

existing coal-fired power plants under section 112, it may not promulgate the emission 

guidelines it has proposed here. 
94

Commenters stated that DEP questions EPA's authority to regulate CO2 emissions from fossilfuel fired EGUs under CAA Section 111(d). Commenters stated existing fossil fuel plants are 

currently regulated under Section 112 of the CAA. Commenters stated that in February 2012, 

EPA promulgated a standard for mercury and certain other air toxins from fossil fuel power 

plants under the National Emission Standards for Hazardous Air Pollutants program authorized 

under Section 112 of the CAA. Commenters stated Section 111(d) allows EPA to mandate 

standards for emissions that are not "from a source category which is regulated under [Section 

112]." Commenters stated DEP questions whether EPA has the authority to promulgate the 

proposed Clean Power Plan because the source category of fossil fuel power plants is now 

regulated under Section 112.

Commenters stated that the EPA does not have the legal authority to promulgate this proposed 

regulation. Commenters said Section 111(d) of the Clean Air Act, as it appears in the United 

States Code, clearly prohibits EPA from regulating "any air pollutant emitted from a source 

category which is regulated under [section 112 of the Clean Air Act]." In fact, commenters stated 

the EPA conceded this fact in New Jersey v. E.P.A.: This requires vacation of CAMR's 

regulations for both new and existing EGUs. Commenters stated EPA promulgated the CAMR 

regulations for existing EGUs under section 111(d), but under EPA's own interpretation of the 

section, it cannot be used to regulate sources listed under section 112; EPA thus concedes that if 

EGUs remain listed under section 112, as the commenters hold, then the CAMR regulations for 

existing sources must fall. 

Commenters stated the court clearly states that the EPA conceded the issue that section 111(d) 

could not be used to regulate air pollutants emitted from the regulated source category. 

Commenters said therefore, the EPA is legally barred by statute and by the legal theories of 

collateral estoppel or res judicata from now regulating greenhouse gas emissions from existing 

sources covered under section.

Response 21: EPA disagrees that it may not promulgate regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble. Further, EPA’s views on arguments presented by the commenters, including 

commenters’ discussion of the AEP opinion and of the Senate amendment, are also discussed in 

EPA’s briefs in the Murray Energy and West Virginia cases, No. 14-1112, No. 14-1146, and No. 

14-1151 (D.C. Cir.).

Comment 22: Commenters stated that by going "outside the fence line" in setting standards, 

EPA developed standards for existing units that are more stringent than new source performance 

standards (NSPS) for new generating units, and this approach establishes a policy with no basis 

in the statute or regulatory guidance.

Response 22: We disagree with this comment. In section V. of the preamble for this rule we 

discuss the relative stringency of the section 111(b) and (d) rules.
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Comment 23: Commenters stated EPA limit its BSER finding to measures that have been 

demonstrated as capable of being undertaken, achieved, and enforced by individual coal-fired 

EGUs acting alone, and EPA should not consider, as part of the BSER, anything that would 

require sources to obtain or rely on offsite emission reductions to achieve compliance. 

Accordingly, commenters concluded, EPA should remove and/or replace the Proposed Rule's 

Building Blocks 2-4.

Response 23: We disagree with this comment. We address this point in discussing our basis for 

building blocks 2 and 3 in section V of the preamble for this rule.

Comment 24: Commenters stated Section 111 governs 'affected sources,' not 'affected entities,' a 

term that exists nowhere in Section 111. Commenters said the EPA's authority extends to setting 

procedures for states to set standards of performance for affected sources, not re-engineering the 

entire electric supply system in the U.S. The commenters stated that the D.C. Circuit Court in 

1978 limited Section 111 regulation to a single stationary source, ruling against even allowing 

the 'bubble' approach of including the entire plant as the 'source' to be regulated. If the courts 

have opined that a 'bubble' approach is illegal under 111, the commenters called into question the 

EPA's assertion of authority to regulate 'outside the fence' entities.

Response 24: We disagree with this comment. The final rule limits the regulatory requirements 

to affected EGUs. As discussed in section V of the preamble for this rule, the EPA is establishing 

emission guidelines for states and is not overstepping its authority because it is not reengineering 

the entire electric supply system in the U.S.

Commenters appeal to Asarco, Inc. v. EPA, 578 F.2d 319 (D.C. Cir. 1978), is without merit. 

Asarco neither construed the definition of standard of performance nor did it address the 

regulation of existing sources under section 111(d). Furthermore, Asarco was decided before the 

Supreme Court’s decision in Chevron v. NRDC, which held that EPA’s plantwide definition is a 

permissible construction of the statutory term “stationary source.” In Chevron, the Court 

reversed the D.C. Circuit’s rejection of the bubbling concept in which the D.C. Circuit based its 

decision on two of its precedents, including Asarco. Accordingly, we do not agree that Asarco is 

persuasive in light of the Supreme Court’s decision in Chevron. 

Even assuming arguendo that Asarco remains good law, the D.C. Circuit held only that the CAA 

precluded the EPA from allowing sources to avoid regulation under section 111(b) by employing 

the so-called “bubble concept,” i.e., an approach that “treat[s] a combination of facilities as a 

single source” in order to “allow a facility whose emissions are increased by alterations to avoid 

complying with the applicable NSPS as long as emission decreases from other facilities within 

the same ‘source’ cancel out the increase from the altered facility.” Id., at 326. Asarco did not 

address whether a standard of performance could be based on a source’s ability to achieve onsite emission reductions by availing itself to off-site measures. Nevertheless, this rule does not 

combine affected EGUs or impose any requirements on other “affected entities.”
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Comment 25: Commenters stated that paradoxically for a rule governing existing coal-fired 

generation, three of the four "building blocks" used to identify state-specific reduction targets 

consist of reductions projected from non-coal generation options or other reduction measures. 

Commenters also addressed the issue of whether EPA may properly consider such "outside the 

fence" reductions in developing emission guidelines for coal-fired power plants under Section 

111(d). Commenters added if one sets that issue aside, these particular building blocks provide 

scant basis for setting realistic emission reduction targets for Kentucky. Commenters closed, 

stating EPA's reliance upon these flawed factors exceeds its statutory authority 

Commenters stated EPA has chosen an unprecedented and legally unsupportable interpretation 

of the Clean Air Act. Commenters' organizations supported the legal position enumerated by the 

Governors of 18 states in their 9 September 2014 letter to President Obama, which reads: "The 

unambiguous language of the CAA expressly prohibits EPA from using Section 111(d) to 

regulate power plants because EPA already regulates these sources under another section of the 

Act. Moreover, even if the Agency did have legal authority to regulate power plants under 

111(d), it overstepped this hypothetical authority when it acted to coerce states to adopt 

compliance measures that do not reduce emissions at the entities EPA has set out to regulate. 

Under federal law, EPA has the authority to regulate emissions from specific sources, but that 

authority does not extend outside the physical boundaries of such sources (i.e., "outside the 

fence"). In attempting to regulate outside the fence, the Agency's proposal not only exceeds the 

scope of federal law, but also, in some cases, directly conflicts with established state law."

Commenters stated the fact is that in the proposed ESPS, the EPA asserts for the first time that it 

can look "beyond the fenceline" of "affected facilities" when it conducts a BSER analysis and 

incorporate emissions reduction opportunities that can be implemented by unrelated third parties. 

Commenters said the EPA's interpretation here is unlawful, arbitrary, and capricious because the 

EPA fails to provide a reasoned basis for changing its interpretation. See Motor Vehicle Mfrs. 

Ass'n v. State Farm Mut. Auto, Ins. Co., 463 U.S. 29, 43 (1983) (In deciding whether an agency 

action is arbitrary and capricious, this Court considers whether "the agency [examined] the 

relevant data and articulate[d] a satisfactory explanation for its action including a 'rational' 

connection between the facts found and the choice made.") Commenters stated although courts 

have acknowledged that "an agency is not locked into the first interpretation of a statute it 

embraces," see Ramaprakashc v. FAA 346 F.3d 1122, at 1125 ("Agencies are free to change 

course as their expertise and experience may suggest or require."), the Supreme Court also has 

made clear that when an agency changes its course, it is "obligated to supply a reasoned analysis 

for the change." State Farm, 463 U.S. at 42. Commenters said if an agency without explanation 

were to make an adjudication which is not consistent with the agency's previously established 

standards, the troubling question would arise whether the agency has lawfully changed its 

standard, or whether it has arbitrarily failed to adhere to its standard, which it may not lawfully 

do. See Huntington Hosp., 319 F.3d at 79; see also Fox Television Stations, Inc. v. Fed. 

Commc'ns Comm'n, 489 F.3d 444, 461 (2d Cir. 2007) rev'd and remanded on other grounds sub 

nom. F.C.C. v. Fox Television Stations, Inc., 556 U.S. 502 (2009). Commenters stated in the 
97

proposed ESPS, the EPA fails to offer such a reasoned analysis and would be hard pressed to do 

so given the Clean Air Act's definition of "source" in Section 111.

Commenters stated the EPA reaches far beyond the affected source category and requires 

emissions reductions that can only be met by looking beyond the sources that are the actual 

subject of the regulation (fossil fuel-fired EGUs) to the rest of the energy sector as well as 

consumer demand for electricity. Commenters said in implementing this regulation, the EPA 

seeks to elevate itself to be the country's preeminent regulator of energy, which is not only well 

beyond its institutional competence, but also well beyond its authority in the Clean Air Act to 

address air pollution and in violation of numerous other federal and state laws.

Commenters state that EPA has intruded into regulatory spheres where it has not jurisdiction and 

no expertise which has resulted in a proposal that will seriously harm markets and electricity 

reliability if implemented. For example, building block 2 is an unprecedented intrusion into areas 

that the FPA has made exclusively subject to FERC’s jurisdiction. 

Commenters state that the proposed rule is unlawful because it ignores a fundamental 

requirement of Section 111: that its standards regulate the emissions performance of (and are 

achievable by) individual sources based on measures that can be incorporated into the design or 

operation of the source itself. This basic focus on individual sources is evident in the text of the 

statute itself and is a characteristic feature of every other Section 111 rulemaking.

Response 25: We disagree with these comments. We discuss our basis for including the 

measures in building blocks 2 and 3 in the BSER in section V of the preamble for this rule, 

including our reasons for not limiting the BSER to the measures in building block 1, as well as 

why relying on these measures as the BSER does not represent over-reaching. Further, the EPA 

is not intruding into FERC’s exclusive jurisdiction under the FPA. Our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. Moreover, these emission 

guidelines provide states with the flexibility to establish, implement, and enforce standards of 

performance and do not intrude on the regulatory domain of FERC or the states. It cannot be said 

that because environmental requirements may have an effect on the wholesale energy market that 

the EPA is therefore intruding into energy regulation. Certainly, in the legislative history of the 

1970 CAA Amendments, Congress expressly identified power plants as a priority source 

category for regulation under CAA section 111. 

Comment 26: Commenters stated while the EPA has the authority to provide flexible 

compliance options, the EPA's enforcement authority under Section 111 is clearly limited to new 

and existing sources in the listed source categories. Commenters said Section 111 certainly does 

not provide the EPA with the authority to impose enforceable obligations on entities that may be 
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involved in implementation of the "outside the fence" measures considered by the EPA in setting 

its proposed performance goals. Commenters said therefore, to the extent that a regulated source 

adopts a compliance strategy involving implementation of "outside the fence" measures by nonjurisdictional entities, it is sufficient for a state implementation plan to provide federal 

enforceability for the performance goal imposed on the regulated source, rather than compliance 

measures performed by non-jurisdictional entities. Commenters said the source (or state) relying 

on outside the fence reductions has the ability to make measures performed by non-jurisdictional 

entities legally enforceable through the mechanisms of contract or agreed order. Commenters

stated however, any requirements for federal enforceability should be deemed satisfied so long as 

federally enforceable obligations in the nature of performance goals are placed on the state and 

regulated sources subject to the statutory requirements. Commenters stated to expand federal 

enforceability beyond those entities would exceed the scope of EPA's authority under Section 

111.

Response 26: In this rule, the EPA is not requiring or authorizing state plans to impose 

requirements on entities other than affected EGUs.

Comment 27: Commenters stated that a ''standard of performance" is a source-specific limit, and 

the CAA defines "standard of performance" generally as "a requirement of continuous emission 

reduction, including any requirement relating to the operation or maintenance of a source to 

assure continuous emission reduction." Commenters stated that in section 111 specifically, a 

"standard of performance" is defined as "a standard for emissions of air pollutants which reflects 

the degree of emission limitation achievable through the application of the best system of 

emission reduction which (taking into account the cost of achieving such reduction and any nonair quality health and environmental impact and energy requirements) the Administrator 

determines has been adequately demonstrated." Commenters stated consistent with the 

interpretation of "standard of performance" as a source specific requirement, Congress directed 

that "in applying a standard of performance to any particular source" states may "take into 

consideration, among other factors, the remaining useful life of the existing source to which such 

standard applies. " Commenters stated that a standard of performance is "a requirement" which

111(d) contemplates states ''applying" to a "particular source." Commenters then explained that 

this Proposed Rule would require compliance measures beyond the physical or legal control of 

the emission sources, and of the four measures, or BSER "building blocks" used by EPA to 

establish statewide standards of performance, only the first- heat-rate improvements at coal-fired 

steam generating units- may be executed at an affected source. Commenters stated the remaining 

three "building blocks" involve shifting generation function from coal- to gas-fired plants, 

replacing fossil fuel generation with renewable energy resources, and avoiding generation 

through end-use efficiency measures. Commenters continued, stating that in the Proposed Rule, 

EPA interprets the use of "system" in "best system of emission reduction" to encompass 

''outside-the-fenceline" measures. Commenters stated EPA reasons that a "system" is a ''set of 

things"; and, in turn, a "system of emission reduction" is a ''set of things" which an affected 

source may utilize to reduce CO2 emissions. Commenters stated EPA presumes that reducing 

generation and fuel use at an "affected EGU" would reduce the CO2 emissions from an affected 
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source. Commenters argued that EPA's interpretation of "system" conflicts with standard canons 

of statutory interpretation. Commenters said "The definition of words in isolation ... is not 

necessarily controlling." Rather, commenters added, interpretation of a word or phrase depends 

upon reading the whole statutory text, considering the purpose and context of the statute, and 

consulting any precedents or authorities that inform the analysis." Here, in the context of 

emission controls, commenters contended, the Clean Air Act consistently refers to "systems" as 

source-specific measures. There is no basis for departing from this usage in section 111(d). 

Commenters stated EPA's interpretation of "system" conflicts with the agency's past application 

of section 111(d). Commenters remarked that EPA's interpretation of "system" conflicts with 

precedent defining the scope of compliance measures contemplated by the CAA. Commenters 

stated the D.C. Circuit previously rejected interpretations of "best system of emission reduction" 

that resulted in aggregate, facility-wide, emission limits rather than an emission limit for 

individual sources. Commenters cited in ASARCO v. EPA, the court invalidated EPA 

regulations that would "allow a plant operator who alters an existing facility in a way that 

increases its emissions to avoid application of the NSPSs by decreasing emissions from other 

facilities within the plant." Commenters stated the court rejected EPA's assertion of " 'discretion' 

to define a stationary source as either a single facility or a combination of facilities," reasoning: 

EPA has attempted to change the basic unit to which the NSPSs apply from a single building, 

structure, facility or installation the unit prescribed in the statute to a combination of such units. 

Commenters stated the agency has no authority to rewrite the statute in this fashion. Commenters 

added that here, by applying standards of performance to the entire power sector rather than 

individual "existing sources," EPA has asserted even broader authority. Commenters added if 

EPA cannot apply performance standards to several sources at a single industrial site 

collectively, the narrower "best system of emission reduction" cannot be interpreted to 

encompass measures and emission limits applied to the entire electric utility sector. Commenters

noted that since the publication of this Proposed Rule, the Supreme Court issued a decision 

noting limits on EPA's authority expand the scope of measures that may be required to achieve 

an emission limit. Commenters stated that in Utility Air, the Court upheld EPA's decision to 

require "best available control technology" (BACT) for greenhouse gases emitted by sources 

already otherwise subject to prevention of significant deterioration (PSD) review. Commenters 

stated the Court observed that the petitioners' concerns about unbounded regulatory authority 

were mitigated by limitations on what EPA could reasonably require as BACT stating, "for one, 

BACT is based on 'control technology' for the applicant's "proposed facility," therefore it has 

long been held that BACT cannot be used to order a fundamental redesign of the facility." 

Commenters stated the Court's reasoning hinged on the petitioners' failure to demonstrate that 

EPA would implement its proposal broadly and that the relevant emission standard, BACT, was 

limited. For several reasons, commenters remarked, the Supreme Court's observations with 

respect to BACT should inform the scope of section 111 (d) "standards of performance." 

Commenters stated both terms are "emission limitations." But, commenters added, BACT 

represents the most stringent limitation achievable, whereas "performance standards" represent 

the "best system ... adequately demonstrated" after taking into consideration a number of 

additional factors. Commenters stated BACT is stricter, authorizing EPA to apply more 

burdensome requirements, than a "standard of performance." Similarly, commenters stated, the 
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statutory definitions of "emission limitation" and "standard of performance" indicate that BACT 

"emission limitations" encompass a broader range of measures than "standards of performance." 

Thus, commenters stated, any constraint on "emission limitation," and therefore on BACT, to 

inside-the-fenceline measures must apply to "standards of performance" as well. Commenters

posited that if EPA cannot define BACT to include measures applied to an entity other than the 

source, EPA cannot define section 111(d) standard of performance to include a broader universe 

of compliance strategies.

Response 27: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble 

and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the 

scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and 

legislative history. To the extent this comment objects to the portfolio approach, which the EPA 

is not finalizing, the comment is moot. Moreover, While EPA has generally recommended 

conducting a BACT analysis for each emissions unit, EPA stated clearly that “the CAA and EPA 

rules provide discretion for permitting authorities to evaluate BACT on a facility-wide basis by 

taking into account operation and equipment which may affect the environmental performance of 

the overall facility.” GHG Permitting Guidance at 23. Thus, EPA does not interpret the BACT 

provisions of the Clean Air Act to preclude considering beyond-the-unit control 

techniques. Moreover, in this context, EPA was considering the use of the term “facility” and 

“source” in the PSD provisions, not the term “system.”

This section of EPA’s guidance also explains that “a BACT analysis should not include (in Step 

1 of the process) energy efficient options that may achieve reductions in a facility’s demand for 

energy from the electrical grid but that cannot be demonstrated to achieve reduction in emission 

released from the stationary source (e.g. within the property boundary.” Id. at 24. However, 

this statement is based on EPA’s historical interpretation that the BACT requirement is 

“inapplicable to secondary emissions, which are defined to include emissions that may occur as a 

result of the construction or operation of a major stationary source but do not come from the 

source itself.” Id. This part of EPA’s guidance describes sources that consume power produced 

by other sources, where that power and the associated emissions are produced and released 

outside of the property boundary of the facility consuming the power. This guidance thus 

generally covers product manufacturing facilities, not facilities that produce electrical power for 

consumers. This element of EPA’s PSD guidance does not discourage PSD permitting 

authorities and applicants from considering measures that may be implemented outside of the 

fenceline of a stationary source but that result in a reduction of emissions inside the 

fenceline. There may be other reasons for not examining such measures closely or selecting 

them as BACT in a given case, but EPA has not interpreted the Act to preclude consideration of 

such options in the PSD program. Further, the focus of the PSD permitting is on construction of 

individual sources and the BACT analysis examines methods that can be applied by a particular 

source on a case-by-case basis. The BSER analysis considers an entire category of 

sources. Thus, EPA’s interpretation of the PSD provisions does necessitate reading section 111 
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to encompass only emission control measure that can be applied inside the property boundary, or 

fence line, of a facility.

Comment 28: Commenters stated of the five source categories regulated solely under Section 

111(d) (phosphate fertilizer plants, sulfuric acid plants, kraft pulp mills, primary aluminum 

plants, and municipal solid waste landfills), all of the emission guidelines were based on a BSER 

that was technological in nature. Commenters said for example, the guideline for fluoride 

emissions from existing phosphate fertilizer plants was based on the application of spray crossflow packed scrubbers, and the guidelines for sulfuric acid mist emissions from sulfuric acid 

plants were based on the use of fiber mist eliminators. Commenters stated in the preamble to the 

final rule for sulfuric acid mist, the U.S. EPA stated that: "Section 111(d) requires emission 

controls based on the general principle of the application of the best adequately demonstrated 

control technology, considering cost." [42 FR 55796 (Oct. 18, 1977)]

Commenters stated four source categories have also been regulated under Section 129, which 

requires the U.S. EPA to establish guidelines under Section 111(d) for certain solid waste 

incineration units. Commenters said under Section 129, the U.S. EPA must base the emission

guidelines on levels reflecting the maximum degree of reduction in emissions and, similar to the 

previous Section 111(d) rules, the Section 129 emission guidelines were derived from the 

installation of control technologies on-site. Commenters said for example, the guideline for 

municipal waste combustors is based on the application of various controls including spray 

dryers, fabric filters, and electrostatic precipitators, and the guideline for commercial and 

industrial solid waste incineration units is based on the use of wet scrubbers. [60 FR 65387 (Dec. 

19, 1995); 65 FR 75338 (Dec. 1, 2000)] Commenters stated the U.S. EPA allows municipal 

waste combustors to participate in averaging and trading programs to meet the nitrogen oxide 

emission requirements and thus look for control methods beyond the fenceline, the actual 

requirements themselves were set on what could be achieved at the facility, unlike the current 

proposed guidelines. [See 60 FR 65402]

Commenters stated other examples of beyond the fenceline controls that can be taken into 

account to meet emission guidelines are the guidelines for hospital/medical/infectious waste 

incinerators and the guidelines for commercial and industrial solid waste incineration units, both 

of which require that affected facilities submit a waste management plan that identifies both the 

feasibility and the methods used to reduce or separate certain components of solid waste from the 

waste stream to reduce or eliminate toxic emissions from incinerated waste. Commenters said 

while it is true that material separation is not a pollution control device and would be 

implemented off-site, the U.S. EPA did not make material separation a part of the BSER and it 

was not used to calculate the emission guideline. Commenters said instead, it is more akin to 

other Section 111(d) procedural requirements such as performance testing and monitoring that 

are often included in Section 111(d) rules. Commenters stated as with municipal waste 

combustor NSPS, this is unlike the current proposed emission guideline for CO2 where the U.S. 
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EPA factored in expansive measures such as re-dispatching, increased renewables, and demandside EE as part of the BSER itself.

Commenters stated the U.S. EPA's most expansive interpretation of the meaning of standard of 

performance under Section 111(d) was for mercury emissions from EGUs. [70 FR 28606 (May 

18, 2005)] Commenters said after delisting EGUs from Section 112(c), the U.S. EPA 

promulgated the Clean Air Mercury Rule (CAMR). Commenters stated CAMR established a 

national mercury emissions cap for new and existing EGUs. Commenters stated the federal 

appeals court later held that U.S. EPA could not regulate mercury emissions under Section 111 

because the initial delisting of EGUs under Section 112 was unlawful. New Jersey v. EPA, 517 

F.3d 574 (D.C. Cir. 2008) Commenters said while defining a cap and trade program as the BSER 

seems a broad enough interpretation of standard of performance to justify the proposed emission 

guideline for CO2, there are important differences between the two.

Commenters stated first, the cap and trade program created by CAMR was based on the 

availability and installation of control technology. Commenters said the preamble to the final 

rule emphasized the fact that the BSER was a combination of the cap and trade mechanism and 

the technology needed to achieve the chosen cap level. In justifying the emission limits in 

CAMR, the U.S. EPA explained in the preamble that "the technologies necessary to achieve the 

emission cap limits . . . have been adequately demonstrated." Commenters said therefore, CAMR 

maintained the source-specific technology-based approach that is the foundation of Section 111.

Commenters stated this is unlike the proposed emission guideline for CO2 that defines the BSER 

as the four building blocks, which include measures such as demand-side EE and re-dispatching 

that have no underlying basis in the installation of control technologies onsite.

Commenters stated secondly, the affected source under CAMR was defined as coal-fired utility 

units for both Section 111(b) and Section 111(d). Commenters said it was only the emission 

limits achievable by applying BSER to the affected sources that were used to calculate the 

emission guideline in the form of a state emission cap. Commenters stated and the cap and trade 

program, including the transfers of credits, was limited to affected sources. Commenters said in 

the proposed emission guideline for CO2, the U.S. EPA has broadened who the rule applies to by 

including affected entities that are not a part of the Section 111(b) performance standard. 

Commenters said additionally, the U.S. EPA imposed obligations on sources comprising the 

entire power system in determining the BSER and the individual state emission guidelines; 

sources which it has no authority to regulate under Section 111.

Commenters stated it is clear that CAMR, while broader than previous Section 111(d) rules, was 

still within the traditional interpretation of standard of performance based on source-specific 

control technologies and limited to affected facilities. Commenters said it in no way supports the 

U.S. EPA's current proposed emission guideline for CO2 that is based on measures imposed on 

entities beyond the scope of the proposed Section 111(b) performance standard and outside of 

the control of affected EGUs.
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Response 28: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

We disagree with commenters’ characterization of the BSER in the Clean Air Mercury Rule 

(CAMR). As discussed in the preamble to this rule, CAMR was promulgated in 2005 under the 

EPA administration in place under President George W. Bush. The rule as commenters noted 

was based on the combination of the cap-and-trade mechanism and available control 

technologies. We disagree, however, that this combination maintains a “source-specific 

technology-based approach.”

Compliance with CAMR was designed to go into effect over two phases. The first phase 

established a mercury emissions cap at 38 tons per year based on a co-benefit of compliance with 

the Clean Air Interstate Rule (CAIR). 70 Fed. Reg. 28606, 28618 (May 18, 2005). CAIR 

established a cap-and-trade program that would have significantly limited SO2 and NOx

emissions from the power sector. EPA determined that by regulating mercury along with CAIR, 

significant mercury reductions would be achieved by air pollution controls designed to reduce 

SO2 and NOx. Id. at 28617. 

The second phase established a mercury emissions cap at 15 tons per year, which exceeds the 

level achievable solely as a co-benefit of CAIR. Id. at 28619. By using an integrated planning 

model that looked at the national and unit levels of utility mercury emissions under different 

control scenarios, the EPA projected that sources would “install SCR [selective catalytic 

reduction] to meet their SO2 and NOx requirements and take additional steps to address the 

remaining Hg [mercury] reduction requirements under CAA section 111, including adding Hgspecific control technologies (model applies ACI [activated carbon injection]), additional 

scrubbers and SCR, dispatch changes, and coal switching.” Id. Further, “[u]nder the cap-andtrade approach,” the EPA projected “that Hg reductions result from units that are most cost 

effective to control, which enables those units that are not cost effective to install controls to use 

other approaches for compliance including buying allowances, switching fuels, or making 

dispatch changes.” Id. Based on this analysis, the EPA determined that the BSER “refers to the 

combination of the cap-and-trade mechanism and the technology needed to achieve the chosen 

cap level.” Id. at 28620. By basing the cap in part on the trading program, EPA set the Phase II 

cap at a level commensurate with widespread implementation, including through dispatch 

changes; whereas if the cap were based solely on the installation of control technologies, then the 

Phase II cap would not be cost-effective for the source category and the emission limit could not 

be justified. 

Lastly, because the final rule limits the regulatory requirements to affected EGUs we do not 

address commenters’ assertions that the rule includes “sources which [the EPA] has no authority 

to regulate under Section 111.”

Comment 29: Commenters stated that power plant carbon dioxide emissions are not regulated as 

hazardous air pollutants under Clean Air Act Section 112. Commenters explained that the 
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Alabama Governor's Office and Dept. of Environmental Management ("the Administration") 

mistakenly contend that EPA is foreclosed from promulgating performance standards for power 

plant carbon dioxide emissions because power plant hazardous air pollutant emissions already 

are regulated under section 112. Commenters stated under the Administration's erroneous 

reading of the Clean Air Act, "[s]ection 111(d) expressly states that the EPA is prohibited from 

regulating any air pollutant emitted from an existing source category that is regulated under 

Section 112 of the Clean Air Act."(Galliher testimony, supra note 7, at 4) but this interpretation 

is not compelled by the language of the Act, its legislative history, or by fundamental principles 

of statutory construction. Commenters stated to the contrary, the language, structure, and history 

of the Act support EPA's longstanding interpretation that the limitation in section 111(d) applies 

to hazardous air pollutants regulated under section 112, and not more broadly to the sources that 

emit both hazardous and non-hazardous air pollutants. Commenters continued, stating that the 

text of section 111(d) does not compel the result the Administration advocates. Commenters 

stated two separate versions of section 111(d) were enacted into law during the 1990 

amendments to the Clean Air Act, explaining that the House version prohibited using section 

111(d) to set standards for existing sources regulated under section 112.(See Brief of Respondent 

EPA, Part V, New Jersey v. EPA, 517 F.3d 574, 582 (D.C. Cir. 2008), available at 2007 WL 

2155494). In contrast, commenters explained, the Senate version did not refer to sources 

regulated under section 112 at all. Commenters said that instead, it prohibited using section 

111(d) to set standards for denominated hazardous air pollutants regulated under section 

112.(Id.) Commenters stated that despite the differences between the two versions, both were 

included in the Statutes at Large and became part of the Clean Air Act (Pub. L. No. 101-549, 

sections 108(g), 302(a)). Commenters stated that EPA has consistently and appropriately adopted 

the Senate version of the 1990 amendment to section 111(d) to preclude regulation of existing 

sources only with respect to hazardous air pollutants emitted from a source category covered 

under section 112.(See, e.g., Brief of Respondent EPA, Part V, New Jersey v. EPA, 517 F.3d 

574, 582 (D.C. Cir. 2008) ("The section 111(d) exclusion only extends to hazardous air 

pollutants"), available at 2007 WL2155494. In dicta, the D.C. Circuit Court of Appeals 

mistakenly characterized EPA as having conceded that section 111(d) precludes regulation of 

source categories regulated under section 112. New Jersey v. EPA, 517 F.3d at 582. The Court's 

observation was neither necessary to its decision nor was it accurate). Thus, commenters

concluded, according to EPA's reasonable and uniform interpretation, regulation of carbon 

dioxide emissions from power plants under section 111(d) is appropriate, even though power 

plant hazardous air pollutant emissions are covered under section 112. Commenters stated that 

EPA's interpretation is also appropriate under the House version of section 111(d), which 

requires, in pertinent part, that: "each State shall submit to [EPA] a plan which (A) establishes 

standards of performance for any existing source for any air pollutant (i) for which air quality 

criteria have not been issued or which is not included on a list published under section 7408(a) of 

this title or emitted from a source category which is regulated under section 7412 of this title." 

(42 U.S.C. section 7411(d)(1) (emphasis added)) Commenters remarked that it is true that the 

mandate of the statute is not entirely clear based on its terms, as it refers to any air pollutant as 

well as source categories of such air pollutants; the Administration appears to have seized on this 

ambiguity. However, commenters continued, where, as here, Congress's intent is not clear on the 
105

face of a statute, EPA has discretion to interpret the statutory directives, and the agency's 

interpretation governs so long as it is reasonable (Chevron U.S.A. v. Natural Res. Def. Council, 

Inc., 467 U.S. 837, 863 (1984)), and EPA's interpretation of section 111(d) in the Clean Power 

Plan is both reasonable and consistent with the agency's prior construction of the statute. 

Commenters added that when interpreting a statute that is not clear based on its plain terms, it is 

appropriate to examine the legislative history to discern Congress' intent in enacting it. 

Commenters stated the legislative history for the 1990 amendments to section 111(d) supports 

EPA's reasonable interpretation of the statutory provision (The 1990 amendments to section 112 

responded to the failure of the original risk-based approach in the 1970-version of section 112. S. 

Rep. No. 101-228, reprinted in 1990 U.S.C.C.A.N. 3385, 3517. The 1990 amendments thus 

replaced the risk-based system with a technology-based approach that seeks to protect public 

health by ensuring that all new sources of hazardous air pollutants meet the same level of 

emission control that is achieved by the best-performing sources for new sources, and the 

average level of emission control achieved by the top-performers for existing sources. Id. at 

3788-89). Commenters stated that well-established principles of statutory construction further 

demonstrate the propriety of EPA's construction of these statutory provisions and offers the 

following reasons. Commenters stated first, EPA's interpretation of section 111(d) to limit 

regulation of hazardous air pollutants rather than source categories is a reasonable approach to 

harmonizing the House and Senate versions of the statute (See Citizens to Save Spencer County 

v. EPA, 600 F.2d 844, 872 (D.C. Cir. 1979)). Commenters stated that in instances such as this, 

where EPA is interpreting a jurisdictional provision of a statute it administers, Chevron 

deference is especially appropriate (See City of Arlington v. FCC, 133 S. Ct. 1863, 1871 (2013)). 

Commenters stated EPA's interpretation of section 111(d) to authorize standards of performance 

for air pollutants that would otherwise remain unregulated, while prohibiting duplicative 

regulation of hazardous air pollutants, is a "permissible construction of the statute" that should 

withstand review (Id. at 1874). Moreover, commenters continued, stating the Administration's 

proffered interpretation of section 111(d) creates an unnecessary and undesirable Hobson's 

choice, in which EPA would be forced to decide between regulating categories of sources that 

emit hazardous air pollutants and regulating dangerous, non-hazardous air pollutants that are also 

emitted by those source categories. In fact, commenters added, the Administration's approach 

would essentially nullify section 111(d). Given the long list of hazardous air pollutants in section 

112(b), and the large numbers of source categories that emit them, commenters continued

stating, it is hard to think of an air pollutant that would fall within the scope of section 111 that is 

not also emitted by a source category subject to section 112 standards for hazardous air 

emissions. Commenters stated that in contrast to this untenable construction, EPA's interpretation 

construes the statute as a whole to give meaning and effect to each provision (See FDA v. Brown 

and Williamson Tobacco Corp., 529 U.S. 120, 133 (2000)). Finally, commenters concluded, the 

Administration's reading of section 111(d) would yield absurd results by rendering that section 

superfluous, explaining that here again, EPA's consistently applied interpretation of section 

111(d) reconciles a potential but avoidable conflict in a manner that gives meaning and effect to 

all pertinent provisions(See, e.g., Appalachian Power Co. v. EPA, 249 F.3d 1032, 1041-42 (D.C. 

Cir. 2001) (affirming EPA's reconciliation of potentially conflicting provisions of the Clean Air 

Act under the doctrine against producing absurd results)). Thus, commenters stated, the Mercury 
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and Air Toxics standards promulgated under section 112 are not an impediment to EPA's 

proposal to establish standards of performance for emissions of non-hazardous greenhouse gases 

like carbon dioxide from existing coal-fired power plants.

Response 29: EPA agrees with these comments that the Section 112 Exclusion in section 111(d) 

is not properly read to preclude EPA from promulgating regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble.

Comment 30: Commenters stated Chevron addressed whether the EPA reasonably constructed 

the term 'stationary source' when it 'allow[ed] States to treat all of the pollution-emitting devices 

within the same industrial grouping as though they were encased within a single 'bubble'. 

Commenters said at issue was an EPA rule, intended to incorporate an amendment to the Clean 

Air Act, that allowed State[s] to adopt a plant-wide definition of the term 'stationary source.'

Commenters stated in determining whether the EPA's definition was proper, the Supreme Court 

articulated a test for 'review[ing] an agency's construction of the statute which it administers.' 

Commenters said first, the reviewing court must determine 'whether Congress has directly 

spoken to the precise question at issue.' If so, commenters added, the statute is unambiguous and 

both the agency and the court 'must give effect to the . . . expressed intent of Congress.' 

Commenters said Congressional intent can be discerned from either the plain language of the 

statute in question or the statute's legislative history. Therefore, the commenters said it is 

necessary to scrutinize a statute's legislative history to determine whether the statute is 

unambiguous on a particular point. Commenters stated in Chevron, however, after looking to the 

statutory language as well as the legislative history, the Court found that "Congress did not have 

a specific intention on the applicability of the 'bubble' concept in these cases".

Commenters stated the Court then proceeded to the second part of the test. Commenters said the 

second step mandates that if 'Congress has not directly addressed the precise question at issue' -

in other words, 'if the statute is silent or ambiguous with respect to the specific issue' - the court 

should determine 'whether the agency's answer is based on a permissible construction of the 

statute.' Commenters stated the Court explained that '[i]f Congress has explicitly left a gap for 

the agency to fill, there is an express delegation of authority to the agency to elucidate a specific 

provision of the statute by regulation. Commenters said such legislative regulations are given 

controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.' 

Commenters stated in other words, if Congress's intent is unclear, the agency may exercise its 

authority in accordance with any reasonable understanding of the statute.

Commenters said to determine what would be a reasonable or permissible construction, a court 

looks to the purposes of and policies behind the statute (or part of the statute at issue) and 

whether the agency's definition addresses competing interests. Commenters stated the Chevron 

Court found that EPA's 'definition is fully consistent with one of [the] concerns . . . that 

motivated the enactment' of the amendment, and that 'the Administrator's interpretation 

represents a reasonable accommodation of manifestly competing interests and is entitled to 
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deference: the regulatory scheme is technical and complex, the agency considered the matter in a 

detailed and reasoned fashion, and the decision involves reconciling conflicting policies.' 

Therefore, the commenters said the Court held that "the EPA's definition of the term 'source' is a 

permissible construction of the statute."

Commenters stated in sum, Chevron requires that if congressional intent can be discerned from 

either the statute itself or the legislative history, the statute is unambiguous and an agency must 

follow Congress's intent. Commenters said if, however, Congress's intent cannot be determined 

either from a plain reading of the statute or the legislative history (with the importance of 

legislative history being hotly debated), the statute is ambiguous and the agency's reasonable 

interpretation must be honored, where the term 'reasonable' is defined in accordance with the 

purposes and policies behind the statute in question.

Response 30: This part of the commenters’ comment does not require a response.

Comment 31: Commenters stated that the ESPS Proposal is prohibited by the plain text of 

Section 111(d); EPA's interpretation of the Statutes at Large as providing a means to circumvent 

the plain text of Section 111(d) in the U.S. Code is incorrect; a proper interpretation of the 

Statutes at Large shows that, as is reflected in the plain text of the U.S. Code, EPA lacks 

authority to promulgate the ESPS Proposal; and EPA's policy arguments for its interpretation of 

Section 111(d) are without merit. Commenters supported comments submitted by State of West 

Virginia, Office of the Attorney General.

Response 31: EPA disagrees that it may not promulgate regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble.

Comment 32: Commenters stated Section 111(d) limits EPA's role to one of procedure. 

Commenters stated EPA may promulgate regulations to establish a "procedure" under which 

states submit implementation plans that establish standards of performance for existing sources 

subject to regulation under Section 111(d). Commenters stated that however, the states, in 

developing their implementation plans, are the ones on whom Congress conferred authority to 

actually establish "standards of performance" for existing sources. See 42 U.S.C. section 

7411(d)(1) (directing EPA to "prescribe regulations which shall establish a procedure . . . under 

which each State shall submit to the Administrator a plan" that establishes standards of 

performance) (emphasis added). Commenters compared section 7411(b)(1)(B) (directing EPA to 

"establish[] Federal standards of performance for new sources" directly) (emphasis added). 

Commenters continued that the states are expressly authorized by the Clean Air Act to apply less 

stringent standards to individual sources or classes of sources. 42 U.S.C. section 7411(d)(1). In 

so doing, commenters added, states -not the EPA- consider cost, practical achievability, a 

source's "remaining useful life," and other source-specific factors when applying these standards 

to particular sources. Id.; see also 40 C.F.R. section 60.24(f). Commenters stated further that 

only when a state fails to submit a satisfactory implementation plan that is, one that is 

unreasonable or fails to comport with the Act's statutory criteria is EPA authorized to perform its 
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second function under 111(d)(2): directly prescribing binding standards for sources. See 42 

U.S.C. section 7411(d)(2); see also 40 C.F.R. section 60.27(c)(3). Cf. Alaska Dept. of Envtl. 

Conservation v. EPA, 540 U.S. 461, 494 (2004) (ultimate issue in Prevention of Significant 

Deterioration program is whether state agency's determinations are "reasonable, in light of the 

statutory guides and the state administrative record"). Comments posited that EPA's proposal sets 

a mandatory, binding "goal" for each state, in the form of an emission rate for the state's entire 

power sector. Under EPA's proposal, commenters stated, once these "goals" are finalized, states 

will have no discretion to alter them. See, e.g., Proposal, 79 Fed. Reg. at 34,835 ("Once the final 

goals have been promulgated, a state would no longer have an opportunity to request that the 

EPA adjust its CO2 goal."), 34,897-98 (rejecting stakeholder suggestion that states be allowed to 

quantify levels of emission reduction or otherwise treat EPA's goals "as advisory rather than 

binding"), 34,892 ("As promulgated in the final rule following consideration of comments 

received, the interim and final goals will be binding emission guidelines for state plans.").

Commenters continued, stating that even if a state can demonstrate that it cannot meet EPA's 

projected emission reductions by implementing a particular aspect of the proposed "best system 

of emission reduction," EPA will not adjust the state's "goal" unless the state demonstrates that it 

cannot realize additional reductions from applying the other aspects of that "system" more 

aggressively, or from "related, comparable measures." Id. at 34,893. Commenters stated the 

proposal thus violates Congress's unambiguously expressed intent in Section 111(d). 

Commenters stated that as the states exercise their authority to appropriately adjust EPA's 

"guidelines" for certain sources and classes of sources, the sources across a given state may in 

the end collectively emit a substance at a greater or lesser rate. Commenters stated there is 

nothing unusual about this result, because before now EPA has properly restricted its 111(d) 

regulations to set guidelines for source emissions not total state emissions. Commenters

continued, stating that EPA attempts to justify this by reference to the statutory definition of 

"standard of performance" as "a standard for emissions which reflects the degree of emission 

limitation achievable through the application of the best system of emission reduction." 42 

U.S.C. section 7411(a)(1) (emphasis added). Commenters stated EPA reads "degree" to mean 

"portion," and offers the interpretation that "[t]hat degree or portion of the required emission 

performance level is, in effect, the portion of the state's obligation to limit its affected sources 

[aggregate, statewide] emissions that the state has assigned to each particular affected source." 

Proposal, 79 Fed. Reg. at 34,891. Commenters stated that the concept of a predetermined 

aggregate cap under which the state parcels out "portions" of its limitation obligation has no 

basis in the implementing regulations or EPA's past practice under 111(d), let alone in the Act 

itself. In essence, commenters concluded, here [rule] treats each state as nothing more than a 

giant source of carbon dioxide, and imposes on each state binding, inflexible emission limits. 

Commenters stated the so-called "flexibility" offered to states here [rule] is no greater than the 

flexibility a regulated source always enjoys under the Clean Air Act, because individual sources 

can devise alternative methods to reach emission levels prescribed by EPA. See, e.g., 42 U.S.C. 

section 7411(b)(5), (h) (forbidding EPA to require installation of particular technological 

systems absent narrowly specified circumstances). Commenters said that states are entitled to 

flexibility not only in procedural means but also in substantive ends. Commenters stated EPA's 

proposal reverses this statutory scheme, promoting the agency to the role of setting binding, 
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substantive standards in the first instance and relegating the states to a ministerial, administrative 

role. In this, commenters stated, EPA claims the authority to strip states of their statutory 

discretion to take account of their unique circumstances, needs, and interests.

Response 32: We disagree. As we explain in section VIII.D of the final rule preamble of the 

CPP, our emission guidelines provide the substantive criteria that are intended to govern the 

review of the Administrator’s review of state plans. The interim and final goals are intended to 

reflect such substantive criteria.

Comment 33: Commenters stated if EPA can ever issue lawful Section 111(d) rules regulating 

coal-fired power plants - that is, after first having withdrawn its regulation of those power plants 

under Section 112, and then having issued lawful regulations for new power plants under Section 

111(b) - EPA still must adopt a wholly different approach to Section 111(d) regulation than the 

one it takes in the present proposal. Commenters stated under this alternative, lawful approach, 

EPA would analyze the types of projects that could reduce greenhouse gas reduction at existing 

sources of coal-fired power plants by reference to Section 111's criteria, which considers such 

factors as cost and performance in arriving at guidelines about what emission rates are actually 

achievable as the "best system of emission reduction" for various categories and subcategories of 

fossil-fuel-fired power plants. Commenters stated EPA has completed some of this work with its 

first "building block," efficiency improvements at power plants, but even that proposal is flawed 

because it overestimates the efficiency improvements that are available at individual power 

plants by considering this matter on a statewide basis. Commenters stated under this lawful 

approach, states would then establish and apply standards of performance to existing power 

plants, drawing on their local knowledge and considering the individual sources and classes of 

sources within their jurisdictions. Commenters stated this approach would honor the proper roles 

of the federal and state governments and result in performance standards that are appropriate for 

and achievable by regulated sources.

Response 33: We discuss our authority to promulgate this rule in section IV of the preamble. For 

the reasons discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, 

our interpretation of the BSER is reasonable and within the scope of EPA’s authority in light of 

the statutory text, statutory context, statutory purpose, and legislative history.

Comment 34: Commenters stated EPA should honor the Act's core statutory limitations on its 

authority and formally determine that Section 111(d) standards are not appropriate for fossil fuelfired power plants.

Response 34: As discussed elsewhere, section 111(d) provides the EPA with authority to 

regulate CO2 from affected EGUs notwithstanding that EPA has regulated emissions from those 

sources under section 112.

Comment 35: Commenters stated EPA's authority under Section 111(d) is limited. Commenters

continued, stating that EPA is empowered to "establish a procedure similar to that provided by 

[section 110 of the Act (8 42 U.S.C. section 7410)] under which each state shall submit to [EPA] 
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a plan which "establishes standards of performance" for existing sources within the state 

(emphasis added).(9 42 U.S.C. section 7411(d)(1)) EPA can set substantive standards of 

performance only when a state fails to submit a "satisfactory" plan.(Id. section 7411(d)(2)(A).) 

Commenters stated the Act gives states, on the other hand, broad discretion to develop plans to 

implement section 111(d) standards of performance subject to a general requirement that the 

state's exercise of discretion be "satisfactory."(Id.) Commenters continued that for a plan to be 

satisfactory, it must include performance standards that are consistent with the definition of 

standard of performance in Section 111(a)(1), Id. section 7411(a)(1), and it must "provide[ ] for 

the implementation and enforcement" of the standards, Id. U.S.C. sections 7411(d)(1)(B). 

Moreover, commenters added, EPA must permit the state in applying a standard "to take into 

consideration, among other factors, the remaining useful life of the existing source to which the 

standard applies."(Id. Commenters comments on remaining useful life here and in other sections 

of these comments address economic and practical operational issues. Commenters also 

incorporated by reference the detailed comments provided by UARG on remaining useful life 

issues as identified from the Proposed Rule and the Oct. 28 Notice of Data Availability, Carbon 

Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 

79 Fed. Reg. 64,543 (Oct. 30, 2014) (NODA).) Commenters stated that apart from those 

statutory requirements, states have significant discretion to develop their plans, including 

discretion to adopt state plans that differ from EPA's emission guidelines.(See 40 C.F.R. -

60.24(f) (2014).) Commenters stated the regulations make clear, however, that in contrast to the 

"emission standards" that states adopt, EPA's emission guidelines are not "legally 

enforceable."(State Plans for the Control of Certain Pollutants from Existing Facilities, 40 Fed. 

Reg. 53,340, 53,341 (Nov. 17, 1975).) Instead, commenters stated, EPA's emission guidelines 

are "only criteria for judging the adequacy of State plans."(Id. at 53,343.) Thus, commenters

concluded, the EPA cannot prescribe to states a standard of performance. Commenters added, the 

binding state emission rates in the Proposal do precisely that.

Response 35: As we explain in section VIII.D of the final rule preamble of the CPP, our 

emission guidelines provide the substantive criteria that are intended to govern the review of the 

Administrator’s review of state plans. The interim and final goals are intended to reflect such 

substantive criteria.

Comment 36: Commenters stated that EPA does not have the authority to disregard the Clean 

Air Act's basic structure and eliminate the primacy and the discretion Congress afforded to the 

states in implementing any binding emission standards under Section 111(d). Commenters stated

that while touting the flexibility available to states, EPA provides only a bare bones description 

of how states might develop "satisfactory" plans to implement Section 111(d) requirements for 

existing EGUs. Commenters added that this approach, which leaves states without sufficient 

guidance on many practical matters, also obscures the fact that the Proposed Rule would, in 

reality, improperly constrain state discretion under Section 111(d).

Response 36: We disagree with this comment. Section VIII. of the preamble for this rule 

provides more detailed guidance to the states. For the reasons discussed elsewhere, this rule does

not improperly constrain state discretion.
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Comment 37: Commenters stated EPA does not have authority for the proposed beyond-thefence-line approach, lacking the legal authority under the CAA to implement Building Blocks 2-

4. Under Section 111(d)(2), EPA must develop an implementation plan to achieve the emission 

reduction targets in the event that a State fails to submit an implementation plan or submits a 

plan that EPA deems unsatisfactory. 42 U.S.C. - 7411(d)(2). Commenters stated that however, as 

a federal agency, EPA has limited regulatory authority and can only exercise the power that has 

been delegated to it by Congress. See North Carolina v. EPA, 531 F.3d 896, 922 (D.C. Cir. 

2008) ('Lest EPA forget, it is 'a creature of statute,' and has 'only those authorities conferred upon 

it by Congress'; 'if there is no statute conferring authority, a federal agency has none.' "(quoting 

Michigan, 268 F.3d at 1081)). Commenters concluded it is not enough for EPA to outline a plan 

showing how CO2 emissions from the electricity sector might be reduced. Commenters stated 

EPA must also demonstrate that it has the legal authority to implement the specific emission 

reduction measures that it identifies. Commenters stated EPA cannot do so here. Commenters 

stated while the CAA gives EPA authority to impose emission reduction obligations on affected 

EGUs that are part of the regulated source category, it does not give EPA authority to implement 

the emission reductions that would be achieved through the other Building Blocks. Specifically, 

commenters stated, EPA lacks authority to make dispatching decisions for a States' EGUs, to 

mandate the continued operation of nuclear facilities, to impose state-specific RPS programs, or 

to impose demand-side energy efficiency requirements on electricity consumers. Because, as 

EPA acknowledges, commenters added, some combination of these actions are necessary to 

achieve each States' emission reduction target, it is clear that EPA lacks the legal authority to 

develop an implementation plan that can achieve the proposed standards of performance. Thus, 

to comply with its obligations under Section 111, commenters added, EPA must withdraw the 

rule and propose alternative emission reduction goals that can be achieved through emission 

reductions that EPA has the legal authority to implement. Nor, commenters added, can EPA rely 

on the more expansive authority retained by States as a means of achieving the proposed 

emission reduction targets. Commenters stated first, and most fundamentally, there is no 

guarantee that each State will submit an implementation plan, let alone one that EPA deems 

satisfactory. Given the complexities in EPA's proposal, commenters stated there is a significant 

likelihood that States will not be able to submit satisfactory implementation plans within the 

proposed time frames. Likewise, commenters stated given the controversial nature of this rule, it 

is possible that some States may simply refuse to prepare an implementation plan at all. Under 

either scenario, commenters stated EPA has a statutory obligation to establish standards of 

performance and a federal implementation plan and, therefore, must design emission reduction 

targets that it is capable of implementing. Commenters stated second, EPA cannot use the CAA 

to require States to adopt implementation plans that include provisions that EPA lacks authority 

to impose. See North Carolina, 531 F.3d at 922 (EPA cannot require States to have SIP 

provisions mandating the retirement of Title IV trading allowances when EPA lacks the authority 

to terminate or limit such allowances). Commenters concluded that even if the States do have the 

authority to implement Building Blocks 2-4, EPA cannot use the NSPS program to commandeer 

the States' authority by requiring them to do so.
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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 concepts 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 would 

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.

Response 37: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER.

EPA is not finalizing the proposed “portfolio” approach, and will not accept state plans that 

attempt to impose emission standards or other CAA compliance obligations on entities other than 

affected EGUs. The state measures approach provides a path for a state to achieve the emission 

performance level as expressed as a state goal in a way that avoids placing enforceable emission 

standards on affected EGUs (unless and until the backstop is triggered). States will have a wide 

range of flexibility in choosing how to demonstrate their affected EGUs are meeting a state goal.

Comment 38: Commenters stated that even if EPA possessed the requisite statutory authority, 

the agency lacks the utility industry expertise to successfully remake an entire industry in its 
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preferred image. Commenters added that EPA's minimal coordination with FERC,(FERC cannot 

supply the missing jurisdiction as it is barred by statute from ordering any entity to construct a 

generator or from intruding into matters reserved for the states. 16 U.S.C. Section 824(a)-(b); 

see, e.g., Elec. Power Supply Ass'n v. FERC, 753 F.3d 216, 224 (D.C. Cir. 2014); Conn. Dep't of 

Pub. Util. v. FERC, 569 F.3d 477, 481 (D.C. Cir. 2009); Transmission Access Policy Study Grp. 

v. FERC, 225 F.3d 667, 718 (D.C. Cir. 2000) which does regulate the wholesale power industry, 

has been insufficient to craft a rule that will achieve its goals while ensuring continued electric 

reliability. 

Response 38: The EPA disagrees with this comment. The EPA explains in the preamble for this 

rule why it is acting within its statutory and is not attempting to remake an entire industry in its 

preferred image, along with the substantial consultations it has had with FERC and others 

concerning reliability and other matters concerning the industry. For a more comprehensive 

discussion of reliability issues, please see preamble section VIII.G.2.

Comment 39: Commenters stated in its Proposed Rule, the EPA has far exceeded its statutory 

authority granted by Congress in regulating existing source emissions under Section 111(d) of 

the CAA. Commenters said the EPA claims that Section 111(d) provides the necessary authority 

for it to promulgate the Proposed Rule, but this is plainly erroneous. Commenters stated Section 

111(d)'s plain language does not provide the EPA authority for the Proposed Rule and its 

accompanying interpretation of BSER and drastic effect on the nation's electric power generation 

system but instead Section 111(d) clearly prohibits the EPA's proposal. Commenters stated in its 

grant of authority, Congress has clearly and succinctly outlined the EPA's authority to regulate 

emissions from existing sources. Commenters said first, the EPA must establish performance

standards regulating CO2 emissions from new units in the source category before it may 

establish performance standards regulating existing sources in the same source category under 

Section 111(d). Commenters said additionally, in this case, the EPA may not regulate coal-fired 

EGUs under the Proposed Rule because the EPA is prohibited by Section 111(d) from regulating 

source categories that are already regulated under Section 112. Commenters stated when 

reviewing whether an agency's interpretation of a statute and its authority under the statute is 

valid, courts apply the framework from Chevron, U.S.A. v. NRDC, 467 U.S. 837, 842-43 (1984). 

Commenters said the courts will apply Chevron's familiar framework to determine if Congress 

has spoken to the specific issue at hand or whether the statute is ambiguous or silent on the 

question at issue and if that is the product of an implicit delegation of interpretative authority to 

the agency. United States v. Mead Corp., 553 U.S. 218, 226-27 (2001). Commenters stated that 

despite the EPA's best effort, under Chevron, the EPA's interpretation of Congressional language 

and the EPA's self-proclaimed authority under Section 111(d) should not be granted deference.

Response 39: We disagree with this comment. We discuss in the preamble for this rule the 

timing of promulgation for a section 111(b) rule to serve as a predicate for a section 111(d) rule, 

the reasons why we have authority to promulgate this rule notwithstanding the fact that we have 

previously promulgated a rule under CAA section 112 for affected EGUs.
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Comment 40: Commenters stated that 1) EPA has never (validly) set section 111(d) 

requirements as anything other than specific emission rates for narrowly defined designated 

facilities; 2) even had that approach been validated, still it would have compelled no more than 

source-by-source compliance with adjusted BSER: The rule, in effect, amalgamated the BSER 

performance of the designated facilities only; and 3) the "other grounds" on which the D.C. 

Circuit vacated CAMR was its holding that mercury (a pervasive HAP) should have been 

regulated under section 112, not section 111(d). And so as in New Jersey, commenters

concluded, EPA appears to have detoured into section 111 by misreading the statutory map, 

which directs EPA instead to use sections 108-110 if and as appropriate to deal with pervasive 

air pollutants emitted from "numerous and diverse mobile and stationary sources." Commenters

added that never before has EPA used Section 111(d) for a ubiquitous pollutant. Its previous uses 

over the last forty years have been directed at pollutants emitted by a few specialized industries 

(such as fluorides and landfill gases).

Response 40: We disagree. We discuss our authority to promulgate this rule in section IV of the 

preamble. For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 41: Commenters urged EPA to reconsider the scope of its authority under Section 

111(d) 

Response 41: The preamble and other supporting documents for this rule reflect our careful 

consideration of the scope of authority under section 111(d) and the implications of this rule for 

states such as Kentucky that rely on coal-fired generation equipped with the latest pollution 

control technology.

Comment 42: Commenters stated the limited scope of section 111 is confirmed by comparing 

that provision to other sections of the Act. Commenters said where Congress has established 

other programs to create standards for new and existing sources, it has required that those 

standards apply on a source-by-source basis. Commenters stated this is true for hazardous air 

pollutants regulated under section 112 of the Act, for visibility-impairing pollutants regulated 

pursuant to the BART provisions of the regional haze program, and it is true of the CAA's 

prevention of significant deterioration program, which requires new and modified sources to 

install "best available control technology" (BACT). Commenters stated not only do these 

programs all apply on a source-by-source basis, they cannot require suspension or curtailment of 

operation. 

Response 42: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 43: Commenters said where Congress has authorized broader programs that do not 

rely on source-specific standards, it has spoken clearly and in ways that fundamentally differ 
115

from the approach it took in section 111. Commenters stated the Title IV acid rain program, for 

instance, created a cap-and-trade program for sulfur dioxide emissions that included express 

directions as to how sources could comply with the program's avoided emission and renewable 

and efficiency-based emission reduction requirements. Commenters said similarly, the Act's 

NAAQS program requires EPA to set general standards to protect human health and the 

environment and expressly authorizes states to impose any measures needed to achieve those 

standards. Commenters stated Section 111 contains nothing like the broad authorizations that 

characterize Title IV or the NAAQS provisions of the Act.

Response 43: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble 

and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the 

scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and 

legislative history.

Comment 44: Commenters stated the CAA gives states, not the EPA, the authority to impose 

standards of performance under 111(d). Commenters stated the EPA's regulatory authority under 

CAA section 111(d) is limited to "establishing procedures" by which States establish standards 

of performance for existing sources. Commenters said this stands in stark contrast to 

CAA section 111(b), where the Administrator was given express authority to promulgate 

substantive standards of performance for new sources. Commenters said the EPA's authority to 

prescribe a plan that establishes standards of performance is limited to situations where a state 

fails to submit a satisfactory plan to EPA. Commenters stated by proposing binding state 

emission rate targets, the EPA is usurping the States' authority, violating the cooperative 

federalism principles on which the CAA is based, and raising serious questions regarding state 

sovereignty under the 10th Amendment. Commenters stated by attempting to regulate electricity 

generation, including nuclear generation and renewable portfolio standards; electricity 

dispatching; and electricity consumers, the EPA is unlawfully exercising authority given to the 

States in the Federal Power Act. 

Response 44: We disagree with these comments. We have responded to each of them in the 

preamble for this rule. The EPA also disagrees with these commenters’ assertions that this action 

violates or even encroaches upon the federal-state balances embodied in either the U.S. 

Constitution or the Clean Air Act. As discussed in the response in the above response in section 

1.2 on cooperative federalism, and also in the Legal Memorandum sections VIII and X, this rule 

is consistent with the traditional balance of federal-state authority under the CAA and 

Constitution.

Comment 45: Commenters stated to the extent that the EPA's regulations purport to give the 

agency broad authority to set binding emissions targets, those regulations are inconsistent with 

the plain meaning of CAA section 111(d) and, therefore, unlawful. Commenters said because the 

vast majority of the Associations' members have never been subject to regulation under 

CAA section 111(d), they have not previously been injured by the EPA's CAA section 111(d) 

regulations and have had no opportunity to challenge them.
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Response 45: We disagree with this comment concerning our authority. While we are not reopening the 1975 regulations, in response to comments, we explain in the preamble why they 

give the EPA broad authority to determine the BSER and, based on that, statewide emission 

limitations for sources in the state. 

Comment 46: Commenters stated EPA falls back in its Legal Memorandum to an erroneous 

prior analysis that the Agency conducted in 2005, in which it concluded that Section 111(d) is 

actually "ambiguous" and therefore subject to the agency's "reasonable" interpretation. Mem. 8, 

26. Commenters explained that 2005 analysis which was part of a rule under Section 111(d) that 

the D.C. Circuit vacated in New Jersey v. EPA, 517 F.3d 574 based its conclusion entirely upon 

a clerical entry in the 1990 Amendments to the Clean Air Act that was not codified in the U.S. 

Code but appears in the Statutes at Large. According to EPA, commenters added, the 1990 

Amendments included two entries relevant to Section 111(d), and both entries appear in the 

Statutes at Large, but only the first amendment described by EPA as the "substantive" one was 

incorporated into the U.S. Code, and EPA argues that the mere existence of the second, clerical 

amendment creates an ambiguity sufficient to call into doubt the language of Section 111(d) in 

the U.S. Code. Commenters believed EPA's attempt to displace the plain terms of Section 111(d) 

was wrong in 2005 and remains so today. Commenters described why they believe the clerical 

"Drafting Error" in the 1990 Clean Air Act Amendments does not create an ambiguity in the 

terms of Section 111(d). They explain that the one-sentence clerical entry referred to by EPA 

falls far short of the showing necessary to cast doubt on the plain terms of Section 111(d) as they 

appear in the U.S. Code. Commenters stated the "Code of Laws of the United States current at 

any time shall . . . establish prima facie the laws of the United States." l U.S.C. 204(a). 

Commenters stated as "prima facie" evidence, the language of Section 111(d) in the U.S. Code is 

displaced only where the U.S. Code is "inconsistent" with the Statutes at Large. [See Stephan v. 

United States, 319 U.S. 423, 426 (1943).], and there is no inconsistency here. Commenters

continued that a review of the two relevant entries in the Statutes at Large reveals that the 

clerical entry does not create an ambiguity or inconsistency, but rather is - as even EPA has 

admitted - a "drafting error [that] should not be considered." [70 Fed. Reg. at 16,031.]

Commenters stated that the first relevant entry appears in the Statutes at Large among a list of 

other entries making substantive amendments to Section 111 prior to these amendments in 1990, 

Section 111(d) had prohibited EPA from requiring state-by-state regulation of any air pollutant 

on the list of HAPs published under Section 112(b)(1 )(A); this particular amendment made a 

significant substantive change by replacing the reference to "112(b)(1)(A)" with the language 

that now appears in the U.S. Code emitted from a source category which is regulated under 

section 112." Pub. L. No. 101-549, 108(g), 104 Stat. 2399, 2467 (1990); and as a result, the 

restriction in Section 111(d) changed from one focused on HAPs regulated under Section 112 to 

one focused instead on source categories regulated under that section. Commenters continued 

that the second relevant entry appears much later in the Statutes at Large among a list of purely 

clerical changes entitled "Conforming Amendments." (Pub, L. No. 101-549, 302(a), 104 Stat. 

2399, 2474 1990). Commenters cited the Senate's Legislative Drafting Manual, stating the 

"Conforming Amendment[s]" are "amendment[s] of a provision of law that [are] necessitated by 

the substantive amendments or provisions of the bill." Senate Legislative Drafting Manual 
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126(h)(2)(A); they effectuate the sorts of ministerial changes required to clean up a statute after 

it has been substantively amended; and thus, conforming amendments "include[] amendments, 

such as amendments to the table of contents, that formerly may have been designated as clerical 

amendments." Id. Commenters continued that consistent with its description as a conforming 

amendment, this particular entry sought simply to bring up to date the cross-reference in Section 

111(d) to Section 112(b)(1)(A); other amendments to the Clean Air Act in 1990 had eliminated 

Section 112(b)(1)(A) entirely and replaced it with Sections 112(b)(1), 112(b)(2), and 112(b)(3). 

Commenters contended that this clerical amendment was designed solely to account for those 

changes, and specifically, it provided that "Section 111(d)(1) of the Clean Air Act is amended by 

striking '[112](b)(1)(A)' and inserting in lieu thereof '[112](b)." Pub. L. No. 101-549. 302(a). 

Commenters concluded that unlike the substantive amendment described above, this nonsubstantive amendment would not have changed the restriction in Section 111(d) from its pre1990 focus on hazardous air pollutants regulated under Section 112. Commenters continued, 

stating that in light of the substantive amendment, however, the second non-substantive 

amendment was clearly an unnecessary mistake or, as EPA has put it, a "drafting error", and 

when the conforming amendment is applied after the substantive amendment, as is required by 

the very nature of conforming amendments, there is no clerical correction left to make because 

the cross-reference to 112(b)(1)(A) has already been removed by the substantive amendment. 

Commenters stated that this is consistent with the codifier's notation in the U.S. Code that the 

clerical amendment "could not be executed," Revisor's Note, 42 U.S.C. 7411. Commenters

concluded that where a conforming amendment is entirely unnecessary, it is rightly understood 

as a clerical mistake that need not be given any effect. See Am, Petroleum Inst. v. SEC, 714 F.3d 

1329, 1336-37 (D.C. Cir. 2013). Commenters posited that EPA has correctly recognized as 

much, - noting in 2005, for example, that the clerical entry "is a drafting error and therefore 

should not be considered" - but it then wrongly determined that it nevertheless "must attempt to 

give effect to both the [substantive] and [clerical] [entries], as they are both part of the current 

law." 70 Fed. Reg. at 16,031; accord Mem. 21 (recognizing "apparent drafting errors during 

enactment of the 1990 CAA Amendments"). Commenters stated this is a fundamental flaw

impacting EPA's analysis. As the D.C. Circuit recently explained, commenters continued, where 

a mistake in renumbering a statute and correcting a cross-reference conflicts with substantive 

provisions of that statute, the mistake should be considered most likely "the result of a scrivener's 

error" and should not be treated as "creating an ambiguity." Am. Petroleum, 714 F.3d at 1336-37, 

and under this reasoning, commenters stated it is clear that the clerical entry simply "should not 

be considered," as EPA originally concluded. 70 Fed. Reg. at 16,031. At the very minimum, 

commenters stated the existence of such a non-substantive, "drafting error" is not enough to 

overcome the fact that language codified in the U.S. Code is "prima facie" evidence of "the laws 

of the United States." I U.S.C. 204(a). Commenters stated that EPA asserts that the nonsubstantive and substantive amendments-- if each were implemented into Section 111(d)'s prior 

text standing alone - would create two separate versions of Section 111(d). Mem. 24. 

Commenters explained that the first version incorporates only the non-substantive amendment 

and, therefore, retains the pre-1990 prohibition on regulating HAPs under Section 111(d), 

regardless of whether the source category emitting those HAPs is regulated under Section 112, 

and the second version is the one that actually appears in the U.S. Code and substantively 
118

changes the prohibition to forbidding EPA from regulating under Section 111(d) any air 

pollutants emitted by any existing source regulated under Section 112. Mem. 24. Commenters

argued that this approach of treating both amendments as, in effect, creating two different 

version of 111(d) directly contradicts EPA's concession that the inclusion of the non-substantive 

entry in the Statutes at Large was merely a clerical "drafting error." Commenters stated that 

critically, the only evidence EPA may use in its attempt to rebut the terms of Section 111(d) as 

expressed in the U.S. Code is the Statutes at Large, see Stephan, 319 U.S. at 426, and the 

Statutes at Large simply do not reflect two separate versions of Section 111(d). Rather, 

commenters argued these reflect only two amendments - one a substantive change and one a 

mere clerical entry - and the clerical entry is rendered moot by the substantive amendment.

Commenters added that EPA's final conclusion from its line of reasoning is not sound, 

explaining that EPA erroneously concludes that since the Senate language was included in the 

final bill even if by mistake, the Agency must "consider" that language. Commenters continued

that as seen, however, EPA is free-indeed, is compelled-to disregard the Senate language 

precisely because it was a "drafting error."(66 Am. Petroleum Inst., 714 F.3d at 1336-37) In any 

event, commenters remarked, EPA did not realize that it could have given both the House and 

Senate language meaning in the manner posited by the Federalist Society paper without 

eviscerating the House language, and in sum, EPA cannot manufacture ambiguity where it does 

not exist, it cannot invent meaning for statutory text which is not based on the text itself, and 

EPA does not have authority to regulate EGU emissions of CO2 under Section 111(d).

Commenters stated that EPA's policy arguments create no ambiguity in Section 111(d), 

explaining that EPA's policy arguments against the "literal" terms of Section 111(d) also cannot 

generate an ambiguity where none exists in the plain statutory text. Commenters explained that 

as a threshold matter, even if EPA were correct, the "literal" terms of Section 111(d) produce 

overly harsh results for EPA's regulatory authority, and EPA may not "redraft a statute in order 

to avoid what the agency characterized as the 'absurd results' that would flow from the statute's 

language" where it is, as here, "not inconceivable that Congress meant what the statute says." 

Assn of Am. RRs, V. Surface Tramp, Rd, 162 F.3d 101, 105 (D.C. Cir. 1998) (quoting Mova 

Pharmaceutical Corp. v. Shalala, 140 F.3d 1060, 1072 (D.C. Cir. 1998)). Commenters concluded 

that EPA's policy arguments miss the mark because the "literal" terms of Section 111(d) are part 

of a rational regulatory scheme. Commenters continued that this regime avoids subjecting 

existing sources to both new national standards for hazardous pollutants under Section 112 as 

well as new state-by-state standards under Section 111, while permitting regulation under both 

Section 111 and Section 112 of new sources. Unlike with new sources, commenters explained, 

the imposition of additional regulatory burdens on existing sources raises questions of fairness 

and lost investments, as existing sources that were built under a different regulatory regime may 

or may not have the technological or financial ability to come into compliance with two sets of 

new rules, and both Sections 112 and 111(d) recognize that the cost of compliance must be 

weighed against maximum achievable reductions. See 42 U.S.C. 741 i(a)(l), 7411(d), 7412(d). In 

establishing this regime, under which regulation of existing sources occurs either under Section 

112 or Section 111(d), commenters contended that Congress properly determined that requiring 
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the same existing source categories to comply with two functionally-independent regulatory 

regimes would threaten these sources' economic viability, and cites EPA's recent regulations on 

coal-fired power plants which will cost those plants more than $9 billion dollars per year, See 

EPA, Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards at 3-13 (Dec. 

2011). Commenters stated that the Proposed Rule would subject those same plants to billions of 

dollars of additional costs, through the imposition of duplicative regulatory requirements, forcing 

many of those plants to close, and that is the exact scenario Congress intended to avoid when it 

amended Section 111(d). Commenters closed, stating that in light of this understanding, EPA's 

policy arguments in favor of ignoring Section 111(d)'s plain language are insubstantial, EPA first 

claims that a "literal reading" of Section 111(d) would be contrary to "Congress' desire in the 

1990 CAA Amendments to require EPA to regulate more substances." Mem. 25-26. Commenters

argued that the mere fact that one of the broad purposes behind the 1990 Amendments was to 

require EPA to regulate more substances under Section 112 does not mean that Congress was not 

cognizant of other values, such as the need to avoid costly double regulation, and - as EPA stated 

in its 2005 analysis - the text, structure, and history of the 1990 Amendments indicates a desire 

by Congress to limit EPA's ability to doubly regulate coal-fired power plants. The discussion and 

ultimate adoption of Section 112(n)(1)(A) "reveals" that Congress did not want to subject coalfired power plants to "duplicative or otherwise inefficient regulation." 70 Fed. Reg. at 15,999. 

Commenters stated it is reasonable to understand Section 111(d) as seeking to forward this same 

general goal of avoiding duplicative regulation.

Commenters stated EPA's effort to resolve the ambiguity is impermissible, explaining that even 

if the clerical error created an ambiguity in Section 111(d)'s "literal" text, EPA's analysis would 

still fail. Commenters argued that the Agency's claim to some form of "deference" for its attempt 

to rewrite Section 111(d) is meritless, Mem. 12, explaining that courts defer to agencies under 

the test set forth in Chevron USA., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 

837 (1984), because there is reason to believe that when Congress "left ambiguity in a statute," it 

"understood that the ambiguity would be resolved, first and foremost, by the agency, and desired 

the agency (rather than the courts) to possess whatever degree of discretion the ambiguity 

allows." Smiley v, Citibank (South Dakota, NA., 517 U.S. 735, 740-741 (1996). Commenters

stated that EPA could not argue that Congress intended EPA to resolve the import of Congress's 

inadvertent clerical "drafting error", and EPA does not so argue. Commenters stated that EPA 

offers no justification for its assertion that it is entitled to deference on this issue, and does not 

cite to Chevron in its discussion of the issue. Commenters continued that EPA could not prevail 

under some other similar form of deference because it offers an "impermissible construction" of 

the supposedly ambiguous statute. Aid Ass'n for Lutherans v, US Postal Serv., 321 F.3d 1166, 

1178 (D.C. Cir. 2003). Commenters argued that EPA's interpretation of Section 111(d) as 

follows: "Where a source category is regulated under Section 112, a Section 111(d) standard of 

performance cannot be established to address any HAPs listed under section 112(b) that may be 

emitted from that particular source category" Mein. 26. is inconsistent with the substantive 

provision embodied in the U.S. Code, that EPA may not "establish[] standards of performance 

for any existing source for any air pollutant emitted from a source category which is regulated 

under [Section 112 of the CAA]." 42 U.S.C. 7411(d) (emphasis added). Commenters stated that 
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EPA's proffered interpretation effectively replaces the term 'any air pollutant" with the term 

"hazardous air pollutant." Commenters cited in Chevron that an agency is not entitled to 

deference when its interpretation is so "manifestly contrary to the statute." Mayo Found, for 

Med. Eluc. & Research v. United States, 131 S. Ct. 704, 711 (2011); accord Petit v. U.S. Dept. of 

Educ., 675 F.3d 769, 785 (D.C. Cir. 2012). Commenters closed, stating that if EPA wanted to 

give effect to its view of both the substantive and the clerical entries in the Statutes at Large -

which, as explained above, EPA claims create two versions of Section 111(d) - without 

impermissibly changing the text of either, it could have done so. Commenters stated one 

commentator has explained, all of EPA's textual concerns could be satisfied by interpreting 

Section 111(d) to prohibit the regulation of "any air pollutant ... which is not included on a list 

published under ...112(b) [revision of the prior version of Section 111(d) after inputting the 

clerical entry] or emitted from a source category which is regulated under section 112 [revision 

of the prior version of Section 111(d) after inputting the substantive entry]." [William J. Haun, 

The Clean Air Act as an Obstacle to the Environmental Protection Agency s Anticipated Attempt 

to Regulate Greenhouse Gas Emissions from Existing Power Plants, 14 Engage: J. Federalist 

Soc'y Prac. Groups 35, 38 (Mar. 2013) (parentheticals revised).] Commenters stated EPA does 

not and could not dispute that this is the only interpretation that gives full effect and meaning to 

every word of both "versions" of Section 111(d) that it believes the Statutes at Large embodies. 

Accordingly, commenters stated, to the extent EPA continues to reject the position that the nonsubstantive entry must be discarded as an inadvertent "scrivener's error[]"(see Am. Petroleum, 

714 F.3d at 1337) the agency is to adopt this alternative interpretation. Commenters stated that 

EPA's refusal to advance or acknowledge this alternative is unsurprising because under this 

approach, the Proposed Rule would still be unlawful and under this alternative interpretation, 

EPA would be prohibited from using Section 111 (d) both: (1) to require regulation of any HAP 

listed in Section 112(b), regardless of whether the HAP is being emitted from a source regulated 

under Section 112; and (2) to require regulation of any pollutant emitted from a source category 

that is regulated under Section 112. Commenters stated even under this alternative reading EPA 

still cannot rely on Section 111(d) as a basis for the Proposed Rule because of the regulatory 

scheme established under Section 112. 

Commenters stated EPA's only legal justification for departing from the Clean Air Act's "literal" 

text is based upon what EPA has admitted was "a drafting error," see 70 Fed. Reg. 15,994, 

16,031 (Mar. 29, 2005), which was properly excluded from the U.S. Code. Specifically, 

commenters stated, EPA claims that a single clerical entry in the 1990 Amendments to the Clean 

Air Act somehow renders the plain text of the Act ambiguous and thus permits EPA to regulate. 

Mem. at 25-27. Commenters stated this argument cannot withstand scrutiny. Commenters stated 

the clerical entry upon which EPA bases its entire rule was a non-substantive "conforming 

amendment," which was erroneously included in the 1990 Amendments to update a crossreference to Section 112, tracking the rearrangement of that section elsewhere in the 

Amendments. Commenters stated the 1990 Amendments also fundamentally altered Section 

111(d) and, in doing so, made the "conforming amendment" impossible to execute. 

Unsurprisingly, commenters stated EPA has not cited a single decision, from any area of law, 

giving any meaning to a clerical change that was rendered moot by a substantive amendment. 
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See Mem. at 26-27. To the contrary, commenters stated controlling case law provides that where 

a mistake in renumbering a statute and correcting a cross-reference conflicts with a substantive 

change, the mistake should not be considered when construing the substantive provision. See, 

e.g., Am. Petroleum Inst. v. SEC, 714 F.3d 1329, 1336-37 (D.C. Cir. 2013). 

Commenters stated that the Legal Memorandum asserts that the inclusion of two conflicting 

amendments creates an ambiguity such that the agency is permitted to "reasonably construe the 

Section 112 Exclusion to authorize the regulation of GHGs under section 111(d)." (See Legal 

Memorandum at (See National Emission Standards for Hazardous Air Pollutants From Coal- and 

Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-FuelFired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-CommercialInstitutional Steam Generating Units, 77 Fed. Reg. 9,304 (Feb. 16, 2012)) Commenters

continued, stating that EPA's confidence that both amendments must be given legal effect is 

misplaced, explaining that while substantive conflicts within a statute should be harmonized, it is 

not clear that both the amendment in section 108(g) and the amendment in section 302(a) are 

substantive. Further, commenters stated that the amendment originating in the House is 

contained in section 108 of the 1990 Amendments with a collection of substantive amendments 

titled "Miscellaneous Provisions", and that this is contrasted to section 109, which is titled 

"Conforming Amendments." Commenters stated that the amendment originating in the Senate is 

contained at section 302, titled "Conforming Amendments", and a mere conforming amendment 

does not have true substantive effect, and so it should not be given equal weight to the clearly 

substantive amendment at section 108. Commenters added that the reading giving effect to only 

the House amendment is, in fact, supported by EPA's initial interpretation of this statutory issue 

years ago. Commenters stated that in 1994, in a supporting document on regulation of Municipal 

Solid Waste Landfills under section 111(d), EPA had its first opportunity to interpret the 

amendments and determined that "section 108(g) is the correct amendment" (EPA, Air 

Emissions from Municipal Solid Waste Landfills - Background Information for Final Standards 

and Guidelines, Pub. No. EPA-453/R-94-021, at 1-5 (1994).) Commenters remarked that the 

Agency reasoned that section 302(a) was intended merely as a "simple substitution of one 

subsection citation for another, without consideration of other amendments of the section." (Id.) 

In other words, commenters said EPA prioritized the section 108(g) amendment over the section 

302(a) amendment. However, commenters stated even if the appropriate treatment of two 

amendments to the same section is to attempt to read them together, it is also not clear that EPA's 

reading is reasonable. Commenters stated each amendment could be read as intended to place a 

specific limit on the scope of section 111(d). When read together, therefore, commenters stated it 

is only reasonable that they should each be viewed as placing independent limits on section 

111(d). Commenters stated the reading advanced by the Agency, however, reads the two 

amendments together to expand the scope of section 111(d) beyond what either of the individual 

amendments would have allowed individually. Commenters stated that, in short, EPA reads the 

amendments in such a way that if a pollutant is on the section 112 pollutant list and the relevant 

category is regulated under section 112 that only then will the Section 112 Exclusion apply, and 

Congress quite clearly did not intend to limit the effect of either amendment, and so any 

reasonable harmonization must read each as independent exclusions. Commenters posited that 
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there is no affirmative judicial precedent on if and how the conflicting amendments to section 

111(d) should be harmonized,(EPA cites Supreme Court decisions in Massachusetts v. EPA, 549 

U.S. 497 (2007), and Am. Elec. Power v. Conn., 131 S.Ct. 2527 (2011), in support of its 

authority to issue this regulation. Commenters stated neither opinion contains a holding clearly 

resolving this issue. Moreover, commenters stated, both opinions were issued before EPA's 

regulation of EGUs under section 112 and so were not required to consider the impact of the 

Section 112 Exclusion on the applicability of section 111(d).)), nor any clear precedent as to how 

to treat conflicting amendments generally. Commenters concluded that significant legal 

questions remain regarding EPA's authority to issue the proposed guidelines in the first instance.

Commenters stated the only textual justification that EPA's Legal Memorandum offers for 

departing from the literal terms of Section 111(d) is unpersuasive, explaining the agency relies 

entirely on a one-sentence clerical entry in the 1990 Amendments to the Clean Air Act that was 

not codified in the U.S. Code but appears in the Statutes at Large. That entry, commenters said, 

even EPA has admitted, was clearly a mistake because it sought to make a technical correction 

rendered moot by another amendment. See 70 Fed. Reg. at 16,031 (describing the entry as a 

drafting error). Nevertheless, commenters stated EPA now claims that it must give meaning to 

this mistake and, as a result, has announced an interpretation of Section 111(d) that directly 

conflicts with the language in the U.S. Code. Commenters stated EPA's interpretation rewrites 

Section 111(d) from a prohibition on the regulation of any air pollutant emitted from a source 

category which is regulated under [Section 112], as stated in the U.S. Code, to a more limited 

prohibition on the regulation of any hazardous air pollutant emitted from such a source category. 

Commenters remarked that this sort of reasoning would be wrong under any circumstance, but it 

is particularly improper here, where it is being offered as the justification for one of the most 

costly regulations in this Nation's history. (Id.) Commenters continued, stating that West Virginia 

and 11 other states have since sued EPA; to date, the agency has declined comment, and urged

EPA to address the specific arguments against the legality of the proposed rule.

Commenters stated EPA's interpretation of the Act is inconsistent with the plain language of 

Section 111(d), which contains no ambiguity. Commenters stated courts grant agencies 

deference in interpreting the meaning of ambiguous statutes. See, e.g., Chevron, U.S.A., Inc. v. 

Natural Res. Defense Council, 467 U.S. 837 (1984). Commenters added there is no ambiguity in 

section 111(d). Commenters stated Section 111(d) says plainly that EPA has no authority to 

regulate a source category already regulated under section 112. Commenters explained that the 

basis of EPA's argument that section 111(d) is ambiguous is the existence in the Statutes at Large 

of two amendments to section 111(d) in the 1990 amendments to the Clean Air Act. Commenters 

stated one amendment was a technical amendment not codified in the U.S. Code because it was 

obvious to the codifier that the substantive amendment that was enacted superseded and rendered 

unnecessary the technical amendment. Commenters stated the U.S. Code therefore notes that the 

clerical entry "could not be executed." Revisor's Note, 42 U.S.C. section 7411. Commenters 

stated the technical amendment included in the Statutes at Large sought to update a crossreference to section 112(b)(1)(A) after section 112(b)(1)(A) was eliminated by another 1990 

amendment to the Act. Commenters stated this non-substantive, ministerial revision was 
123

included in a section in the Statutes at Large entitled "Conforming Amendments." Clean Air Act 

Amendments, Pub. L. No. 101-549, section 302(a), 104 Stat. 2399, 2574 (1990). But, 

commenters added, this revision was superseded and became moot when the second, substantive 

amendment to section 111(d) passed nearly two months later. H.R. 3030 (containing the 

substantive provision) passed on May 23, 1990, while S. 1630 (containing the ministerial crossreference) passed on April 3, 1990. See H.R. REP. NO. 101-490, at 454 (1990), reprinted in 2 A 

LEGISLATIVE HISTORY OF THE CLEAN AIR ACT AMENDMENTS OF 1990 ("Leg. 

History"), at 3021, 3478 (1993) (report to accompany H.R. 3030); S. 1630, 101st Cong. section 

112(e)(4)-(5)(D) (as passed by Senate, Apr. 3, 1990), reprinted in 3 Leg. History, at 4119, 4431-

33. Commenters remarked that although the technical amendment had a role to play prior to the 

substantive amendment to section 111(d) that was eventually adopted, once that amendment was 

adopted, inclusion of the technical amendment in the Statutes at Large was simply a "drafting 

error," as EPA has properly recognized. 70 Fed. Reg. 15,994, 16,031 (Mar. 29, 2005). 

Commenters stated as EPA stated, it was "hard to conceive that Congress would have adopted 

section 112(n)(1)(A), yet retained the [clerical] amendment to section 111(d)." Id. at 16,031. 

Commenters stated it does not conflict with and need not be reconciled with the substantive 

amendment which, in "a literal reading," EPA admits, means that the Agency "c[an] not regulate 

any air pollutant from a source category regulated under section 112." EPA Legal Memorandum 

at 26 (emphasis added). Commenters stated the Supreme Court has interpreted the provision in 

the same way: "EPA may not employ section 7411(d) if existing stationary sources of the 

pollutant in question are regulated under . . . the hazardous air pollutants program, section 7412." 

Am. Elec. Power Co. v. Connecticut, 131 S. Ct. 2527, 2537 n.7 (2011). And yet, commenters 

added, in an effort to expand its regulatory reach and to invoke judicial deference in doing so, the 

Agency attempts to fabricate ambiguity in the statute. Commenters noted that the D.C. Circuit 

has explained that it will not "read[] too much into a mere clerical error" and notes that incorrect 

conforming amendments (or the lack thereof) are common and can often be "the result of a 

scrivener's error." Am. Petroleum Inst. v. SEC, 714 F.3d 1329, 1336, 1337 (D.C. Cir. 2013). 

Commenters stated such errors should thus not be interpreted as giving rise to an "ambiguity." 

Id. at 1336. Commenters stated EPA is not required to reconcile obvious mistakes - editorial 

vestiges that were never executed in the U.S. Code - with substantive, intentional amendments to 

the Act. Commenters stated EPA should simply disregard obvious mistakes in the Statutes at 

Large that, because they were mistakes, "could not be executed" in the U.S. Code. Commenters 

stated even if there were ambiguity in the presence of the two provisions in the Statutes at Large, 

however, agencies have deference only to interpret the ambiguous meaning of a statute, not to 

divine what the text of a statute actually is. In this case, commenters added, if there is any 

uncertainty at all (which there is not), it centers on what the language of the statute actually is: 

why Congress neglected to reconcile both a substantive and a superseded clerical provision 

before they were entered in the Statutes at Large. Commenters stated the meaning of each of the 

substantive and clerical amendments is clear, not ambiguous. Commenters stated EPA 

inexplicably argues that both amendments should be read together even when there is no doubt 

that Congress did not intend for a superseded technical amendment to remain in the statute. 

Disregarding this obvious intent, commenters stated the Agency insists it should "give some 

effect to both amendments." EPA Legal Memorandum at 26. But, commenters stated, even if 
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two provisions in a statute are irreconcilable, "Chevron is not a license for an agency to repair a 

statute that does not make sense." Scialabba v. Cuellar de Osorio, 134 S. Ct. 2191, 2214 (2014) 

(Roberts, C.J., concurring). Commenters stated that in other words, "[d]irect conflict is not 

ambiguity, and the resolution of such a conflict is not statutory construction but legislative 

choice." Id. Commenters stated Courts will grant agencies deference only "because we presume 

that Congress intended to assign responsibility to resolve the ambiguity to the agency." Id. 

Commenters stated if it is clear that Congress did not assign such responsibility to an agency, but 

merely made a drafting mistake (which it does with some frequency), it is equally clear that such 

mistakes do not confer to agencies the license to rewrite the statute. UARG v. EPA, 134 S. Ct. at 

2446 ("[A]n agency may not rewrite clear statutory terms to suit its own sense of how the statute 

should operate."). Commenters stated EPA in fact cites no authority for the deference it implies it 

should receive to reconcile the "conflict" in section 111(d) it purports to have discovered. 

Commenters stated that in the litigation challenging CAMR, however, which also attempted to 

regulate coal-fired EGUs under section 111(d), EPA cited Citizens to Save Spencer County v. 

EPA, 600 F.2d 844 (D.C. Cir. 1979), to support its creative interpretation of section 111(d). Final 

Br. of Resp't EPA at 102-03, New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008) (No. 05-1097). 

Commenters stated that this is a very different situation from Citizens to Save Spencer County, 

where two different statutory provisions had different, mutually exclusive dates for regulatory 

action. Commenters stated those provisions could not be reconciled and the Agency was found to 

have reasonably "pursue[d] a middle course." Citizens to Save Spencer Cnty., 600 F.2d at 871. 

By contrast, commenters stated, the amendments at issue here can easily be reconciled, first and 

foremost by recognizing that the clerical amendment was inserted in the Statutes at Large by 

mistake and, therefore, should be disregarded. Commenters posited that even if one desires to 

infuse the clerical amendment with substantive intent, the two provisions are most clearly read as 

prohibiting the duplicative regulation of sources under both section 111(d) and section 112.

Commenters stated that EPA's proposed construction does not accord with either provision or 

with legislative intent. Commenters remarked that even if one were to attempt to treat the clerical 

amendment as substantive, as EPA does, the two provisions can be read in harmony, and one can 

easily give effect to both provisions, which when read together simply say that no source 

category and no pollutant that are regulated under section 112 can be regulated under section 

111. Commenters stated that in other words, reading both amendments together, EPA is 

prohibited from regulating under section 111(d) any pollutant or any source category that is 

regulated under section 112. Commenters stated this construction is the only one that construes 

both provisions substantively and that is also faithful to the plain text of both. Commenters stated 

the substantive amendment in the Statutes at Large reads: "Regulation of Existing Sources. 

Section 111(d)(1)(A)(i) of the Clean Air Act . . . is amended by striking or 112(b)(1)(A) and 

inserting or emitted from a source category which is regulated under section 112. " Clean Air Act 

Amendments, Pub. L. No. 101-549, section 108(g), 104 Stat. 2399, 2467 (1990). Commenters 

stated the clerical amendment reads: "Conforming Amendments. (a) Section 111(d)(1) of the 

Clean Air Act is amended by striking 112(b)(1)(A) and inserting in lieu thereof 112(b)." Id. 

section 302(a), 104 Stat. at 2574. Commenters stated that in the CAMR rulemaking, the Agency 

adopted an interpretation of the two amendments in its attempt "to give some effect to both." 
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EPA Legal Memorandum at 26. Commenters stated it proposes to do so again here, though with 

a slightly different hurdle to maneuver. Commenters stated in CAMR, EPA sought to regulate a 

hazardous air pollutant under section 111(d), and as part of that effort, "delisted" the source 

category of coal- and oil-fired EGUs from regulation under section 112. Commenters stated that 

in 2005, EPA interpreted the two amendments together to mean: "Where a source category is 

being regulated under section 112, a section 111(d) standard of performance cannot be 

established to address any HAP listed under section 112(b) that may be emitted from that 

particular source category. Thus, commenters stated, if EPA is regulating source category X 

under section 112, section 111(d) could not be used to regulate any HAP emissions from that 

particular source category." 70 Fed. Reg. at 16,031-32. Commenters stated that in this 

interpretation, rather than giving effect to both amendments, the Agency in fact limited the reach 

of each and constrained its authority to regulate to a world much smaller than either the clerical 

or substantive amendment alone contemplated.(The substantive amendment addresses source 

categories, without regard to pollutant ("Universe A"). The clerical amendment, read 

substantively, addresses pollutants, without regard to source category ("Universe B"). By 

artificially merging the two, EPA created not Universe A + B, but Universe C, a potential 

regulated universe much smaller than either Universe A or Universe B, thereby ignoring the 

intents of both amendments rather than choosing to give effect to both or at least one.) 

Commenters stated EPA thus gave effect to neither provision and proposes the same 

interpretation now. Commenters stated EPA ignores the statutory text, despite being required "to 

give effect, if possible, to every word Congress used." Reiter v. Sonotone Corp., 442 U.S. 330, 

339 (1979). Commenters stated EPA did not then and does not now explain how altering the 

intent of both amendments by limiting their individual reaches "gave effect" to each amendment. 

Commenters stated EPA's interpretation expressly contravenes the first amendment (under 

section 108(g) of the Statutes at Large, 104 Stat. at 2467) because it would allow EPA to regulate 

the same source category it is regulating under section 112. Commenters stated EPA's approach 

would also expressly contravene the second amendment (under section 302(a) of the Statutes at 

Large, 104 Stat. at 2574) because it would allow the Agency to use section 111(d) to regulate 

hazardous air pollutants from a source category that is not already subject to section 112 

standards. But, commenters stated, perceived ambiguity or conflict "gives no license to a court or 

agency to indulge in unrestrained and fanciful flights of constructional imagination to arrive at 

artful but artificially consistent interpretations." Citizens to Save Spencer Cnty., 600 F.2d at 870.

Commenters stated besides limiting the universe of sources and gases that EPA can regulate 

under section 111(d) beyond what either the House or Senate intended with their amendments 

alone, Commenters added, the Agency's interpretation also unreasonably constrains the plain 

meaning of the substantive amendment in the mistaken interest of giving some meaning to the 

clerical amendment, which again EPA admits was likely a non-substantive "drafting error." 70 

Fed. Reg. at 16,031. Commenters stated although EPA argued that its 2005 interpretation "gives 

effect to the House's desire to increase the scope of EPA's authority under section 111(d) and to 

avoid duplicative regulation of [hazardous air pollutants] for a particular source category," id. at 

16,032 (citing 136 Cong. Rec. H12911, 12934 (daily ed. Oct. 26, 1990)), it also acknowledged 

the interpretation "does not give full effect to the [substantive amendment], because a literal 

reading . . . would mean that EPA could not regulate [hazardous air pollutants] or non-
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[hazardous air pollutants] emitted from a source category regulated under section 112," Id. 

Commenters stated that it is not surprising that Congress would have confirmed and clarified the 

limited reach of section 111(d). Commenters stated prior to the 1990 Amendments, section 

111(d) looked solely to whether the pollutant at issue was already regulated under section 108 or 

section 112. Commenters stated with the 1990 amendments, section 112 was transformed from a 

little used provision into a comprehensive control technology program. See EPA, "Summary of 

the Clean Air Act," http://www2.epa.gov/ laws-regulations/summary-clean-air-act; H.R. REP. 

NO. 101-490, at 151 (1990), reprinted in 2 Leg. History, at 3175; S. REP. NO. 101-228, at 148 

(1990), reprinted in 5 Leg. History, at 8338, 8488. Commenters stated Congress fundamentally 

changed section 112 so that those standards now "apply to sources in a category . . . rather than 

to pollutants individually." S. REP. NO. 101-228, at 148 (1990), reprinted in 5 Leg. History at 

8488. Commenters added that to avoid onerous duplication, Congress then amended section 

111, which is also technology-based and also applies to source categories rather than to 

pollutants. Commenters stated if an entity is regulated under section 112, it cannot also be 

regulated under section 111(d). Commenters stated that for all the reasons discussed above, 

EPA's interpretation of section 111(d) does not accord with either the plain statutory language or 

its legislative history. Commenters stated EPA lacks authority to regulate coal- and oil-fired 

EGUs under section 111(d). EPA must withdraw the Proposed Guidelines because they violate 

both the text and Congress's clear intent in the 1990 Amendments.

Commenters added that even if it were appropriate for EPA to assume now that despite being a 

drafting error, the Senate amendment must be incorporated into Section 111(d), that does not 

mean that the House amendment cannot be given full effect, and even when faced with two 

equally applicable provisions, full effect should be given to each to the extent possible. See Watt 

v. Alaska, 451 U.S. 259, 267 (1981). Commenters stated EPA could give full effect to each 

provision by excluding from Section 111(d) any source category regulated under Section 112 

and any pollutant listed in Section 112(b). Commenters stated that by reading the two

amendments in this light, EPA could give full effect to the plain meaning of each amendment in 

a manner consistent with Congress' intent. Commenters continued, stating when there are two 

acts upon the same subject, the rule is to give effect to both if possible. - United States v. Borden 

Co., 308 U.S. 188, 198 (1939); see also Watt, 451 U.S. at 267 (an agency or court must read [two 

allegedly conflicting] statutes to give effect to each if [it] can do so while preserving their sense 

and purpose); Morton v. Mancari, 417 U.S. 353, 551 (1974).

Commenters stated that the House amendment is consistent with the co-benefits associated with 

regulating source under Section 112. Commenters remarked it is clear as a policy matter that 

Congress, in the 1990 CAA amendments, was focused on avoiding unnecessary and duplicative 

regulation of emissions from stationary sources. Commenters stated that as EPA has recognized, 

this is particularly true for EGUs. See 70 Fed. Reg. at 15,999 (asserting that Congress treatment 

of EGUs reveals Congress recognition that Utility Units are a broad, diverse source category that 

is subject to numerous CAA requirements, including requirements under both Title I and Title 

IV, and that such sources should not be subject to duplicative or otherwise inefficient regulation). 

Commenters stated prohibiting EPA from regulating existing sources under both Sections 111(d) 
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and 112 is consistent with the broader policy objective of avoiding duplicative regulation. 

Commenters stated emission controls designed to reduce emissions of one pollutant typically 

have the effect of reducing emissions of a much broader suite of pollutants. Thus, commenters 

stated, when EPA requires a facility to install the maximum achievable control technology 

(MACT) required under Section 112 to reduce target pollutants, there can frequently be little or 

no need for additional regulatory obligations for other pollutants under section 111(d) because 

applying the stringent MACT standard can have the effect of controlling many other common 

pollutants. Commenters stated that the correlation between emission reductions of multiple 

pollutants is also central to EPA's practice of using surrogates as a means of controlling 

emissions of hazardous air pollutants. Commenters stated that under this approach, EPA may 

regulate [a] pollutant indirectly when its emissions are controllable by regulation of other 

pollutants.- Natl Lime Assn v. EPA, 233 F.3d 625, 637 (D.C. Cir. 2000) (citing NRDC v. EPA, 

822 F.2d 104, 125 (D.C. Cir. 1987). Thus, with respect to Section 112, commenters added, courts 

have held that EPA may use a surrogate to regulate hazardous air pollutants if it is reasonable to 

do so, and have repeatedly held that EPA can use non-HAP criteria pollutants such as PM2.5 as 

surrogates for HAP pollutants under Section 112. Id. at 637-40; Sierra Club v. EPA, 353 F.3d 

976, 984 (D.C. Cir. 2004). Commenters posited that EPA's frequent reliance on co-benefits and 

surrogates under Section 112 is consistent with policy underlying Congress' decision to foreclose 

regulation under Section 111(d) where a source category is regulated under Section 112 

regulation of hazardous air pollutants from a source category under Section 112 can have the 

ancillary effect of reducing emissions of other non-HAP pollutants that might otherwise be 

regulated under Section 111(d). (Congress' decision to forbid additional regulation of Section 

112 sources is also supported by the fact the preemption applies only to existing sources. 

Retrofitting existing sources with new pollution control technology is extremely costly and will 

provide limited benefits since, in many cases, existing sources have a limited remaining useful 

life. In contrast, new sources, which have more flexibility to install pollution controls and longer 

projected useful lives, can be subject to both Section 112 MACT standards and standards of 

performance under Section 111(b). Likewise, existing sources that are regulated under Section 

112 and elect to undergo a modification or reconstruction can also be subject to standards of 

performance under Section 111(b).)

Commenters stated that units are already regulated under Section 112 of the Clean Air Act, and 

any difference in the Act's Section 111(d) provisions are due to a clerical error in the drafting of 

the Senate version of the language. Commenters explained that the House version found in the 

1990 CAA Amendments substantively changes and expands the limitation on EPA's authority to 

propose rules under Section 111(d) on source categories already regulated under Section 112. 

Commenters stated the House Amendment can be found in the Statutes at Large, among all the 

other substantive amendments to the Act, and in contrast, the Senate version is merely a clerical 

amendment to reflect drafting changes in other provisions of the 1990 CAA Amendments in 

order to accurately reflect cross references. Further, commenters added, the Senate Amendment 

can be found in a section of amendments specifically designated as "Conforming Amendments," 

which are non-substantive. Commenters concluded that the House amendment, being a 

substantive amendment, ultimately eliminates the cross-reference that the Senate's conforming 
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amendment was intending to update, and therefore, once the House amendment is applied, the 

Senate amendment is rendered unnecessary.

Commenters remarked verbatim "As a matter of legislative history, the 1990 Clean Air Act 

Amendments began with the announcement of a Bush I administration proposal on June 12, 

1989." "The Administration bill was introduced in the House as H.R. 3030 on July 27, 1989, by 

Representative Dingell," with many co-sponsors, "and in the Senate as S1490 on August 3, 1989, 

by Senator Chafee." S. 1490 did not advance. As first introduced, H.R. 3030 had both what 

became Public Law 101-549, section 108(f) and section 112(n). In the July 24, 1989 draft, what 

became section 108(g) of the CAA was numbered as section 108(d). What ultimately became 42 

U.S.C. 7412(n)(1)(A) was numbered at that time section 301(m). Thus, it can be seen that these 

two sections were substantively unchanged in H.R. 3030 from its introduction on July 27, 1989 

through its passage on May 23, 1990. The most important committee report on H.R. 3030 is 

Report 101-490, dated May 17, 1990. Section 108(f) and section 301(l) of H.R. 3030, as passed 

on May 23, 1990, were reported on May 17, 1990 as previously quoted. In the title-by-title 

analysis, there was no discussion of section 108(f). Section 301(l) was discussed in these terms: 

Electric utilities. Under new section 112(l), the Administrator is directed to perform an 

assessment of the hazards to public health which may reasonably be anticipated to result from 

emissions listed under this section from certain electric utilities after imposition of the 

requirements of this Act. The Administrator is directed to report the results of this study to the 

Congress within three years after enactment. The Administrator shall develop and describe in his 

report to the Congress alternative control strategies for emissions from affected sources 

warranting regulation under this section. The Administrator is required to regulate such sources 

if he finds such regulation appropriate and necessary after considering results of the study. The 

report set forth the textual effect of section 108(f) on section 111(d) of the CAA using brackets 

and italics. Likewise, the addition of the language in section 301(l) to section 112 of the CAA 

was set forth in italics. Although there were floor Amendments on May 23, 1990, none of them 

pertained to sections 108(f) or 301(l) of H.R. 3030. However, it should be noted that the House, 

at the same time it was forbidding regulation of source categories under section 111(d) of the 

CAA that are regulated under section 112, passed a floor amendment entitled "INFORMATION 

GATHERING ON GREENHOUSE CASES [sic] CONTRIBUTING TO GLOBAL CLIMATE 

CHANGE" which became section 715 of H.R. 3030 as passed. Consequently, it cannot be said 

that Congress was unaware of the possibility that other pollutants, such as GHGs, might warrant 

regulation under the CAA someday, even as Congress was opting to foreclose regulation under 

section 111 of source categories regulated under section 112, including, depending on EPA's 

decision with respect to section 112(n), electric utility generating units. On the Senate side, S. 

1490 at sections 108(d) and 301(m) tracked the provisions in H.R. 3030 that we have been 

considering. "The Senate Environmental Protection Subcommittee of the Committee on 

Environment and Public Works used S1630, an alternative clean air proposal introduced by 

Senator Baucus on September 14, 1989, as its markup vehicle." Entitled "The Clean Air 

Restoration and Standards Attainment Act," S. 1630, as introduced, did not amend the CAA to 

broadly authorize national emission standards for existing sources under section 112, so there 

was no occasion to reference sections 111(d) or 112 of the CAA. As characterized by Senator 
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Baucus: "As a first major step toward controlling greenhouse gases, the bill require[d] cars to 

meet 'for the first time' a carbon monoxide standard." After markup, S. 1630 did have a section 

taken from S. 816 to address section 112. S. 816, introduced April 18, 1989, replaced the criteria 

for section 112 addressing extreme hazards with broader criteria and an initial statutory list like 

that now found at section 112(b) of the CAA. S. 816 also introduced the concept of regulating 

major and area sources. Boilers generally were intended to be within the regulated major source 

categories or subcategories. Section 4(c) provided a conforming amendment that updated the 

section 111(d) reference to section 112: "Section 111(d)(1) of the Clean Air Act is amended by 

striking '112(b)(1)(A)' and inserting in lieu thereof '112(b).'" By continuing to exclude from 

section 111(d) of the CAA those pollutants regulated by section 112 while expanding the number 

of those pollutants and the criteria for adding new pollutants, S. 816 significantly reduced the 

reach of the section 111(b) program. S. 1630 was reported out of the Senate Environmental and 

Public Works Committee as an omnibus clean air bill on November 16, 1989. That committee 

issued its Report 101-228 on December 20, 1989. The report contained the additional views of 

Senator Warner in which he regretted that the bill did not contain the utility study provisions of 

S. 1490. Senator Symms in his statement of minority views likewise regretted the additional 

duplicative regulation that S. 1630 would impose on utility power plant emissions without the 

benefit of the study proposed by the administration. The report depicted the textual change in 

sections 111(d)(1) from "112(b)(1)(A)" to "112(b)." That change appeared in S. 1630 at section 

305(a) under the heading "Conforming Amendments." S. 1630 was removed from the Senate 

floor on February 1, 1990 in the face of a veto threat. A redrafted S. 1630 was returned to the 

Senate floor on March 5, 1990. Under the title "Conforming Amendments," the following 

appeared: "Sec. 305(a) Section 111(d)(1) of the Clean Air Act is amended by striking 

'112(b)(1)(A)' and inserting in lieu thereof '112(b).'" This was necessary because the section 

112(b)(1)(A) r'gime was going away under S. 1630. Section 112(b)(1)(A) of the CAA had 

provided: "The Administrator shall, within 90 days after the date of the enactment of the Clean 

Air Act Amendments of 1970, publish (and shall from time to time thereafter revise) a list which 

includes each hazardous air pollutant for which he intends to establish an emission standard 

under this section." In its place, S. 1630 enacted a lengthy list of pollutants for EPA to regulate 

under the revamped section 112 and established broad criteria that covered pollutants that 

negatively affected human health or the environment, even if those pollutants were not extremely 

hazardous as previously required. "Debate on the compromise S1630 began on March 5 and

continued to April 3, 1990." Over that period "the bill was changed substantially by 111 

amendments," none of which were significant for this discussion. "S.1630, as amended, passed 

the Senate by a vote of 89 to 11 on April 3, 1990." Under the caption "Conforming 

Amendments," section 305(a) provided "Section 111(d) of the Clean Air Act is amended by 

striking '112(b)(1)(A)' and inserting in lieu thereof '112(b).'" There was no equivalent to what 

became section 112(n) of the CAA. In conference, "[t]he House amendment to the text of the bill 

struck out all of the Senate bill after the enacting clause and inserted a substitute text." The 

Senate receded from its disagreement with the House by offering a substitute amendment as "a 

substitute for the Senate bill and the House amendment." The Conference Committee Report 

expressly noted engagement with the electric utility requirement that became section 112(n) of 

the CAA. The revamped section 112 national emission standard program enacted by Public Law 
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101-549, found in title III, "is a mixture of provisions from the House and Senate bills, with

amendments." Section 302, entitled "Conforming Amendments," contained, as subsection (a), 

these provisions: "Section 111(d)(1) of the Clean Air Act is amended by striking '112(b)(1)(A)' 

and inserting in lieu thereof '112(b).'" Section 821 of Public Law 101-549 required information 

gathering on CO2. It is apparent from the legislative history that sections 108(g) and 301(n) of 

Public Law 101-549 had been substantively related in the House bill since being first proposed 

by the administration. It is also clear that, in conference, the Senate accepted the substantive 

policy reflected in those two provisions. The agreed policy was that regulation of existing EGU 

sources under section 112 of the CAA would be studied with a decision to follow. The policy 

also included the intent not to regulate existing sources under section 111(d) if a decision were 

made to regulate those sources under section 112. This applied to existing sources in general and 

existing EGU sources in particular. The importance of the policy difference between H.R. 3030 

and S. 1630 could not have been overlooked given the statements of Senators Warner and 

Symms in S. Rep. 101-228. Nor can it be said to have been overlooked when the Senate adopted 

the House provision regarding the utility study in section 112(n). Indeed, Senator Chafee noted 

that in "amending section 111 of the Clean Air Act relating to new and existing stationary 

sources . . . [t]he Senate recedes to the House except that with respect to the requirement 

regarding judicial review of reports, the House recedes to the Senate and with respect to 

transportation planning, the House recedes to the Senate with certain modifications." Senator 

Durenberger also described the "3-year study of utility emissions followed by regulations to the 

extent the Administrator finds them necessary." Furthermore, given the requirement to gather 

data on CO2 "an historical precursor of regulation" Congress was on notice that section 108(g) 

of Public Law 101-549 would prevent regulation of CO2 from existing sources of EGUs under 

section 111(d) of the CAA if the decision were made to regulate those sources under section 

112."

Commenters continued verbatim "What then is the legal significance of the inclusion of section 

302(a) in Public Law 101-549, providing: "Section 111(d) of the Clean Air Act is amended by 

striking 112(b)(1)(A) and inserting in lieu thereof 112(b)"" Section 302(a) of Public Law 101-

549 must be regarded as a mere conforming amendment, held over by inadvertence. Once the 

Senate consciously agreed to the policy reflected in sections 108(g) and 301(n), Congress could 

not have intended to adopt 302(a) instead of those two provisions. Hence the retention of section 

302(a) was a drafting error, as EPA has previously said. Furthermore, the revisers' note to 42 

U.S.C. S. 7411(d) correctly indicates that the command contained in section 302(a) cannot be 

executed. This is clearly right because the conforming amendment of section 302(a) cannot be 

given effect once the substantive amendment in section 108(g) is effectuated. As a consequence, 

with or without explicit drafting error analysis, 108(g) should be given effect because technical 

or conforming amendments are not to be deemed of equal dignity for purposes of statutory 

interpretation with the substantive provisions of a statute. In United States v. Electronic Data 

Systems Federal Corp., the Federal Circuit emphasized that it was inappropriate "to give a 

technical amendment substantive effect that would undermine" the clearly expressed substantive 

intent of Congress. Rather, "[c]ongressional designation of an amendment as a 'conforming 

amendment' evidences legislative intent that the amendment should be read as non-substantive," 
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and so should not be given an interpretation that works a substantive change to the law. The issue 

in Electronic Data Systems was "[w]hether the Brooks Act, 40 U.S.C. S. 759 (1982 & Supp. IV 

1986), provides the Board with jurisdiction over Postal Service procurements of [automatic data 

processing equipment or] ADPE." The Brooks Act, enacted in 1965, gave the General Services 

Administration broad authority over procurement of ADPE on behalf of the federal government," 

including the Post Office Department and all other agencies listed in 40 U.S.C. S. 474. At the 

time of the Post Office Department's re-organization as the Postal Service in 1970, Congress saw 

fit to provide generally that federal contracting law would not "apply to the exercise of the 

powers of the Postal Service," without reference to the Brooks Act. However, a "technical 

amendment" in the very re-organization act that provided the Postal Service this independence 

substituted the "Postal Service" in place of "the Post Office Department" in 40 U.S.C. S. 474's 

list of agencies to which the Brooks Act applied. Reading the "technical amendment's" addition 

of Postal Service to the list in section 474 to be merely "an attempt to conform a previously 

existing statute that mentioned the Post Office Department," without substantive intent, the court 

noted "[t]he Postal Reorganization Act, moreover, itself contravenes the Board's reading of the 

technical amendment because that Act omits the Brooks Act from the list of enumerated statutes 

applicable to the Postal Service" that were provided elsewhere in the Act. So the Federal Circuit 

resolved this plain language conflict by granting priority to the clearly expressed intent of 

Congress in the substantive amendments over any contrary apparent meaning suggested by the 

technical amendments." 

Commenters continued verbatim "With respect to drafting errors, the Supreme Court has held 

that the plain language of a provision may be ignored, for example, where "common sense 

suggests that the cross-reference is simply a drafting mistake, a failure to delete an inappropriate 

cross-reference in the bill that Congress later enacted into law," concluding that the language 

would not necessarily "creat[e] ambiguity, but [merely] reflect[] a mistake" by Congress. Where 

a conforming provision related to a portion of a bill that was substantively rejected is 

incongruently held over in the resulting Act, it may be fairly held that the legislative intention 

was to strike that conforming provision but that it was overlooked in error. The D.C. Circuit has 

previously dealt with scrivener's errors in the context of the Clean Air Act Amendments of 1990 

and EPA's claim of Chevron deference. The portion of the 1990 Amendments scrutinized 

Appalachian Power had made various substitutions to cross-referenced sections of the Clean Air 

Act and in one had altered the cross-reference to designate a subsection that had not previously 

been cross-referenced. Despite the plain language of the CAA, the court recognized that 

"[r]eading a statute contrary to its seemingly clear meaning is permissible "[i]f "the literal 

application of a statute will produce a result demonstrably at odds with the intentions of its 

drafters."" " Because the statute "as written is at odds with congressional intent" and there is "a 

convincing account of how [the error] came to be enacted" "there inadvertent substitution "in the 

course of a routine renumbering of statutory cross-references"" the Court permitted EPA to 

construe the amendments "as if this 'inadvertence' had not occurred." An earlier opinion of the 

D.C. Circuit had adopted Step One analysis for analyzing the existence and effect of scrivener's 

errors, reserving Chevron step two for instances in which "there are multiple ways of avoiding a 

statutory anomaly, all equally consistent with the intentions of the statute's drafters (and equally 
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inconsistent with the statute's text)." Under either approach, EPA may not nullify the 

unambiguous language of section 108(g), a substantive amendment that changes the pre-1990 

law in anticipation of regulating EGUs under section 112, merely because of the presence of a 

left-over conforming amendment that was drafted prior to the Senate's acceptance of the House's 

approach to EGUs." 

Commenters continued verbatim "At section III of its Legal Memorandum, EPA again seeks to 

explain away the legal obstacles to regulating source categories under section 111(d) of the CAA 

which are regulated under section 112. EPA begins by citing Massachusetts v. EPA for the 

proposition "that greenhouse gases (including CO2) are an air pollutant under the CAA." EPA 

then asserts that in American Electric Power, the Court expressed an "understanding that section 

111, including section 111(d), applies to carbon dioxide emissions from those sources." This is 

an odd assertion to make given the fact that the Court assumed the very thing that EPA now 

takes such pains to attempt to refute; namely that "EPA may not employ 7411(d) if existing 

stationary sources of the pollutant in question are regulated under the National Ambient Air 

Quality Program, 7408-7410, or the hazardous air pollutants program, 7412. See 7411(d)(1)." 

Furthermore, the Supreme Court in UARG at footnote 5 of the majority opinion carefully noted 

that whether CO2 may be regulated under section 111(d) is an open question. In discussing the 

drafting history of the 1990 Amendments to the CAA, EPA first says that the passage of both the 

House substantive amendments and the Senate conforming amendment "stem from apparent 

drafting errors that occurred during enactment of the 1990 CAA Amendments, which revised 

section 111(d)." Then, EPA says this gives rise to "ambiguities" to a "conflict" allowing EPA to 

"reasonably construe the section 112 exclusion to authorize the regulation of GHCs under section 

111(d)." But as demonstrated above, where a drafting error can be identified, there is no conflict 

or ambiguity. Instead, the drafting error should be disregarded. EPA seeks to bolster its position 

by appealing to its statements from March 29, 2005. According to EPA, its interpretation best 

comports with congressional intent because "giv[ing] full effect to the House language" by 

accepting "a literal reading of that language would mean that the EPA could not regulate any air 

pollutant from a source category regulated under section 112, a result that would be inconsistent 

with (i) Congress' desire in the 1990 CAA Amendments to require the EPA to regulate more 

substances, and not to eliminate the EPA's ability to regulate large categories of air pollutants, 

and (ii) the fact that the EPA has historically regulated non-hazardous air pollutants under 

section 111(d), even where those air pollutants were emitted from a source category actually 

regulated under section 112." But this misapprehends clear congressional intent. Congress did 

not simply want "EPA to regulate more substances." Congress wanted EPA to regulate more 

substances under section 112 using national standards other than substances from EGUs. It left 

open the question whether to regulate EGUs under section 112 at all. As a part of that legislative 

bargain, it was substantively agreed that source categories regulated under section 112 would not 

be regulated under section 111(d). This was Congress' substantive intent. In light of that intent, 

the conforming amendment was no longer conforming, but became a drafting error that is now 

due to be disregarded." 
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Commenters stated that even if these two versions are deemed to exist, the proposed rule fails 

principles of statutory construction. Courts and agencies must "give effect, if possible, to every 

word Congress used." Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979). Applying that 

standard to the present case would require an interpretation that gives effect to "every word" of 

both limitations. Here, the two limitations can be read together to prohibit EPA from regulating 

under Section 111(d) both any pollutant emitted from any source category already regulated 

under Section 112 and any hazardous air pollutant regardless of its source. See, e.g. Letter from 

National Association of Manufacturers et al. to EPA 26-27 (July 25, 2012), available at 

http://www.nam.org/~/media/53e86e050c7a495a9cc84f9778balf10/association_ghg_nsps_co

mments_june_25_2012.pdf. If EPA's erroneous view of the Statutes at Large is accepted, that 

would be the only proper interpretation and the proposed rule would still be prohibited. 

Commenters continued, stating that EPA instead has constructed a new interpretation of Section 

111(d), which improperly seeks to cut back on each limitation rather than incorporating both. 

Commenters added that the Senate amendment is only a clerical change and therefore must yield 

to the House version. Commenters stated conforming amendments are applied only after 

substantive amendments, which renders the Senate amendment superfluous. 

Commenters stated even if it were appropriate to treat the House and Senate amendments as in 

direct conflict, this would not create an ambiguity that EPA would be empowered to resolve, as 

there is no implied delegation from Congress to do so. "Direct conflict [between statutory 

provisions] is not ambiguity, and the resolution of such a conflict is not statutory construction but 

legislative choice. Chevron is not a license for an agency to repair a statute that does not make 

sense." Scialabba v. Cuellar de Osorio, 134 S.Ct. 2191, 2214 (2014) (Roberts, C.J., concurring). 

Commenters stated that EPA must therefore give effect the version of the statute published in the 

United States Code, which provides that "the Code of Laws of the United States current at any 

time shall...establish prima facie the laws of the United States..." 1 U.S.C. section 204(a) (2006). 

This prima facie evidence is displaced only where the U.S. Code is 'inconsistent' with the 

Statutes at Large. Here, commenters remarked, that is not true, when both the House and Senate 

amendments are given effect. Stephan v. United States, 319 U.S. 23, 426 (1943).

Response 46: EPA disagrees that it may not promulgate regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble. Further, EPA’s views on arguments presented by the commenters, including 

commenters’ discussion of the AEP opinion and of the Senate amendment, are also discussed in 

EPA’s briefs in the Murray Energy and West Virginia cases, No. 14-1112, No. 14-1146, and No. 

14-1151 (D.C. Cir.).

Comment 47: Commenters stated that EPA's Legal Memorandum correctly describes the history 

of the different House and Senate-enacted versions of Section 111(d)(1) (EPA, Legal 

Memorandum for Proposed Carbon Pollution Emission Guidelines for Existing Electric Utility 

Generating Units (June 2014), available at http://www2.epa.gov/sites/production/files/2014-

06/documents/20140602-legal-memorandum.pdf, at 20-27)). Commenters remarked (verbatim) 

The House version (which is the version presented in the U.S. Code) provides for standards of 
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performance for existing sources "for any air pollutant (i) [1] for which air quality criteria have 

not been issued or which is not included on a list published under [CAA section 108(a)] or [2] 

emitted from a source category which is regulated under [section 112]." Because power plants 

are a source category regulated under section 112 for mercury and other hazardous air pollutant 

("HAP") emissions, see 77 Fed. Reg. 9,304 (Feb. 16, 2012) (final Mercury and Air Toxics 

["MATS"] rule), some industry groups have argued that the foregoing language precludes EPA 

from issuing section 111(d) performance standards of performance for emissions of any 

pollutants (including CO2) from existing power plants. The Senate version, which also appears 

in the enacted (i.e., Statutes at Large) version of the 1990 amendments, requires standards of 

performance "for any air pollutant . . . which is not included on a list published under section 

108(a) or 112(b) (1)(A)" of the Act. In the Legal Memorandum, EPA correctly concludes that the 

enactment of these conflicting versions creates an ambiguity that EPA is authorized to resolve 

under step 2 of the test articulated in Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-844 

(1984) (Id. at 25). The agency then offers a reasonable interpretation of the provisions as 

together excluding from regulation under section 111(d) not all pollutants, but only and 

specifically HAPs that are both listed under section 112(b) and emitted by sources (such as 

power plants) that are regulated under section 112 (Id. At 26-27). Under EPA's construction, 

therefore, the agency may not regulate power plant mercury emissions under section 111(d), 

since mercury is a listed HAP and power plants are regulated under section 112 by the MATS 

rule, but it must regulate power plant CO2 emissions under section 111(d), since CO2 is not a 

HAP listed under section 112(b), notwithstanding the MATS rule. EPA's proposed construction 

is consistent with the context and evolution of section 111(d), and it is necessary to consider the 

1990 Clean Air Act Amendments against this legal backdrop. See McFarland v. Scott, 512 U.S. 

849, 856 (1994) ("Congress legislated against this legal backdrop . . . and we safely assume that 

it did not intend for the express requirement of counsel to be defeated in this manner"). 

Historically, section 111 has served a gap-filling function to ensure that EPA had a mechanism to 

regulate dangerous air pollutants that were not already covered under the criteria pollutant or 

HAP programs. Prior to the 1990 Amendments, the HAP exclusion under section 111(d) applied 

only to pollutants "not included on a list published under" Section 112" not to categories of 

sources that emitted those pollutants. 42 U.S.C. 7411(d)(1)(1977); Public Law 95-95. There is 

nothing in the structure or history of the 1990 Amendments to suggest that Congress meant to 

drastically broaden that exclusion, which has always functioned simply to ensure that EPA's 

section 111(d) rules do not encompass pollutant emissions already subject to regulation under 

Act's criteria pollutant or air toxics provisions for existing sources. EPA is therefore well within 

its authority to interpret the Amendments as preserving the function and scope of section 111(d) 

that existed prior to 1990, and is correct to interpret the statute to permit regulation of CO2 

emissions from existing EGUs under section 111(d). 

The industry reading also ignores clear statutory evidence that Congress intended sections 111 

and 112 to work in unison, not disharmony. Congress expressly directed that the source 

categories to be regulated under section 112 be consistent with the list of source categories 

regulated under section 111. 42 U.S.C. 7412(c)(1). This cross-reference would serve no purpose 

if Congress had intended that HAP regulations under section 112 would prohibit EPA from 
135

regulating any and all emissions, HAP and non-HAP alike, from those sources under section 

111(d). In this regard - and in effectively dismantling an entire Clean Air Act program - the

industry reading would contravene the fundamental canon that statutes are to be construed to 

give all words and provisions effect. See, e.g., Northwest Austin Mun. Utility Dist. No. One v. 

Holder, 557 U.S. 193, 211 (2009) (rejecting statutory interpretation that would render a provision 

"all but a nullity . . . It is unlikely that Congress intended the provision to have such limited 

effect.") (citation omitted); TRW v. Andrews, 534 U.S. 19, 29, 31 (2001) (rejecting reading that 

would "in practical effect" render statutory provision "entirely superfluous in all but the most 

unusual circumstances . . . . It is a cardinal principle of statutory construction that a statute ought, 

upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall 

be superfluous, void, or insignificant. Were we to adopt Andrews' construction of the statute, the 

express exception would be rendered insignificant, if not wholly superfluous.") (citations and 

internal quotation marks omitted); Mayle v. Felix, 545 U.S. 644, 662 (2005) (rejects reading 

under which statutory limitations period "would have slim significance"). Along these same 

lines, the industry reading would effectively treat the 1990 Amendments as an implied repeal of 

section 111(d). Courts generally reject claims of implied repeal, and will only accept them when 

there is "overwhelming evidence" and "when the earlier and later statutes are irreconcilable." 

E.M. AG Supply v. Pioneer Hi-Bred International, 534 U.S. 124, 137, 141-42 (2001) (citations 

and internal quotation marks omitted). Neither condition applies in this instance. Nor is there any 

evidence that Congress meant to strip section 111(d) of its utility in such a cryptic manner. If 

Congress had meant to significantly restrict the applicability of section 111(d)(1), it would have 

said so clearly. See Board of Trustees v. Roche Molecular Systems, 131 S. Ct. 2188, 2198-99 

(2011) ("[I]f Congress has intended such a sea change . . . it would have said so clearly"); 

Whitman v. Am. Trucking Assns, 531 U.S. 457, 468 (2001) ("Congress . . . does not alter the 

fundamental details of a regulatory scheme in vague terms or ancillary provisions -- it does not, 

one might say, hide elephants in mouseholes."). This point is particularly salient in the case of 

the 1990 Clean Air Act Amendments, which were universally understood to tighten, not loosen, 

the statute's pollution control measures. See, e.g., Remarks of President Bush Upon Signing S. 

1630, 26 Weekly Comp. Pres. Doc. 1824 (Nov. 19, 1990) (reprinting the President's signing 

statement of Nov. 15, 1990) ("This legislation isn't just the centerpiece of our environmental 

agenda. It is simply the most significant air pollution legislation in our nation's history, and it 

restores America's place as the global leader in environmental protection."). To assert that a 

landmark bill praised for its environmental stringency actually eviscerates key provisions of the 

statute sub silentio borders on the absurd, and EPA is correct to reject this flawed reasoning in 

favor of a construction that actually advances the statute's goals. See Griffin v. Oceanic 

Contractors, Inc., 458 U.S. 564, 575 ("[I]nterpretations of a statute which would produce absurd 

results are to be avoided if alternative interpretations consistent with the legislative purpose are 

available."); American Water Works Assn v. EPA, 40 F.3d 1266, 1271 (D.C. Cir. 1994) (where 

reading of statute would lead to absurd results, statute has no plain meaning and is proper subject 

of construction by agency and courts). In short, given the conflicting amendments, EPA is 

authorized to adopt a reasonable interpretation of the statute. Northeast Hosp. Corp. v. Sebelius, 

657 F.3d 1, 11 (D.C. Cir. 2011) ("We are thus faced with two inconsistent sets of statutory 

provisions. Northeast points us to provisions that tie entitlement to payment and state that once a 
136

person enrolls in Part C, payments are no longer made under Part A. The Secretary points us to 

other provisions that assume it is possible to be both entitled to benefits under Part A and 

enrolled in Part C. Under these circumstances, we conclude that the Medicare statute does not 

unambiguously foreclose the Secretary's interpretation."); Chevron, 467 U.S at 842-43. And, for 

reasons stated above, EPA's interpretation comports with the context, history, structure, and 

purpose of the Clean Air Act. As such, its construction should merit judicial deference in any 

legal proceeding challenging its authority to regulate CO2 emissions from existing EGUs under 

section 111(d).

Alternatively, if the 1990 House and Senate language were to be deemed in irreconcilable 

conflict (i.e., if the conflicting amendments cannot both be given literal effect, and if EPA lacks 

authority to adopt a reasonable interpretation to resolve the conflict), then both chambers' 1990 

amendments to section 111(d) must fail. In that scenario the language would revert to the pre1990 version, which authorizes S.111(d) regulation of any air pollutant "for which air quality 

criteria have not been issued or which is not included on a list published under section 7408(a) or 

7412(b)(1)(A) of this title." Since CO2 are listed neither under S. 7408(a) nor S.7412(b), under 

this scenario as well EPA would be authorized to promulgate section 111(d) guidelines for 

power-plant CO2 emissions. Finally, even if the House amendment were deemed to be the only 

applicable amendment, the same outcome should obtain. First, the Supreme Court has recently 

noted EPA's practice of adopting context-appropriate interpretation of the Clean Air Act phrase 

"air pollutant." Utility Air Regulatory Group v. EPA ("UARG"), 134 S. Ct. 2427, 2439-42 

(2014). For example, [t]he Act authorizes EPA to enforce new source performance standards 

(NSPS) against a pre-existing source if, after promulgation of the standards, the source 

undergoes a physical or operational change that increases its emission of "any air pollutant." S. 

7411(a)(2), (4), (b)(1)(B). EPA interprets that provision as limited to air pollutants for which 

EPA has promulgated new source performance standards. 36 Fed.Reg. 24877 (1971), codified, 

as amended, 40 C.F.R. 60.2; 40 Fed.Reg. 58419 (1975), codified, as amended, 40 C.F.R.

60.14(a). Id. 2440 (emphasis in original). Similarly here, a context-appropriate reading of "any 

air pollutant," when used with the phrase "emitted from a source category which is regulated 

under section 7412," would encompass only an air pollutant listed under section 112 that is 

emitted from such a source category. Considered from another angle, sources are not regulated in 

the abstract, but regulated with regard to specific pollutants. Hence, any interpretation of the 

phrase "regulated under section 7412" must include an implied phrase indicating what the source 

in question is being regulated with regard to. Under the industry interpretation, this implied 

phrase is "with regard to any pollutant," i.e., "emitted from a source category which is regulated 

under section 7412 [with regard to any pollutant]." A much more rational interpretation would 

include the implied phrase "with regard to HAPs," i.e., "emitted from a source category which is 

regulated under section 7412 [with regard to any HAPs]," which not only effectuates rather than 

frustrates the purpose of the statute, as discussed above, but accords with the kind of 

contextually-appropriate reading of the statute described in UARG. An examination of the 

historical context surrounding the House language militates in the same direction. Prior to the 

1990 Amendments, EPA had been tasked with listing hazardous air pollutants for regulation 

under section 112. The pre-1990 language of section 111(d) reflected this fact insofar as it 
137

referenced the "list published under section . . . 7412(b)(1)(A)." Frustrated with the agency's 

slow progress on this front, Congress took it upon itself to list 190 HAPs by statute and then 

delegated to EPA the authority and responsibility to regulate emissions of those HAPs on a 

source-by-source basis. It is for this reason that the House amendment deleted the pre-1990 

references to the list of HAPs, which was now defined by statute rather than EPA regulation, and 

replaced it with a reference to source categories, which were now the subject of EPA regulation 

for the HAP emissions. Given this historical context, it is clear that the House language was 

meant to preserve the status quo, under which EPA could not regulate a source's HAP emissions 

under section 111(d) if it was already doing so under section 112, rather than silently introduce a 

new and massive exclusion into the statute that effectively rendered section 111(d) a dead letter.

Second, the literal language of the House amendment favors EPA's interpretation of the statute. 

As EPA recently observed in a legal brief opposing the industry interpretation of section 111(d), 

even if one disregards the Senate amendment and considers only the House amendment, as 

Petitioner and amici advocate, that text does not unambiguously say what Petitioner and amici 

believe it says. In fact, a truly "literal" reading (see Amici Br. at 4) results in precisely the 

opposite conclusion (Response to Petition at 28, In re: Murray Energy Corp., No. 14-1112 (D.C. 

Cir. Nov. 3, 2014)). The relevant portion of section 111(d), as amended by the House, contains a 

string of three exclusionary clauses, separated from each other by "or": The Administrator shall 

prescribe regulations . . . under which each State shall submit to the Administrator a plan which 

establishes standards of performance for any existing source for any air pollutant [1] for which 

air quality criteria have not been issued or [2] which is not included on a list published under 

section 7408(a) of this title or [3] emitted from a source category which is regulated under 

section 7412 of this title . . . . 42 U.S.C. S. 7411(d)(1) (emphasis and internal numbering added). 

Because Congress used the conjunction "or" rather than "and," the three exclusions arguably 

should be viewed as alternatives, rather than requirements to be imposed simultaneously. See 

U.S. v. Woods, 134 S.Ct. 557, 567 (2013) ("Moreover, the operative terms are connected by the 

conjunction "or." While that can sometimes introduce an appositive . . . its ordinary use is almost 

always disjunctive, that is, the words it connects are to 'be given separate meanings.'") (Merriam 

Webster's Dictionary defines "or" as "a function word [used] to indicate an alternative <coffee or 

tea> <sink or swim>." See Merriam Webster, Definition of "Or," 

http://www.merriamwebster.com/dictionary/or (last visited Nov. 19, 2014)). In other words, 

section 111(d) "literally" provides that the Administrator may require states to establish 

standards for an air pollutant so long as either air quality criteria have not been established for 

that pollutant, or one of the other two remaining criteria is met. Air quality criteria have not been 

issued for CO2. Thus, under a truly literal reading of section 111(d)(1) as amended by the House, 

whether power plants have been regulated under section 7412 - and for what pollutant - is 

irrelevant: the CO2 regulations at issue are authorized. To compound the ambiguity, the third 

exclusionary clause in the House's version of section 7411(d)(1), which provides the basis for the 

industry interpretation of section 111(d), differs from the first two in that it does not contain a 

negative: [EPA may require states to submit plans establishing standards for] any air pollutant 

[1] for which air quality criteria have not been issued or [2] which is not included on a list 

published under section 7408(a) of this title or [3] emitted from a source category which is 
138

regulated under section 7412 of this title . . . . 42 U.S.C. 7411(d)(1) (emphasis and internal 

numbering added). The industry argument presumes that the negative from the second clause 

was intended to carry over into the third (i.e., implicitly inserting another "which is not" before 

"emitted from a source category"), but that is not what the text actually says; instead, it states that

EPA may require standards for "any air pollutant . . . emitted from a source category which is 

regulated under section 7412." 42 U.S.C. 7411(d)(1). Thus, read literally, the House's version of 

section 7411(d) means the exact opposite of what petitioners and amici argue, and provides that 

EPA may regulate emissions of a pollutant from a source category where that category is 

regulated under section 7412. Other observers have made this argument as well: As amended by 

the House amendment language, S.111(d) would direct EPA to regulate, through state plans, 

"any air pollutant (i) for which air quality criteria have not been issued or which is not included 

on a list published under Section 7408(a) of this title or emitted from a source category which is 

regulated under Section 7412 of this title . . . ." The use of the conjunction "or" to join the two 

"which" clauses in (i) is most naturally read such that only one of the "which" conditions must be 

met in order for EPA to have regulatory authority under S. 111(d). This reading would provide 

EPA authority to regulate an existing source for any air pollutant that is not a criteria pollutant, 

regardless of the meaning of the "or emitted" clause that is the subject of the two competing 1990

CAA Amendments (Nordhaus & Gutherz, Regulation of CO2 Emissions From Existing Power 

Plants Under S. 111(d) of the Clean Air Act: Program Design and Statutory Authority, 44 ELR 

10,366, 10,377 n.89 (May 2014). Additional support for construing section 111(d) to permit 

standards of performance for such emissions appears in Konschnik, K., EPA's 111(d) Authority

Follow Homer and Avoid the Sirens, LegalPlanet (May 28, 2014), http://legalplanet.org/2014/05/28/guest-blogger-kate-konschnik-epas-111d-authority-follow-homer-andavoid-the-sirens/ (incorporated herein by reference)). As discussed above, the history, purpose, 

and structure of the Clean Air Act, of the 1990 Amendments, and of section 111(d) all 

persuasively show that EPA may regulate CO2 emissions from existing EGUs under section 

111(d). Accordingly, under any acceptable heuristic, the Clean Power Plan is an appropriate 

exercise of EPA's authority under that provision of the statute and is on firm legal footing. 

Response 47: EPA agrees that it has the authority to promulgate regulations addressing CO2 

emissions from existing power plants under section 111(d). EPA’s discussion of this issue is in 

Section IV of the preamble.

Comment 48: Commenters stated the decision to regulate existing power plants under Section 

111(d) of the Clean Air act is not lawful because it violates the previsions set forth in the 5 U.S. 

Code - 706(2)(A),(B),(C), and (E). Commenters stated that 5 U.S. Code - 706(2)(A) requires 

that the law not be arbitrary or capricious. Commenters stated that, generally, laws require 

specific guidelines of how the regulated body should act in order to comply appropriately so to 

avoid any violations. However, commenters added, the proposed rule is not clear as to what the 

states should specifically do in order to meet the goals of the EPA. Commenters stated that, for 

example, the EPA reads, "While this proposal lays out state-specific CO2 goals that each state is 

required to meet, it does not prescribe how a state should meet its goal." Commenters stated that 

before issuing any type of regulation under Section 111, the EPA must first identify specific 
139

types of facilities (which are generally known as sources under the CAA) that, in the EPA's 

judgment, emit air pollution that endangers public health. Commenters stated that as part of this 

process, the EPA creates source categories and carefully defines the type of facilities that fall 

within these categories; however, specific types of facilities in the proposed rule that endanger 

public health were not mentioned. Commenters added that climate change should be addressed 

by Congress and not by regulatory fiat via the EPA.

Response 48: The EPA disagrees with this comment. The commenters assert in a conclusory 

fashion that the proposed rule violates each one of the standards of review in the APA. Not only 

does the APA not apply to this action, but the EPA’s final rule is reasonable, thorough, wellexplained and well within the EPA’s statutory authority. The final rule provides ample guidance 

to states on ways to comply with the emission guidelines, including application of the BSER, 

other systems of emission reduction, trading, and the state measures approach. The commenters’ 

assertion that the EPA did not identify specific types of facilities that endanger public health is 

absurd. The final rule applies to existing steam electric generators and stationary combustion 

turbines, the largest sources of CO2 emissions in the U.S. The final rule’s applicability provisions 

further describe which facilities are affected sources subject to the rule’s requirements.

Comment 49: Commenters cautioned EPA from reading the Supreme Court's decision in AEP 

v. Connecticut to grant EPA the authority to regulate GHGs under section 111(d), explaining that 

dicta in that case regarding the suitability of Section 111(d) in regulating GHGs was based on an 

erroneous paraphrase of the relevant statute. Commenters added that decision was issued prior to 

EPA's regulation of electric generating units under Section 112.

Commenters stated that the legal position stated by the 18 Governors is more fully developed in 

the challenge brought against EPA in the US Court of Appeals for the District of Columbia 

Circuit by a group of 12 State Attorneys General, led by Attorney General Patrick Morrisey of 

West Virginia [see Case No. 14-1146]. Commenters stated in their suit the AG's referred to the 

guidance rendered by the Supreme Court on June 20, 2011, in American Electric Power, Inc. v. 

Connecticut, 131 S. Ct. 2527 (2011) ("AEP"), that EPA could not regulate the same sources 

under both Section 112 and Section 111(d) of the Clean Air Act. Commenters continued, stating 

Section 112 permits national regulations of sources of hazardous air pollutants. Commenters 

stated Section 111(d), on the other hand, is a rarely used provision that grants EPA authority to 

require States to regulate emissions from existing sources on a state-by-state basis under certain 

narrow circumstances, but that expressly excludes from EPA's authority the power to regulate 

"any air pollutant ... emitted from a source category which is regulated under [Section 112]." 42 

U.S.C. section 7411(d). Commenters noted that in AEP, several parties brought a common law 

public nuisance action, seeking abatement of emissions of carbon dioxide. Commenters stated 

the Court held "that the Clean Air Act and the EPA actions it authorizes displace any federal 

common law right to seek abatement" of such emissions. Commenters stated in the course of 

explaining that EPA is required under Section 111(d) to regulate carbon dioxide emissions from 

existing sources under certain circumstances, the Court noted the Section 112 "exception" to the 

regulation of such existing sources under Section 111(d): "EPA may not employ ... 111(d) if 

existing stationary sources of the pollutant in question are regulated under ... the ' hazardous air 
140

pollutants' program, [Section 112]." Commenters added that on February 16, 2012, EPA 

finalized a national emission standard for new and existing power plants under Section 112. 

Specifically, commenters stated EPA reaffirmed that power plants should be listed as a "source 

category" under Section 112. Commenters stated that it then proceeded to impose under Section 

112 onerous regulations on those plants, with which compliance will cost over $9 billion per 

year. As a result, commenters stated, the Clean Air Act in Section 111, as interpreted by the 

Supreme Court in the AEP case, precludes additional regulation of existing power plants under 

Section 111(d).

Response 49: EPA disagrees that it may not promulgate regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble. Further, EPA’s views on arguments presented by the commenters, including 

commenters’ discussion of the AEP opinion, are also discussed in EPA’s briefs in the Murray 

Energy and West Virginia cases, No. 14-1112, No. 14-1146, and No. 14-1151 (D.C. Cir.).

Comment 50: Commenters stated that in the 1990 Clean Air Act amendments, Congress took 

pains to ensure that its strengthening of section 112 would not inadvertently impair any of the 

Clean Air Act's other vital protections, and Congress explicitly provided in section 112 that "No 

emission standard or other requirement promulgated under this section shall be interpreted, 

construed or applied to diminish or replace the requirements of a more stringent emission 

limitation or other applicable requirement established pursuant to section [111] of this title, part 

C or D of this subchapter, or other authority of this chapter or a standard issued under State 

authority." (31542 U.S.C. - 7412(d)(7).) Consequently, commenters stated, EPA retains its 

obligation to-for example-regulate non-HAPs as well as HAPs from new stationary sources 

under section 111(b), regardless of whether those sources are also regulated under section 112. 

Commenters stated that similarly, states and EPA are required to ensure that state 

implementation plans under section 110 achieve attainment with National Ambient Air Quality 

Standards for criteria pollutants, even if those plans include requirements for existing sources 

that are also subject to section 112 standards. Commenters stated Congress unambiguously 

intended for the requirements of section 110, 111 and 112 to continue operating in careful 

coordination to protect the public from all harmful pollutants emitted by stationary sources. Also,

commenters added that in the 1990 amendments, Congress also carved out one categorical 

exception from the seamless threefold framework for controlling stationary source emissions. 

Commenters stated that by enacting section 129, Congress crafted a unique regime for one type 

of source: solid waste incineration units. Commenters stated Congress decided to exclude these 

units from regulation under section 112 and instead subject them to tailored regulation under 

sections 129 and 111. (Clean Air Act Amendments, Pub. L. 101-549, -S. 305, 104 Stat. 2399, 

2583 (1990) (codified at 42 U.S.C. - 7429(h)(2)). Thus, commenters stated that in the only case 

where Congress excluded a class of sources from regulation under sections 110, 111(d), or 112 

because other CAA controls were sufficient, it provided for rigorous, source category-specific 

regulation elsewhere in the CAA. Commenters stated that the treatment of EGUs is entirely 

different, explaining that Congress authorized regulation of EGUs under section 112 if EPA 

"finds such regulation is appropriate and necessary after considering the results of" a study of the 
141

health risks of EGU HAP emissions after the implementation of other CAA requirements. 42 

U.S.C. section 7411(n)(1)(A). Commenters stated Congress did not remove EGUs from the 

tripartite framework for stationary source regulation, but allowed EPA to forego regulation of 

EGU HAP emissions if incidental control of HAPs through other CAA programs (such as the 

CAA cap-and-trade program to reduce acid rain, which only affects EGUs) rendered that 

regulation unnecessary. Commenters stated that in deciding whether to regulate EGUs' HAP 

emissions, EPA was required to consider its study of the public health impacts of those HAP 

emissions; (42 U.S.C. - 7412(n)(1)(A). Section 112(n) mandates three studies: EPA's study of the 

hazards EGU HAP emissions pose to public health after the imposition of other Clean Air Act 

requirements, which the agency must consider in its "appropriate and necessary" finding, S. 

7412(n)(1)(A); an EPA study of EGU mercury emissions and technologies for controlling such 

emissions, S. 7412(n)(1)(B); and a National Institute of Environmental Health Sciences study on 

the threshold level of mercury exposure below which adverse human health effects are not 

expected, S. 7412(n)(1)(C). None of these studies non-HAP emissions.) Commenters stated 

Congress did not require this study to analyze the public health impacts of non-HAP pollution 

from EGUs because the Act does not force EPA to choose between regulating non-HAP 

emissions from EGUs under 111(d) or regulating HAP emissions under 112. Commenters

continued, stating that the 1990 Clean Air Act Amendments also revised the Act to more 

effectively protect human health and the environment in several other important ways. For 

instance, commenters stated, Congress amended section 110 to authorize EPA to require SIP 

revisions that are necessary to adequately mitigate interstate pollution transport, (Id., S. 101, 104 

Stat. at 2407 (codified at 42 U.S.C. - 7410(k)(5))) and authorized EPA to apply certain sanctions 

if a state submits an inadequate SIP. (Id., S. 101, 104 Stat. at 2407-08 (codified at 42 U.S.C. S. 

7410(m))) Commenters stated the legislation introduced new landmark programs and 

strengthened existing programs, prompting President George H.W. Bush to declare: "This 

legislation isn't just the centerpiece of our environmental agenda. It is simply the most significant 

air pollution legislation in our nation's history, and it restores America's place as the global 

leader in environmental protection." (Remarks of President George H.W. Bush Upon Signing S. 

1630, 26 Weekly Comp. Pres. Doc. 1824 (Nov. 19, 1990) (reprinting the President's signing 

statement of Nov. 15, 1990))

Response 50: EPA agrees that it has the authority to promulgate regulations addressing CO2 

emissions from existing power plants under section 111(d). EPA’s discussion of this issue is in 

Section IV of the preamble.

Comment 51: Commenters stated the proposed rule is unlawful because EPA has not finalized 

Section 111(b) "new source" regulation of carbon dioxide emission from coal-fired power plants, 

which is legally necessary before any Section 111(d) regulation of those plants. And given that 

the proposed Section 111(b) new source standards are patently unlawful, no such predicate is 

likely forthcoming.

Commenters stated that the Proposed Section 111(d) Rule Is Illegal Because EPA Has Not 

Finalized any Lawful Rule for Equivalent New Sources, explaining that as EPA has 

acknowledged since 1975, this provision prohibits EPA from invoking Section 111(d) unless and 
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until it has completed and finalized a lawful rule for "new sources of the same type." 40 Fed. 

Reg. 53, 340, 53,340 (Nov. 17, 1975); see also 39 Fed. Reg. 36,102, 36,102 (Oct. 7, 1974) 

(proposed rule) (predicates for use of 111(d) include "[a] standard of performance for affected 

facilities has been promulgated under section 111(b) of the Act") (emphasis added). Commenters

continued that put another way, promulgation of lawful new source performance standards is "a 

necessary predicate for the regulation of existing sources" under Section 111(d). 79 Fed. Reg. 

1,430, 1,496 (Jan. 8, 2014). Commenters stated that in the present rulemaking, EPA claims that it 

will satisfy that "necessary predicate" through two proposed rulemakings, once they are 

finalized: (1) the proposed new source performance standards for new fossil fuel-fired power 

plants ("New Source Rule"), 79 Fed. Reg. 1,430 (Jan. 8, 2014); and (2) performance standards 

for modified and reconstructed fossil fuel-fired power plants ("Modified Source Rule"). See 

Proposal, 79 Fed. Reg. 34,852 (June 18, 2014). Commenters posited that EPA's arguments are 

flawed as a matter of law, and as a result the proposed Section 111(d) rule will be entirely 

unlawful.

Commenters stated they do not believe EPA promulgated an appropriate Section 111(b) standard 

of performance that is a necessary prerequisite for proposed Section 111(d) standards. 

Commenters stated EPA does not have the legal authority to propose Section 111(d) standards 

without properly establishing Section 111(b) standards of performance.

Commenters stated EPA lacks the sufficient legal prerequisites to propose and finalize the 

proposed guidelines, explaining that Section 111(d) makes clear that EPA may not finalize 

guidelines for an existing source unless new sources of the same type of entity are already 

subject to a section 111(b) performance standard. CAA section 111(d)(1). Commenters

explained that EPA's Subpart B regulations spell this requirement out in more detail and extend it 

to the proposal stage: Only "[c]oncurrently upon or after" standards have been proposed for "a 

designated pollutant from [new] facilities" may EPA propose draft emission guidelines for the 

same pollutant for "designated facilities." 40 C.F.R. section 60.22(a). Commenters stated that a 

"designated facility" is an "existing facility" of the "same type" that is subject to a standard of 

performance under section 111(b). Id. Section 60.21(b); 40 Fed. Reg. at 53,341, and thus, in 

order for EPA to lawfully propose and finalize section 111(d) emission guidelines for EGUs, it 

first must have lawfully proposed and finalized standards of performance for new EGUs of the 

same type. Commenters concluded that the legal prerequisites for lawful emission guidelines 

governing CO2 emissions from EGUs have not been met, and the Proposed Guidelines are 

therefore unlawful and may not be finalized. 

Response 51: We disagree with these comments. We explain in the preamble to the final rule the 

timing considerations for promulgation of a rule under section 111(b) for that rule to serve as a 

predicate for a section 111(d) rule and why this section 111(d) rule has a valid predicate.

Comment 52: Commenters stated that the proposed Section 111 (b) rule for new sources raises 

serious legal and technical questions about whether carbon capture and sequestration, explaining 

that. Commenters stated if the Section 111(b) rule fails, the necessary predicate for Section 

111(d) rule for existing sources fails with it, and therefore, EPA must wait until the federal courts 
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have assured the agency that its Section 111(b) approach for new EGU s is legally sound before 

it can finalize its Section 111(d) proposal.

Commenters stated that in order for the EPA to require states to submit Section 111(d) plans to 

control emissions from existing sources in a particular industrial categories, the EPA must first 

have established lawful standards under Section 111(b) for new sources in that category.

Commenters said the Section 111(d) proposal identifies two pending 111(b) proposals that have 

not been finalized and are unlawful. Commenters also said the new-source proposal is unlawful 

because it violates express restrictions on Section 111(b) rulemakings imposed by the Energy 

Policy Act of 2005 by inappropriately considering certain government-subsidized projects in the 

Section 111 standard-setting process. (See generally Comments of the Competitive Enterprise 

Institute on Clear Air Act section 111(b) Carbon Pollution Standards (May 9, 2014).

Commenters stated the legal implication is critical since the EPA is barred from implementing an 

existing source rule under 111(d) without having successfully promulgated a new source 

standard under 111(b).

Response 52: We disagree with these comments. We explain the legal basis for the section 

111(b) rule for newly constructed sources in the preamble for that rule, including addressing the 

commenters’ concerns about EPA05 and CCS.

Comment 53: Commenters also remarked that EPA states that any EGU that becomes subject to 

a state plan under section 111(d) that subsequently undergoes a modification or a reconstruction 

must remain subject to the regulatory requirements of the state plan in addition to having to 

comply with EPA's requirements for modified and reconstructed EGUs under section 111(b). 79 

Fed. Reg. at 34,962-63, 34,965, 34,969, 34,974-75, 34,987. Commenters strongly disagreed with 

EPA's statement. Commenters stated the CAA does not allow EPA to regulate the same source 

as both an existing and new source. Commenters said although a state may have authority under 

section 116 of the CAA to impose additional regulatory requirements on a modified or 

reconstructed source as a matter of state law, EPA cannot compel states to regulate a given unit 

as both an existing and new source. Commenters stated under the plain language of the CAA, a 

source that is regulated under section 111(b) because it is a "new" source cannot simultaneously 

be subject to regulation under section 111(d) as an "existing" source under federal law, and vice 

versa. Commenters continued, stating that in this rulemaking, EPA states that "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)." 79 Fed. Reg. at 34,903. Likewise, commenters 

stated that in its proposed standards for modified and reconstructed EGUs under section 111(b), 

EPA asserts that "existing sources that are subject to requirements under an approved CAA 

section 111(d) plan would remain subject to those requirements after undertaking a modification 

or reconstruction." 79 Fed. Reg. at 34,974. Commenters stated EPA claims that it can adopt this 

position because section 111 "is silent on whether requirements imposed under a CAA section 

111(d) plan continue for a source that ceases to be an existing source because it modifies or 

reconstructs." 79 Fed. Reg. at 34,904. Commenters stated that this is simply incorrect, and states 
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that Section 111 speaks clearly and directly to the issue. Commenters stated the CAA states that 

"[t]he term "new source" means any stationary source, the construction or modification of which 

is commenced after the publication of regulations (or, if earlier, proposed regulations) 

prescribing a standard of performance under this section which will be applicable to such 

source." CAA section 111(a)(2). Commenters said Section 111(a)(6) states that "[t]he term 

"existing source" means any stationary source other than a new source." Commenters posited

that these definitions, by their own terms, are mutually exclusive, and thus, under section 111, an 

existing source is one that has commenced construction before the publication of regulations (or 

proposed regulations) applicable to new sources of the same type. Commenters stated such 

existing sources are subject to standards promulgated pursuant to section 111(d) of the Act. 

Commenters stated a new source can come into existence either through greenfield construction 

that commences after publication of proposed rules applicable to such new sources or through 

commencing at such time a reconstruction or modification of what would otherwise be an 

existing source. (A physical or operational change that increases the capacity of an existing 

source to emit may trigger a "modification" analysis. See, e.g., 40 C.F.R. section 60.14. 

Replacement of components that involves investments exceeding 50 percent of the fixed capital 

costs of a comparable, entirely new facility triggers the reconstruction analysis. See Id. section 

60.15(d)) Commenters stated the critical fact here is that once a modification or reconstruction 

commences, the "existing" source ceases to exist and a "new" source takes its place. Commenters

remarked that new sources are subject to regulation pursuant to section 111(b), and under the 

CAA's explicit terms, section 111(d) cannot apply to sources subject to section 111(b). 

Commenters continued, stating that EPA has long codified this strict division between existing 

and new sources in binding legislative rules governing CAA programs. Commenters stated that 

for instance, modified and reconstructed sources are regulated as new sources under the CAA's 

new source "maximum achievable control technology" program pursuant to section 112(g)(2). 

Commenters stated in finalizing NSPS for Subpart Da units in 1998, the Agency emphasized that 

the inclusion of modified sources in the definition of "new source" in section 111(a)(2) is a "clear 

statutory mandate." 63 Fed. Reg. at 49,448. Commenters stated EPA's newfound discovery of 

supposed statutory ambiguity cannot be reconciled with the Agency's longstanding 

implementation of the CAA. Ignoring this clear statutory division, commenters remarked, the 

Agency offers two policy reasons to justify some newly found statutory ambiguity and its 

proposal to subject new sources to both existing and new source regulatory requirements. 

Commenters stated first, EPA claims that modified or reconstructed units should remain subject 

to the existing source program because "[u]ncertainty about whether units would remain in the 

program could be very disruptive to the operation of the program." 79 Fed. Reg. at 34,904. 

Commenters stated second, EPA argues that it should continue to apply the existing source 

program to modified and reconstructed sources because "potential discrepancies in the stringency 

of the two programs" might "creat[e] incentives for sources to seek to avoid their obligations 

under a CAA section 111(d) plan by undertaking modifications." Id. Commenters stated both of 

EPA's concerns would be resolved by withdrawing the proposed standards for modified and 

reconstructed EGUs. Commenters stated EPA has discretion not to impose NSPS for modified or 

reconstructed units and by choosing not to do so in this instance, it would avoid the concerns it 

has raised. Moreover, commenters stated, even assuming that EPA's concerns are valid regarding 
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disruption and uncertainty to the section 111(d) program over whether units would leave the 

program, this does not justify ignoring the plain language of the statute. Commenters said state 

plans devised with the correct statutory interpretation in mind can include provisions to 

accommodate such changes. Indeed, commenters stated, EPA envisions many sources shutting 

down as a result of the Proposed Guidelines. RIA at 3-34, Tbl. 3-12. Commenters stated if state 

plans can accommodate units leaving the program through cessation of operations, there is no 

reason why they cannot accommodate the transition of modified or reconstructed units from the 

existing source program to the section 111(b) program for new sources. In addition, commenters 

stated, to the extent EPA has designed a section 111(d) program that cannot function while 

adhering to the requirements of section 111(a)(2) and section 111(a)(6), it is EPA's proposal, not 

the CAA, that must be revised. See, e.g., ASARCO, 578 F.2d at 329 (where EPA is concerned 

about practical application of proposed rule, solution is to alter standard). Commenters finally

stated, although states can opt to impose additional requirements on modified and reconstructed 

EGUs as a matter of state law under section 116 of the Act, EPA cannot require the states to 

regulate a unit as both a new and existing source as this would violate the CAA. Commenters

stated it should also be noted that newly constructed EGUs that commence construction after 

January 8, 2014 (the date of publication of the proposed NSPS rule for new EGUs under section 

111(b)) are outside of the section 111(d) program. Commenters stated to the extent these newly 

constructed EGUs displace higher-emitting generation units (such as an NGCC unit that replaces 

a coal-fired EGU), however, it would be permissible for a state that employs the rate-based 

approach under section 111(d) to allow the megawatt hours generated by these newly 

constructed units to be included in the denominator for a state's rate, and this approach would be 

similar to how renewable energy and new nuclear units are treated in the Proposed Guidelines. 

For states that use the mass-based approach, the emissions from newly constructed units would 

not be included in the program at all. Commenters continued, stating that with regard to EPA's 

concern that there could be an incentive for sources to modify or reconstruct "to avoid their 

obligations under a CAA section 111(d) plan," 79 Fed. Reg. at 34,904, for the reasons explained 

above, a source that undertakes modifications or undergoes reconstruction after the date of the 

proposal of the applicable NSPS has no obligations under a section 111(d) plan by operation of 

the CAA; it could only have such obligations as a matter of state law at the state's discretion. 

Commenters further stated, to the extent EPA has proposed discrepancies in the new source and 

existing source programs that might create incentives the Agency dislikes, the solution is not 

rewriting the terms of the CAA. See UARG v. EPA, 134 S. Ct. at 2445 ("An agency has no 

power to "tailor" legislation to bureaucratic policy goals by rewriting unambiguous statutory 

terms."), and the reason for this discrepancy is EPA's decision to propose a section 111(d) 

program that bears no relationship to the requirements of section 111 or to any section 111 

standard EPA has previously written. See, e.g., 61 Fed. Reg. 9905 (Mar. 12, 1996) (municipal 

solid waste landfills); 42 Fed. Reg. 55,796 (Oct. 18, 1977) (sulfuric acid production units). 

Commenters stated if EPA were to write a section 111(d) standard that complied with the CAA, 

this discrepancy would disappear. Commenters concluded, stating EPA's proposed interpretation 

of the CAA is inconsistent with the statutory text of sections 111(a)(2) and 111(a)(6) and is 

unsupported by rational policy considerations. Commenters stated EPA must, therefore, revise 

the Proposed Guidelines to conform to the CAA requirement that new sources subject to section 
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111(b) requirements (including modified and reconstructed sources) cannot also be required to 

comply with section 111(d) state plans under the CAA.

Commenters recommended EPA provide further justification for its position that existing EGUs 

initially subject to the Section 111(d) requirements would remain subject to these requirements if 

later a unit is modified or reconstructed and becomes subject to the 111(b) rules governing 

modifications and reconstructions.

Commenters stated that in EPA's June 2014 proposed modification and reconstruction rule, the 

Agency proposes to keep modified and reconstructed sources in a state's section 111(d) plan if at 

the time of modification and reconstruction the source was subject to the state's section 111(d) 

plan: "For the reasons discussed in the Legal Memorandum . . . all existing sources that become 

modified or reconstructed sources and which are subject to a CAA section 111(d) plan at the 

time of the modification or reconstruction, will remain in the CAA section 111(d) plan and 

remain subject to any applicable regulatory requirements in the plan, in addition to being subject 

to regulatory requirements under CAA section 111(b)".(79 Fed. Reg. at 34,963/col. 1) Similarly, 

commenters observed, in the proposed Section 111(d) guidelines, EPA restates this proposal, 

reiterating that the modified and reconstructed unit would be subject to Section 111(d) and 

Section 111(b) requirements simultaneously: "The 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 stated under 

this interpretation, 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) simultaneously with 

this rulemaking. Commenters stated that it should be noted that this proposal applies to any 

existing source subject to any CAA section 111(d) plan, and not only existing sources subject to 

the CAA section 111(d) plans promulgated under this rulemaking."(79 Fed. Reg. at 34,903/col. 

3) While commenters understand the initial appeal of this proposal for purposes of ensuring 

continued emission reductions from existing units, commenters stated EPA's proposal creates 

significant legal risk under the CAA. Commenters explained that Section 111(a) is clear in 

defining a new source as "any stationary source, the construction or modification of which is 

commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a 

standard of performance under this section which will be applicable to such source." 

Commenters stated Section 111(b)(1)(B) further requires EPA to establish separate standards for 

new sources within one year of listing the source category: "Within one year after the inclusion 

of a category of stationary sources in a list under subparagraph (A), the Administrator shall 

publish proposed regulations, establishing Federal standards of performance for new sources 

within such category." In contrast, commenters remarked, existing sources are clearly regulated 

under Section 111(d), which requires EPA to establish "standards of performance for any 

existing source for any air pollutant" for which air quality criteria have not been issued or which 

is not included on a list published under Section 108 of the CAA or emitted from a source 

category which is regulated under Section 112 of the CAA, but "to which a standard of 

performance under this section would apply if such existing source were a new source." 
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Commenters argued that EPA cannot regulate the same sources under both provisions, stating 

that the statute is clear "either a source is new subject to standards under Section 111(b), or a 

source is an existing source subject to standards under Section 111(d). Commenters stated this 

separation is reinforced by the different criteria guiding standard setting for new versus existing 

sources in each provision. Commenters stated that EPA ignores the plain meaning and structure 

of section 111 by attempting to subject sources to both existing and new standards at the same 

time, and instead of proposing dual, simultaneous regulation of modified and reconstructed units 

that would increase legal risk for the rule, EPA should simply clarify that any physical or 

operational change undertaken to improve efficiency or comply with a state's Section 111(d) plan 

represents a pollution control project and is thus excluded from triggering modification. 

Commenters stated this would greatly simplify the program and largely address the problem of 

dual regulation. Commenters stated that while existing sources traditionally have not triggered 

reconstruction as often as modification, Commenters anticipated that many existing sources will 

opt to repower rather than build a new Greenfield plant. Commenters' October 16, 2014, 

comments submitted in response to EPA's proposed rule for modified and reconstructed sources 

recommended that the Agency finalize standards that are reflective of what repowered sources 

can achieve. Commenters remarked that if EPA insists on proceeding with the more legally 

vulnerable approach of keeping reconstructed sources in Section 111(d), the Agency could 

simplify compliance by establishing that a reconstructed source's compliance with a state's 

111(d) plan also satisfies Section 111(b) standards for reconstructed units. Alternatively,

commenters stated, as noted above in the PSD/NNSR discussion, EPA has similar discretion not 

to impose NSPS for modified or reconstructed units, and in fact, EPA has previously decided not 

to establish certain NSPS for modified or reconstructed units in specific source categories, 

including Asphalt Processing and Asphalt Roofing Manufacture (which exempts modified 

sources from the visible emission standard 40 C.F.R. 60.472(a)(3)) and Synthetic Fiber 

Production Facilities (that does not apply to modified facilities 40 C.F. R. 60.600(c)). 

Commenters posited that deciding not to impose standards on these units would prevent dual 

regulation.

Commenters stated the Proposal indicates that 'an existing source that becomes subject to 

requirements under CAA 111(d) will continue to be subject to those requirements even after it 

undertakes a modification or reconstruction.' Commenters said however, Section 111 is clear that 

(1) 'modified' units must be regulated as a 'new source' and (2) the definitions of 'new source' and 

'existing source' are mutually exclusive - one unit cannot be both. Commenters stated a 'new 

source' is clearly defined as 'any stationary source, the construction or modification of which is 

commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a 

standard of performance under this section which will be applicable to such source.' Commenters

said once an existing source is modified, it becomes a 'new source' by virtue of the language in 

Section 111(a)(1) that deems modified sources to be 'new sources.' Commenters said under the 

EPA's own longstanding regulations, the same would ordinarily be true of any reconstructed 

source an 'existing source,' on the other hand, is not defined directly, but only as 'any stationary 

source other than a new source.' Commenters stated Congressional intent to make these terms 

mutually exclusive could not be clearer. Commenters said to suggest that a source can be both is 
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therefore directly inconsistent with the statute. Commenters said the EPA offers nothing to 

support its interpretation that a source can be regulated as both a 'new source' and an 'existing 

source' simultaneously. Commenters stated never in the history of the Clean Air Act has a source 

been classified under both 'new' and 'existing' categories at the same time, and the EPA should 

withdraw its attempt to do so from this Proposal.

Commenters continued that duplicative regulation under Sections 111(b) and 111(d) is not 

permitted by the CAA, and EPA cannot regulate the same source under both CAA Section 

111(b) and CAA Section 111(d). Commenters explained that an EGU regulated under CAA 

Section 111(b) because it is a "new source"-which modified and reconstructed sources are 

defined to be - cannot simultaneously be subject to regulation under CAA Section 111(d) as an 

existing source and vice versa. Commenters stated modified or reconstructed sources that were 

previously subject to a state plan under CAA Section 111(d) cannot be required to continue to be 

covered by CAA Section 111(d), although states do have discretion to keep those sources in their 

CAA Section 111(d) plans if the states choose to do so.

Commenters stated EPA asked for comment on bringing Section 111(b) Standards into the 

Section 111(d) Program. Commenters stated Section 111 specifically prohibits combining the 

two programs when it states, "The term 'existing sources' means any stationary source other than 

a new source." Commenters stated they believe that this provision is dispositive.

Commenters stated that the EPA should not attempt to regulate CO2 emissions for the same 

source under both section 111(b) and section 111(d) of the Clean Air Act. The commenters said 

considering how modified and reconstructed sources may already be drawn from the group of 

existing units that the EPA has proposed to regulate for CO2 emissions under Section 111(d), the 

commenters recommended that the EPA simply exempt modified and reconstructed sources from 

CAA Section 111(b) regulation. The commenters said that states should retain the flexibility to 

exempt or assign regulatory applicability to modified and reconstructed sources for CO2 

emissions. The commenters stated that if necessary, these state-driven, flexible assignments 

could be proposed by the states in their 111(d) State Implementation Plans. The commenters said 

new NGCC or coal generating units regulated under Section 111(b) and subject to CO2 New 

Source Performance Standard (NSPS) requirements should not also be subject to regulation 

under Section 111(d) existing unit requirements.

Commenters stated the CAA is clear that the EPA's choice of regulations under Section 111 is 

binary: the EPA may either (1) promulgate a federal standard of performance for new sources 

pursuant to CAA Section 111(b)(1)(B); or (2) prescribe regulations pursuant to Clean Air Act 

Section 111(d)(1)(A) requiring states to submit a plan 'similar to Section 110' that adopts 

standards of performance for existing sources. Commenters said a source can be a 'new source' 

or an 'existing source,' but it cannot be both at the same time. Commenters stated the Act's binary 

division is then reemphasized in the definitions section of Section 111, which provides: (2) The 

term 'new source' means any stationary source, the construction or modification of which is 

commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a 

standard of performance under this section which will be applicable to such source. (6) The term 
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'existing source' means any stationary source other than a new source. 42 U.S.C. Section 

7411(a)(4) & (6). Commenters stated the definitions are clear that an 'existing source' cannot be a 

'new source' and therefore, regulation of the same source under Section 111, subsections (b) and 

(d) at the same time cannot be squared with the express language of the CAA. Commenters said 

this means that the suggestion in the Proposed Rule that: 'The 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. Under 

this interpretation, 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) simultaneously with 

this rulemaking.' Commenters stated that 79 Fed. Reg. 34,903, col. 3, cannot be reconciled with 

the plain text of Section 111. Commenters said 'an agency has no power to 'tailor' legislation to 

bureaucratic policy goals by rewriting unambiguous statutory terms,' regardless of how desirable 

the agency believes such an interpretation may be. See UARG v. EPA, 573 U.S. ---, slip op. at 21 

(2014). Commenters stated the EPA's existing NSPS regulations also make this point. 

Commenters said they state, flatly, that 'an existing facility, upon reconstruction, becomes an 

affected facility,' 40 C.F.R. Section 60.15(a), and an 'affected facility means, with reference to a 

stationary source, any apparatus to which [an NSPS] standard is applicable,' 40 C.F.R. Section 

60.2 Affected facility. Commenters stated by contrast, the 111(d) implementing regulations in 40 

C.F.R. Part 60, Subpart B provide that a "designated facility means any existing facility (see 

Section 60.2(aa)) which emits a designated pollutant and which would be subject to a standard of 

performance for that pollutant if the existing facility were an affected facility (see Section 

60.2(e))." 40 C.F.R. Section 60.21(b) (emphasis added). Commenters said it is thus clear that a 

designated facility cannot also be an affected facility at the same time. Commenters stated the 

EPA has nowhere justified its sweeping change in interpretation that upends years of consistent 

application of Section 111 of the CAA. Commenters stated similarly, the EPA has nowhere 

supported its novel contention that a 'reconstructed facility' is still an existing facility. 

Commenters said this interpretation flatly contradicts 40 C.F.R. Section 60.15(a), which states 

that a facility that is reconstructed is an 'affected facility' (i.e., one subject to the NSPS standards, 

and not a 'designated facility'). Commenters stated the EPA's interpretation requires disregard of 

its own regulations - regulations that the agency specifically stated are not open for comment and 

hence are not subject to change in this rulemaking.

Response 53: The EPA is not finalizing the proposed once-in-always-in approach, so these 

comments are moot. Also see Section XXII of the Legal Memorandum regarding UARG.

Comment 54: Commenters stated EPA's authority under section 111(d) is limited to issuing 

"emission guidelines" addressing factors relevant to the states' implementation of the BSER that 

has been adequately demonstrated to reduce CO2 emissions at a source (inside the fence). 

Commenters noted that Section 111(d) specifically directs EPA to establish a procedure for 

states to submit plans establishing performance standards for existing sources. States possess 

considerable discretion and flexibility under the Act in developing standards of performance 

based on EPA's emission guidelines. Commenters stated to the extent EPA's guidelines are based 
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on replacing equipment to improve the efficiency of the generating unit, EPA should clearly 

exempt such activities from being considered a "modification" for purposes of NSR permitting, 

particularly in light of EPA's Office of Enforcement and Compliance Assurance's previous focus 

on these type of projects in their enforcement cases. Commenters stated these projects have also 

been the target of third party citizen suits contending they represent violations of the NSR rules. 

Response 54: We disagree with this comment. We discuss in the preamble for this rule the 

implications of affected EGUs’ compliance actions, including implementing building block 1 

measures, for NSR.

Comment 55: Commenters stated EPA's fallback attempt to argue the Modified Source Rule 

could provide the "necessary predicate" for its section 111(d) proposal when the New Source 

Rule is held unlawful is a transparent and illegal end-run around Section 111's text and structure. 

See 79 Fed. Reg. at 34,852. Unsurprisingly, commenters stated EPA can point to no authority or 

prior examples to support such an approach, because it is plainly unlawful. Commenters stated 

under Section 111(d)'s plain text, the predicate rulemaking must lawfully regulate equivalent 

"new" sources not simply equivalent modified or reconstructed sources only. See 42 U.S.C. 

section 7411(d)(1)(A)(ii). Commenters stated the term "new source" is not ambiguous in this 

context. Instead, Section 111(a)(2) of the Act defines it as "any stationary source, the 

construction or modification of which is commenced after the publication of regulations (or, if 

earlier, proposed regulations) prescribing a standard of performance under this section which 

will be applicable to such source." 42 U.S.C. section 7411(a)(2). Commenters explained that as 

multiple submitted comments on the modified-source proposal demonstrate, the EPA's position 

that Section 111's ostensible silence as to whether a source that undergoes modifications ceases 

to be an existing source subject to 111(d) standards allows it to subject sources to both the 111(b) 

modified-source and 111(d) existing-source regimes is unlawful. But commenters added such 

arguments from silence are an "untenable" means of proving agency authority. See infra Section 

III; see also Aid Ass'n for Lutherans v. U.S. Postal Serv., 321 F.3d 1166, 1174-75 (D.C. Cir. 

2003). Commenters continued that both the structure of Section 111 and its subsections defining 

"new" and "existing" sources make perfectly clear that these are mutually exclusive terms: an 

"existing" source that undergoes modifications becomes a "modified" source, which is treated as 

a "new" source for Section 111's purposes, and therefore falls under 111(b) alone. Commenters

concluded that because EPA may not lawfully issue a Section 111(b) modified source rule that 

covers only modified sources, let alone impose both that rule and a 111(d) rule on existing 

sources that undergo modifications, the modified-source rule will not and cannot provide a 

lawful predicate for the existing-source rule.

Commenters stated the proposed NSPS is flawed with EPA suggesting that the Proposed 

Modified and Reconstructed Source Rule can serve as the requisite Section 111(b) predicate rule 

for the Proposed Rule. (42 U.S.C. - 7411(a)(2); Id. at S. 7411(a)(6)(emphasis added); Id. at S. 

7411(a)(2); EPA expressly recognizes the perverse incentives its suite of proposed rules creates. 

79 Fed. Reg. at 34,904 (explaining that one reason for EPA's otherwise inexplicable attempt to 

subject modified and reconstructed sources to the Section 111(d) standard "is to avoid creating 

incentives for sources to seek to avoid their obligations under a CAA section 111(d) plan by 
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undertaking modifications. Commenters stated the EPA is concerned that owners or operators of 

units might have incentives to modify purely because of potential discrepancies in the stringency 

of the two programs, which would undermine the emission reduction goals of CAA section 

111(d).").) Commenters explained that EPA proposes to treat modified and reconstructed sources 

as being both new sources and existing sources at the same time and states this is impermissible 

under the plain terms of the statute, noting that under Section 111(a), the categories of new 

sources and existing sources are mutually exclusive, and a source may not belong to both 

categories at once. Commenters concluded that to the extent that EPA wishes to treat modified 

and reconstructed sources as existing sources subject to the proposed Section 111(d) standard, it 

may not at the same time contend that they are new sources subject to a Section 111(b) standard, 

and that because this is hat EPA does, the modified/reconstructed source rule cannot serve as a 

predicate for issuance of the very same Section 111(d) standard to which those sources would be 

subject. Commenters stated that the crux of the matter is that EPA may only categorize modified 

sources as either new or as existing; it may not treat such sources as both; and more specifically, 

the Agency may not choose and treat modified sources as "new" for establishing a predicate rule, 

yet "existing" for purposes of subjecting them to continued regulation under the existing source 

rule. Commenters stated that if EPA opts to treat modified and reconstructed sources as existing 

sources, then, contrary to EPA's assertions, the Proposed Modified and Reconstructed Source 

Rule cannot serve as the requisite Section 111(b), new-source predicate rule for the Proposed 

Rule, and in either case, EPA cannot regulate modified and reconstructed sources under the 

Proposed Rule.

Response 55: EPA disagrees with these comments. Under section 111(d), EPA “shall prescribe 

regulations” with respect to emissions from existing sources if certain predicates are met. One of 

the predicates for regulation of a pollutant under 111(d) is that the pollutant be one “to which a 

standard of performance under this section would apply if such existing source were a new 

source.” See section 111(d)(1)(A)(ii). Clearly, a standard for newly constructed sources is a 

“new source” standard that is a predicate for 111(d) regulation. But “new source” is defined to 

also include a source “the modification of which is commenced after the publication of 

regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this 

section which will be applicable to such source.” Further, under EPA regulations in 40 CFR 

60.15, sources that meet the definition of “reconstruction” in 40 CFR 60.15(b) are considered to 

be new sources. Thus, standards for any of these three types of sources are properly considered 

to be “new source” standards, and any of these can serve as the predicate “new source” standard 

under section 111(d)(1)(A)(ii).

Further, with respect to the portions of this comment that concern the regulation of modified or 

reconstructed sources under section 111(d) after they became subject to standards under 111(b), 

as explained in section VIII of the preamble, the EPA is not finalizing its proposal on that point.

Comment 56: Commenters stated that EPA's authority under Section 111 (d) of the Clean Air 

Act (the Act) is limited to regulating sources that would be regulated under Section 111 (b) of 

the Act if they were "new" sources.(See 42 U.S.C.A Section 7411 (d)(1) ("The Administrator 

shall prescribe regulations which shall establish a procedure ... under which each State shall ... 
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establish[] standards of performance for any existing source ... to which a standard of 

performance under this section would apply if such existing source were a new source ... "))

Commenters state that the source category subject to regulation under Section 111 is coal-fired 

electric generating units. EPA's methodology sets emission reduction targets based on reductions 

purportedly achievable through re-dispatch from coal to gas (Block 2), development of 

renewable energy (Block 3), and implementation of energy efficiency measures (Block 4). 

Commenters state that these reductions cannot be achieved by actions taken at sources within the 

source category at issue and, thus, should not be considered in determining the best system of 

emission reductions or as the basis for State-specific emission goals under Section 111 (d).

Response 56: We disagree with this comment. We discuss in section V. of the preamble for this 

rule our justification for including the measures in building blocks 2 and 3 as part of the BSER, 

including responding to the commenters’ comments.

Comment 57: Existing guidelines under 111(d) should not be set at a level more stringent than 

new source performance standards established for the same source category under section 111(b)

Commenters stated the Proposed Emission Guidelines compound the problem created by 

establishing inequitable state carbon emissions goals by setting those goals for some states, 

including Virginia, at a level well below that which the EPA has proposed for new fossil fuelfired electric generating units as NSPS under section 111(b) of the Act. Commenters said the 

second paragraph of the EPA's "The Clean Air Act in a Nutshell: How It Works" from 2013 

says, "The law calls for new stationary sources to be built with best technology, and allows less 

stringent standards for existing stationary sources." Commenters stated an examination of the 

Congressional record indicates that this is how Congress intended section 111 to operate all 

along.

Commenters stated the legislative history of section 111 implicitly makes clear that NSPS for 

new sources under section 111(b) were intended to be more stringent than existing source 

Emission Guidelines under section 111(d), not the other way around. Commenters said the 

legislative history discusses in depth several reasons why NSPS should be more stringent than 

Emission Guidelines for existing sources under section 111(d). Commenters stated these reasons 

include: 1) the fact it is more economical to install state-of-the-art pollution control equipment on 

new sources than to retrofit it onto existing plants; 2) to spur the development of new 

technologies, and; 3) not to unduly hasten the shut-down of existing facilities. Congress stated:

[I]n establishing standards of performance based upon emission reduction realizable with the 

best technological system of continuous emission reduction, believes that it is prudent public 

policy to require achievement of the maximum degree of emission reduction from new sources, 

while encouraging the development of innovative technological means of achieving equal or 

better degrees of control. (Emphasis added.)
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Commenters stated Congress reiterated its directive to the EPA that new sources should be more 

stringently regulated in the following Clarifying Statement to the legislative history of the 1977 

Clean Air Act Amendments:

Clarification of Section 111(d). This section is also intended to clarify the basis for standardsetting for existing sources under section 111(d) of the Act. Under the committee bill, the 

standards in the section 111(d) State plan would be based on the best available means (not 

necessarily technological) for categories of existing sources to reduce emissions.

Commenters stated taken in the context of the rest of section 111's legislative history, this 

statement clearly implies that the "best available means" requirement of section 111(d) did not 

have to include section 111(b)'s more rigorous technology mandate. Commenters said Congress 

never contemplated a situation where it would be acceptable to impose a more stringent standard 

under section 111(d) than under section 111(b). 

Commenters stated the Proposed Emission Guidelines, however, fall into the trap Congress 

meant section 111 to avoid. Commenters said by setting the carbon emissions goals for some 

states at a level far below what the EPA has proposed for natural gas combined cycle (NGCC) 

units under section 111(b), the Proposed Emission Guidelines will hasten the shutdown of 

existing section 111(d) affected units and spur the construction of new NGCC plants. 

Commenters said this is not the result Congress intended when it drafted section 111. 

Commenters urged the EPA to revise the Proposed Emission Guidelines so that no state goal is 

set at a level lower than the rate established for new NGCC units under section 111(b).

Response 57: We disagree that the section 111(d) standards are more stringent than the section 

111(b) standards. We explain in the Legal Memorandum why the section 111(b) and (d) 

standards are based on different determinations of the BSER.

Comment 58: Commenters stated EPA's proposed guidelines for existing power plant 

performance standards under the Clean Air Act Section 111(d) are simply the most recent 

example of the Federal Government's usurping authorities properly delegated to the states. 

Commenters concurred that EPA's proposal interferes with traditional state authority and energy 

planning and appears to be well beyond the agency's authority under the CAA.

Commenters stated that EPA has improperly attempted to limit Section 111(d)'s expressed 

statutory authority, delegation of authority to the states, and in doing so, EPA's proposal not only 

rejects state discretion under the Clean Air Act but jettisons decades of unquestioned precedent 

establishing state jurisdiction over electricity markets. 

Commenters stated the CPP interprets the contours of Section 111(d) in a way wholly 

unsupported by the text of the statute. Commenters said the CPP seeks to bring about major 

changes to Indiana's electricity sector using programs that have nothing to do with existing 

power plants. Commenters provided examples including: uneconomic dispatch of natural gasfired power plants, new investments in renewable energy, and overall reductions in electricity 
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demand by Indiana businesses and households. Commenters said each of these policies may or 

may not have merit, but they cannot be authorized by the federal CAA at the EPA's insistence. 

Commenters said rather, decades of consistent law and precedent demonstrate that such policies 

are the exclusive province of the Indiana State Legislature and Indiana regulators as delegated. 

Commenters stated the CAA merely authorizes the EPA to craft a "best system of emissions 

reduction" at "existing sources," not to craft a statewide system to reduce emissions of a pollutant 

that happens to originate at power plants.

Commenters stated that this rule bypasses the federal and state legislature, ties the hand of the 

Governor, and usurps my authority as a constitutional officer. Commenters concurred.

Commenters continued, stating "The EPA's proposals for major expansions of state energy 

efficiency, renewable energy programs interfere with traditional state authority and energy 

planning and appear to be well beyond the agency's authority under the Clean Air Act." The 

commenters closed by stating they also feel that this should be in the hands of the President and 

the Congress and the Senate, not the EPA.

Commenters stated, these consequences, moreover, would all stem from a patently unlawful 

application of the Clean Air Act. Commenters stated EPA's proposal seeks to expand the scope 

of Section 111(d) in an unprecedented manner. Commenters stated it would do so at the expense 

of state authority that is expressly identified and preserved in the Clean Air Act and in the 

unquestionable jurisdiction of states over intra-state electricity markets. Commenters stated that

it would do all of these things for no discernible benefit.

Commenters stated that EPA's proposals for major expansion of state energy efficiency and 

renewable energy programs interfere with the traditional state authority to manage the plan and 

appear to be well beyond the agency's authority under the Clean Air Act. Commenters continue 

that State legislatures have set renewable energy goals based on balancing local economic and 

environmental considerations now and find that those judgments had been second guessed by 

EPA. Commenters added that Congress itself is not able to agree on national renewable energy 

targets. The EPA focused the rule only on actions to reducing emissions within plant programs. 

Commenters stated EPA has improperly attempted to limit Section 111(d)'s expressed statutory 

authority, delegation of authority to the states, and in doing so, EPA's proposal not only rejects 

state discretion under the Clean Air Act but jettisons decades of unquestioned precedent 

establishing state jurisdiction over electricity markets. 

Commenters stated this rule bypasses the federal and state legislature, ties the hand of the 

Governor and usurps my authority as a constitutional officer. 

Response 58: We disagree. For the reasons discussed in section V.A. and V.B. of the preamble 

and in the Legal Memorandum, our interpretation of the BSER is reasonable and within the 

scope of EPA’s authority in light of the statutory text, statutory context, statutory purpose, and 
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legislative history. In section V. of the preamble for this rule, we also explain the respective roles 

of the EPA and the states under CAA section 111(d).

We disagree that we are expanding our authority to include wholesale energy market regulation. 

Our emission guidelines simply reflect an achievable emissions limit through the application of 

the BSER and do not in themselves require states or sources to implement the BSER. Moreover, 

these emission guidelines provide states with the flexibility to establish, implement, and enforce 

standards of performance and do not intrude on the regulatory domain of FERC or the states. It 

cannot be said that because environmental requirements may have an effect on the wholesale 

energy market that the EPA is therefore intruding into energy regulation. Certainly, in the 

legislative history of the 1970 CAA Amendments, Congress expressly identified power plants as 

a priority source category for regulation under CAA section 111. Finally, we note that, with 

respect to comments regarding demand-side energy efficiency, the EPA is not including building 

block 4 as a component of BSER.

Comment 59: Commenters stated that states must have the opportunity to exercise the same 

authority as EPA, explaining that under Section 111(b), traditional canons of statutory 

construction dictate that States exercise the same authority with respect to existing sources under 

Section 111(d) as EPA exercises with respect to new sources under Section 111(b). Commenters 

stated Section 111(b) directs EPA to establish[] Federal standards of performance for new 

sources within such category, while Section 111(d) directs States to establish standards of 

performance for any existing source to which a standard of performance would apply if such 

existing source were a new source. Commenters stated when identical words such as the 

direction to establish standards of performance are used in different subparts of the same 

statutory provision, they must be given the same meaning. See Gustafson, 513 U.S. at 570; ACF 

Indus., Inc., 510 U.S. at 342; Retzlaf, 510 U.S. at 143. Thus, commenters concluded that when 

establishing standards of performance for existing sources under Section 111(d), States must be 

permitted to exercise the same authority that EPA exercises under Section 111(b): namely to 

conduct a BSER analysis, select the best system of emission reduction for a source category or 

subcategory, and then translate that into a source-specific emission standard. 

Commenters stated the Proposed Rule disrupts the congressionally established and judicially 

recognized division of responsibility for implementing existing source standards under Section 

111(d) of the Clean Air Act, and it conflicts with the Act by reducing states to secondary partners 

with EPA, when, in fact, Congress intended states to take the lead. Commenters explained that 

this flaw is evident in the general approach EPA proposes to take: first, in establishing the CO2 

emission rate limits applicable to each state; and second, in the specific details of state plan 

implementation discussed throughout the Proposal.

Response 59: We disagree with these comments for the reasons stated in our response to the 

previous comment in this section regarding cooperative federalism under the CAA, as well as in 

section VIII of the Legal Memorandum accompanying the final rule. Furthermore, in section V. 

of the preamble for this rule, we also explain the respective roles of the EPA and the states under 

CAA section 111(d).
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Comment 60: Commenters stated that the U.S. EPA's proposed existing-source rule overreaches 

far beyond the bounds established by the Clean Air Act, and it endeavors to impose "beyond the 

fenceline" regulations to revamp Ohio's entire electricity infrastructure -- from power generation, 

to transmission, and even to consumption. Commenters stated Congress did not intend for the 

Clean Air Act's relatively-narrow Section 111(d) to be used as a mechanism for far-reaching 

regulatory overhaul of the Nation's energy-generation sector. Cf Whitman v. Am. Trucking 

Assn., Inc., 531 U.S. 457, 468 (2001) (EPA may not exercise broad regulatory control absent 

explicit statutory authority: "Congress, we have held, does not alter the fundamental details of a 

regulatory scheme in vague terms or ancillary provisions-it does not, one might say, hide 

elephants in mouseholes."). Commenters continued, stating that the United States Supreme Court 

has echoed its concern with EPA overreach specifically in the context of U.S. EPA's desire to 

regulate greenhouse gas emissions. UA.R.G. v. EPA, 134 S.Ct. 2427 (2014), explaining that in

UA.R.G., the Supreme Court again emphasized that vast regulatory expansions should not arise 

from an agency's interpretation of an arguably ambiguous statute, but must instead derive from 

"clear congressional authorization." Id. at 2444; accord Whitman, supra. Commenters contended

that the proposed rule ranges far beyond the authority that Congress has provided to U.S. EPA. 

Commenters continued that as set forth more fully in the Brief for Petitioners recently filed by 

Ohio and its fellow Petitioners in State of West Virginia, et al. v. United States Environmental 

Protection Agency (D.C. Cir. No. 14-1146), U.S. EPA purports to rest its rulemaking authority 

on a section of the Clean Air Act (section 111(d)) that the EPA previously has described as 

designed to confront specific problems involving pollutants that are "highly localized and thus 

[where] an extensive procedure, such as the SIPS require, is not justified." 40 Fed. Reg. at 

53,340; 53,342 (Nov. 17, 1975). Commenters stated under Section 111(d), "the number of 

designated facilities per state should be few," and the resulting state plans "much less complex 

than the SIPs" for criteria pollutants under Clean Air Act section 110. Id. at 53,345. Commenters

argued that Congress has not conferred upon U.S. EPA the power it seeks to wield here. Indeed, 

not only has Congress withheld such a sweeping grant of authority, it explicitly has outlawed 

what U.S. EPA now proposes - the double regulation of sources under both Clean Air 

Act section 112 and section 111(d). 

Response 60: EPA’s implementing regulations were issued pursuant to CAA section 111(d), 

which required the Administrator to establish a CAA section 110-like procedure for states to 

submit plans, which establish, implement, and enforce standards of performance for existing 

sources in a CAA section 111(b) regulated source category. In accordance with CAA section 

111(d) and pursuant to these implementing regulations, the EPA develops emission guidelines to 

assist states in preparing and submitting such state plans. 

In the preamble to EPA’s implementing regulations, the EPA explained that “Section 111(d) of 

the Act was specifically designed to require control of pollutants which are not presently 

considered ‘hazardous’ within the meaning of section 112 and for which ambient air quality 

standards have not been promulgated.” 40 Fed. Reg. at 53341. Thus, “Congress specifically 

recognized the need for control of a third category of pollutants” even though “these pollutants 

might later be reclassified as hazardous or criteria pollutants.” Id. at 53342. Although the EPA 
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observed that sometimes health and welfare problems caused by such pollutants may be “highly 

localized,” neither CAA section 111(d) nor the EPA’s implementing regulations restrict CAA 

section 111(d) to “localized” pollutants.

In response to comments that “argued that the nine months provided for development of State 

plans after promulgation of an emission guideline by EPA would be insufficient,” the EPA noted

that CAA section 111(d) plans would “[i]n most cases” be “less complex than the SIPs” and that 

“the number of designated facilities per State should be few.” Id. at 53345. Nevertheless, because 

“Congress provided only nine months for SIP development,” the EPA saw no reason to lengthen 

the nine-month provision for purposes of CAA section 111(d). That said, EPA’s implementing 

regulations authorize the Administrator to extend the period for submission of any plan, and she 

has exercised that authority for this rule.

Comment 61: Commenters stated that without direct Congressional authorization, EPA cannot 

exercise authority over state Public Utility Commissions (PUCs), state energy offices, or state 

energy policy, and EPA does not have the authority to dictate fuel use, require reduced 

utilization of units or require re-dispatch as a compliance mechanism, mandate rules governing 

end use or mandate renewable requirements for states. Commenters contended that EPA's 

authority is limited to authorities provided by the CAA over pollution control at source specific 

fossil fuel units that "may emit any air pollutant."(42 USC Section 7411(a)(3))

Response 61: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

We disagree that we are expanding our authority to include wholesale energy market regulation

nor state retail regulation. Our emission guidelines simply reflect an achievable emissions limit 

through the application of the BSER and do not in themselves require states or sources to 

implement the BSER. Moreover, these emission guidelines provide states with the flexibility to 

establish, implement, and enforce standards of performance and do not intrude on the regulatory 

domain of FERC or the states. It cannot be said that because environmental requirements may 

have an effect on the wholesale energy market that the EPA is therefore intruding into energy 

regulation. Certainly, in the legislative history of the 1970 CAA Amendments, Congress 

expressly identified power plants as a priority source category for regulation under CAA section 

111.

Comment 62: Commenters stated that EPA's use of the words "guidance" and "information" 

throughout this regulation indicates that information is all that EPA is authorized to provide the 

States but EPA is not authorized by that regulation to issue emission "guidelines," like the 

present proposal, that contain binding state-wide emission reduction goals and that are thus 

"guidelines" only in name. Commenters stated that even if EPA has the authority to issue 

CAA section 111(d) regulations governing CO2 emissions from coal-fueled EGUs, the Proposed 

Rule impermissibly intrudes upon Wyoming's express authority under CAA section 111(d) to 

"establish" state-specific standards of performance. Commenters explained that under 
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CAA section 111(d), EPA's authority is limited to adopting a "procedure" under which "each 

State shall submit to the Administrator a plan which (A) establishes standards of performance .... 

", and the Proposed Rule is far more than procedural. Rather, commenters contended, the 

Proposed Rule would usurp Wyoming's CAA and state law authority to "establish" performance 

standards by dictating what the standards must be, and additionally, EPA has structured the 

Proposed Rule in a way that would prevent Wyoming from considering "the remaining useful 

life of the existing source" in applying a state-established performance standard.

Commenters stated what EPA calls "standards of performance" that it leaves to states to 

determine are not standards of performance within the meaning of CAA Section 111(a) and (d). 

Rather, commenters remarked, they are akin to state implementation plan measures that states 

must adopt to attain an EPA-established NAAQS. Commenters continued, stating that under the 

Proposed Rule, whatever plan the state submits, however, must ensure that emissions from the 

regulated source category must decline to the level of EPA's specific goals, and thus, directly or 

indirectly, EPA is dictating the level of emission reduction regulated sources must make, and it

has determined that level by applying the BSER factors. Commenters concluded that EPA is 

promulgating performance standards within the meaning of CAA Section l11(a) but commenters

explained that under CAA Section 111(d), however, Congress gave states, not EPA, authority to 

establish those standards. Commenters stated that given that the Proposed Rule gives EPA 

primary decision making at the expense of North Dakota, EPA claims of "state flexibility" are 

not accurate. 

Commenters added the EPA must recognize its own narrow authority to establish emissions 

guidelines under section 111(d) and, consistent with the cooperative federalism principle 

inherent in the CAA, state primacy to establish performance standards and develop state plans to 

satisfy the guidelines.

Response 62: We disagree with these comments. In the preamble for this rule, we explain the 

respective roles of the EPA and the states under section 111(d) and we explain the interpretation 

of the “remaining useful life” provision of section 111(d)(1) and how the states may rely on it.

Comment 63: Commenters stated these proposed rules leave no doubt that EPA's action under 

Clean Air Act section 111- and the Clean Air Act in general- usurps Congressional authority and 

contravenes Congress's manifest commitment to keeping coal as an important component of the 

nation's electricity mix

Response 63: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

EPA also disagrees with the characterization that coal will not remain an important part of the 

nation’s energy mix.
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Comment 64: Commenters stated that the proposed rule's "outside-the-fence" emission 

reductions from non-affected sources and measures including re-dispatching NGCC, RE, and EE 

would be necessary to meet the targets proposed for Pennsylvania. Commenters said because of 

the potential effects on fuel diversity, energy prices, and other consumer effects, commenters

believe that such policy decisions are better left to the United States Congress or other elected 

officials. Commenters stated clearly, this is a concern of the Pennsylvania House of 

Representatives and Senate, both of which passed legislation that was signed into law by the 

Governor of Pennsylvania. Commenters said this legislation mandates that commenters submit 

the proposed Section 111 (d) State Plan to the General Assembly for their review and approval. 

Response 64: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

As explained in section VIII.B.1 of the preamble, we have provided adequate time for necessary 

state legislative processes.

Comment 65: Commenters stated that in Utility Air Regulatory Group v. EPA, the Supreme 

Court cautioned against the kind of expansive interpretation of the CAA that pervades the CPP. 

Commenters explained that the Court has noted that an EPA interpretation of its authority would 

be unreasonable if "it would bring about an enormous and transformative expansion" in the 

EPA's regulatory authority without "clear congressional intent."(134 S. Ct. 2427,2444 (2014).) 

"When an agency claims to discover in a long-extant statute an unheralded power to regulate a 

significant portion of the American economy, we typically greet its announcement with a 

measure of skepticism."(Id. (quoting FDA v. Brown & Williamson, 529 U.S. 120, 159, 188 

(2000)) (internal quotation marks omitted)) "We expect Congress to speak clearly if it wishes to 

assign to an agency decisions of vast 'economic and political significance."(Id.) Commenters

contended that the CPP seeks to do precisely what the Court has already rejected: to vastly 

expand the EPA's regulatory authority without Congressional approval by discovering in a "long 

extant statute an unheralded" power in section 111(d) of the Act. Commenters said one of the 

Court's prior decisions addressing this issue offers the following caution to such an expansive 

interpretation of the Act: "[I]n [the] EPA's assertion of that authority, we confront a singular 

situation: an agency laying claim to extravagant statutory power over the national economy 

while at the same time strenuously asserting that the authority claimed would render the statute 

'unrecognizable to the Congress that designed' it."(Utility Air Regulatory Group, 134 S. Ct. at 

2444)" Commenters stated further still, it is inconceivable that Congress would have intended for 

this rarely used provision of the Clean Air Act to empower the EPA to usurp state oversight of 

electricity markets. Commenters stated as the Supreme Court explained, "Congress . . . does not 

alter the fundamental details of a regulatory scheme in vague terms or ancillary provision-it does 

not, one might say, hide elephants in mouse holes."(Whitman v. Am. Trucking Assns., Inc., 531 

U.S. 457,468 (2001).

Response 65: We disagree with this comment. In sections IV and V. of the preamble to this rule, 

and the Legal Memo, we explain our legal basis and, in light of the U.S. Supreme Court 
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jurisprudence the commenters cite, why this rule is consistent with CAA authority and does not 

overstep the bounds of that authority.

Comment 66: The commenters have identified other legal issues raised by the Clean Power Plan 

that EPA should consider. Commenters said specifically, the regulation of existing sources 

through the Clean Power Plan seems to be premature; see CAA section 111(d)(1)(A), 42 

U.S.C. section 7411(d)(1)(A). Commenters said Section 111(d)(1)(A)(ii) requires EPA to first 

finalize standards of performance for new sources before developing procedures for the 

submission of state plans for existing sources. Id. Commenters said moreover, EPA has not yet 

made an endangerment finding as required by Section 111(b)(1)(A) to support the proposed 

Clean Power Plan; see CAA section 111(b)(1)(A); 42 U.S.C. section 7411(b)(1)(A).

Response 66: We disagree with these comments. We respond to each of the points raised in the 

preamble for this rule.

Comment 67: Commenters disputed EPA's suggestion that the ESPS can be revised to require 

further reductions in the future. Commenters stated that Section 111(d) standards to date have 

been interpreted as a one-time standard but EPA suggests in the Preamble that it can continually 

re-visit the existing unit standard in the future to obtain lower state emissions rates and tougher 

standards. Commenters explained that while Section 111(b) calls for revisiting new unit 

standards every 8 years, there is no such provision concerning existing units under Section 

111(d), and EPA does not have the authority to continually force states to tighten the existing 

unit standards. 

Response 67: This comment is outside the scope of this rulemaking.

Comment 68: Commenters remarked about alternatives to federal enforcement of PUCN 

regulatory actions. Commenters stated that to address the concerns set forth above, the Nevada 

Agencies suggest that the USEPA could avoid these issues by clarifying that its authority is 

limited to controlling emissions from affected sources. Commenters believed that an approach 

that is more aligned with the federal-state partnership embodied in the Clean Air Act will make 

the final goal federally enforceable, but would leave matters traditionally within state purview to 

state enforcement. Commenters added that States need the flexibility to be able to commit to 

achieving the targeted emission reduction goals without making the programs to achieve 

reductions themselves federally enforceable. Commenters closed, stating that an implementation 

plan such as the state commitment approach outlined in the preamble (79 FR at 34901) would 

allow states the ability to timely react to ever-changing markets or other circumstances.

Response 68: The final rule limits federal enforceability to emission standards for affected 

EGUs, whether in the context of an emission standard type plan, a state measure type plan, the 

federal backstop, or a federal plan.

Comment 69: Commenters remarked that states cannot be subject to citizen suits solely for 

failure to meet their state goals, citing Sierra Club v. Korleski, in which the Sixth Circuit 
161

explained that a state is liable to citizen suits when it acts as a polluter rather than a 

regulator.(Sierra Club v. Korleski, 681 F.3d 342 (6th Cir. 2012); see Bennett v. Spear, 520 U.S. 

154 (1997). In implementing state plans pursuant to the Proposed Rule, commenters explained 

that states are acting as regulators and, therefore, would not be subject to citizen suits for failure 

to implement their state plans. Furthermore, commenters stated if a state has implemented all the 

measures in its state plan, the state has implemented the performance standard envisioned under 

Section 111 regardless of whether the state achieves all of its expected emission reductions. 

Commenters posited that Section 111 of the CAA, unlike Section 110, does mandate that a state 

attain a uniform numeric emissions standard. Accordingly, commenters stated there would be no 

violation of a standard to support a citizen suit. Commenters stated that courts may only enforce 

specific state plan strategies, and may not enforce a state plan's overall objectives or aspirational 

goals, which would bar citizen suits against states for failing to meet their state goals (See, e.g., 

Bayview Hunters Point Community Advocates v. Metro. Trans., 366 F.3d 692 (9th Cir. 2003); 

Trustees for Alaska v. Fink, 17 F.3d 1209, 1212 (9th Cir. 1994)), and thus, citizen suits may be 

brought against entities regulated under the plan to enforce the measures in the plan, but citizens 

could not sue a state due to the failure of the state to meet its state emission reduction goal.

Response 69: Section 304 of the CAA authorizes citizens to bring civil actions against any 

person who is alleged to have violated or to be in violation of “an emission standard or 

limitation” but does not authorize citizens to directly compel state action to implement the 

requirements of CAA section 111(d). The EPA therefore agrees with commenters that section 

304 does not allow for a citizen suit against a state that fails to implement a section 111(d) state 

plan or fails to meet its emission goal, where the state has not itself taken on the obligation to 

meet an “emission standard or limitation.” Under the “emissions standards” approach, affected 

EGUs—and not states—will be subject to citizen enforcement through section 304. Although 

states will be obligated to take corrective measures for certain emission standards plan 

approaches if an implemented state plan fails to achieve required emission reductions, the EPA 

does not believe this would constitute a “violation” of an “emission standard or limitation” for 

purposes of section 304. Under the “state measures” approach, if the state plan fails to achieve 

required emissions reductions it will trigger a federally enforceable “backstop.” Emissions 

standards imposed under the backstop would be enforceable against affected EGUs under section 

304. In the event a state fails to submit an approvable state plan, the EPA is authorized to impose 

a federal plan in the state’s place.

Comment 70: Commenters stated that in order to draft a FIP that incorporates EPA's proposed 

building blocks, EPA would have to order utility companies to dispatch their power plants 

differently than they do now; it would have to order utilities - and likely others - to build 

renewable resources in place of lower cost resources; it would have to order utilities to build or 

retain nuclear plants, and require state commissions to allow cost recovery for such plants in 

utility rates (or require the state legislature and governor's office to commit to subsidize such 

resources) - actions backed by authority that is questionable, at best, and with federalism 

implications. 
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Response 70: This comment is beyond the scope of this rulemaking, which establishes EGs for 

state plans in the first instance. The EPA is proposing a federal plan to implement the EGs in a 

separate action. While this comment is out of scope, we note that we disagree with the 

commenters that these are the types of actions that the EGs would compel the agency to take in 

order to achieve the emission performance rates in the EGs. The proposed federal plan will be 

designed to achieve emissions reductions through the application of emission standards that 

apply to, and are enforceable against, the affected EGUs.

Comment 71: Commenters stated that inflexible emission limits are inconsistent with the state 

role defined by Congress in section 111(d). Commenters explained that Section 111(d) 

establishes specific roles for EPA and states. Commenters noted that EPA proposes specific 

mandatory "goals," or target emission rates, for each state characterizing these numerical limits 

as 4'emission guidelines,"(EPA Legal Memorandum at 32. Compare 40 C.F.R. section 60.21(d), 

discussed in EPA's Legal Memorandum at 31, with 42 U.S.C. section 7411(a) (EPA's definition 

of "emission guideline" is nearly identical to the statutory definition of "standard of 

performance" in section 111 of the Clean Air Act)) and EPA will not adjust the mandated 

emission rate where a state cannot implement one of the building blocks, unless the state 

demonstrates that it cannot achieve the rate by other means- by applying the other BSER 

building blocks more aggressively or through some other "related, comparable 

measures."(Proposed Rule, 79 Fed. Reg. at 34,893) Commenters stated that once finalized, EPA 

does not intend to allow states to alter the target emission rates, (Proposed Rule, 79 Fed. Reg. at 

34,835 ("Once the final goals have been promulgated, a state would no longer have an 

opportunity to request that the EPA adjust its CO2 goal."); Id at 34,897-98 (rejecting suggestion 

that states be allowed to treat EPA's goals "as advisory rather than binding"); Id. at 34,892 

(noting that the emission rates promulgated in the final rule will be binding emission guidelines 

for state plans)) , and these inflexible emission limits are inconsistent with the state role defined 

by Congress in section 111(d).

Response 71: We disagree with this comment. We discuss the state goals and our legal 

authority for them in the preamble for this rule.

Comment 72: Commenters stated EPA's ability to craft a rule that accounts for regional 

differences and the disproportionate impacts on coal producing states of regulating CO2 

emissions from power plants is limited by its Clean Air Act authority.

Response 72: We disagree. As we explain in section V of the preamble, section 111, including 

as interpreted by the D.C. Circuit, may be reasonably interpreted to authorize the EPA to take 

regional differences into account.

Comment 73: Commenters stated that the proposed NSPS for new sources does not address the 

same type of facilities as the proposed guidelines. Commenters explained that even if EPA could 

demonstrate that it proposed a lawful NSPS for new EGUs, which it cannot do, its Proposed 

Guidelines do not address the "same type" of facility that the proposed NSPS for new EGUs 

would address. Commenters stated on this basis alone the Proposed Guidelines lack the legal 
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prerequisite that a standard of performance for the same type of facility will have been proposed

concurrently with or before the section 111(d) proposal. Id. Commenters stated under the 

Agency's own Subpart B regulations, emissions guidelines may apply only to designated 

facilities - the same type of facility regulated under the new source NSPS rule. In this context, 

commenters stated that would mean that EPA could propose emission guidelines only for fossil 

fuel-fired EGUs that meet the threshold requirements set forth in the new source NSPS proposal. 

Commenters stated that in the Proposed Guidelines, however, EPA never defines what the 

regulated "designated facility" would be. Commenters stated that in an attempt to accomplish its 

novel, systems-based approach to BSER, EPA dodges the question of what the "designated 

facility" is and instead has introduced a new term: "affected entity." See, e.g., 79 Fed. Reg. at 

34,951, Proposed 40 C.F.R. section 60.5740(a)(3) (State plans must identify "the state emission 

performance level for affected entities that will be achieved through implementation of the 

plan."); Id., Proposed 40 C.F.R. section 60.5740(a)(3)(ii)(B) ("For a mass-based CO2 emission 

performance level, the identified level of performance must represent the total tons of CO2 that 

will be emitted by affected entities during each plan performance period."). Commenters stated 

EPA defines "[a]ffected [e]ntities" to mean "any of the following: An affected EGU, or another 

entity with obligations under this subpart for the purpose of meeting the emissions performance 

goal requirements in these emission guidelines." Id. at 34,956, Proposed 40 C.F.R. section 

60.5820 (emphasis added). Commenters stated the CAA and EPA's Subpart B regulations 

prohibit EPA from expanding the universe of covered sources under section 111(d) beyond those 

regulated as new sources under section 111(b). CAA section 111(d)(1); 40 C.F.R. section 

60.22(a). Commenters remarked that the Subpart B regulations limit EPA to proposing and 

finalizing emission guidelines for "designated facilities," not "affected entities," which EPA has 

defined to be a world much larger than "designated facilities." See, e.g., 40 C.F.R. section 

60.21(e) ("Emission guideline means a guideline set forth in subpart C of this part, or in a final 

guideline document published under section 60.22(a), which reflects the degree of emission 

reduction achievable through the application of the best system of emission reduction which 

(taking into account the cost of such reduction) the Administrator has determined has been 

adequately demonstrated for designated facilities.") (second emphasis added); Id. section 60.22 

(a) ("Concurrently upon or after proposal of standards of performance for the control of a 

designated pollutant from affected facilities, the Administrator will publish a draft guideline 

document containing information pertinent to control of the designated pollutant [from] 

designated facilities."); Id. section 60.22(b)(5) ("The Administrator will specify different 

emission guidelines or compliance times or both for different sizes, types, and classes of 

designated facilities when costs of control, physical limitations, geographical location, or similar 

factors make subcategorization appropriate."). Commenters continued, stating that EPA insists it 

is "following the requirements of" the Subpart B regulations and is not amending or reopening 

them, 79 Fed. Reg. at 34,844, and yet it fails to adhere to the most basic of the Subpart B 

requirements: identifying the regulated source category, which by law must be identical to the 

source category regulated under the section 111(b) NSPS. In fact, commenters stated the very 

first non-definitional sentence of the Subpart B regulations states that EPA's guideline document 

must contain "information pertinent to control of the designated pollutant [from] designated 

facilities." 40 C.F.R. section 60.22(a). Indeed, commenters remarked, the Proposed Guidelines 
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would regulate sources that extend far beyond the coal- and gas-fired EGUs EPA would regulate 

under its January 2014 NSPS Proposal. Commenters stated EPA does at times use the term 

"affected EGU" but such term is not used interchangeably or as a synonym with the term 

"affected entity." Commenters stated it is clear that EPA intends for the section 111(d) emission 

guidelines to apply to "affected entities," not only to "affected EGUs." See, e.g., 79 Fed. Reg. at 

34,953, Proposed 40 C.F.R. section 60.5780(a) ("Your state plan shall include emission 

standard(s) that are quantifiable, verifiable, non-duplicative, permanent, and enforceable with 

respect to each affected entity."); id. at 34,953-54, Proposed C.F.R. section 60.5780(f) ("An 

emission standard is enforceable against an affected entity if: (1) A technically accurate 

limitation or requirement and the time period for the limitation or requirement is specified; (2) 

Compliance requirements are clearly defined; (3) The affected entities responsible for 

compliance and liable for violations can be identified; (4) Each compliance activity or measure is 

enforceable as a practical matter; and (5) The Administrator and the state maintain the ability to 

enforce violations and secure appropriate corrective actions . . . ."). Commenters stated only after 

EPA discusses the requirement that state plans apply standards to "affected entities," EPA inserts 

a separate section in its proposed regulatory language discussing the "Applicability of State Plans 

to Affected EGUs." Id. at 34,954. Commenters said states must address emissions from affected 

EGUs in their state plans, but it is abundantly clear that EPA's design envisions emissions-related 

requirements under section 111(d) applying to a much broader range of sources than the sources 

that would be regulated under its section 111(b) NSPS proposal. Commenters stated EPA 

explains in the preamble that state plans may apply "enforceable measures" that "are 

implemented by the state or by another entity" in addition to EGUs. Id. at 34,837; see also Id. at 

34,853 ("Based on requests from stakeholders, the EPA is proposing that states be authorized to 

submit state plans that do not impose legal responsibility on the affected EGUs for the entirety of 

the emission performance level, but instead, by adopting what this preamble refers to as a 

portfolio approach, impose requirements on other affected entities (e.g., renewable energy and 

demand-side energy efficiency measures) that would reduce CO2 emissions from the affected 

EGUs."). Thus, commenters concluded, under EPA's Proposed Guidelines, the "designated 

facility" would be EGUs, the state (the entity to which EPA is in fact applying a numeric ratebased emissions goal), and other entities, including any "private or public third-party entity." Id. 

at 34,917. Moreover, commenters stated, EPA has no authority, under either section 111(d) or 

the Subpart B regulations, to adopt nonnegotiable, binding "emission goals" for states as it 

proposes to do. Subpart B does not even mention the term "emission goal." Commenters stated 

that both Subpart B and section 111(d) speak in terms of "standards of performance." 

Commenters stated under section 111(a)(1), the standard of performance must reflect the degree 

of "emission limitation" that is achievable with the BSER. Commenters stated under section 

111(d), states are to establish standards of performance applicable to sources. Commenters stated 

EPA's convoluted approach disregards both the statute and its own implementing regulations and 

would apply to states a binding emission limitation, and states would then be free to apply 

standards of performance to any "affected entity" it wishes, without fealty to the restriction that 

the regulated entity must be identical in the section 111(b) and section 111(d) regulations. 

Commenters stated EPA's interpretation of its own regulations does not accord with the statute. 

Moreover, commenters added, because EPA acts contrary even to its own regulations, it is 
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entitled to no deference in interpreting them. Finally, commenters stated, for the same reasons, 

EPA's proposal for modified and reconstructed sources under section 111(b) is also not sufficient 

to justify the section 111(d) proposal. See 79 Fed. Reg. at 34,852 ("The EPA intends to complete 

two CAA section 111(b) rulemakings regulating CO2 from new fossil fuel-fired EGUs and from 

modified and reconstructed fossil fuel-fired EGUs before it finalizes this rulemaking, and either 

of those section 111(b) rulemakings will provide the requisite predicate for this rulemaking."). 

Commenters stated although the CAA defines the term "new source" to include a modified 

source, CAA section 111(a)(2), the Proposed Guidelines seek to regulate systems, states, and 

sources other than individual EGUs. Commenters stated the Proposed Guidelines define an 

"Affected Entity" as any entity with an enforceable obligation under a state plan. 79 Fed. Reg. at 

34,956, Proposed 40 C.F.R. section 60.5820. Commenters stated this could include nearly any 

type of entity, "e.g., an entity that is regulated by the state, such as an electric distribution utility, 

or a private or public third-party entity." Id. at 34,917. By contrast, commenters stated, the 

section 111(b) proposals for modified, and reconstructed facilities define the designated facility 

as a fossil fuel-fired EGU. Commenters stated this is a mismatch, and added EPA cannot 

regulate a different type of source under section 111(d) than the type of source that is regulated 

as a new (or modified or reconstructed) source under section 111(b). Commenters stated that 

because EPA has failed to meet these fundamental legal prerequisites for proposing and 

finalizing section 111(d) emission guidelines for CO2 emissions, the Proposed Guidelines are 

unlawful and must be withdrawn.

Response 73: The final rule does not authorize state plans to impose section 111(d) state plan 

requirements on entities other than affected EGUs; accordingly, the concerns commenters

expressed in this comment do not apply to this rule.

Comment 74: Commenters stated that by making regulation of existing sources contingent upon 

the promulgation of standards of performance for new sources, Congress made it clear that 

Section 111(d) is a supplementary program that builds off of the standards of performance and 

BSER analysis applied to new sources. Yet, commenters contended, EPA's Proposed Rule for 

existing sources diverges substantially from the framework created in its Section 111(b) 

proposal, and explain that because Section 111(b) and Section 111(d) both cross-reference the 

same definition of "standard of performance" included in Section 111(a), EPA must apply the 

same methodology when conducting the BSER analysis for both existing and new sources. 

Commenters stated that this is not what EPA did in the proposed rule for existing sources, and 

EPA's proposed rule for new sources did not rely on the broad-based portfolio approach 

presented by EPA in this proposed rulemaking but, instead, EPA's proposed rule for new sources 

appropriately limited itself to source specific technological means of reducing CO2 emissions-it 

contained no "plant to plug" proposals like those included in Building Blocks 2, 3, and 4 of the 

current proposal. 

Response 74: We disagree. We explain in the Legal Memorandum why the section 111(b) and 

(d) standards are based on different determinations of the BSER.
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Comment 75: Commenters stated that requiring greater reductions from states that have already 

reduced emissions is not consistent with the structure of the CAA. Nowhere in the Act is EPA 

authorized to require additional reductions from a source simply because it had already achieved 

the desired level of emission performance. Commenters stated in a more traditional approach to 

section 111 standards, EPA would base standards on the emission rate achievable through the 

use of a particular control technology. Commenters stated if a unit already had installed that 

control technology, it would be deemed compliant. Commenters stated this would not be a free 

pass to the contrary, it would recognize that the source had invested in achieving the required 

emission performance goal early and, therefore, was achieving that goal. Commenters stated in 

the proposed section 111(d) guidelines, however, reductions already achieved through state and 

utility investments in clean energy are not deemed compliant, but are, instead, met with 

standards that require additional, more stringent reductions.

Response 75: The EPA recognizes the importance of early actions taken by states and industries 

to reduce emissions of greenhouse gases and the effect these actions have had on global 

emissions. However, the CAA does not require that emission guidelines under section 111 

provide credit for actions that predate the EPA’s decision to regulate emissions from a source 

category – and commenters have not identified any provisions of the CAA to support this 

contention. While technology-based standards may sometimes result in early-acting facilities 

being deemed in compliance without further action, this is not a mandatory feature of emissions 

regulations generally or emission guidelines under section 111(d). Furthermore, trying to account 

for all actions pre-dating the emission guidelines that may have reduced a state’s or facility’s 

emissions would be impracticable here. In the final rule, the EPA is establishing uniform 

emission rates and state targets tailored to emission reduction opportunities available to states 

and sources through the application of the BSER. For a discussion of the EPA’s approach to 

early actions taken by states or affected entities after promulgation of the final rule but before the 

first compliance period, see the final rule preamble at section VIII.B.2.

Comment 76: Commenters stated the New Source Rule - if finalized in anything like its 

proposed form - will not be a lawful predicate for the proposed Section 111(d) rule. Commenters

explained that the New Source Rule is based upon EPA's claim that the "best system of emission 

reduction" for carbon dioxide emission from coal-fired power plants is partial carbon capture and 

storage (CCS). 79 Fed. Reg. at 1,430 but as 16 States explained in their comment letter to EPA, 

CCS is not the "best system of emission reduction" because CCS has not been shown to be 

reasonably reliable, efficient, broadly available, or economically feasible in any commercial 

setting. Commenters added that, as the States also explained, the proposed New Source Rule 

violates the Energy Policy Act of 2005 because EPA's claim that CCS technologies have been 

"adequately demonstrated" is based on government-funded projects that would not be 

economically viable without government funds; the 2005 Act expressly forbids EPA from 

relying on these projects when setting standards under Section 111. Finally, commenters stated, 

the New Source Rule is arbitrary and capricious, as the States' comment letter articulated, 

because EPA's justifications for the rule are contrary to the agency's own predictions. 
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Commenters explained that EPA may not finalize guidelines for existing sources unless new 

sources of the same type of entity are already subject to a section 111(b) performance standard.

Commenters stated EPA's proposed NSPS for new coal-fired EGUs fails to meet the statutory 

requirements for a standard of performance under section 111(b) of the Act because partial 

carbon capture and storage is not adequately demonstrated and the proposed NSPS does not 

actually require a reduction in CO2 emissions. Commenters stated as a result, the NSPS does not 

satisfy the legal prerequisite for the Proposed Guidelines.

Commenters stated EPA's proposed NSPS for new Coal-Fired EGUs is unlawful and cannot 

support Section 111(d) emission guidelines and explains that because EPA's proposed NSPS for 

new coal-fired EGUs fails to meet the statutory requirements for a "standard of performance" 

under section 111(b) of the Act, it cannot satisfy the legal prerequisite for the Proposed 

Guidelines. Commenters stated that the CAA requires a "standard of performance" to be 

"achievable" and based on a "best system of emission reduction" that must be "adequately 

demonstrated" for sources within a category or subcategory. CAA section 111(a)(1). 

Commenters stated the BSER must be a design or process measure that is available for each 

source type to which the standard will apply. Commenters stated EPA's proposed NSPS for new 

Subpart Da fossil-fired units is based on the use of carbon capture and storage ("CCS"), a 

technology that, as UARG exhaustively demonstrated in its May 2014 comments to EPA on that 

proposed rule, is neither available nor adequately demonstrated. Furthermore, commenters

added, an NSPS must reduce emissions from a source by incorporating a system of continuous 

emission reduction into the design of the source itself. Commenters stated EPA's proposed NSPS 

for new Subpart Da sources failed this most basic test; the proposed Subpart Da standard would 

not reduce emissions. Commenters stated the proposed NSPS for new Subpart Da sources, which 

is based on one element of CCS, would mandate no reduction in the CO2 generated by a source. 

Instead, it merely requires that a new source separate some percentage of the CO2 from its flue 

gas stream, without imposing any requirements regarding the CO2's ultimate fate. Commenters 

stated the proposed NSPS for new Subpart Da units is a "carbon separation" system, not a 

"carbon capture and sequestration" system, and therefore it does not reduce emissions. 

Commenters stated the proposed 1,100 lb CO2/MWh standard merely reflects the amount of 

unseparated CO2 a source would be limited to releasing from its stack. Yet, commenters stated,

the total CO2 generated by the source would not change. Commenters stated the remainder of the 

CO2 generated by the source and not emitted from the stack would be sent off-site with the 

expectation that it would be sequestered. Commenters stated that it would not violate the 

proposed NSPS if 100 percent of the CO2 separated by the capture technology subsequently 

were released to the atmosphere. Thus, commenters stated, the proposed NSPS for Subpart Da 

units would not reduce emissions. Moreover, commenters stated, in the proposed NSPS for new 

EGUs, EPA failed to show that the proposed separation-based standard is achievable for sources 

within the category as a whole because its limited discussion of achievability considers only 

integrated gasification combined cycle ("IGCC") units, which make up only one type of source 

covered by the proposed standard. Commenters stated a standard based solely on "IGCC with a 

single-stage [water gas shift] reactor and a two-stage acid gas removal system," 79 Fed. Reg. at 

1470, a form of pre-combustion CO2 separation, cannot support a standard for pulverized coal 
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("PC") or circulating fluidized bed units, which require post-combustion separation. 

Commenters stated EPA did not analyze or even assert that the proposed separation standard is 

achievable for coal-fired units using post-combustion capture methods. Commenters stated any 

standard that applies to PC units based on a finding that it is achievable with a technology that 

only IGCC units can use is contrary to law. Commenters continued that because there is no 

lawful proposed standard of performance for new coal-fired EGUs, EPA lacks the legal 

prerequisite to propose or promulgate the Proposed Guidelines for those sources. Commenters 

stated a standard of performance under section 111(b) of the Act must be "achievable" and 

"adequately demonstrated" for sources in a source category. Commenters stated because EPA's 

January 2014 NSPS Proposal for new sources is neither, the section 111(b) new source rule does 

not meet the requirements to be a standard of performance for new coal-fired units. Commenters

concluded that without an effective standard for new units, EPA cannot propose a standard for 

existing units. See CAA section 111(d)(1); 40 C.F.R. section 60.22(a).

Response 76: We disagree with these comments. We explain in the section 111(b) rule our basis 

for the standards of performance we finalize in that rule and respond to all comments submitted 

on that rule. It is not necessary to respond substantively to comments concerning the validity of 

the section 111(b) rule in this rule.

Comment 77: Commenters stated that Section 111(d) of the Clean Air Act (CAA) contains clear 

and explicit language limiting EPA's regulatory authority to the EGU source(s) that 'emit or may 

emit any air pollutant'. The commenters added that the plain understanding of this statutory 

requirement of the CAA is that performance standards are to be only imposed on 'sources' that 

actually emit a regulated pollutant, i.e. fossil fuel-fired EGU's. By historic regulatory precedent, 

the public, the commission and the industry have understood the source to be composed of the 

boiler, the turbine-generator, prime movers, pollution controls and other associated auxiliary 

equipment generally situated within the fence line of a generating unit. Correspondingly, 

commenters stated emissions from any aspect of the source are to be controlled by imposing 

performance standards on the source at the source. Commenters stated this rule proposes and 

expects their commission to implement actions that go beyond the commission's authority as an 

entity created by statute. While EPA has insisted there is flexibility beyond the 4 Building 

Blocks, the commenters stated the authority granted under the CAA and an understanding that 

commission's authority and the Florida Department of Environmental Protection statutory 

authority leave us to achieve compliance with the rule only within the fence line of our 

generation facilities. Reviewing the policy models of EPA, along with our statutory 

requirements, the commenters believed that implementation of the Proposed Rule will require 

premature closure of our fossil fuel-fired plants, will result in stranded costs of a very young fleet 

and will directly impact our ratepayers and will put the commission in conflict with the Clean 

Water Act (CWA) and the proposed Waters of the United States Rule (WOTUS).

Response 77: The final rule limits the federally enforceable emission limits to affected EGUs.

We discuss in the preamble for this rule the steps we took in this rule to minimize the problem of 
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stranded assets. With respect to concerns that some methods of compliance would implicate the 

Clean Water Act, this rule provides states with significant flexibility in developing emission 

standards for affected EGUs, and envisions that EGUs will have significant flexibility in 

determining how to comply with those emission standards.

Comment 78: Commenters stated that is effectively mandating fuel and generation unit design 

choices for new EGUs constructed in the United States. Commenters stated that the Clean Air 

Act enables EPA only to regulate pollution, not dictate fuel or design choices by industry, much 

less to the point of declaring coal- and petcoke-fired EGUs to be obsolete or banning new 

construction outright, and Congress never intended for the Clean Air Act to authorize EPA's 

extraordinary policy decisions to phase out entire sources of energy as proposed in this 

rulemaking. Commenters contended that EPA seeks to assert regulatory authority over not only 

pollution, but energy as well.

Response 78: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Moreover, we disagree that we are expanding our authority to include wholesale energy market 

regulation. Our emission guidelines simply reflect an achievable emissions limit through the 

application of the BSER and do not in themselves require states or sources to implement the 

BSER. Moreover, these emission guidelines provide states with the flexibility to establish, 

implement, and enforce standards of performance and do not intrude on the regulatory domain of 

FERC or the states. It cannot be said that because environmental requirements may have an 

effect on the wholesale energy market that the EPA is therefore intruding into energy regulation. 

Certainly, in the legislative history of the 1970 CAA Amendments, Congress expressly identified 

power plants as a priority source category for regulation under CAA section 111.

Comment 79: Commenters stated verbatim EPA's policy against making Best Available Control 

Technology ("BACT") determinations that would "fundamentally redefine the nature of the 

source" also demonstrates the extent to which EPA's effort to use the word "system" to expand 

its authority into a nationwide bubble is unreasonable. EPA Office of Air Quality Planning and 

Standards, "PSD and Title V Permitting Guidance for Greenhouse Gases," EPA-457/B-11-001 at 

26 (March 2011), citing In re Prairie State Generating Co., 13 E.A.D. 1, 23 (EAB 2006). 

Commenters stated that according to EPA's guidance, "the option of using natural gas as a 

primary fuel would fundamentally redefine a coal-fired electric generating unit" in most cases. 

Id. at 27. Commenters stated the permitting agency therefore should not require an entity that 

plans to construct or modify a coal-based power plant to switch to natural gas. Id. Yet,

commenters stated the Proposed Rule would require owners and operators of existing fossil fuelbased plants to substitute NGCC, nuclear or renewable generation capacity for their existing 

capacity, in whole or in part. Commenters stated this effectively redefines the source, even if the 

new primary fuel is used at a different location. Commenters stated EPA's proposal therefore 

represents a sharp departure from its own prior guidance, demonstrating the unreasonableness of 

EPA's interpretation of the word "system" in CAA Section 111(a)(1).
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Commenters stated that BSER must be applied directly to EGUs, explaining that EPA does not 

consider the BACT requirement as a means to redefine the basic design of a source or change the 

fundamental scope of a project when considering available control alternatives. For example, 

commenters offered, EPA does not require applicants proposing to construct a coal-fired EGU to 

consider building a NGCC unit instead, and yet, building blocks 2 and 3 essentially constitute a 

fundamental change to coal-fired EGUs by compelling states to shift generation to NGCC and 

renewable sources.

Response 79: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Nevertheless, commenters that contend this rule impermissibly “redefines” stationary sources 

have not demonstrated that the Clean Air Act contains a general prohibition on requiring a 

“redesign” or “redefinition” of individual regulated sources, or a category of sources, through 

administrative rulemaking. The commenters have not cited an example where EPA applied such 

a limitation when setting emissions standards for an entire category of sources under section 111 

or another provision of the Act. The commenters cite only EPA’s guidance and past practice with 

respect to the issue of “redefining the source” in the distinct context of the PSD program, which 

involves the case-by-case review of the construction of an individual stationary source. EPA 

does not agree that its approach to the “redefining the source” question in the context of PSD 

permitting makes it impermissible or unreasonable for EPA to determine that building blocks 1, 

2, and 3 constitute the BSER for existing sources covered by this rule. As other commenters have 

pointed out, there are distinctions between the PSD program and the CAA program EPA is 

implementing in this rule and the statutory provisions on which these programs are based. In 

addition, commenters that oppose the rule on this basis have not accurately described EPA’s 

interpretation of the PSD provisions in the Act. 

The CAA’s PSD program is administered primarily by state and local permitting authorities as 

individualized preconstruction requirement under CAA section 165. Pursuant to this program, 

proposed new or modified major facilities in attainment/unclassifiable areas must undergo a 

case-by-case permitting analysis to establish an achievable “emission limitation based on the 

maximum degree of reduction” for each pollutant regulated under the CAA, taking into account 

“energy, environmental, and economic impacts and other costs.” 42 U.S.C. § 7479(3). The 

BACT analysis also considers the “application of production processes and available methods, 

systems, and techniques, including fuel combustion techniques for control of each such 

pollutant.” Id. BACT is not applicable to unmodified existing sources nor is it applied on a 

source category basis.

The PSD BACT analysis typically proceeds in five steps. Commenters’ assertions relate to the

first of these steps.

In the EPA’s PSD and Title V Permitting Guidance for Greenhouse Gases, we explain that the 

first step of the BACT analysis “is to cast a wide net and identify all control options with 
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potential application to the emissions unit under review” and that this step “need not necessarily 

include inherently lower polluting processes that would fundamentally redefine the nature of the 

source proposed by the permit applicant.” Id. at 26. We also explain that “BACT should 

generally not be applied to regulate the applicant’s purpose or objective for the proposed 

facility.” Under this framework, our GHG Guidance states that “a permitting authority should 

look first at the administrative record to see how the applicant defined its goal, objectives,

purpose or basic design for the proposed facility in its application.” Id. However, we clarify that 

the “EPA does not interpret the CAA to prohibit fundamentally redefining the source and has 

recognized that permitting authorities have the discretion to conduct a broader BACT analysis if 

they desire. The ‘redefining the source’ issue is ultimately a question of degree that is within the 

discretion of the permitting authority.” Id. at 26-27. Thus, Commenters’ assertion that EPA has a 

policy “against making [BACT] determinations that would ‘fundamentally redefine the nature of 

the source’” overstates the nature of EPA’s guidance on this issue.

EPA agrees with the commenters who point out that the Agency’s policy concerning redefining 

the source in the context of the PSD BACT analysis is not relevant for purposes of CAA section 

111(d), which calls for a determination of BSER for a category of existing sources. As noted 

above, BACT determinations are case-by-case preconstruction requirements that require the 

installation of the “best available control technology” at the time of construction of a new major 

emitting facility or as part of a major modification of an existing facility. Because BACT applies 

at the preconstruction stage on a case-by-case basis and generally requires the installation of 

control technology, it is appropriate (though not required) for a permitting authority to limit the 

scope of BACT to take into account the proposed purpose and design of such projects on a caseby-case basis. 

In contrast, section 111(d) expressly applies to “existing sources.” Developing an emission 

guideline generally applicable to existing sources within an entire category under CAA section 

111(d) differs from the five-step case-specific analysis under CAA section 165 for assessing 

whether the best available pollution controls can be incorporated into a particular facility at the 

time it is newly constructed or undergoes a major modification. 

Under CAA section 111(d), the Administrator identifies a list of adequately demonstrated control 

options in use by the industry, selects the best of those control options after considering cost and 

other factors, then selects an achievable limit for the category through the application of the 

BSER across the industry. States are subsequently responsible for developing plans based on an 

emission guideline and may take into account a source’s remaining useful life, among “other 

factors,” in applying a standard of performance to any particular source. The BSER for purposes 

of section 111(d) is not limited to technology that can be built into a specific source because 

affected sources have already been constructed. Rather, it is generally based on pollution control 

systems that can be implemented by an existing source and need not necessarily include retrofit 

controls. 

As we discuss at length in the preamble, owners/operators of existing steam EGUs have for 

many years employed generation shifts that are similar to building block 2, and, in fact, have in 
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recent years shifted generation to NGCC units as a means of reducing emissions of air pollutants, 

including CO2. As we also discuss at length in the preamble, owners/operators of existing steam 

EGUs and NGCC units have also for many years invested in renewable energy and, in recent 

years, have done so for the purpose of reducing air pollutants, including CO2. Moreover, a 

survey of IRPs notes that many owners and operators of steam EGUs are planning to continue to 

shift more to NGCC generation and renewable energy in the future, and many owners and 

operators of NGCC generation are planning to invest more in renewable energy. In light of this 

history and current practice of EGUs implementing the same measures that are in building blocks 

2 and 3, it is apparent that those measures are part of the business purposes and objectives within 

the power sector. Accordingly, the BSER, which incorporates building blocks 2 and 3, cannot be 

said to force a fundamental redefinition of the business of generating electric-power. Likewise, 

it cannot be said that this rule forces a fundamental redefinition of the design of any particular 

source. 

EPA agrees that the requirements of section 111 and the PSD program are linked together in 

various ways. However, this linkage reflects Congress’ intention that these two programs work 

together to address different aspects of the air pollution problem. The linkage reflects 

Congressional intent for these program to complement each other, not for EPA to implement 

them in exactly the same way. The latter would be redundant, and frustrate the distinct purpose 

for which each program was created. Notwithstanding the statutory linkages cited by 

commenters, the PSD provisions and section 111 are phrased fundamentally differently. BACT 

is prescriptive and BSER is open-ended. For that reason alone, there is no basis to claim that they 

must be interpreted in the same way to limit controls to measures that can be implemented into 

the design or operations of the source. In addition, while standards promulgated under section 

111 serve as the floor for BACT limits established under section 169(3), nothing in the Act 

requires that BACT limitations serve as the floor for emission guidelines under section 111.

Thus, EPA’s policies under CAA section 165 regarding the construction of individual sources 

are not controlling for purposes of establishing category-wide standards for existing sources 

under CAA section 111(d). Even if the PSD “redefining the source” policies were applicable in 

this context, it would be within the Administrator’s discretion to consider requiring a 

fundamental redesign of a newly constructed or modified sources. EPA’s case-by-case 

application of CAA section 165 in the PSD program does not limit the Administrator’s discretion 

in establishing an emission guideline for an entire category of existing sources under CAA 

section 111(d).

Comment 80: Commenters stated they read ESPS provisions on definition of standard of 

performance, source, and stationary source and authority specific to ESPS as limiting EPA's 

authority associated with ESPS limits to requiring certain measures that derive from the design 

and operation of a facility's air pollution control systems, but not to include measures designed to 

limit emissions primarily by the reduced operation of the affected stationary source

Response 80: We disagree with this comment. We discuss this comment in section V. of the 

preamble for this rule.
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Comment 81: Commenters stated as the EPA acknowledges, a performance standard cannot 

impose unreasonable costs on industry. See Legal Memorandum at 37-38. Commenters said the 

costs of performance standards under Section 111 cannot be "exorbitant," Essex Chemical Corp. 

v. Ruckleshaus, 486 F.2d 427, 433 (D.C. Cir. 1973), and cannot be "greater than the industry 

could bear and survive," Portland Cement Ass'n v. EPA, 513 F.2d 506, 508 (D.C. Cir. 1975) 

(cited in Legal Memorandum at 38 n. 34). Commenters said the Clean Air Act does not intend 

such a result. Commenters stated Section 111(d) is specifically directed at balancing costs of 

controls and the remaining useful life of existing sources against the benefits to be gained by 

regulation. Commenters said this statutorily-required balancing reflects Congress' intent to limit 

regulation of existing sources under the Act unless there are important health risks - for example, 

the regulation of existing sources under Section 112's hazardous air pollutant provisions. 

Commenters said the pollutants regulated under Section 111(d) are not hazardous air pollutants, 

or even criteria pollutants, and the structure of the statutory provisions recognizes that in the 

hierarchy of regulated pollutants, Section 111(d) pollutants are of a lesser priority. Commenters

stated thus, Congress certainly did not intend for the EPA to wield Section 111(d) in a manner 

that would prematurely shutter existing, especially newly-built, facilities.

Response 81: We disagree that this rule imposes unreasonable costs on industry for the reasons 

discussed in the preamble.

Comment 82: Commenters stated for the first time, the EPA seeks to set state-by-state "goals," 

which are really legally enforceable mandates for all states, including Wyoming. Commenters

said however, the EPA lacks the authority under either CAA section 111(d) or the EPA's 

CAA section 111(d) regulations to set binding statewide "goals." Commenters stated notably, the 

term "goal" is not even used in the CAA or the EPA's implementing regulations.

Response 82: We disagree with this comment. We address the issues concerning state goals in 

the preamble. In addition, we note that the implementing regulations do refer to the ability of 

states to set standards that are “equivalent” to the degree of emission limitation achieved by the 

BSER, which the agency is providing for here through the provision of “goals,” see 40 CFR 

60.22(b)(5), so contrary to the commenter, this rule is consistent with the implementing 

regulations.

Comment 83: Commenters said similarly, for the first time, the EPA defines a "system" of 

emission reduction to be mandated reductions in the amount of time facilities within the 

regulated source category are allowed to operate. Commenters stated forcing coal-fueled EGUs 

to reduce operation (or retire) is not a "system" of emission reduction under CAA section 111(d).

Response 83: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 84: Commenters stated the CAA envisions a far greater role for the states in 

designing and implementing Section 111(d) existing unit standards than has been afforded to the 
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states by the EPA. Commenters said the EPA's role is to establish a procedure, not a standard or 

state goal. Commenters stated the statute assigns to the states specific authorities to "when 

applying a standard of performance to any particular source under a plan submitted" to take into 

consideration, among other factors, the remaining useful life of the existing source to which such 

standard applies." Commenters said this does not limit states to providing less stringent standards 

to plants that only have a few years left to operate. Commenters stated it just as logically allows 

states to modify or postpone regulation of CO2 for plants that have long operating lives 

remaining or where applying the standards would result in an expensive, unwarranted plant 

closure that could compromise electric reliability and result in far higher consumer costs. 

Commenters stated forcing plants with useful remaining operating lives to close is completely 

contrary to the statutory requirement that directs the EPA Administrator to take into account "the 

remaining useful lives of the sources in the category of sources to which such standard applies." 

Commenters stated it is worth noting that this section, in addition to directing the EPA to take 

this into account, also states that the EPA regulations "shall permit the state" to take these factors 

into account. Commenters said the EPA has inappropriately eliminated this statutory authority to 

allow states to take important factors into account concerning specific plant conditions in 

developing the state plan. 

Response 84: As we explain in section VIII.D of the final rule preamble of the CPP, our 

emission guidelines provide the substantive criteria that are intended to govern the review of the 

Administrator’s review of state plans. The interim and final goals are intended to reflect such 

substantive criteria. 

Comment 85: Commenters stated the EPA has not issued "guidelines" to the states. Commenters

said the EPA asserts in the rule that the standards imposed on the states are mandatory, cannot be 

changed during the course of the program, and each state is required to develop a "federally 

enforceable" plan that must be achieved in the timetable set forth by the EPA. Commenters

stated the building blocks upon which the EPA bases the standards for most states are simply 

unachievable, and as importantly, leave no room for states to treat certain units differently or 

otherwise to modify the standards in a meaningful manner as provided by the statute.

Response 85: As we explain in section VIII.D of the final rule preamble of the CPP, our 

emission guidelines provide the substantive criteria that are intended to govern the review of the 

Administrator’s review of state plans. The interim and final goals are intended to reflect such 

substantive criteria. Moreover, as explained in sections V.A. and V.B. of the preamble, our 

emission guidelines simply reflect an achievable emissions limit through the application of the 

BSER and do not in themselves require states or sources to implement the BSER. That is, EPA is 

responsible for determining the level of emission limitation from the source category, while 

states have the responsibility of assigning emission requirements to their sources that will ensure 

their achievement of that level of emission limitation. States may fulfil their responsibility by 

establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER.
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Comment 86: Commenters stated the EPA's proposed system is not a definite or specific system 

but instead a listing of disparate items that largely do not even relate to the regulate source 

category --coal-fired EGUs. Commenters stated this attempt to regulate outside its authoritative 

grant of Section 111(d) is a clear attempt to regulate the electric generation, transmission and 

consumption market in the United States and has been plainly prohibited by the Supreme Court. 

See UARG v. EPA, 134 S.Ct. 2427, 2444 (2014) (quoting FDA v. Brown & Williamson Tobacco 

Corp., 529 U.S. 120, 159 (2000)) ("When an agency claims to discover in a long-extant statute 

an unheralded power to regulate 'a significant portion of the American economy,' we typically 

greet its announcement with a measure of skepticism" and the Court will expect "Congress to 

speak clearly if it wishes to assign an agency decisions of vast economic and political 

significance.") Commenters added this concept is strengthened when an agency lays claim to 

authority to regulate subjects traditionally left to States because "[a]bsent a clear statement of 

that purpose, [the court] will not presume Congress to have authorized such a stark intrusion into 

traditional state authority." Bond v. United States, 134 S. Ct. 2077, 2083 (2014).

Response 86: EPA disagrees with this comment. For the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history. Furthermore, we disagree that we are 

expanding our authority to include wholesale energy market regulation. Our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. Moreover, these emission 

guidelines provide states with the flexibility to establish, implement, and enforce standards of 

performance and do not intrude on the regulatory domain of the states. It cannot be said that 

because environmental requirements may have an effect on the wholesale energy market that the 

EPA is therefore intruding into energy regulation. Certainly, in the legislative history of the 1970 

CAA Amendments, Congress expressly identified power plants as a priority source category for 

regulation under CAA section 111.

Comment 87: Commenters stated the new "interpretation" of CAA Section 111(d) set forth in 

the Proposed Rule encourages the states to submit a plan that contain what the EPA calls 

"portfolio" measures. Commenters said the measures would be undertaken by states or third 

parties and, upon the EPA's approval, would become enforceable against those entities. 

Commenters stated CAA Section 111(d), however, does not provide the EPA the authority to 

create federally enforceable obligations on entities that do not own or operate facilities within the 

regulated source category. Commenters stated rather, CAA Section 111 authorizes standards to 

be set for facilities within the EPA-listed source categories. Commenters said it does not apply to 

any other facilities or entities that are not part of the listed source category.

Response 87: To the extent that this comment relates to the proposed portfolio approach, this 

comment is moot. The EPA is not finalizing the portfolio approach. Furthermore, under the 

final rule, EPA would be limited to enforcing the emission standards applicable to the affected 

EGUs .
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Comment 88: Commenters noted that fundamental to this proposed rulemaking is the EPA's 

authority to regulate CO2 from EGUs under Section 111(d) of the CAA. The commenters

described that Section 111(d) requires states to submit plans that establish standards of 

performance for any existing source for any air pollutant for which air quality criteria have not 

been issued or which is not included on a list published under Section 7408(a) or emitted from a 

source category which is regulated under Section 7412, but to which a standard of performance 

under Section 111 would apply if such existing source were a new source. The commenters

noted that air quality criteria have not been issued for CO2 and CO2 has not been included on a 

list published under Section 7408(a), so this leaves Section 7412, codified as Section 112 to be 

considered. The commenters noted that EPA recognizes that CO2 is emitted from EGUs, which 

are also regulated under Section 112, and the EPA stated in its Legal Memorandum in support of 

the proposed rule:

"As presented in the U.S. Code, the Section 112 Exclusion appears by its terms to 

preclude from section 111(d) any pollutant if it is emitted from a source category that is 

regulated under section 112. The U.S. Code version of 111(d) can be read to provide that 

the provision would not cover GHGs because GHGs are emitted from EGUs and EGUs 

are a source category regulated under section 112." (Legal Memorandum at 22.)

The commenters noted that the EPA argued that this provision is ambiguous due to drafting 

errors arising from the 1990 CAA amendments (79 Fed. Reg. at 34853) and un-reconciled 

differences between the Senate and House versions. Commenters stated the EPA stated that the 

Senate amendment excluded regulation of any pollutant included on a list published under 

Section 112(b). Id. Commenters stated this would mean that CO2 is not excluded from regulation 

under Section 111(d) because it is not a hazardous air pollutant listed under Section 112, i.e., 

CO2 is not a pollutant listed under Section 112(b). On the other hand, commenters stated, the 

House amendment excluded the regulation of any pollutant which is "emitted from a source 

category which is regulated under Section 112." Id. The commenters argued that the house 

version would exclude CO2 from Section 111(d) regulation because CO2 is emitted from EGUs 

which are also regulated under Section 112. The commenters noted that the EPA concludes that 

these amendments "conflict with each other and thus are ambiguous." Id. Then, commenters 

stated, the EPA states that it "may reasonably construe the provision to authorize the regulation 

of GHGs under CAA section 111(d)." Id.

The commenters asserted that the EPA's discussion of its authority under this proposed rule 

states that the plain language of Section 111(d) can be interpreted to exclude regulation of CO2

emissions from EGUs. The commenters argued that the EPA has chosen to ignore that issue and 

move forward, referring to the U.S. Supreme Court's decision in American Electric Power Co. v. 

Connecticut. See American Electric Power Co. v. Connecticut, 131 S. Ct. at 2527 (2011). There, 

commenters stated, the Court found that the Clean Air Act and the EPA actions it authorizes 

displace any federal common law right to seek abatement of carbon-dioxide emissions from 

fossil fuel-fired power plants." American Electric, 131 S. Ct. at 2537.
177

Commenters argued that the EPA contends that this decision was "premised on the Court's 

understanding that CAA section 111, including CAA section 111(d), applies to carbon dioxide 

emissions from those sources." 79 Fed. Reg. at 34853. Commenters stated the Court discussed 

the requirements of Section 111 and stated that if the EPA "does not set emissions limits for a 

particular pollutant or source of pollution, States and private parties may petition for a 

rulemaking on the matter, and EPA's response will be reviewable in federal court." American 

Electric, 131 S. Ct. at 2538. Commenters stated the Court then noted that the EPA was engaged 

in a Section 111 rulemaking to set standards for greenhouse gas emissions from fossil-fuel fired 

power plants to settle litigation brought by the plaintiffs. Id. Commenters stated, the Court stated 

that the CAA "provides a means to seek limits on emissions of carbon dioxide from domestic 

power plants - the same relief the plaintiffs seek by invoking federal common law." Id. 

Commenters stated the Court here did not conclude that such regulation was appropriate, only 

that the EPA had agreed to pursue regulation at the plaintiffs' behest and as such, federal 

common law was preempted.

The commenters noted that in further discussion of its position on preemption of common law, 

the Court stated:

"The critical point is that Congress delegated to EPA the decision whether and how to 

regulate carbon-dioxide emissions from power plants; the delegation is what displaces 

federal common law. Indeed, were EPA to decline to regulate carbon-dioxide emissions 

altogether at the conclusion of its ongoing section 7411 rulemaking, the federal courts 

would have no warrant to employ the federal common law of nuisance to upset the 

agency's expert determination." Id. at 2538-2539. (Emphasis added.)

Commenters argued that the Court's focus here is on displacement of nuisance common law, not 

on the propriety of the EPA's current proposed regulation. Commenters stated the Court even 

states that the EPA may decide not to regulate CO2 from EGUs at all. The commenters argued 

that recognized conflict in the statutory authority for such regulation is a good reason to make 

such a decision, and suggested that Congress can then decide whether it needs to change the 

statute to provide a path for regulation and, if such statutory action is taken, Congress can give 

the EPA direction on how to pursue that path. The commenters argued that the EPA should not 

attempt to regulate in the way that it has until such Congressional action takes place.

Response 88: EPA has concluded that it has the authority to promulgate regulations addressing 

CO2 emissions from existing power plants under section 111(d). Further, EPA disagrees that it is 

required or appropriate for EPA to delay promulgating regulations addressing CO2 emissions 

from existing power plants until after Congress passes further legislation.

Comment 89: Commenters argued that the EPA lacks statutory authority to issue the rule for 

several reasons. First, the commenters noted that statutory language of Section 111(d) is a 

product of differing House and Senate versions. Commenters stated under the Senate version, 

unless a particular air pollutant emitted by existing sources was regulated by one of several other 

listed Clean Air Act provisions, existing sources emitting that pollutant could be regulated under 
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Section 111(d). Commenters stated that in contrast, the House version prohibits existing sources 

from being regulated under Section 111(d) if the existing sources are regulated under Section

112. The commenters argued that under prevailing rules of legislative construction and case law 

regarding harmonization of conflicting statutory provisions, the House provision controls. The 

commenters argued that because, effective in 2012, EPA already regulates coal-fired power 

plants under Section 112 in the Mercury and Air Toxics Standard, the EPA has no authority to 

regulate existing coal-fired power plants a second time under Section 111(d).

Response 89: EPA disagrees that it may not promulgate regulations addressing CO2 emissions 

from existing power plants under section 111(d). EPA’s discussion of this issue is in Section IV 

of the preamble. Further, EPA’s views on arguments presented by the commenters, including 

commenters’ discussion of how to reconcile the House amendment and the Senate amendment, 

are also discussed in EPA’s briefs in the Murray Energy and West Virginia cases, No. 14-1112, 

No. 14-1146, and No. 14-1151 (D.C. Cir.).

Comment 90: Commenters argued that Section 111(d) requires EPA to issue a valid new source 

performance standard (NSPS) under Section 111(b) before issuing an existing source standard. 

Based on flaws in the proposed NSPS and modified/reconstructed source standard, the 

commenters asserted that it is doubtful that either of the provisions will be lawfully finalized, and 

therefore, EPA has not satisfied this prerequisite to issue the Section 111(d) rule.

Response 90: Comments on the validity of the section 111(b) rulemaking for CO2 emissions 

from newly constructed, modified, and reconstructed sources are discussed in that rulemaking, 

and are not relevant for this rulemaking.

Comment 91: Some commenters stated there is nothing in CAA 111(d) that suggests that the 

EPA has the authority to set limits or require emission reductions for existing sources premised 

on the construction of new sources nor does EPA have the authority to require redispatch. 

Accordingly, the commenters asserted that the EPA is precluded from applying this approach in 

any final rule.

Response 91: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

1.3 AUTHORITY TO REGULATE STATES' ENERGY MARKETS

Comment 1: Commenters stated because the EPA maintains that it has the authority to 

implement a federal plan in the event that the state does not produce a compliant plan within the 

proposed rule's timeframe, and because compliance with both the Arizona interim and final goals 

is impossible without resorting to not only Building Block 2 but also Building Blocks 3 and 4, 

any plan produced by the EPA utilizing the stated compliance targets will necessarily require the 
179

EPA to venture into regulating renewables, demand side management, and resource portfolio 

planning. Commenters said none of these measures involve the emission of any sort of air 

pollutant and are, therefore, beyond the EPA's authority to regulate under the CAA.

Response 1: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER.

EPA recognizes that each state has unique factual circumstances that will shape the development 

of a state’s plan. We look forward to working with the states to account for these factual 

circumstances in developing satisfactory state plans.

Comment 2: Commenters stated Building Blocks 2, 3, and 4 of the proposed BSER contain 

measures well beyond the EPA's statutory authority. Commenters said yet, once the EPA 

approves a state plan, all of those measures will nonetheless become federally enforceable. 42 

U.S.C. section 4711(d)(2)(B). Commenters stated with this Proposed Rule, the EPA seeks to gain 

control over aspects of the economy that are not within its jurisdiction. Commenters stated 

Building Blocks 2 and 3 relate to replacing electricity produced by coal-fired units with energy 

produced by natural gas-fired units and RE facilities. Commenters said the EPA seeks to use 

these building blocks as a means to remove states' ability to control intrastate electricity markets 

and to mandate that utilities dispatch electricity based on lowest carbon emissions. Commenters 

stated the EPA further uses these building blocks to exert authority over company-level decisions 

regarding whether to invest resources in developing specific types of energy resources. 

Commenters stated with Building Block 4, the EPA intends to reduce carbon emissions through 

energy efficiency improvements made by end-use consumers of electricity. Commenters said 

reductions in consumer energy consumption are personal choices made outside the purview of 

the CAA. Commenters stated the EPA cannot reasonably argue that Congress intended to allow 

the EPA to control such minutia about the personal lives of ordinary people when it drafted 

legislation to allow the EPA to control emissions from existing stationary sources.

Commenters stated the Supreme Court has shown no tolerance for agency overreach without 

clear Congressional approval. Commenters said Utility Air Regulatory Group at 2444 ("EPA's 

interpretation is ... unreasonable because it would bring about an enormous and transformative 

expansion in EPA's regulatory authority without clear congressional authorization.") 
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Commenters said the proposed BSER is beyond the jurisdiction of EPA and does not comport 

with Section 111(d).

Response 2: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

To the extent this comment objects to the portfolio approach, which the EPA is not finalizing, the 

comment is moot. Likewise EPA is not including building block 4 in its BSER determination.

Comment 3: Commenters stated the EPA cannot set a performance standard for States that the 

agency itself lacks the authority to implement should States fail to submit a satisfactory 

implementation plan. Commenters stated the EPA cannot implement building block two because 

it does not have authority to make electricity dispatching decisions - under the Federal Power 

Act ("FPA"), States are given authority to regulate electricity within their borders and have 

exclusive jurisdiction over the distribution of electricity to end-use customers. Commenters said 

states also retain the authority to determine the rules for the operation of power plants within 

their borders. Commenters stated the EPA cannot implement the nuclear component of building 

block three because the National Regulatory Commission ("NRC") has authority over permitting, 

re-permitting and commissioning of nuclear power plants and the EPA has no authority to extend 

the permitting life of a nuclear power plant and is equally misguided to assume that all existing 

nuclear plants will ultimately be relicensed by the NRC. Commenters stated the EPA cannot 

implement the renewable energy component of building block three because States, and not the 

federal government, have the authority to establish renewable portfolio standards ("RPS"). 

Commenters said the decision of whether or not to adopt, change, or abandon an RPS is reserved 

exclusively to the States and cannot be usurped by the EPA via the CAA. Commenters stated the 

EPA lacks authority to mandate demand-side energy efficiency programs within States. Demandside energy efficiency programs such as Energy Efficiency and Resource Standards (EERE) are 

programs that States have the sole authority to implement within their borders. 

Response 3: For the reasons explained in the preamble, inclusion of building block 3 is 

consistent with EPA’s statutory authority. EPA has included neither EE nor nuclear in the final 

BSER.

Comment 4: Commenters stated that EPA cannot set a performance standard for states that the 

agency itself lacks the authority to implement should states fail to submit a satisfactory 

implementation plan. Commenters asserted that EPA does not have the authority to implement 

building blocks two, three or four in a state and thus cannot impose these requirements. 

Commenters explained that EPA cannot implement building block two because it does not have 

authority to make electricity dispatching decisions. Commenters stated, under the Federal Power 

Act, states are given authority to regulate electricity within their borders. Commenters noted, 

along these lines, states have exclusive jurisdiction over the distribution of electricity to end-use 

customers. Commenters said states also retain the authority to determine the rules for the 
181

operation of power plants within their borders. Thus, commenters stated that EPA's reliance on 

building block two in setting performance standards exceeds its CAA authority. Commenters 

continued, stating that EPA cannot implement the nuclear component of building block three 

because the National Regulatory Commission (NRC) has authority over permitting, re-permitting 

and commissioning of nuclear power plants. Commenters asserted that EPA has no authority to 

extend the permitting life of a nuclear power plant and is equally misguided to assume that all 

existing nuclear plants will ultimately be relicensed by the NRC. Commenters said, equally, EPA 

cannot implement the renewable energy component of building block three because states, and 

not the federal government, have the authority to establish renewable portfolio standards (RPS). 

Commenters noted that the decision of whether or not to adopt, change, or abandon an RPS is 

reserved exclusively to the states and cannot be usurped by the EPA via the CAA. Commenters 

continued, stating that EPA lacks authority to mandate demand-side energy efficiency programs 

within states. Commenters added that demand-side energy efficiency programs such as Energy 

Efficiency and Resource Standards are programs that states have the sole authority to implement 

within their borders, and EPA's reliance on building block four in setting performance standards 

exceeds its CAA authority.

Commenters stated that EPA cannot implement the nuclear component of building block three 

because the National Regulatory Commission ("NRC") has authority over permitting, repermitting and commissioning of nuclear power plants. Commenters explained that EPA has no 

authority to extend the permitting life of a nuclear power plant and is equally misguided to 

assume that all existing nuclear plants will ultimately be relicensed by the NRC, and equally, 

EPA cannot implement the renewable energy component of building block three because states, 

and not the federal government, have the authority to establish renewable portfolio standards 

("RPS"). Commenters believed the decision of whether or not to adopt, change, or abandon an 

RPS is reserved exclusively to the states and cannot be usurped by the EPA via the CAA. 

Commenters stated that EPA's reliance on building block three in setting performance standards 

also exceeds its CAA authority. Commenters added that EPA lacks authority to mandate 

demand-side energy efficiency programs within states, explaining that demand-side energy 

efficiency programs such as Energy Efficiency and Resource Standards (EERE) are programs 

that states have the sole authority to implement within their borders. Commenters concluded this 

portion of their remarks, stating EPA's reliance on building block four in setting performance 

standards exceeds its CAA authority.

Response 4: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

We also explain in section V.B. of the preamble why the BSER does not include demand-side 

energy efficiency measures, accordingly, comments relating to building block 4 are moot.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 
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level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER.

Comment 5: Commenters stated that EPA must fully understand and base its rulemaking on the 

facts regarding this complex system. Commenters said that for the first time, EPA is proposing to 

move beyond its established precedent of basing performance standards under Section 111 on 

"behind the fence" systems of emission reductions, to the "beyond the fence" system that take 

effect through and because of the integrated electric grid and its connected generators and loads -

that is, the bulk electric system. Commenters said EPA explicitly acknowledges that it is 

depending on the BES and its integrated nature, both to operate the elements of EPA's BSER, 

and to be able to characterize them as a "system," as is required under Section 111(a). 

Commenters stated that in so doing, EPA has taken on the statutory burden outlined in the 

definitions of Section 111 (a). Commenters said that EPA must understand the interconnected 

and complex nature of the BES - a system that sometimes is referred to as encompassing "the 

world's largest machine" [See, e.g., the United Nation's Sustainability Development Goal 

Working Group, "Technical Aspects of Grid Interconnection." 2006, available online: 

http://www.un.org/esa/sustdev/publications/energy/chapter2.pdf. Also see The National Energy 

Technology Laboratory's (NETL) series, "Power Market Primers," which explores the 

complexity of the BES, focusing on the interaction between reliability, markets, and technology. 

NETL published the report in June 2013, publication # NETL/DOE-2013/1617, available online 

at www.netl.doe.gov/.] - well enough to take into account the myriad costs of using it to achieve 

such significant emission reductions, along with the many non-air quality health and 

environmental impacts and energy requirements that are implicated by the modifications to it. 

Commenters said that an incomplete or inadequate understanding of the BES's reliability, system 

dynamics, interconnected grid operations, markets and the challenges of building, maintaining 

and coordinating power plant and energy transmission and delivery infrastructure cannot support 

a reasoned use of the BSER for the purpose of setting performance standards.

Response 5: We agree with the commenter that it is important for the agency to have an 

understanding of the interconnected nature of the grid. This rule is based on just such an 

understanding.

Comment 6: Commenters argued that Congress has granted the authority to regulate the electric 

system to FERC as the primary federal regulator of interstate wholesale rates, terms and 

conditions of operating the interconnected bulk power system. In addition, commenters said 

reliability is so important that in 2005 Congress approved the establishment of an independent 

North American electric reliability organization (ultimately NERC) under the supervision of 

FERC. Commenters noted that NERC, together with eight regional reliability entities, develops 

reliability standards and conducts compliance and enforcement for the entire interconnected bulk 
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power system. Therefore, commenters stated, the scope of BSER should not be defined so 

broadly that it extends into areas to which Congress has clearly delegated authority to other 

agencies.

Response 6: As we explain in sections V.A. and V.B. of the preamble, our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. That is, EPA is responsible for 

determining the level of emission limitation from the source category, while states have the 

responsibility of assigning emission requirements to their sources that will ensure their 

achievement of that level of emission limitation. States may fulfil their responsibility by 

establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER. Finally, with respect to the nuclear issues that 

commenter raises, we note that we have not included nuclear generation as a component of 

building block 3 in the final rule. Further, we note that the EPA considered the interconnected 

nature of the electricity grid in structuring the final rule. For a comprehensive discussion of this 

issue, please see preamble section I.A., II.C., and discussions throughout preamble of the 

interconnected nature of the electricity grid.

Comment 7:

Commenters stated that EPA should re-propose and address the concern that nothing in the Clean 

Air Act gives EPA the authority to specify the types of new generation resources that should be 

constructed to fulfill a utility's obligation to serve. Commenters said this authority has been 

specifically reserved to the states under the FPA, and no Congress has yet passed laws to 

establish national renewable portfolio standards. Commenters said however, EPA should allow 

states to examine the planned additions of renewable and other low- or non-emitting resources 

under existing integrated resource plans and other siting or certification requirements, and use 

any approved, cost-effective resource additions as creditable emission reductions, to facilitate the 

transition of the existing fleet to a cleaner, more modern system.

Response 7: As we explain in sections V.A. and V.B. of the preamble, our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. That is, EPA is responsible for 

determining the level of emission limitation from the source category, while states have the 

responsibility of assigning emission requirements to their sources that will ensure their 

achievement of that level of emission limitation. States may fulfil their responsibility by 

establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER. Further, the EPA is in not determining what types of 

generation should be constructed to fulfill a utility’s obligation to serve. Rather, the EPA is 

determining the level of emission limitations from the source category. 

Comment 8: Commenters stated nuclear and renewable generation cannot be part of BSER for 

several compelling legal reasons. Commenters said neither nuclear nor renewable sources fall 
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within the target source category, and EPA's authority under Section 111 does extend beyond 

that category. Commenters said BSER must reduce emissions within a source category and that 

replacing source category generation with zero-emitting generation outside the source category is 

not BSER. Commenters said BSER cannot lawfully be "applied" outside of the "affected 

facility" within the specified source category-here, fossil fuel-fired EGUs. Commenters said 

fundamentally, BSER is directed at reducing emissions at an operating facility within a source 

category; therefore, BSER targeting facilities outside of the specified source category cannot 

serve as BSER for the source category. Commenters said EPA's inclusion of Building Block 3 as 

part of a BSER for fossil fuel-fired EGUs is plainly unlawful.

Response 8: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

EPA has not included nuclear in the final BSER.

Comment 9: Commenters urged EPA not to include energy efficiency as part of the emission 

rate goal setting methodology. Commenters said the ability to require reductions through energy 

efficiency measures is well outside the scope of EPA's authority under the CAA, which is limited 

to imposing controls at affected sources. Commenters said EPA fails to consider regional and 

state limitations on the potential for energy efficiency measures to achieve emission rate 

reductions. Commenters said EPA's assumption that states can achieve a 1.5 percent annual 

energy efficiency improvement rate is erroneous and results in arbitrarily low emission rate 

goals.

Response 9: As explained in section V.B. of the preamble, EPA has not included EE in the final 

BSER.

Comment 10: Commenters stated the decision to regulate existing power plants under Section 

111(d) of the Clean Air act is not lawful because it violates the previsions set forth in the 5 U.S. 

Code - 706(2)(A),(B),(C), and (E). Commenters stated the 5 U.S. Code - 706(2)(A) requires that 

the law not be arbitrary or capricious. Commenters stated that generally, laws require specific 

guidelines of how the regulated body should act in order to comply appropriately so to avoid any 

violations. However, commenters added, the proposed rule is not clear as to what the states should 

specifically do in order to meet the goals of the EPA. Commenters stated that for example, the 

EPA reads, "While this proposal lays out state-specific CO 2 goals that each state is required to 

meet, it does not prescribe how a state should meet its goal." Commenters stated before issuing 

any type of regulation under Section 111, the EPA must first identify specific types of facilities 

(which are generally known as sources under the CAA) that, in the EPA's judgment, emit air 

pollution that endangers public health. Commenters stated that as part of this process, the EPA 

creates source categories and carefully defines the type of facilities that fall within these 
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categories; however, specific types of facilities in the proposed rule that endanger public health 

were not mentioned. Commenters added that climate change should be addressed by Congress an 

don't by regulatory fiat via the EPA.

Response 10: EPA disagrees with commenters contention that this rule is arbitrary and 

capricious or otherwise a violation of the provisions in 5 USC 706, and with commenters views 

on what is required in this rule. As discussed in various places in the preamble and elsewhere in 

response to comments, this rule establishes certain requirements but also leaves states with 

significant flexibility in the development of their state plans, which is consistent with Congress's 

intent under section 111(d).

Comment 11: Commenters stated that the radical nature of its proposal becomes all the more 

evident when one considers what will occur if a state does not submit an implementation plan, or 

if EPA finds a submitted plan unsatisfactory. Commenters said the Agency will then prescribe a 

federal implementation plan for that state, as authorized by 42 U.S.C. section 7411(d)(2). 

Commenters said this plan would apply the range of "building blocks" to the state. Commenters 

said it would set binding emission limits for coal- and gas-fired power plants that would switch 

the way that sources are allowed to dispatch, set renewable portfolio requirements that would 

force electric utilities and others to develop renewable resources against their will in order to be 

allowed to continue operating existing coal-fired assets, and set the same type of efficiency 

standards for consumers of electricity that the D.C. Circuit recently invalidated when FERC 

attempted to do so. Commenters said this total federal invasion of a state power sector would 

remove all pretexts and expose the true extent of this proposal's violation of state authority. 

Commenters said while this would provide clarity, such a catastrophe for federalism is 

antithetical to the Constitution and cannot be justified under any provision of federal law.

Response 11: With regard to energy efficiency, we are not including building block 4 as a 

component of BSER in the final rule. Additionally, we note that renewable energy is one 

potential measure that may be employed, consistent with the state flexibility principle that is 

central to this program. This rule does not regulate renewable energy sources. It identifies the 

BSER for affected sources, which entails substitute generation to zero-emitting generators, but it 

does not impose emissions requirements on such sources. At the point of implementation of the 

emission standard, either in a state or federal plan under section 111(d), the source still retains 

the flexibility to determine how it will meet the standard. Neither the state air regulator, nor the 

agency, will need to or be required to regulate specific dispatch decisions in order to meet the 

requirements of the final rule. For example, in a state implementing a mass-based emission 

trading program, the agency’s determined emission performance levels may set the mass budget, 

but the primary compliance obligation on the source is simply to hold allowances sufficient to 

cover emissions. Failure to do so could subject a source to state or federal CAA enforcement. 

But that need not involve the air regulator in any of the other choices the owners and operators of 

the affected EGUs make regarding their operations or level of generation.

Comment 12: Commenters stated EPA's reliance on demand response as part of the source of 

BB4 reductions is especially untimely since the D.C. Court of Appeals has recently found that 
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the Federal Power Act does not grant the FERC authorities over demand response. Commenters 

stated for EPA to establish an enforceable goal, based on the expected exercise of authority that 

Congress has reserved exclusively for states, is highly legally vulnerable. 

Response 12: We appreciate these comments but it is not necessary to substantively respond or 

make changes to the rule because the rule does not include demand-side energy efficiency 

(building block 4) as part of the BSER or, therefore, as part of the goal calculations. 

Comment 13: Commenters described the allocation under the FPA of authority for overseeing 

the generation, transmission, distribution, and sale of electric energy. Commenters stated that 

FERC is responsible for transmission and sale at wholesale in interstate commerce, as specified 

in Section 201(a) of the FPA. Commenters indicated that the states have authority over electric 

generation facilities, local distribution, retail sales of electricity, and intrastate transmission 

pursuant to section 201(b) of the FPA. Commenters stated that Section 201(a) of the FPA also 

expressly states that federal authority "extend[s] only to those matters which are not subject to 

regulation by the States." Commenters also referenced Fed. Power Comm'n v. S. Cal. Edison 

Co., 376 U.S. 205, 218 (1964) and Ark. Elec. Co-op. Corp. v. Ark. Pub. Serv. Comm'n, 461 U.S. 

375, 377-78 (1983).

Commenters stated that the FPA establishes a "bright line" between federal and state roles 

governing the electric utility industry. Commenters referenced FPC v. SCE, 376 U.S. at 215 and 

quoted the court's finding: "Congress meant to draw a bright line easily ascertained, between 

state and federal jurisdiction . . . ." Commenters stated that the FPA's preservation of state 

regulatory authority of the electric utility industry is consistent with the Tenth Amendment to the 

US Constitution, which declares that "[t]he powers not delegated to the US by the Constitution, 

nor prohibited by it to the States, are reserved to the States respectively, or to the people." 

Commenters concluded that under the proposed CPP, EPA has attempted to erase the "bright 

line" between state and federal authority in regulating electricity and therefore the EPA's 

proposal exceeds the Agency's authority.

Commenters stated that the local-interstate division of responsibility between the States and 

FERC makes perfect sense; no central federal regulator can effectively regulate local generation 

and distribution throughout the US, and electricity service is not perfectly fungible or uniform. 

Commenters believed that even if the FPA did not grant the States primacy over local electricity 

markets, EPA's proposal would be ill-advised and that because the States retain authority over 

the electric system, the proposed rule is unlawful.

Commenters claimed that the EPA has "read Section 111(d) to eliminate that bright line divide, 

and would confer upon the EPA the broad authority over matter long left to the States' authority 

that Congress has specifically chosen not to confer on FERC?" Commenters claimed that the 

proposed rule would improperly dictate to the States what mix of electric generating resources 

must be built, maintained, and operated. Commenters believed the proposal "flouts" the wellestablished division between retail and wholesale electric markets by, for instance, attempting to 
187

regulate the end-use consume retail activity under building block 4. Commenters claimed that 

nothing in the D.C. Circuit's EPSA ruling delegates to the EPA the authority over retail activities 

that are currently solely within state jurisdiction. Commenters concluded that the proposed rule 

would eviscerate the regulatory compact between the federal government and states undergirding 

energy regulation for nearly 100 years, further confirming that the proposed rule is "improper."

Commenters stated that EPA's Proposed Guidelines ignore the division of responsibilities 

embodied in the FPA and attempts to claim state authority over generation, resource planning, 

and other matters for EPA. Commenters stated that the Proposed Guidelines would 

impermissibly inject EPA into the separate spheres that the FPA has assigned to the states and to 

FERC. Commenters stated that EPA's Proposed Rule impermissibly interjects EPA into federal, 

state, and local regulatory spheres. The commenters concluded that the proposed rule is invalid 

and should be withdrawn.

Response 13: We disagree that we are expanding our authority to include wholesale energy 

market regulation or state retail regulation. Additionally, we are not changing well-established 

divisions between retail and wholesale electricity markets. Our emission guidelines simply 

reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. Moreover, these emission 

guidelines provide states with the flexibility to establish, implement, and enforce standards of 

performance and do not intrude on the regulatory domain of FERC or the states. It cannot be said 

that because environmental requirements may have an effect on the wholesale energy market that 

the EPA is therefore intruding into energy regulation. Certainly, in the legislative history of the 

1970 CAA Amendments, Congress expressly identified power plants as a priority source 

category for regulation under CAA section 111.

Comment 14: Commenters asserted that the proposed CPP does not conflict with the FPA. 

Commenters said that no provision of the FPA limits the authority of EPA under the CAA to 

establish emission guidelines (or other emission standards or limitations) for EGUs and that no 

such limitation should be implied. Commenters noted that the D.C. Circuit court has dismissed 

past claims that the FPA exempts or displaces the nation's federal environmental laws. [See 

Monongahela Power Co. v. Marsh, 809 F.2d 41, 50 (D.C. Cir. 1987) (holding that hydroelectric 

facilities licensed by FERC are still subject to Clean Water Act permitting requirements, because 

"...the Power Act does not provide adequate justification for ignoring the express and 

unambiguous directive of the subsequently-adopted Pollution Control Act Amendments."); cf. 

PUD No. 1 v. Wash. Dep't of Ecology, 511 U.S. 700, 723 (1994) (refusing to limit applicability 

of Clean Water Act requirements to hydroelectric projects licensed by FERC on the basis of 

"hypothetical" conflicts between the Clean Water Act and FERC's authority under the FPA)]. 

Commenters noted that no aspect of the CPP requires EPA or the states to interfere with rates 

established by FERC. Commenters said the CPP guidelines, once implemented by the states, 

may have the effect of altering the generating costs of fossil fuel EGUs, with indirect or 

incidental impacts on wholesale sales or transmission rates that are subject to FERC jurisdiction. 
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Commenters indicated that this is true of most pollution limitations placed on power plants, and 

such effects do not present conflicts with FERC's authority under the FPA. Commenters said, 

FERC's recent Order No. 1000 recognizes that state and federal public policy requirements, such 

as renewable portfolio standards and emission limitations, can impact jurisdictional transmission 

rates, and requires that the impacts of those policies be taken into account in for regional 

transmission planning.

Commenters believed that policies to promote renewable energy or energy efficiency, or 

integrated resource plans, which lie within the traditional authority reserved to the states under 

the FPA, have already been implemented in many states over the last several years. Commenters 

said, there is no doubt that such policies are fully consistent with the FPA, given the high 

standard that the Supreme Court has articulated for preemption under the FPA and the Natural 

Gas Act (NGA). Commenters further noted that the Supreme Court has held state regulations are 

only preempted by these statutes if "it is impossible to comply with both state and federal law; 

[a] state regulation prevents attainment of FERC's goals; or [] a state regulation's impact on 

matters within federal control is not an incident of efforts to achieve a proper state purpose." 

[Northwest Cent. Pipeline Corp. v. State Corp. Comm'n, 109 S.Ct. 1262, 1277 (1989). Although 

the holding in this case pertains to the Natural Gas Act, the federal courts typically interpret and 

apply the Natural Gas Act and the FPA in identical fashion. See Ark. La. Gas Co. v. Hall, 453 

U.S. 571.] Commenters also said the Supreme Court has recognized that "every state statute that 

has some indirect effect on rates and facilities of natural gas companies is not preempted." 

Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 309 (1988). 

Commenters also noted that the lower courts have found that states retain broad authority to 

regulate the type, quantity, and location of electricity generating resources within their borders. 

Commenters said FERC has repeatedly affirmed that states have the authority to dictate the 

generation resources from which utilities may procure electric energy and, FERC's own 

administrative precedents have recognized that states retain authority to use a variety of 

regulatory tools, including taxes and subsidies for particular fuels or generating types, to meet 

their electricity needs. Commenters said, Congress intended the FPA "to supplement, not limit, 

the reach of state regulation." Kentucky West Virginia Gas Co. v. Pennsylvania Pub. Util. Com'n, 

837 F.2d 600, 606 (3rd Cir. 1988).

Response 14: We appreciate these comments and agree with commenters that the EPA’s actions 

in this final rule do not conflict with the Federal Power Act or FERC and state jurisdiction.

Comment 15: Commenters believed the proposal is based on authority that Congress has not 

granted to the EPA.

Commenters stated that the CPP goes beyond EPA's regulatory authority under the CAA. 

Commenters claimed that Congress never intended for the nation's energy resources, the 

production and distribution of electricity, or energy policy to be set through the CAA. 
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Commenters stated that the CPP would dramatically expand EPA's authority. Commenters 

contended that "such a comprehensive alteration of the regulatory framework" must be addressed 

by Congress before its implementation. Commenters stated that Congress is required to provide 

an extremely clear statement of its intent to authorize such an intrusion on the state's traditional 

police powers. 

Commenters quoted and/or cited the Supreme Court decision on the Tailoring Rule [Utility Air 

Regulatory Group v EPA, 134 S. Ct. 2427, 2444 (2014) (quoting FDA v. Brown & Williamson 

Tobacco Co., 529 U.S. 120, 159 (2000))]. Commenters drew parallels between the expansion of 

authority under the Tailoring Rule and the perceived expansion of authority under the 

CPP. Commenters quoted a portion or all of the following from the Tailoring Rule decision: 

"EPA's interpretation is also unreasonable because it would bring about an enormous and 

transformative expansion in EPA's regulatory authority without clear congressional 

authorization. When an agency claims to discover a long extant statue an unheralded power to 

regulate a 'significant portion of the American economy' we typically greet this announcement 

with a measure of skepticism." Commenters also included further explanation from the Court's 

Tailoring Rule decision: "We expect Congress to speak clearly if it wishes to assign to an 

agency decisions of vast 'economic and political significance'." Commenters also quoted the 

following cases as shown: Chisom v. Roemer, 501 U.S. 380, 396 n.23 (1991) (["In a case where 

the construction of legislative language such as this makes so sweeping and so relatively 

unorthodox a change as that made here, . . . judges as well as detectives may take into 

consideration the fact that a watchdog did not bark in the night.") (quoting Harrison v. PPG 

Indus., Inc., 446 U.S. 578, 602 (1980) (Rehnquist, J., dissenting)); Aid Ass'n for Lutherans, 321 

F.3d at 1175 ("Given the extremity of the effect that results from the Postal Service's 

interpretation, we would expect to see some indication that Congress intended such an effect, but 

we find no[ne] in the statute . . . ."]).

Commenters indicated that the proposed CPP Rule's natural gas redispatch, energy efficiency, 

and renewable energy "building blocks" are areas traditionally reserved to the sovereign 

authority of the states and that, to date, Congress has been unwilling to develop national 

renewable energy standards, recognizing the wide diversity of state laws in existence, and the 

disparate capability to deploy renewable resources among states.

Commenters indicated that States exercise virtually exclusive authority to regulate electricity 

generation, distribution, and consumption within their borders. Commenters stated that 

if Congress intends to alter the 'usual constitutional balance between the States and the Federal 

Government,' it must make its intention to do so 'unmistakably clear in the language of the 

statute.' [See e.g. Gregory v. Ashcroft, 501 U.S. 452, 460-61, 111 S. Ct. 2395, 2401, 115 L. Ed. 

2d 410 (1991) ((quoting Atascadero State Hospital v. Scanlon, 473 U.S. 234, 242 (1985)); see 

also Bond v. U.S., 134 S. Ct. 2077, 2089 (2014); Gregory v. Ashcroft, 501 U.S. 452, 460-61 

(1991); City of Abilene v. FCC, 164 F.3d 49, 52 (1999)]. Commenters stated that there is no 

"plain statement" by Congress that it intended EPA to have authority to interfere with State 

sovereign authority over electricity markets. Commenters stated that to the contrary, Congress 
190

expressly provided that States should determine performance standards in the first instance and 

that the States had substantial flexibility to account for the economic impact such standards 

would have on existing sources. Commuters stated that in the absence of such clarity, courts 

"refer to basic principles of federalism embodied in the Constitution to resolve ambiguity in a 

federal statute." Bond, 134 S. Ct. at 2090. Commenters further stated that in the absence of a 

clear congressional authorization, which does not exist here, EPA cannot infringe upon 

traditional state sovereign functions.

Commenters stated that Congress has not left any room for EPA to have anything whatsoever to 

do with the bulk-power system or the grid, not to mention to regulate, or redesign, or to affect the 

electric energy system.

Commenters indicated that the CAA allows EPA to regulate emissions of pollutants at their 

sources - but under Section 111(d) it must share that authority with the states. Commenters 

indicated that EPA's authority to regulate air pollution from stationary sources should not be read 

to cut across this complex scheme of federal and state regulations.

Commenters claimed that the proposed rule is intended to establish a National Energy Policy and 

that establishing an energy policy is the responsibility of Congress, and not the EPA. 

Commenters questioned the validity of the EPA's authority to establish a nationwide energy 

policy.

Commenters stated that EPA cannot require a fundamental redesign of the electricity generation 

and distribution system. Commenters stated that because, under Prevention of Significant 

Deterioration BACT requirements, a source cannot be required to fundamentally redesign their 

facility, then, the EPA should not have the authority to fundamentally redesign the electricity 

generation and distribution system. Commenters cited the Supreme Court decision on the 

Tailoring rule at 18 134 S. Ct. 2427, 2448 (2014).

Commenters stated that Congress did not implicitly authorize EPA under the CAA to establish 

national and state energy policy. Commenters indicated that when Congress added the Acid Rain 

Program to the CAA in 1990 that Congress was careful to preserve the existing authority of 

states and FERC over energy policy and that Congress explicitly prohibited EPA from intruding 

on the processes already in place for managing electricity rates and reliability. Commenters 

quoted: "Nothing in this section shall be construed as requiring a change of any kind in any State 

law regulating electric utility rates and charges or affecting any State law regarding such State 

regulation or as limiting State regulation (including any prudency review) under such a State 

law. Nothing in this section shall be construed as modifying the Federal Power Act or as 

affecting the authority of the Federal Energy Regulatory Commission under that Act. Nothing in 

this subchapter shall be construed to interfere with or impair any program for competitive 

bidding for power supply in a State in which such program is established." (42 U.S.C. section 

7651b(f)). Commenters stated that Congress' explicit prohibition of authority over energy rates 

and reliability to EPA in Title IV of the CAA proves the absurdity of any claim that EPA has the 
191

authority to regulate these same issues under the generic terms of Section 111(d) that say nothing 

about these matters.

Commenters contended that federal law may be interpreted to "reach into areas of State 

sovereignty" only where "the language of the federal law compels the intrusion" (i.e., City of 

Abilene v FCC, 164 F.3d 49, 52 (D.C. Cir. 1999), and Gregory v. Ashcroft, 501 U.S. 452, 460) 

and that there is nothing that can be gleaned from the text of Section 111 compelling such a 

result. Commenters also cited the Supreme Court finding (EDF v. EPA, 467 F.3d 1329, 1334 

(D.C. Cir. 2006)) that in the context of applying BACT, the states have the authority because 

they are best positioned to account for local circumstances that make a technology "unavailable" 

in a certain area; thus, the commenters claimed that the same holds true for establishing source

emission standards based on BSER. The commenters claimed that the states' role in applying the 

BSER is a critical "safeguard" against overly-stringent regulation of existing sources.

Commenters stated the CAA establishes the right of states to set their own emission standards 

based on the EPA guidelines, and the EPA oversteps its authority by setting "binding" emission 

goals and compliance mechanisms. Commenters stated the EPA is barred by U.S. Supreme 

Court precedent from infringing upon a traditional state sovereign function unless Congress has 

adopted clear statutory language expressly authorizing the Agency to do so. Arkansas Elec. Coop., 461 U.S. at 377. See New York v. United States, 505 U.S. 144, 112 S.Ct. 2408, 120 L.Ed.2d 

120 (1992); see also "Federalism, State Sovereignty and the Constitution: Basis and Limits 

of Congressional Power," Kenneth R. Thomas, Congressional Research Service (Updated June 

17, 2005) at CRS-1.[7] Commenters said nothing in the CAA expressly authorizes the EPA to 

regulate the generation of electricity, the type of electricity, or other such energy regulatory 

matters traditionally reserved to states. Commenters stated the CAA delegates to the EPA the 

authority to establish procedures only, and reserves to the states the authority to set emission 

standards. 42 U.S.C. 7411(d)(1)(A).

Commenters described how Section 111 confines EPA's authority to areas in which its expertise 

is greatest: emission reduction technologies, technology applicability, technology costs, and 

energy and environmental impacts associated with technology implementation.

Commenters stated that Congress delegated to EPA only the authority to regulate sources of air 

pollution under Section 111(d). Commenters quoted other court cases supporting their contention 

that EPA has assumed authority that Congress did not intend. Commenters cited Michigan v. 

EPA, 268 F.3d 1075, 1082 (D.C. Cir. 2001): "Agency authority may not be lightly presumed." 

Also commenters quoted Ethyl Corp. v. EPA, 51 F.3d 1030, 1060 (D.C. Cir. 1995); Michigan, 

268 F.3d at 1082: "Were courts to presume a delegation of power absent an express withholding 

of such power, agencies would enjoy virtually limitless hegemony, a result plainly out of keeping 

with Chevron and quite likely with the Constitution as well."

Commenters stated that courts recognize an implicit delegation of rulemaking authority only 

when Congress has not spoken directly to the extent of such authority, or has "intentionally left 
192

[competing policy interest] to be resolved by the agency charged with administration of the 

statute" quoting Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 865-866 

(1984). Commenters also stated that the court in Bowen v. Georgetown Univ. Hosp. [Bowen v. 

Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988)] spoke clearly to this point, stating that "it is 

axiomatic that an administrative agency's power to promulgate legislative regulations is limited 

to the authority delegated by Congress."

Commenters stated that any power given to EPA must be defined by statute and quoted Elec. 

Power Supply Ass'n v. FERC, 753 F.3d 216, 220 (D.C. Cir. 2014), stating that EPA "has no 

power to act unless and until Congress confers power upon it." Commenters stated that when 

EPA acts outside its statutory reach, its action is "plainly contrary to law and cannot stand, 

"[Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)].

Commenters stated that even assuming the statute is ambiguous enough to allow EPA to take 

such an expansive approach to its power over stationary source emissions, the presumption 

against federal intrusion onto a traditional state power requires that EPA proffer a clear statement 

to support its authority. Commenters contended that the CAA supplies no such clear statement 

and concludes that EPA's assertion of authority is therefore impermissible in light of state 

responsibilities over electricity generation, distribution, and consumption.

Commenters stated that EPA argued in the proposal that Section 111(d) authorizes EPA to 

regulate inter - and intrastate generation, sale, and transmission of electric power because 

Congress did not expressly constrain it from doing so. Commenters countered by quoting U.S. v. 

Stauffer Chern. Co., 684 F.2d 1174, 1187 (6th Cir. 1982) and Erlenbaugh v. United States, 409 

U.S. 239, 245 ( 1972): "[w]here a problem of interpretation was apparently not foreseen by 

Congress, it is appropriate to consult and be guided by those areas covering the same subject 

where the expression of legislative intent is clear." Commenters summarized these cases by 

stating that "statutes 'intended to serve the same function' are construed together." Commenters 

stated that when Congress passes new legislation, "it acts aware of all previous statutes on the 

same subject," quoting from Erlenbaugh, 409 U.S. at 244. Commenters contended that 

presumably Congress was aware of the FPA when subsequently enacting the CAA and Congress 

would not have granted EPA broader regulatory authority than that given to FERC without an 

explicit statement.

Commenters stated that EPA's proposal attempts to use the CAA to override states' energy 

policies and impose a national energy and resource-planning policy that picks winners and losers 

based solely on EPA's policy choices, forcing states to favor renewable energy sources and 

demand-reduction measures over fossil fuel-fired electric production. However, commenters 

stated that the CAA generally and Section 111(d) specifically do not give EPA broad authority to 

reorganize states' economies.

Commenters stated that Congress clearly intended that the CAA be confined to the regulation of 

air pollution and not the energy sector writ large, which is under the statutory jurisdiction of 
193

FERC and the states. Commenters stated that until the CPP, the EPA has never attempted to use 

the CAA to compel States to pass specific energy statutes.

Commenters stated, the proposed rule is much different than EPA's preceding rules in the degree 

to which it intrudes into traditional utility system planning and its lack of flexibility.

Commenters said, we are concerned that the dictates of this proposed rule will frustrate TVA's 

least-cost energy resource planning activities and make the energy TVA provides less affordable 

and less reliable. Commenters said, EPA has proposed a construct for this rule that necessitates 

the involvement of the states and EPA in energy resource planning and the operation and 

dispatch of energy resources. Commenters said, while some State entities may have experience 

in these matters, EPA does not. Commenters said, further, if the definition of "emission 

standard" is modified as EPA proposes, these activities will be made subject to enforcement by 

advocacy groups with agendas that ignore or are antagonistic to TVA's and other utilities' goal of 

providing reliable and affordable electricity.

Response 15: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

We do not agree that the EPA is setting a national energy policy through the Clean Air Act. We 

also disagree that we are interfering with FERC or state jurisdiction. 

The EPA disagrees with commenters’ assertions that this rule violates the federal-state balances 

embodied in either the U.S. Constitution or federal statutes. This rule does not upset traditional 

balances between state and federal authority. Our emission guidelines simply reflect an 

achievable emissions limit through the application of the BSER and do not in themselves require 

states or sources to implement the BSER. Moreover, these emission guidelines provide states 

with the flexibility to establish, implement, and enforce standards of performance and do not 

intrude on the regulatory domain of FERC or the states. It cannot be said that because 

environmental requirements may have an effect on the wholesale energy market or state retail 

regulation that the EPA is therefore intruding into energy regulation. Certainly, in the legislative 

history of the 1970 CAA Amendments, Congress expressly identified power plants as a priority 

source category for regulation under CAA section 111. Finally, as a matter of constitutional law, 

this rule does not alter the balance between state and federal authority any more than already 

provided in the Clean Air Act and in countless other cooperative federalism regimes that have 

routinely been upheld as constitutional. The Legal Memorandum accompanying the final rule 

discusses this constitutional aspect.

The federal enforceability considerations raised in the comment arose primarily under the 

proposed portfolio approach for state plans. As explained in section VIII.C of the preamble, the 

EPA is not finalizing the portfolio approach, which would have allowed state plan submittals to 

include federally enforceable measures that apply to entities that are not affected EGUs. 

However, as further explained in section VIII.D, if the state is adopting the state measures type 

plan, the state plan submittal will need to specify, in the supporting materials, the state 
194

enforceable measures that the state is relying upon in conjunction with any federally enforceable 

emission standards for affected EGUs to meet the emission guidelines. The final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements 

for its affected EGUs. Consistent with longstanding practice under the Clean Air Act, if a 

regulated entity does not meet a requirement, the EPA will address the matter on a case-by-case 

basis, to determine the appropriate response and resolution. Third parties have authority under 

section 304 of the CAA that is similar to the EPA’s authority under section 113(a)-(h) of the 

CAA.

Our rule does not conflict with section 403(f) under Title IV. We disagree that we are expanding 

our authority to include wholesale energy market regulation. Our emission guidelines simply 

reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. Moreover, these emission 

guidelines provide states with the flexibility to establish, implement, and enforce standards of 

performance and do not intrude on the regulatory domain of FERC or the states. It cannot be said 

that because environmental requirements may have an effect on the wholesale energy market that 

the EPA is therefore intruding into energy regulation. Certainly, in the legislative history of the 

1970 CAA Amendments, Congress expressly identified power plants as a priority source 

category for regulation under CAA section 111. Lastly, we note that section 403(f) is only 

relevant to construing “subchapter” IV, i.e., Title IV.

Comment 16: Commenters referred to and applied the rules of the "Chevron Deference" or 

"Chevron doctrine" (Chevron, 467 U.S. at 865-866) for assessing any conflict between the CAA 

and FPA. Commenters stated that Congressional intent under the FPA is clear and that there is 

no conflict, and concluded the EPA "impermissibly" interprets a conflict between the Acts. 

Commenters claimed that following the principles of the "implied repeal" process, EPA does not 

have authority under the CAA to regulate the power grid. 

Commenters claimed that Congress clearly intended there to be no conflict between these two 

acts [CAA and FPA] because it unequivocally granted FERC exclusive authority to regulate the 

bulk power system as recently as 2005 without so much as alluding to the CAA; therefore, for 

this reason, it effectively repealed any implied authority the EPA could possibly glean from the 

CAA that it too may regulate the power grid.

Commenters contended that if the EPA implements its CAA authority lawfully, by regulating 

only the source category at issue in the rule and not the entire electricity grid, the CAA would 

not be in conflict with the FPA and the two acts can be reconciled.

Commenters claimed that because the proposed rule "impermissibly interprets the CAA to 

conflict with the FPA," then validity of the rule must be analyzed. Commenters claimed that 

employing the Chevron standard, EPA's reconfiguring energy markets and risking grid reliability 

is inconsistent with the administrative structure that Congress has enacted. 
195

Commenters claimed that using the first step of an "implied repeal" analysis, it is clear that the 

FPA and CAA can be reconciled, and that the CAA does not explicitly provide EPA with any 

authority to regulate the bulk power system. Also, commenters claimed that EPA has merely 

granted itself this authority through the CPP. 

Commenters stated that even if the EPA is entitled to Chevron Deference, the proposal is an 

expansion of the EPA's regulatory authority without clear Congressional approval.

Commenters stated that the final rule should be well within the reasonable deference the federal 

courts would grant the EPA to interpret the CAA according to the Chevron standard of review.

Commenters stated that at "Chevron step one", it should be recognized that a "system" does not 

really mean "virtually any set of things" and they defined the meaning of "system" in terms of its 

Latin and Greek systema. Commenters stated that "the integrated grid" and the "interconnected 

electricity sector" (as defined in the Legal Memorandum at 50 and 54, respectively) in and of 

themselves are systems different from the statutorily derived "system of emission reduction." 

Commenters concluded that the EPA's interpretation [of 111(d)] fails at Chevron step two, and 

asserted that a claim of agency authority lacking principled limits will not be deemed reasonable 

(American Library Association, 406 F.3d at 702-03).

Commenters contended that the EPA's CPP rendering a wholesale energy market regulation does 

not pass Chevron step two because it does not reasonably effectuate Congress' intent for the 

CAA (i.e., Chevron, 467 U.S. at 845; United States v. Shimer, 367 U.S. 374, 382-383 (1961)).

Commenters concluded that "the judiciary is the final authority on issues of statutory 

construction and must reject administrative constructions which are contrary to clear 

congressional intent"; therefore, commenters claimed that Chevron step two compels a judicial 

evaluation of congressional intent. 

Commenters stated that if a court determined the two acts could not be reconciled as they 

pertained to the power regulation, the courts will utilize the second step of the "implied repeal" 

analysis by analyzing the later statute (i.e., FPA) to determine if it repealed the prior statute. 

Commenters claimed that even assuming that the EPA is entitled to Chevron Deference, the 

EPA's interpretation is unreasonable because it would bring about enormous and transformative 

expansion of the EPA's regulatory authority without clear congressional authorization; the 

commenters quoted Brown & Williamson Tobacco, 529 U.S. at 159 ("when an agency claims to 

discover in a long-extant statute an unheralded power to regulation "a significant portion of the 

American economy" then agency must provide an especially convincing explanation of its legal 

authority"). 

Commenters stated that EPA's reliance on Chevron (deference) does not consider the interplay 

with other implicated statutes, and has lead the EPA to overstep its authority and encroach upon 
196

authority reserved exclusively to the States (building blocks 3 and 4) and FERC (building block 

2).

Response 16: The EPA disagrees with commenters. For the reasons discussed in section V.A. 

and V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history.

Furthermore, we disagree that we are expanding our authority to include wholesale energy 

market regulation or state retail regulation. Our emission guidelines simply reflect an achievable 

emissions limit through the application of the BSER and do not in themselves require states or 

sources to implement the BSER. Moreover, these emission guidelines provide states with the 

flexibility to establish, implement, and enforce standards of performance and do not intrude on 

the regulatory domain of FERC or the states. It cannot be said that because environmental 

requirements may have an effect on wholesale energy or retail markets that the EPA is therefore 

intruding into energy regulation. Certainly, in the legislative history of the 1970 CAA 

Amendments, Congress expressly identified power plants as a priority source category for 

regulation under CAA section 111.

Comment 17: Commenters indicated that the states have authority over electric generation 

facilities, local distribution, retail sales of electricity, and intrastate transmission pursuant to 

Section 201(b) of the FPA.

Commenters stated that states alone, not the federal government or FERC, have the authority 

over electric generation resources and fuel mix determination. Commenters provided several 

references to support this statement (i.e., John E. Nowack & Ronald D. Rotunda, 

CONSTITUTIONAL LAW 138 (7th ed., 20014); Munn v. Illinois, 94 U.S. 113, 124 (1877); 

Richard J. Pierce, Jr. and Ernest Gellhorn, REGULATED INDUSTRIES IN A NUTSHELL 78-

83 (1999); and, 221 16 U.S.C. 791a, et seq.) Commenters stated that State regulation of 

electricity generation is "one of the most important functions traditionally associated with the 

police powers of the States." [Arkansas Elec. Coop., 461 U.S. at 377] Commenters stated that 

one of a state's core powers is to promote the health and economic well-being of its citizens, 

including through the management of its energy and air quality resources. 

Commenters also spoke to the specific authorities conferred to states. Commenters stated that 

retail energy markets and local service issues (including the siting and construction of electric 

generating units, closure of existing units, operational limitations, distribution, ratemaking, 

demand-side management, and renewable and efficiency requirements) are within the exclusive 

purview of the state and local authorities and entities cannot be regulated under the CAA. 

Commenters stated that Integrated Resource Plans (IRPs) unquestionably fall on the state side of 

the "bright line". Commenters indicated that EPA is required to allow states to regulate and 

determine the need for additional generating capacity through the IRP procedure, which is a 

legally mandated and highly structured public process. Commenters indicated that the state 
197

Public Service Commission balances electric resources to meet the needs of electric consumers 

and uses the IRP process to set long-term resource portfolios for regulated electric utilities. 

Commenters argued that state PUCs retain considerable authority over utility operations, 

including regulation of rates and terms and conditions of retail sales of power and distribution 

service, siting of utility facilities, and programs designed to increase renewable generation and 

promote demand side and end use efficiency. Commenters stated that under state laws, most, if 

not all, of the emission-reducing measures contemplated in building blocks 2, 3, and 4 fall under 

the exclusive authority of state utility regulators or the governing boards of local public power 

utilities or rural electric cooperatives established pursuant to state law, not state environmental 

agencies or EPA. Commenters claimed that the CAA does not give EPA sweeping authority over 

the electricity system, and, specifically for Texas, the authority rests with the PUC of Texas 

(PUCT) and the Electric Reliability Council of Texas (ERCOT). Commenters indicated that even 

though TCEQ regulates source emissions, the PUCT regulates transmission and limited portions 

of the wholesale and retail markets, and ERCOT manages the dispatch of electricity into the 

market. Commenters concluded that no state regulatory agency would be able to implement the 

proposed rule.

Commenters stated that EPA should ensure in the final rule that the 111(d) guidelines to states 

are not prescribing or mandating these types of energy policy requirements that are exclusively 

the authority of states.

Commenters stated that the States should retain their power to regulate electric utilities 

concerning questions of need, reliability, cost and other related concerns including determining 

resource portfolios that might not favor the selection of higher cost resources over lower cost 

resources. Commenters cited several cases in support of their argument: New England Power 

Generators Ass'n v. FERC, 757 F.3d 283, 290 (D.C. Cir. 2014; New York v. FERC, 535 U.S. 1, 

24; and Pacific Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm'n, 461 U.S. 

190, 205 (1983). 

Commenters provided Court decisions that they stated supports the states authority set up under 

the FPA. Commenters referenced or quoted the Supreme Court in New York v. FERC, 535 U.S. 

at 22-23, stating that the FPA's "legislative history is replete with statements describing 

Congress' intent to preserve state jurisdiction over local facilities." Commenters also stated that 

the Supreme Court has noted that FERC itself "has recognized that the States retain significant 

control over local matters even when retail transmissions are unbundled", and referred to FERC's 

own acknowledgments of the limits on its jurisdiction in Order No. 888 [New York v. FERC, 

535 U.S. 1, 24 (quoting Order No. 888 at 31,782, n.543 ("'Among other things, Congress left to 

the States authority to regulate generation and transmission siting'"), and n.544 ("'This Final Rule 

will not affect or encroach upon state authority in such traditional areas as the authority over 

local service issues, including reliability of local service; administration of integrated resource 

planning and utility buy-side and demand-side decisions, including DSM [demand-side 

management]; authority over utility generation and resource portfolios; and authority to impose 
198

non-by-passable distribution or retail stranded cost charges.'") (2002)).] Commenters also 

referred to New York and cited New York v. FERC, 535 U.S. 1, 20 (2002) ("FERC's jurisdiction 

over the sale of power has been specifically confined to the wholesale market." (emphasis 

omitted)

Commenters stated that numerous judicial decisions have read the FPA and the other federal 

energy statutes as retaining the States' "traditional responsibility in the field of regulating 

electrical utilities for determining questions of need, reliability, cost and other related state 

concerns" and "traditional authority over the need for additional generating capacity, the type of 

generating facilities to be licensed, land use, ratemaking, and the like" [Pac. Gas & Elec. Co. v. 

State Energy Res. Conservation & Dev. Comm'n, 461 U.S. 190, 205 and 212 (1983)]. 

Commenters stated that the Supreme Court has also emphasized that federal regulation by 

agencies other than FERC may not invade the domain that the FPA has preserved for the states. 

Commenters stated that in Pacific Gas & Electric Co. v. State Energy Resources Conservation & 

Development Commission, [461 U.S. 190 (1983)], the Court concluded that federal regulation of 

the safety of nuclear power plants did not override state authority over "the regulation of 

electricity production." Commenters stated that the Court noted that the only exception to state 

regulation of these activities was FERC's authority under the FPA over interstate wholesale sales 

and transmission by FERC-jurisdictional utilities. [Pac. Gas & Elec. Co. v. State Energy Res. 

Conservation & Dev. Comm'n, 461 U.S. 205] 

Commenters provided additional court decisions that maintained states authority, see also 

[Niagara Mohawk Power Corp. v. FERC, 452 F.3d 822, 824 (D.C. Cir. 2006) ("States retain 

jurisdiction over retail sales of electricity and over local distribution facilities.")]; [Duke Energy 

Trading & Mktg., L.L.C. v. Davis, 267 F.3d 1042, 1056 (9th Cir. 2001) ("Retail sales of 

electricity are within the exclusive jurisdiction of the States")]. Commenters also referenced 

court decisions that upheld the division of authority, see also Chemehuevi Tribe of Indians v. 

Fed. Power Comm'n, 420 U.S. 395, 408, 409-10 (1975); First Iowa Hydro-Elec. Coop. v. Fed. 

Power Comm'n, 328 U.S. 152, 168 (1946).]. Commenters stated that the courts have consistently 

rejected federal attempts to intrude on the States' authority in these areas [See, e.g., S. Cal. 

Edison Co. v. FERC, 603 F.3d 996, 1000-02 (D.C. Cir. 2010) (FERC lacked jurisdiction to 

preempt State authority to "set the netting period for station power" i.e., the pricing mechanism 

"in the retail market")]; [Piedmont Envtl. Council v. FERC, 558 F.3d 304, 315 (4th Cir. 2009) 

(FERC lacked permitting authority where a State commission "engage[d] in a legitimate use of 

its traditional powers")]; [Detroit Edison Co. v. FERC, 334 F.3d 48, 54 (D.C. Cir. 2003) (ruling 

that FERC actions infringed on State retail jurisdiction)]. Commenters also referenced PPL 

EnergyPlus, LLC v. Nazarian, 753 F.3d 467 (4th Cir. 2014) (emphasizing the need to preserve 

"the division of the regulatory field that Congress went to so much trouble to establish" by 

respecting "Congress specific grant of power to the States to regulate production.")]. 

Commenters stated that Congress chose to confine FERC's sphere of regulation to preserve 

traditional state regulatory authority over all other sales - including retail sales - and over 

generation and local distribution facilities. Thus, commenters stated, Congress intended to 

"tak[e] no authority from State Commissions" [New England Power, 455 U.S. at 341 (quoting 
199

H.R. Rep. No. 1318, 74th Cong.,1st Sess. 8 (1935)) (emphasis omitted).], and Congress 

specifically preserved the autonomy of state and local public power utilities from plenary FERC 

regulation. Commenters stated that for state and local public power utilities, Congress expressly 

stated that FERC's general FPA authority does not apply to states and subdivisions of states, 

unless the FPA provision expressly so provides. Commenters stated that Congress has confirmed 

this division of authority between states and FERC, in the PURPA of 1978, PURPA amendments 

in 1992, and most recently in the Energy Policy Act of 2005, which granted FERC authority to 

create an Electric Reliability Organization (known as NERC) to help develop and enforce 

reliability standards for the U.S. Bulk Power System. Commenters stated that the statute "does 

not authorize the ERO [Electric Reliability Organization] or the Commission to order the 

construction of additional generation or transmission capacity or to set and enforce compliance 

with standards for adequacy or safety of electric facilities or services." Commenters stated that it 

would be wholly inappropriate for EPA to rely on a purportedly ambiguous environmental 

provision to claim authority over electricity markets that Congress has even expressly denied 

FERC. Commenters also stated that Congress did not intend for FERC to regulate intrastate 

electricity transactions or mandate that states undertake specific programs designed to foster 

increased renewable generation or end-use efficiency measures. Commenters believed if FERC 

has limited authority in these areas, EPA must also, and as a policy matter, EPA should not 

intrude into areas that are appropriately left to the state to regulate.

Commenters stated that FERC itself has recognized the authority of states. Commenters noted 

that FERC has acknowledged that the FPA "explicitly removes from Commission jurisdiction 

facilities used for the generation of electric energy (except as specifically provided)" leaving 

those matters to the States [Middle South Servs., Inc., 32 FERC Section 61,425, at 61,946 

(1986).]; and commenters noted that FERC itself has expressly acknowledged the rights of states 

to encourage the development of particular generation resources as a legitimate policy interest 

that is within their jurisdiction under the FPA [see, e.g., Order Accepting Proposed Tariff 

Revisions, Subject to Conditions, and Addressing Related Complaint, PJM Interconnection, 

L.L.C., 135 FERC paragraph 61,022, at 61,106 (Apr. 12, 2011) (a state may "act within its 

borders to ensure resource adequacy or to favor particular types of new generation").] 

Commenters stated that FERC has recognized that state law does not intrude on federal 

jurisdiction to the extent that a state is directing the planning and resource decisions of electric 

utilities under its jurisdiction [see Order on Complaint and Petition for Declaratory Order and on 

Petition for Enforcement, Midwest Power Sys., Inc., 78 FERC paragraph 61,067, at 61,246 (Jan. 

29, 1997) (Iowa statute not preempted "to the extent that [it] require[s] [state utilities] . . . to 

purchase from certain types of generating facilities"); see also Order on Requests for 

Reconsideration, S. Cal. Edison Co., 71 FERC paragraph 61,269 (June 2, 1995) (states have 

broad powers to direct the planning and resource decisions of utilities under their jurisdiction)]. 

Commenters quoted FERC Commissioner Tony Clark in recent Congressional testimony [FERC 

Perspectives: Questions Concerning EPA's Proposed Clean Power Plan and other Grid 

Reliability Challenges: Hearing Before the Subcomm. on Energy and Power of the H. Comm. on 

Energy & Commerce, 113th Cong. 4, 7 (July 29, 2014) (written testimony of Tony Clark, 

Comm'r, FERC), available at http://energycommerce.house.gov/hearing/ferc-perspectives-
200

questions-concerning-epa%27s-proposed-clean-power-plan-and-other-grid], stating that the 

Proposed Guidelines would "dramatically alter the traditional lines of authority by creating a new 

paradigm of oversight of net carbon emission from a state" and potentially result in states 

"ceding ultimate authority of the regulation of their state's public utilities and energy 

development to the EPA."

Commenters cited Electric Power Supply Association (EPSA) vs. Fed. Energy Regulatory 

Comm’n, 753 F.3d at 216, and stated it is not credible for the EPA to assert that, even though the 

federal agency that is actually tasked with overseeing interstate energy markets cannot engage in 

demand-side regulation, the federal pollution control agency is "sub silentio" empowered to do 

so by Section 111(d). Commenters reiterated that the division of authority was upheld by EPSA, 

753 F.3d at 216; commenters stated that courts rejected attempts by FERC to use indirect means 

to regulate in areas that the FPA reserves to the states, referencing EPSA, 753 F.3d at 221. 

Commenters further explained EPSA, 753 F.3d at 216, stating that the court vacated FERC 

Order No. 745 which established revised rules for compensating demand-side resources in 

FERC-jurisdictional markets, because demand reductions did not constitute wholesale sales of 

energy and "the Federal Power Act unambiguously restricts FERC from regulating the retail 

market . . . ." [753 F.3d at at 224]. Commenters also referenced Duke Power Co. v. Fed. Power 

Comm'n, 401 F.2d 930, 935 (D.C. Cir. 1968) (explaining that the "major emphasis" of the FPA 

"is upon federal regulation of those aspects of the industry which - for reasons either legal or 

practical - are beyond the pale of effective state supervision"); Conn. Dep't of Pub. Util. Control 

v. FERC, 569 F.3d 477, 481 (D.C. Cir. 2009) (reiterating established principle that FERC may 

not "directly regulat[e]" electric generation). 

Commenters specifically noted that the D.C. Circuit's recent decision in EPSA v. FERC has 

significant ramifications for Building Block 4 of the Proposed Rule. Specifically, commenters 

stated that in EPSA, the court ruled that FERC's wholesale jurisdiction does not extend to the 

regulation of putative "wholesale sales" by demand-response resources because that would 

constitute "direct regulation" of state-jurisdictional retail markets [EPSA, 753 F.3d at 222, 224]. 

Commenters contended that EPSA v. FERC thus holds that demand-response resources may not 

be permitted to participate as sellers of wholesale energy in FERC jurisdictional, RTOadministered markets. Commenters stated that some have argued that this holding would also 

apply to demand-response resources participating as sellers in RTO capacity markets.

Commenters stated, however, that the EPSA decision does not disturb state-administered 

demand-response programs and does not foreclose the recognition in wholesale markets of such 

demand-response programs in wholesale demand. Commenters believed that the EPSA decision 

respects state and local authority over demand-response resources and will, in the long run, better 

enable the development of demand response in wholesale markets. Thus, commenters stated that 

the EPSA decision is not an impediment to EPA's long-term goals, but since the decision has 

vacated FERC's attempt to supplant state and local authority over retail demand response, EPA 

may need to reevaluate this building block and appropriately adjust each state's emission goals.
201

Commenters stated EPA must defer to existing federal and state-specific policies in its 

calculation of renewable energy potential for Florida and other states. According to the 

commenters, the Florida Legislature has established policies to encourage the development of 

renewable energy resources and to ensure these resources contribute to reliable electric service at 

a reasonable cost. The commenters provided information on Florida laws and The Public Utility 

Regulatory Policies Act (PURPA), stating that they provide the legal framework for the 

interconnection and economic parameters to develop renewable energy and therefore Floridaspecific policies should be inherent to the Proposed Rule.

Response 17: We disagree with commenters. As an initial matter, we note that the final rule does 

not include building block 4 – demand-side energy efficiency – as a component of BSER. 

Therefore, we will not address comments on building block 4. As we explain in sections V.A. 

and V.B. of the preamble, our emission guidelines simply reflect an achievable emissions limit 

through the application of the BSER and do not in themselves require states or sources to 

implement the BSER. That is, EPA is responsible for determining the level of emission 

limitation from the source category, while states have the responsibility of assigning emission 

requirements to their sources that will ensure their achievement of that level of emission 

limitation. States may fulfil their responsibility by establishing emission standards or creating 

plans consistent with the guidelines. In doing so, states will be able to choose from a wide range 

of emission reduction measures, including measures that are not part of the BSER. 

We disagree that we are expanding our authority to include wholesale energy market regulation. 

Our emission guidelines simply reflect an achievable emissions limit through the application of 

the BSER and do not in themselves require states or sources to implement the BSER. Moreover, 

these emission guidelines provide states with the flexibility to establish, implement, and enforce 

standards of performance and do not intrude on the regulatory domain of FERC or the states. It 

cannot be said that because environmental requirements may have an effect on the wholesale 

energy market that the EPA is therefore intruding into energy regulation. Certainly, in the 

legislative history of the 1970 CAA Amendments, Congress expressly identified power plants as 

a priority source category for regulation under CAA section 111. 

Comment 18: Commenters claimed the proposed rule interferes with or usurps state 

responsibilities under the FAA and would inappropriately assign oversight of electric generation 

to the EPA. Commenters believed the proposed rule effectively limits the state regulator's ability 

to implement appropriate and balanced resource planning, interferes with the state utility 

regulators' ability to manage electricity rates, and gives the EPA oversight of electric generation 

dispatch, construction and integration of renewable power, and customer electricity 

consumption. Commenters argued the proposed rule would usurp the state utility regulator's 

authority by limiting the availability of certain electric generating resources, forcing the 

premature retirement and replacement of existing generating resources, requiring the 

implementation of renewable energy and costly energy efficiency standards, requiring the state 

to construct new generation units, and increasing electricity rates for customers. Commenters 

argued that the EPA has no jurisdictional authority under section 111(d) to assume this role. 

Commenters believed the EPA would need clear Congressional authorization to usurp state's 
202

authority over utility rates, fuels and generation choices and stated that "it is hard to imagine that 

Congress intended to give EPA authority to regulate the entire electric system by the use of the 

general term "system." Commenters stated that the environmental regulation has been limited to 

specific requirements on specific plants, and has never been interpreted to grant EPA broad 

authority to dictate the operation of the entire electricity system.

Commenters argued that the proposal overrides state prerogatives by forcing them to prioritize 

natural gas-fired generation over coal-fired generation and non-fossil-fuel generation or energy 

efficiency over fossil-fueled generation. Commenters felt that the renewable portfolio standard 

would severely infringe on state's regulatory jurisdiction. Commenters referenced Detroit Edison 

Co., 334 F.3d at 49 ("Retail service [subject to State authority] - denotes transmission or 

distribution to end users."); see also In re S. Cal. Edison Co., D. 05-01-054, 2005 WL 350964 

(Cal. P.U.C. Jan. 27, 2005) (discussing State regulation of dispatch). Commenters stated that the 

unlawfulness of EPA's approach applies equally to EPA's proposal to prioritize the dispatch of 

existing NGCC facilities and EPA's suggestion in the NODA that its BSER analysis could be 

expanded to include new NGCC facilities. Commenters stated that, likewise, requiring the 

construction of new renewable power plants to serve retail demand is clearly not within the 

federal government's limited authority over "wholesale" transmission. Commenters stated that in 

Building Block 4, by seeking to regulate local and intrastate electricity markets in the name of 

reducing demand, EPA is usurping the States' traditional authority over those markets. 

Commenters stated that the FPA clearly recognizes States' authority with respect to the 

generation and dispatch of electricity, and nothing in the CAA suggests that Congress has 

independently given EPA authority to compel fuel switching within the electricity sector.

Commenters argued that the proposed rule overrides each state's prerogative to determine its own 

electricity policies. Commenters noted that state utility regulators are responsible for ensuring 

the lowest possible electricity prices for ratepayers and claimed that by forcing coal-fired 

generating plants to shut down several years before the end of their remaining useful life and 

consequently causing electricity prices to increase, the EPA would be improperly usurping the 

state utility commission's authority to ensure low electricity prices. Similarly, commenters 

argued that the CPP's environmental dispatch requirement for utility electric generating units 

would interfere with a state's utility commission's ability to comply with its duty to ensure that 

utility services are provided to the ratepayers at the "lowest reasonable cost." 

Commenters noted that the states and FERC have expertise in public utility ratemaking and in 

understanding the complexity of the electric grid and electric reliability and argued that the EPA 

would not only exceed its authority but lacks the necessary experience and expertise to oversee 

the electric system. Commenters expressed similar concern regarding expansion of EPA's 

authority and noted that electric coops are governed by locally elected boards that are in a better 

position to understand the dynamics of their local power systems and the desire of their member 

owners than the EPA. 
203

Commenters contended that after an implementation is approved by EPA, a state will have lost 

its ability to chart its own course as to how it regulates public utilities and its energy sector as a 

whole, and further claimed that the several ISOs are warning that the grid cannot operate reliably 

under the EPA's proposal and electric costs will skyrocket.

Commenters claimed that the CPP effectively reverses Ohio's decision to restructure its 

electricity market. Commenters indicated that in 1999 Ohio restructured the electricity market to 

tap into the decentralized forces of supplier competition and consumer choice. Commenters 

described how consumers can choose between different prices, contract terms, generation 

resources, and incentives. Commenters claimed that the CPP would induce a "soft re-integration" 

of Ohio's market which would undermine the state's restructuring decision.

Commenters stated that the EPA's CPP would force the State Corporation and/or Public Utility 

Commission to oversee utility resource planning in order to further the EPA's climate change 

goals. Commenters quoted National Association of Regulatory utility Commissioners Chairman 

Joshua Epel who said the proposal's renewable generation goals and end-use efficiency programs 

". . . concerns me more than just about anything else in the rule."

Commenters expressed concern that state energy policy making would become subject to federal 

oversight and that the EPA would order states to boost their renewable generation goals or 

increase their end-use efficiency programs. 

Commenters stated that policies such as renewable energy portfolio standards, energy efficiency 

standards, and cap-and-trade carbon emissions systems have always been implemented by 

deliberation in state legislatures or public utility commissions. Commenters noted that the 

American Clean Energy and Security Act of 2009 was an attempt by the U.S. Congress to 

authorize these policies [see H.R. 2454 of the 111th U.S. Congress; this legislation, also known 

as the Waxman-Markey Bill, was passed by the U.S. House, but failed in the Senate] and stated 

that "the EPA cannot now do what the elected representatives of the American people declined to 

authorize simply by reinterpreting long-extant statutes to suddenly provide such authorization."

Commenters claimed that the EPA's "asserted authority could dramatically overhaul the choices 

made by Colorado officials" related to their RPS. Commenters explained that the Colorado law 

allows state officials discretion regarding enforcement of a 2% rate cap when it comes into 

conflict with the green energy production quota. Commenters asked whether the EPA would 

allow this choice to be made by the State.

Commenters requested the proposed rule be withdrawn because it inappropriately usurps state 

authority. 

Commenters noted that the United States Court of Appeals for the District of Columbia recently 

prohibited efforts made by FERC that sought to encourage demand side management programs. 

Commenters stated that the court found that these efforts encroached upon powers that are within 

the exclusive purview of the states [see Electric Power Supply Ass'n v. FERC, 753 F.3d 216 
204

(D.C. Cir. 2014)]. Commenters stated that the Proposed Rule impermissibly encroaches on these 

same powers. Commenters also said that the FPA splits jurisdiction over the sale and delivery of 

electricity between the federal government and the states on the basis of the type of service being 

provided and the nature of the energy sale. Commenters quoted from Congressional testimony by 

FERC Commissioner Tony Clark who warned that states risk losing autonomy to EPA. 

Specifically, commenters quoted Mr. Clark stating that to the extent the state plan "becomes 

blessed by EPA and submitted and approved by EPA . . . [the state] will have lost that 

opportunity [to modify its plan] because it will have become a part of a Federally-approved plan 

and [the state] would then need to seek approval from the EPA." (See FERC Perspectives: 

Questions Concerning EPA's Proposed Clean Power Plan and Other Grid Reliability Challenges: 

Hearing Before the H. Subcomm. on Energy & Power of the H. Comm. on Energy, (2014) 

(statement of Tony Clark, Chairman, FERC), available at 

http://energycommerce.house.gov/hearing/fercperspectives-questions-concerning-epa%27sproposed-clean-power-plan-and-other-grid). Commenters, also citing ESPA, 753 F.3d at 216, 

stated that EPA should not be able to take a greater amount of power from the states than the 

D.C. Circuit allowed FERC to take. Commenters claimed that building block 4 conflicts with 

state authority over regulation of energy, stating that EPSA, 753 F.3d at 218 upholds that not 

even FERC has authority to induce a reduction in the consumption of electricity by consumers. 

Commenters further claimed that neither the EPA nor the federal government as a whole has 

authority to restrict the use or purchase of electricity, or impose heat rate improvements.

Commenters stated that EPA should certainly have no more ability to "do indirectly what it could 

not do directly" (Altamont Gas Transmission Co. v. FERC, 92 F.3d 1239, 1248, D.C. Cir. 1996) 

than FERC would with respect to matters that the FPA left to the states. Commenters believed 

that the limitations placed on EPA's authority by the Constitution and the CAA were confirmed 

almost 40 years ago (see Dist. of Columbia v. Train, 521 F.2d 971, 974 (D.C. Cir. 1975)) and 

believes the Supreme Court will exercise its authority to prevent any unconstitutional coercion of 

state power and authority by the federal government (see Nat'l Fed'n of Indep. Bus. v. Sebelius, 

132 S. Ct. 2566, 2601-04, 2656-66 (2012)).

Commenters stated that the proposed rule's attempt to federalize control over state energy policy 

is inconsistent with the FPA. Commenters stated that it is unreasonable for EPA to propose 

regulation under Section 111(d) that would allow precisely the type of federal control over state 

decision-making that Congress denied to the federal government in the context of the FPA. 

Commenters claimed that the jurisdictional question turns on whether the Agency action 

"constitutes[s] direct regulation" of an area that is subject to state regulation (Connecticut Dept. 

of Public Utility Control v. FERC, 569 F.3d 477, 478 (D.C. Cir. 2009)).

Commenters stated that the rule's unprecedented reach extends past New Mexico's utilities and 

even beyond the Public Service Commission - all the way to the state legislature. Commenters 

further stated that EPA's CPP would require New Mexico lawmakers to enact energy laws that 

mandate the usage of certain types of energy and services in the retail electricity market. 
205

Commenters stated that EPA infringes upon state legislatures and public service commissions by 

attempting to set state energy policy at the federal level. 

Commenters argued that the proposal combines a renewable energy portfolio with demand-side 

control measures to create a de facto national energy policy at the expense of state authority and 

economic freedom.

Commenters believed that the EPA was attempting to federalize electric system that has been 

under the purview of the states or open markets. Commenters stated that the proposed rule 

dictates what both state environmental regulatory agencies and state energy commissions must 

adopt as policy choices, effectively choosing the winners and losers for electricity generation 

rather than leaving those decisions up to states and the market. Moreover, commenters stated that 

the process requires these policy choices to be made federally enforceable, taking any future 

decision to change that policy out the states' hands. Commenters argued that the CAA does not 

empower EPA to take over state decision-making authority regarding electric production, 

delivery, and use.

Commenters claimed that the proposal requires state plans must be federally enforceable and 

argued that this demonstrates the EPA is usurping states' authority under the FPA.

Commenters noted that the operation of EGUs at a public power utility are assigned under state 

and local laws to the public power utility and stated that the proposed rule intrudes upon the local 

control of public power utilities.

Response 18: We disagree with commenters. As an initial matter, the final rule does not include 

building block 4 – demand-side energy efficiency – as a component of BSER. Therefore, we will 

not address comments on building block 4. Additionally, we note that we are not requiring 

affected EGUs to invest in renewable energy sources. Renewable energy is one potential 

measure that may be employed, consistent with the state flexibility principle that is central to this 

program. 

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER. 

We disagree that we are expanding our authority to include wholesale energy market regulation, 

state retail regulation, or federalizing state decisions over energy policy. Our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. Moreover, these emission 

guidelines provide states with the flexibility to establish, implement, and enforce standards of 
206

performance and do not intrude on the regulatory domain of FERC or the states. It cannot be said 

that because environmental requirements may have an effect on the wholesale energy market that 

the EPA is therefore intruding into energy regulation. Certainly, in the legislative history of the 

1970 CAA Amendments, Congress expressly identified power plants as a priority source 

category for regulation under CAA section 111.

We note that the federal enforceability considerations raised in the comment arose primarily 

under the proposed portfolio approach for state plans. As explained in section VIII.C of the 

preamble, the EPA is not finalizing the portfolio approach, which would have allowed state plan 

submittals to include federally enforceable measures that apply to entities that are not affected 

EGUs. However, as further explained in section VIII.D, if the state is adopting the state measures 

type plan, the state plan submittal will need to specify, in the supporting materials, the state 

enforceable measures that the state is relying upon in conjunction with any federally enforceable 

emission standards for affected EGUs to meet the emission guidelines. The final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements 

for its affected EGUs. Consistent with longstanding practice under the Clean Air Act, if a 

regulated entity does not meet a requirement, the EPA will address the matter on a case-by-case 

basis, to determine the appropriate response and resolution.

Comment 19: Several commenters said that electricity is not generated on a state-by-state basis.

Commenters also state that the EPA is unlawfully intruding on FERC’s authority under Federal 

Power Act 215 to ensure reliability of the bulk power system. Commenters also say that the EPA 

failed to consult with FERC about the 111(d) rule’s technical feasibility and impacts on 

reliability and markets.

Commenters stated that the title of the proposed rule, the Clean Power Plan, makes it clear that 

EPA is creating national electricity policy. Commenters said EPA's proposal sets emission 

standards on a state-by-state basis with initial compliance levels mandated in 2020, ongoing to 

2030. Commenters said that FERC has a responsibility to promote the reliability of our nation's 

bulk power system under section 215 of the Federal Power Act. Commenters said FERC must 

analyze the reliability impacts of the proposed rules. Commenters said because FERC is the 

economic regulator of the nation's wholesale electricity markets and is directed by statute to 

assure just and reasonable rates, the Commission also has a duty to analyze the economic 

consequences of the proposal.

Response 19: We disagree with commenters. The EPA is not setting a national electricity policy. 

Further, we are not expanding our authority to include wholesale energy market regulation. Our 

emission guidelines simply reflect an achievable emissions limit through the application of the 

BSER and do not in themselves require states or sources to implement the BSER. Moreover, 

these emission guidelines provide states with the flexibility to establish, implement, and enforce 

standards of performance and do not intrude on the regulatory domain of FERC or the states. It 

cannot be said that because environmental requirements may have an effect on the wholesale 

energy market that the EPA is therefore intruding into energy regulation. Certainly, in the 

legislative history of the 1970 CAA Amendments, Congress expressly identified power plants as 
207

a priority source category for regulation under CAA section 111. For a comprehensive discussion 

of how we considered reliability in developing the final rule, please see preamble section 

VIII.G.2. 

Further, we disagree with commenters that EPA is intruding on FERC’s authority under FPA 

section 215 to ensure bulk power system reliability. The EPA is setting achievable emission 

limits. We are not asserting authority over issues that Congress has exclusively reserved for 

another. As noted in the final rule preamble, EPA officials worked closely with DOE and FERC 

officials to ensure, to the greatest extent possible, that actions taken by states and affected EGUs 

to comply with the final rule mitigate potential electric system reliability issues. Senior EPA 

officials met with each of the FERC Commissioners and EPA staff had frequent contact with 

FERC staff throughout the development the rule. FERC held four technical conferences to 

discuss implications of compliance approaches to the rule for electric reliability, infrastructure, 

and electricity markets. EPA staff attended the four conferences and EPA leadership spoke at all 

of them. The EPA, DOE, and FERC will continue to work together to ensure electric grid 

reliability in the development and implementation of state plans. The EPA has considered the 

input of FERC, DOE, and multiple stakeholders regarding reliability, infrastructure, and market

issues as it developed the final rule. For a more comprehensive discussion of reliability issues, as 

well as the EPA’s coordination with both FERC and DOE, please see preamble section VIII.G.2. 

This section also includes a discussion of reliability analysis and reports regarding the 111(d) 

rule. For a discussion of infrastructure and market issues, please see preamble section V and the 

GHG Mitigation Measures TSD. Finally, we note that the agency has addressed concerns about 

time needed to develop state plans and meet interim performance levels. Thus, with initial 

submittals, all states will have until September 6, 2018 to submit final plans, and the interim 

performance period will not begin until 2022. Additionally, the final rule adjusts the interim 

goals to provide a gradually phased-in initial reduction requirement and a more gradual glide 

path to the final 2030 goals. This more gradual application of the BSER over the 2022-2029 

interim period provides the state with substantial latitude in selecting the emission reduction 

glide path for affected EGUs over that period.

Comment 20: Comments stating that the EPA is attempting to usurp state authority over 

renewable energy, energy efficiency, and similar programs through the extension provision in 

proposed 40 Code of Federal Regulations (CFR) section 60.5760(a)(3), and furthermore, that no 

state agency can make such a federally enforceable commitment for measures in state law.

Commenters stated, the EPA is attempting to usurp state authority over renewable energy, 

energy efficiency, and similar programs through the extension provision in proposed 40 Code of 

Federal Regulations (CFR) section 60.5760(a)(3). Commenters said, the EPA does not have the 

legal authority under FCAA section 111(d) to make any demands regarding a state's current 

programs that are not already federally enforceable. Commenters said, furthermore, the 

constitutions of Texas and most other states prohibit a state agency from making a federally 

enforceable commitment binding the state legislature from changing state law. 
208

Commenters stated, in section 60.5760(a)(3), the EPA is proposing that in exchange for an 

extension, the state must commit to not remove any existing CO2 measures. Commenters said, 

furthermore, the state must make the commitment in a way that allows the EPA to still enforce 

the measure even if the state fails to submit a final plan or EPA does not approve the final plan. 

Commenters said, unless a state program, such as renewable energy standard, is already federally 

enforceable under a state plan or a SIP, the EPA does not have the authority to make any 

demands of the states regarding such a program. Commenters said, the EPA is attempting to 

force states to surrender that authority through section 60.5760(a)(3). Commenters said, for the 

EPA to threaten to withhold an extension unless the state surrenders authority of these programs 

to the EPA is blatant extortion of the states.

Commenters stated, furthermore, no state agency can make such a federally enforceable 

commitment for measures in state law. Commenters said, the rule, as proposed, applies to the 

administrator of the air quality program in a state. Commenters said, state agencies cannot bind 

their legislative process in the manner EPA is requiring. Commenters said, the TCEQ is no more 

capable of making such a commitment than the EPA can commit that a provision of the FCAA 

will not change. Commenters said, even a state legislature may not be able to restrict a future 

legislature from changing state law. Commenters said, the provision in section 60.5760(a)(3) 

makes it impossible for a state to qualify for an extension. Commenters said, this provision is 

illegal and unnecessary and should be removed from the rule.

Response 20: We disagree that we are expanding our authority to include wholesale energy 

market regulation or state retail regulation. Our emission guidelines simply reflect an achievable 

emissions limit through the application of the BSER and do not in themselves require states or 

sources to implement the BSER. Moreover, these emission guidelines provide states with the 

flexibility to establish, implement, and enforce standards of performance and do not intrude on 

the regulatory domain of FERC or the states. It cannot be said that because environmental 

requirements may have an effect on the wholesale energy market that the EPA is therefore 

intruding into energy regulation. Certainly, in the legislative history of the 1970 CAA 

Amendments, Congress expressly identified power plants as a priority source category for 

regulation under CAA section 111. 

The federal enforceability considerations raised in the comment arose primarily under the 

proposed portfolio approach for state plans. As explained in section VIII.C of the preamble, the 

EPA is not finalizing the portfolio approach, which would have allowed state plan submittals to 

include federally enforceable measures that apply to entities that are not affected EGUs. 

However, as further explained in section VIII.D, if the state is adopting the state measures type 

plan, the state plan submittal will need to specify, in the supporting materials, the state 

enforceable measures that the state is relying upon in conjunction with any federally enforceable 

emission standards for affected EGUs to meet the emission guidelines. The final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements 

for its affected EGUs. Consistent with longstanding practice under the Clean Air Act, if a 
209

regulated entity does not meet a requirement, the EPA will address the matter on a case-by-case 

basis, to determine the appropriate response and resolution.

Comment 21: Commenters stated that nothing in the CAA authorizes or hints at providing 

authority to EPA to redesign the nation's electricity supply system. 

Commenters stated that the EPA does not possess lawful authority to regulate electricity, power 

markets, the transmission and sale of energy into wholesale and retail markets, determine 

resource mix, or regulate operation or construction of the electric grid; Commenters asserted that 

this authority resides with FERC (for wholesale transactions) and the states' Public Utilities 

Commissions (for retail transactions). 

Commenters quoted FERC Commissioner's Tony Clark and Phillip Moeller (written testimonies 

before the Committee on Energy and Commerce, Subcommittee on Energy and Power, U.S. 

House of Representatives, July 29, 2014) to support their argument that the proposal would 

require extensive changes to the operation of the nation's power grid, and that this proposal 

usurps states' authority over the electricity grid.

Commenters stated that EPA does not have the authority to order states to implement, and lacks 

the authority itself to implement, Building Blocks 2, 3, and/or 4. Commenters reiterated that 

states, and not the federal government, have authority to implement Building Block 3 and/or 4. 

Commenters indicated that EPA's reliance on building block two in setting performance 

standards exceeds its CAA authority because the states have authority to regulate electricity 

under the FPA programs. Commenters stated that building block 3 would displace the roles 

traditionally performed by state legislatures and state regulatory agencies. Commenters claimed 

that EPA's portfolio approach (through Building Blocks 2, 3 & 4) would have the states regulate 

activities that remain the exclusive province of FERC. Commenters asked the question of 

whether, under the proposed rule, states would be required to regulate dispatch in contravention 

of FERC authority.

Commenters stated that if a state chooses to include increased dispatch of NGCC plants, 

renewable energy, or energy efficiency in its compliance plan under 111(d), the jurisdiction over 

these activities remains with FERC and the state utility commissions. Commenters agreed that 

although using renewable energy and energy efficiency for the purpose of complying with CO2

emissions reduction goals is good public policy, enforceability by EPA is problematic, as it may 

usurp the authority of FERC and state public utility commissions over these activities. 

Commenters concluded by stating that EPA's oversight could lead to unintended consequences in 

terms of costs and reliability issues.

Commenters stated that the regulation of CO2 emissions is beyond the authority of the ISOs and 

RTOs.
210

Commenters said that the proposed guidelines do not address the D.C. Circuit's decision in 

EPSA that was decided less than a month before the Proposed Guidelines were published in the

Federal Register (Elec. Power Supply Ass'n v. FERC, 753 F.3d 216 (D.C. Cir. 2014)). 

Commenters stated that the decision both vacated FERC Order No. 745 and prohibits some 

demand-side resources from directly participating in FERC-jurisdictional markets, although it 

does not affect state-administered demand-response programs. Commenters quoted from FERC 

and argued it would be inconsistent for EPA to continue to assume that demand-side resources 

will play an expanded role in supporting emissions reductions given EPSA's potential 

implications. ("Whether the Opinion is read narrowly or broadly, its implementation will involve 

both setting new prospective rules and unwinding demand response participation in certain 

wholesale markets - a task with significant market and financial implications that go far beyond 

the typical burdens of litigation . . . ." [See Mot. of FERC to Stay Issuance of Mandate at 11, 

Elec. Power Supply Ass'n v. FERC]). 

Commenters stated that the authority to require States to implement discrete energy policies is 

denied to the federal government under the FPA. Commenters also referred to Elec. Power 

Supply Ass'n v. FERC, noting that the FERC order was struck down for violating the states' 

exclusive jurisdiction over retail electricity markets. Commenters stated that it is unclear how the 

EPA would exercise this claimed jurisdiction (i.e., the authority to state lawmakers to enact 

energy statutes).

Commenters stated that a federal agency may not assert authority over issues that Congress has 

exclusively reserved for another. Commenters cited Hunter v. FERC, 711 F.3d 155, 156 (D.C. 

Cir. 2013) as an example, stating that the court rejected FERC's attempts to regulate matters that 

the court believed were exclusively subject to the jurisdiction of the Commodity Futures Trading 

Commission. Commenters also stated that it is clear that "jurisdiction cannot arise from the 

absence of objection, or even from affirmative agreement" by a regulatory body, [see Columbia 

Gas Transmission Corp. v. FERC, 404 F.3d 459, 463 (D.C. Cir. 2005)], any more than it can be 

created by the consent of a private party [see, e.g., Weinberger v. Bentex Pharms., Inc., 412 U.S. 

645, 652 (1973) ("Parties . . . cannot confer jurisdiction; only Congress can."); Cal. Indep. Sys. 

Operator Corp. v. FERC, 372 F.3d 395, 398 (D.C. Cir. 2004); Michigan v. EPA, 268 F.3d 1075, 

1081 (D.C. Cir. 2001) ("EPA is a federal agency - a creature of statute. It has no constitutional or 

common law existence or authority, but only those authorities conferred upon it by Congress. 'It 

is axiomatic that an administrative agency's power to promulgate legislative regulations is 

limited to the authority delegated by Congress.' Bowen v. Georgetown Univ. Hosp., 488 U.S. 

204, 208 . . . (1988). Thus, if there is no statute conferring authority, a federal agency has 

none.").] 

Commenters stated that states do not have the authority to implement building block 2. 

Commenters stated that the EPA does not have authority under the FPA to modify dispatch rules 

under building block 2. Commenters contended that operators also do not have control over 

dispatch. Commenters stated that it appears that only FERC has the authority under the FPA to 
211

approve changes to dispatch rules and that any "redispatch" mechanism developed by EPA 

would require FERC approval.

Commenters stated that the regulators in their respective states do not have the authority to 

require the minimum amounts of renewable energy and energy savings stipulated by their states' 

CPP target, and therefore the proposed rule would require enabling legislation in order to 

comport with the EPA's CPP. Commenters stated that there is no statutory authority in Texas to 

empower an agency to require and regulate demand side management.

Commenters stated that the states face significant jurisdictional uncertainty about their ability to 

achieve compliance through environmental permit limitations and the re-dispatch necessary to 

operate within such limitations.

Commenters quoted FERC Commissioner Clark: "States do not have authority to unilaterally 

compel dispatch of a unit in a FERC jurisdictional wholesale market." Commenters further 

quoted FERC Commissioner Moeller who said that it is not clear "how an RTO could prioritize 

version State Implementation Plans over its own market dispatch." 

Commenters stated that the Proposed Rule assumes that states can regulate dispatch and require 

environmental dispatch to implement the measures contemplated in building block 2. 

Commenters stated that in RTO regions, however, such matters are managed by RTOs pursuant 

to FERC-approved rules or directly through FERC-approved tariffs. Commenters stated that the 

Proposal is arbitrary and capricious because, in failing to recognize FERC's role and its statutory 

obligations when regulating dispatch, it would create serious regulatory conflicts, as explained 

by FERC Commissioner Tony Clark:

"[E]ven if all states in a region band together under the regional grid operator, any 

changes in the wholesale markets must necessarily be vetted and approved by FERC. The 

Commission would be charged with the awkward task of evaluating fundamental 

wholesale market design changes driven by environmental priorities approved by EPA. 

Yet FERC is an economic and reliability regulator. Any decisions made by FERC must be 

rooted not in the CAA, but in our 'just and reasonable' and not 'unduly discriminatory or 

preferential' rate standard in the FPA. FERC's ability to alter or reject an RTO-proposed 

compliance mechanism would present a conflict with EPA's evaluation of the compliance 

plans. Absent Congress stepping in and clearly defining FERC authority and EPA 

authority, it is hard not to envision a future jurisdictional train wreck" [Clark 

Testimony].

Commenters stated that the Proposal assigns implementation of the portfolio-based emissionreducing measures in building blocks 2, 3, and 4 to the states, and EPA does not specify whether 

the state utility commission or the state environmental regulatory agency is charged with 

implementing building blocks 2, 3, and 4. However, commenters noted, state environmental 

agencies generally do not have authority under state law to implement these building blocks - or 
212

have any experience in integrated resource planning - and thus they may be ill-suited to the task 

in comparison to the state utility commission. Commenters stated the Proposal fails to appreciate 

that state utility commissions can implement building blocks 2, 3, and 4 only for the utilities they 

regulate under state law, and nearly all state utility commissions lack the authority to implement 

these building blocks with respect to their state's public power utilities; thus, EPA oversimplifies 

the difficulty of implementation of the Proposal's portfolio-based building blocks under existing 

state laws.

Commenters stated that the courts have also made clear that ambiguous statutory language is not 

sufficient to authorize an agency to regulate an area that has been traditionally subject to State 

regulatory authority. [See Am. Bar Ass'n, 430 F.3d at 472 (finding it unreasonable for federal 

agency to regulate area traditionally subject to State regulation when Congress has not spoken in 

clear terms)]. 

Commenters stated that the dispatch provisions of building block 2 of the proposed rule also 

violate federal law. Commenters stated that dispatch of Southwestern Electric Power Company's 

(SWEPCO's) EGUs within Texas is controlled by the Southwest Power Pool (SPP), according to 

market-based tariffs and operating agreements that are intended to capture the benefits of 

security constrained market-based economic dispatch across wide regions of the US in order to 

secure more cost-effective operation for the benefit of wholesale and retail customers. 

Commenters stated that the operations of SPP are based on agreements of the system owners and 

operators, and are subject to oversight by FERC, but even FERC has no ability to compel any 

particular technique of coordination [Atlantic City Elec. Co. v. FERC, 295 F.3d 1 (D.C. Cir. 

2002).]. Commenters stated that SWEPCO is aware of no provision of state or federal law that 

would allow EPA or the state to alter those arrangements and dictate a specific technique to 

achieve this arbitrary level of dispatch for a specific type of unit. Commenters stated that energy 

markets recently developed in SPP have been carefully structured to achieve the least cost 

dispatch operation of committed generation, and to allow operators of the individual units the 

flexibility to respond to dynamic and constantly changing circumstances in both the supply of 

and demand for electricity [PUCT Project No. 42636---Commission Comments on Proposed 

EPA Rule on Greenhouse Gas Emissions for Existing Generating Units, Comments of SWEPCO 

at 7-8 (Sept. 5, 2014)].

Commenters also cited California Independent System Operator Corp. (CAISO) v. FERC, 372 

F.3d 395, 399 (D.C. Cir. 2004), stating that the D.C. Circuit rejected FERC's attempt to replace 

the CAISO's governing board under its authority to regulate "practice[s]" affecting "rates and 

charges" in the wholesale electric markets. Commenters stated that the court concluded that 

FERC's construction of "practice in this context is . . . a sufficiently poor fit with the apparent 

meaning of the statute that the statute is not ambiguous on the very question before us." [CAISO 

at 401] (citing Brown, 513 U.S. at 120). Commenters stated that, in that case, too, the court 

found the lack of a limiting principle on FERC's assertion of authority critical because of the 

"staggering" and "drastic implications of [FERC's] overreaching," noting that the agency's 

reasoning would "apply to its regulation of all other jurisdictional utilities," allowing it 
213

"tomorrow without any further precedent or any further claim of expanded power" to, for 

instance, remove and replace Duke's or Dynegy's boards of directors. But, commenters stated, in 

the case of Section 111(d), the agency proposes to create a new regulatory program from whole 

cloth that applies without limitation to all fossil fuel-fired power plants and any other source 

"roped in" by a state or EPA in a manner that constitutes centralized energy and economic 

reorganization. Commenters stated that to say the least, "skepticism" is all the more appropriate 

in the face of such a sweeping proposal, UARG, 134 S. Ct. at 2444. Commenters stated that 

whatever gaps or ambiguities EPA purports to discover and interpret in the CAA, the agency 

cannot bootstrap them into providing it "an unheralded power to regulate" the states' energy 

sectors, [Id.]

Commenters stated that the extent to which EPA's proposal would impact national energy policy 

is most directly illustrated by the effect of the proposal on coal-fired EGUs; EPA's own (likely 

understated) projections indicate that coal generation will cease entirely in eleven states. 

Commenters stated that given the importance of the energy sector to the economy, only the 

legislature should determine whether, as a matter of energy, economic, security, or 

environmental policy, one type of fuel should essentially be banned. Commenters stated that in 

enacting CAA Section 111, Congress spoke directly to the importance of coal-fired EGUs [see 

H. Rep. No. 95-294 at 192 ("The committee has designed this section and the entire bill, to 

encourage and facilitate the increased use of coal . . . .")]. In addition, commenters stated that 

Section 111(d)(12) of the Public Utilities Regulatory Policies Act of 1978 ("PURPA"), as set 

forth in Section 1251 of the Energy Policy Act of 2005 ("EPAct 2005"), requires each electric 

utility to develop a plan for "minimizing dependence on one fuel source and ensuring that the 

electric energy it sells to consumers is generated using a diverse range of fuels and technologies 

including renewable technologies." Commenters stated that EPA's proposal contravenes 

PURPA's endorsement of fuel diversity and the requirement that each utility maintain a diverse 

mix of generation resources. 

Commenters stated that the EPA does not address how the CAA interacts with other laws, and 

thus whether the EPA has the authority or expertise to formulate enforceable goals for matters 

that fall within the exclusive jurisdiction of other federal and state agencies (i.e., states' retail 

electricity regulation).

Commenters asked EPA to explain the legal and regulatory mechanisms it has under the CAA to 

require the Arizona Corporation Commission to direct merchant NGCCs to increase generation 

to replace generation from existing coal-fired plants.

Response 21: We disagree with commenters. As an initial matter, we note that the final rule 

does not include building block 4 – demand-side energy efficiency – as a component of BSER. 

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 
214

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER. 

We disagree that we are expanding our authority to include wholesale energy market regulation 

or state retail regulation. Our emission guidelines simply reflect an achievable emissions limit 

through the application of the BSER and do not in themselves require states or sources to 

implement the BSER. Moreover, these emission guidelines provide states with the flexibility to 

establish, implement, and enforce standards of performance and do not intrude on the regulatory 

domain of FERC or the states. It cannot be said that because environmental requirements may 

have an effect on the wholesale energy market that the EPA is therefore intruding into energy 

regulation. Certainly, in the legislative history of the 1970 CAA Amendments, Congress 

expressly identified power plants as a priority source category for regulation under CAA section 

111.

We also disagree with commenters that the final rule interferes with economic dispatch. Instead, 

the potential to shift generation identified in building block 2 is entirely consistent with the 

existing economic dispatch protocols. Environmental policies can shift generation in two ways. 

The first is operational restrictions, such as permit limits on the number of hours that an EGU 

can operate in order to limit emissions. The second is changes in the relative costs of generation 

among different types of affected EGUs related to pollution reduction measures. For example, a 

regulation that necessitates the use of a control technology that requires the application of a 

reagent in a certain kind of EGU will increase the variable cost of operating that plant, which in 

turn may reduce the amount of generation it is called upon to deliver to the grid through securityconstrained economic dispatch procedures. This is consistent with economic dispatch.

The federal enforceability considerations raised in the comment arose primarily under the 

proposed portfolio approach for state plans. As explained in section VIII.C of the preamble, the 

EPA is not finalizing the portfolio approach, which would have allowed state plan submittals to 

include federally enforceable measures that apply to entities that are not affected EGUs. 

However, as further explained in section VIII.D, if the state is adopting the state measures type 

plan, the state plan submittal will need to specify, in the supporting materials, the state 

enforceable measures that the state is relying upon in conjunction with any federally enforceable 

emission standards for affected EGUs to meet the emission guidelines. The final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements 

for its affected EGUs. Consistent with longstanding practice under the Clean Air Act, if a 

regulated entity does not meet a requirement, the EPA will address the matter on a case-by-case 

basis, to determine the appropriate response and resolution.

Comment 22: Commenters stated that critics of EPA's proposal argue that the plan would, for 

the first time, allow EPA to set policies that influence the types of fuels used as inputs in 

electricity production, a role that has traditionally been played by state utility regulators, either 
215

directly in regulated states or in conjunction with energy markets in deregulated 

states. Commenters contended, however, that implementation of the CAA has repeatedly resulted 

in fundamental shifts in the fuel balance used in the power sector. Commenters described the

history of Section 111 regulations and legislative changes that have impacted the fuel that power 

plants have used. Commenters referenced the sulfur dioxide regulation for power plants based on 

the 1970 CAA, which encouraged low sulfur coal. Commenters noted that high sulfur coal was 

encouraged after Congress' 1977 Amendments to the CAA and low sulfur coal was again 

encouraged after the 1990 CAA Amendments with the Title IV cap-and-trade provisions for 

sulfur dioxide. Commenters stated that EPA has also altered the mix of fuel used for the 

production of energy through its regulatory authority, giving both the Cross-State Air Pollution 

Rule under Section 110 and the Mercury and Air Toxics Standards rule under Section 112 as 

examples. Commenters stated that these rules are expected to encourage a shift from coal to 

natural gas in the electricity sector.

Response 22: We appreciate these comments.

Comment 23: Commenters stated that Congress gave FERC the authority to regulate interstate 

electricity transactions and wholesale energy markets through the FPA and the Energy Policy 

Act, and that the EPA's proposal encroaches on that authority. Commenters contended that the 

CPP violates section 310(a) of the CAA because it interferes with FERC's exclusive authority to 

(1) regulate interstate transmission and the wholesale sale of electric energy (sections 205 and 

206 of the FPA); (2) promote the voluntary regional coordination of generation and transmission 

facilities (section 202(a) of the FPA); and (3) ensure reliability of the BPS (section 215 of the 

FPA). Commenters stated that Congress has explicitly prohibited EPA from interfering with 

FERC's jurisdiction and cited section 310(a) of the CAA, stating that the Act "shall not be 

construed as superseding or limiting the authorities and responsibilities, under any other 

provision of law, of the Administrator or any other Federal officer, department, or agency." 

Commenters asserted that FERC's mission is to assist consumers in obtaining reliable, efficient 

and sustainable energy services at a reasonable cost through appropriate regulatory means, while 

EPA's mission is to protect human health and the environment by issuing and enforcing antipollution standards.

Commenters stated that the FPA vests FERC with authority to ensure that the rates, terms, and 

conditions for jurisdictional sales and transmission are "just and reasonable" and "not unduly 

discriminatory" or preferential. Commenters stated the FPA vests FERC with jurisdiction over 

"public utilities" (a term that the commenters indicated generally excludes publicly-owned 

utilities and rural electric cooperatives). Commenters provided details on how FERC establishes 

"just and reasonable" rates, terms and conditions regarding the sale at wholesale of electric 

energy in interstate commerce and transmission of electric energy in interstate commerce. 

Commenters said that FERC specifically regulates the rates, terms and conditions under which 

the RTOs and ISOs offer service as well as other interstate transmission services.
216

Commenters stated that courts have affirmed that the section 205 filing requirement applies 

broadly to all classifications, practices, and procedures that "significantly affect" the price or 

non-price terms and conditions of FERC jurisdictional services. Commenters cited City of 

Cleveland v. FERC, 773 F.2d 1368, 1376 (D.C. Cir. 1985): "There is an infinitude of practices 

affecting rates and service. The statutory directive must reasonably be read to require the 

recitation of only those practices that affect rates and service significantly . . . ." (emphasis 

omitted). According to the commenters, under section 205(a), FERC may only accept filed rates, 

rules, and practices if it determines that they are "just and reasonable" [16 U.S.C. 824d(a)].

Commenters stated this EPA proposed rule has the potential to comprehensively reorder the 

jurisdictional relationship between the federal government and states as it relates to the 

regulation of public utilities and energy development.

Commenters stated that although the FPA preserves state and local control over generation 

resource facilities; their development and procurement; generation resource adequacy; and 

generation resource portfolio diversity, a long line of cases makes clear that FERC has exclusive 

jurisdiction over interstate transmission and wholesale sales of electricity. Commenters cited 

PPL EnergyPlus, LLC v. Nazarian, Nos. 13-2419, 13-2424 (4th Cir. 2014). Commenters 

referenced New York v. FERC, 535 U.S. at 6-7; Nantahala Power & Light Co. v. Thornburg, 

476 U.S. 953, 966 (1986) (quoting FPC v. SCE, 376 U.S. at 215-16 ("Congress meant to draw a 

bright line easily ascertained, between state and federal jurisdiction.... This was done in the 

[FPA] by making [FERC] jurisdiction plenary and extending it to all wholesale sales in interstate 

commerce except those which Congress has made explicitly subject to regulation by the 

States."). Commenters stated that because the Proposed Rule also would interfere with areas that 

fall squarely within FERC's FPA purview, it must be withdrawn and re-proposed.

Commenters stated that the Supreme Court has repeatedly held that FERC's exclusive 

jurisdiction over interstate transmission is extraordinarily broad because of the integrated nature 

of the interstate transmission grid and the laws of physics. Commenters stated, for example, in 

New York v. FERC, 535 U.S. 1 (2002), the Court endorsed an earlier ruling, Federal Power 

Commission v. Florida Power & Light Co., 404 U.S. 453, 469 (1972), confirming FERC's 

exclusive jurisdiction over the Florida Power & Light Company's ("FPL") transmission facilities. 

Commenters cited the Court recounting: 

"[S]ince electric energy can be delivered virtually instantaneously when needed on a 

system at a speed of 186,000 miles per second, such energy can be and is transmitted to 

FPL when needed from out-of-state generators, and in turn can be and is transmitted 

from FPL to help meet out-of-state demands; . . . there is a cause and effect relationship 

in electric energy occurring throughout every generator and point on the FPL, Corp, 

Georgia, and Southern systems which constitutes interstate transmission of electric 

energy by, to, and from FPL." New York v. FERC, 535 U.S. at 7 n.5 (internal quotation 

marks omitted). 
217

Commenters cited Mississippi Power & Light Co. v. Mississippi as evidence that Congress made 

it clear that where FERC has lawfully acted to ensure just and reasonable rates, states no longer 

have the power to act. Commenters stated that the Supreme Court has consistently held that 

states may not infringe on FERC's exclusive authority over wholesale sales and markets, 

explaining that:

"Congress has drawn a bright line between state and federal authority in the setting of 

wholesale rates and in the regulation of agreements that affect wholesale rates. States 

may not regulate in areas where FERC has properly exercised its jurisdiction to 

determine just and reasonable wholesale rates or to insure that agreements affecting 

wholesale rates are reasonable" [Mississippi Power & Light Co. v. Mississippi, 487 U.S. 

354, 374 (1988).].

Commenters stated that following Nantahala [Nantahala Power & Light Co. v. Thornburg, 476 

U.S. 953, 963 (1986)], the Court concluded that: (1) FERC has exclusive jurisdiction over 

wholesale rates, and utilities cannot be ordered to charge rates not on file with FERC; (2) 

"FERC's exclusive jurisdiction applies not only to rates but also to capacity allocations that affect 

wholesale rates;" and (3) states may not bar regulated utilities from passing through to retail 

customers FERC-mandated wholesale rates. Commenters stated that it would follow that, under 

the Proposed Rule, a state could not use its economic regulatory authority to block purchases of 

power from higher-emitting resources where contracts for the purchase of that power had already 

been approved by FERC. Commenters stated that states might also have trouble directing utilities 

to invest in lower emitting resources where those investments could hurt the investment interests 

of independent owners of higher-emitting resources in FERC-jurisdictional wholesale markets. 

Commenters stated that in New England Power Generators Association, Inc. v. FERC, the D.C. 

Circuit held that FERC could lawfully approve a tariff for the ISO-NE market that would have 

had the effect of significantly burdening state RPSs [757 F.3d 283 (D.C. Cir. 2014)]. 

Commenters stated that under the ISO-NE tariff approved by FERC, utilities that invested in 

renewable resources in compliance with state RPS requirements could not use the capacity from 

those resources to demonstrate that they had enough capacity to meet their consumers' demand 

unless those resources were bid into and cleared in the ISO-NE capacity market; because the new 

renewable resources cost significantly more than the already depreciated fossil resources in that 

market, it was highly unlikely they would clear. Commenters stated that the utilities, therefore, 

could not only have to pay for the renewable resources to meet their RPS requirement but could 

also have to pay for duplicate capacity in the market.

Commenters stated that the Fourth Circuit's decision in PPL EnergyPlus, LLC v. Douglas R.M. 

Nazarian [753 F.3d 467 (4th Cir. 2014)] upheld a district court order striking down a Maryland 

law that directed state jurisdictional retail utilities to contract with a select generator to purchase 

the generator's output at a specified price to encourage new gas-fired generation in the state. 

Commenters noted that, in addition, a district court in New Jersey struck down a similar New 

Jersey law last year with a "Contract for Differences" scheme [see PPL EnergyPlus, LLC v. 

Hanna, 977 F. Supp. 2d 372 (D.N.J. 2013]. Commenters stated that the Third Circuit upheld the 
218

district court decision on appeal [see PPL EnergyPlus, LLC v. Solomon, No. 13-4330 (3d Cir. 

Sept. 11, 2014)]. Commenters stated that in this case, the state was addressing concerns that 

insufficient generation was available to meet local needs, but it could have equally been designed 

to ensure that new lower-emitting resources would be built to replace existing higher-emitting 

resources pursuant to the Proposed Rule. Commenters stated that the court concluded that the 

laws interfered with wholesale ratemaking because the new capacity would "affect" prices for 

capacity in a FERC-regulated market. Commenters quoted the Fourth Circuit: "Although states 

plainly retain substantial latitude in directly regulating generation facilities, they may not 

exercise this authority in a way that impinges on FERC's exclusive power to specify wholesale 

rates." Commenters quoted the Supreme Court in a similar context: "[T]he problem of this case 

is not as to the existence or even the scope of a State's power to [regulate generation facilities]; 

the problem is only whether the Constitution sanctions the particular means chosen by [the state] 

to exercise the conceded power if those means threaten effectuation of the federal regulatory 

scheme". Commenters stated that in this regard, the Fourth Circuit found that Maryland law 

impermissibly eroded the FERC-determined price and undermined FERC's exclusive authority. 

Commenters stated that state actions that undermine a FERC tariff could be found to violate the 

Supremacy Clause, even if undertaken to advance a permissible state objective, including 

attempts to comply with the Proposed Rule. Commenters stated that the environmental dispatch 

of generation that would be required under the Proposed Rule could be found beyond the States' 

authority to implement, because FERC - not the States - establishes the rules governing how

generation is dispatched in wholesale markets, and any attempt by the States to 

impose requirements contrary to FERC approved tariff and market rules could be found to 

violate the Supremacy Clause of the Constitution.

Commenters stated that Section 202(a) of the FPA authorizes FERC to "divide the country into 

regional districts for the voluntary interconnection and coordination of facilities for the 

generation, transmission, and sale of electric energy" in order to ensure "an abundant supply of 

electric energy" with "the greatest possible economy" and with regard to the "proper 

conservation and utilization of natural resources". Commenters stated that it is "definitively" 

clear that such coordination must be voluntary and that FERC has no power to compel any 

particular "technique of coordination" [Atl. City Elec. Co., 295 F.3d at 12 (quoting Duke Power 

Co. v. Fed. Power Comm'n, 401 F.2d 930, 943 (D.C. Cir. 1968)]. Commenters also referenced 

Cent. Iowa Power Coop. v. FERC, 606 F.2d 1156, 1161 (D.C. Cir. 1979) and stated that the 

court held that the voluntariness requirement of section 202(a) prevented FERC from revising a 

proposed power-pooling agreement that "provide[d] a mechanism for coordinated daily 

operation of generation facilities" to create an even more "fully integrated electric system with 

central dispatch of generating units". Commenters stated, for example, that FERC may not force 

utilities to form or join an RTO under section 202(a).

Commenters stated that to ensure non-discriminatory transmission service and to separate the 

operation of the transmission grid from the economic interests of generators, FERC has also 

encouraged the creation of ISOs and RTOs [See Midwest ISO Transmission Owners v. FERC, 

373 F.3d 1361, 1364 (D.C. Cir. 2004)]. Commenters stated that these entities, "provide open 
219

access to the regional transmission system to all electricity generators at rates established in a 

single, unbundled, grid-wide tariff that applies to all eligible users in a non-discriminatory 

manner" [see Midwest ISO Transmission Owners v. FERC, 373 F.3d 1364 (D.C. Cir. 2004) 

(internal quotations omitted)]. Commenters stated that these ISOs and RTOs are FERCjurisdictional public utilities, subject to comprehensive FERC regulation under the FPA.

Commenters described the role of ISOs and RTOs in selecting the generation with the least cost, 

as well as the procedures in non-RTO/ISO areas. Commenters stated that for purposes of the 

Proposed Rule the important point is not what rates and terms are in the tariffs governing the 

different power markets, but that all of these terms and conditions are filed with and approved by 

FERC and FERC alone; neither EPA nor the states have any power to alter them. Commenters 

also stated that under the Filed Rate Doctrine, operators are bound to what FERC has approved 

and have no choice but to implement the rates, terms, and conditions of their FERC tariffs.

Commenters stated that Section 206 requires FERC to revise any filed "rate, charge, or 

classification," or "any rule, regulation, practice, or contract" affecting them, if it determines that 

they are "unjust, unreasonable, unduly discriminatory or preferential”. Commenters stated that in 

recent decades, FERC has generally relied on the interplay of competitive market forces, subject 

to its oversight, to ensure that wholesale prices for electric energy are just and reasonable. 

Commenters stated that EPA's proposed Building Block 2 calls for reducing emissions from 

affected EGUs in the amount that results from substituting generation at those EGUs with 

expanded low- or zero-carbon generation. Commenters stated that the Proposed Guidelines assert 

that it would be technically feasible for states to use redispatch to achieve substantial emissions 

reductions. Commenters stated that EPA posit that it would be technically feasible to increase the 

average utilization rates of NGCCs to seventy percent via redispatch. Commenters stated that 

EPA estimates the cost and economic impacts of achieving that NGCC utilization rate and 

concludes that they would be reasonable. 

Commenters stated that FERC's jurisdiction over wholesale sales is comparably expansive, [see, 

e.g., Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 300 (1988)]. Commenters stated that 

Schneidewind dealt with the Natural Gas Act rather than the FPA. Commenters said that because 

"the relevant provisions of the two statutes are in all material respects substantially identical," 

however, the Supreme Court has adopted an "established practice of citing interchangeably 

decisions interpreting the pertinent sections of the two statutes." [Ark. La. Gas Co. v. Hall, 453 

U.S. 571, 577 n.7 (1981) (internal quotation marks omitted)] ("The [FPA] long has been 

recognized as a comprehensive scheme of federal regulation of all wholesales of [energy] in 

interstate commerce.") (internal quotation marks omitted); Appalachian Power Co. v. Pub. Serv. 

Comm'n, 812 F.2d 898, 902 (4th Cir. 1987) ("FERC's jurisdiction over interstate wholesale rates 

is exclusive . . . .")].

Commenters stated that to the extent that there is a federal role to play in regulating dispatch or 

demand side energy efficiency, that role has been assigned to FERC and not to EPA. 

Commenters stated that EPA's role with respect to energy efficiency is limited to promoting 
220

voluntary programs. Commenters stated that regardless of EPA's general authority under Section 

111(d), Congress, in the FPA, made FERC the sole federal agency with authority over the 

generation, dispatch, and consumption of electricity [see Morton, 417 U.S. at 550-51 ("Where 

there is no clear intention otherwise, a specific statute will not be controlled or nullified by a 

general one, regardless of the priority of enactment."); see also Hunter v. FERC, 711 F.3d 155 

(D.C. Cir. 2013) (holding that a federal agency has no authority to exercise jurisdiction over 

subject matter reserved exclusively to another agency)]. Commenters stated that, at a minimum, 

given the demarcation of authority adopted in the FPA and Congress' decision to limit the role of 

the federal government in regulating electricity markets, Section 111(d) cannot be read as giving 

EPA authority to mandate a fundamental restructuring of those markets, as the proposed rule 

seeks to do. 

Commenters stated that ERCOT is the only ISO in the country that is wholly contained within 

one state and is not synchronously interconnected to the remainder of the US. Commenters stated 

that ERCOT is unique among the nation's ISOs in that it is subject to very limited and specific 

jurisdiction by FERC under the FPA. Commenters stated that transmission of electric energy 

occurring wholly within ERCOT is not subject to FERC's rate setting authority under FPA 

Sections 205 or 206 nor is it subject to FERC's sale, transfer and merger authority under Section 

203 of the FPA (see: http://www.ferc.gov/industries/electric/indus-act/rto/ercot.asp). 

Commenters stated that pursuant to FPA Section 215, FERC does have jurisdiction to establish 

and enforce reliability standards for users of the bulk power system within ERCOT. Commenters 

stated that under FPA Sections 210, 211 and 212, FERC has limited jurisdiction to order certain 

entities within ERCOT to interconnect and provide transmission service. Commenters stated that 

historically, FERC orders issued under FPA Section 212 that are applicable to entities in ERCOT 

have expressly stated that the utilities in ERCOT that are not currently public utilities under the 

FPA will not become public utilities and therefore subject to FERC jurisdiction for any purpose 

other than carrying out the provisions of FPA Sections 210, 211 and 212 [see e.g., Kiowa Power 

Partners, LLC, 99 FERC Para 61,251 (May 31, 2002).]

Commenters stated that provisions of the FPA also generally do not apply to the U.S. and federal 

agencies (including federal power marketing administrations), states and municipalities and their 

agencies (including state and local public power utilities), and most rural electric cooperatives.

Commenters stated that FERC has no authority to order the construction of generation facilities, 

and has only very limited authority regarding construction of transmission facilities. Commenters 

said, with the exception of licensing hydro facilities, FERC also has no authority to address the 

siting of generation facilities. Commenters also stated that DOE has virtually no regulatory 

authority over utility generating, dispatch or customer business practices outside emergency 

situations [see Section 202 of the FPA]. Commenters stated the DOE also has limited authority 

to try to expedite the siting of utility facilities on federal land or otherwise requiring a federal 

approval [see FPA section 216(h)]. Finally, commenters stated that DOE establishes efficiency 

standards for utility transformers and for many electric powered customer appliances [see 
221

generally Title III, Part B of the Energy Policy and Conservation Act of 1975, Pub. L. 94-163], 

but DOE has no authority to require the purchase and use of such equipment.

Commenters stated that the Definition of BSER impermissibly intrudes into wholesale electricity 

markets. Commenters said states do not have the authority to promulgate the laws and 

regulations that would be necessary to achieve the full redispatch, and associated emissions 

reductions, anticipated under Building Block 2. Commenters said the regulatory scheme 

governing the transmission and sale of power is a complex combination of both state and Federal 

law. Commenters said the FPA embodies Congress' attempt "to reconcile the claims of federal 

and local authorities and to apportion federal and state jurisdiction over the industry." 

Commenters said under the FPA, FERC has exclusive jurisdiction over "the transmission of 

electricity in interstate commerce and the sale of such energy at wholesale in interstate 

commerce." Commenters said states retain jurisdiction only over retail sales of electricity, 

generating facilities, facilities used for local distribution, and facilities used for transmission of 

energy wholly consumed by the transmitter. Commenters said the Federal scheme "leaves no 

room either for direct state regulation of the prices of interstate wholesales of [energy], or for 

state regulations which would indirectly achieve the same result." 

Commenters stated that the outside-the-fence provisions of the proposed guidelines are based on 

novel legal theories that could change the scope of air regulation more than any prior act of 

Congress because commenters believed that the proposal primarily relied on demand-side energy 

efficiency measures that lower demand for electricity and measures that mandate electricity 

system operators to dispatch EGUs powered by natural gas and renewable resources prior to 

dispatching EGUs that burn coal. Commenters asserted that the proposal contravenes section 310 

of the Clean Air Act which states that the Act "shall not be construed as superseding or limiting 

the authorities and responsibilities, under any other provision of law, of ... any other Federal 

officer, department, or agency[,]" but commenters believed that is exactly what the proposed 

guidelines are attempting to do by superseding the authorities over electricity regulation granted 

by Congress to the United States Department of Energy, and particularly the Federal Energy 

Regulatory Commission (FERC). Commenters asserted that FERC, through its oversight of the 

North American Electric Reliability Corporation (NERC), is responsible for ensuring the 

reliability, security, and adequacy of the U.S. bulk power system. 

Response 23: We disagree that we are expanding our authority to include wholesale energy 

market regulation or state retail regulation. The EPA is not interfering with the FERC’s exclusive 

authority under Federal Power Act sections 205 and 206 to regulate interstate transmission and 

wholesale sales of electric energy. Our emission guidelines simply reflect an achievable 

emissions limit through the application of the BSER and do not in themselves require states or 

sources to implement the BSER. Moreover, these emission guidelines provide states with the 

flexibility to establish, implement, and enforce standards of performance and do not intrude on 

the regulatory domain of FERC or the states. It cannot be said that because environmental 

requirements may have an effect on the wholesale energy or retail energy markets that the EPA 

is therefore intruding into energy regulation. Certainly, in the legislative history of the 1970 
222

CAA Amendments, Congress expressly identified power plants as a priority source category for 

regulation under CAA section 111. Additionally, we note that we are not including building 

block 4 – demand-side energy efficiency – as a component of the building blocks. Additionally, 

we note that the final rule does not require FERC or states to exercise jurisdiction over entities or 

areas over which it does not have jurisdiction. 

We disagree with commenters that the final rule requires environmental dispatch. Instead, the 

potential to shift generation identified in building block 2 is entirely consistent with the existing 

economic dispatch protocols. Environmental policies can shift generation in two ways. The first 

is operational restrictions, such as permit limits on the number of hours that an EGU can operate 

in order to limit emissions. The second is changes in the relative costs of generation among 

different types of affected EGUs related to pollution reduction measures. For example, a 

regulation that necessitates the use of a control technology that requires the application of a 

reagent in a certain kind of EGU will increase the variable cost of operating that plant, which in 

turn may reduce the amount of generation it is called upon to deliver to the grid through securityconstrained economic dispatch procedures. This is consistent with the principle of economic 

dispatch. Further, we are not requiring states and affected EGUs to implement building block 2, 

or any of the building blocks for that matter, in order to meet the final rule requirements. 

Therefore, the EPA is not interfering with FERC’s exclusive jurisdiction under FPA sections 205 

and 206 by regulating interstate transmission and wholesale sales of electric energy.

Further, there are many actions that states can take to fulfil the 111(d) final rule requirements 

without running afoul of FERC’s exclusive jurisdiction over wholesale electricity rates under the 

Federal Power Act to regulated interstate transmission and the wholesale sale of electric 

energy.

14

Commenters assert that the final rule conflicts with the voluntariness requirement of Section 

202(a) of the FPA, intrudes into an area of FERC authority, and constitute an unlawful EPA 

attempt to exercise even greater power over the coordination of transmission and sale of 

electricity than the FPA gives to FERC. Commenters claim that the final rule intrude on FERC’s 

jurisdiction under FPA section 202(a) by promoting the development of state plans for the 

coordinated operation and dispatch of EGUs and by specifying rules to govern the development 

and evaluation of such plans. We disagree. While we believe that multi-state approaches can lead 

 

14 See, e.g., Brief for the United States and the Federal Energy Regulatory Commission as Amici 

Curiae, at 17-20, PPL Energy Plus, LLC v. Solomon, No. 13-4330 (3rd Cir. filed Mar. 20, 2014) 

(citations omitted) (providing examples of valid state actions including the ability of states to 

“`use any resource they wish to secure the capacity they need’”, the ability “of states to promote 

particular generation resources as a legitimate policy interest within their jurisdiction”, state 

actions “directing the planning and resource decisions of electric utilities under its jurisdiction”, 

and the ability of states to “subsidize particular resources provided the implementation of the 

subsidy does not interfere with the Commission’s statutory responsibility to maintain the reliable 

operation of wholesale energy markets at just and reasonable rates”). 
223

to more efficient implementation with lower compliance costs for affected EGUs and lower 

impacts on electricity ratepayer, the final rule does not require multi-state plans. We view the 

ability of a state to implement an individual plan or a multi-state plan as a significant flexibility 

that allows a state to tailor implementation of its state policy objectives and circumstances. In 

fact, the final rule makes clear that participation on multi-state plans is voluntary. States have 

flexibility to determine how they will design their state plans – whether that be on an individual 

state basis or participating in a regional effort. We do not agree with commenters that the rule, as 

a practical matter, effectively requires multi-state coordination nor do we agree that the final rule 

expands the scope of existing RTO dispatch. The final rule sets emission limits by apply the 

BSER. It is up to state and affected EGUs to determine how to meet the rule’s requirements. 

There are no requirements that they utilize the building blocks to do so. There is no requirement 

that they change their market structures or expand RTOs to do so. For a comprehensive 

discussion of how affected EGUs can implement the building blocks see the preamble section V 

and the Legal Memorandum. We discuss the multi-state plan issue in greater detail in preamble 

section VIII.C.5.

Further, we disagree with commenters that EPA is intruding on FERC’s authority under FPA 

section 215 to ensure bulk power system reliability. The EPA is setting achievable emission 

limits. We are not asserting authority over issues that Congress has exclusively reserved for 

another. As noted in the final rule preamble, EPA officials worked closely with DOE and FERC 

officials to ensure, to the greatest extent possible, that actions taken by states and affected EGUs 

to comply with the final rule mitigate potential electric system reliability issues. Senior EPA 

officials met with each of the FERC Commissioners and EPA staff had frequent contact with 

FERC staff throughout the development the rule. FERC held four technical conferences to 

discuss implications of compliance approaches to the rule for electric reliability, infrastructure, 

and electricity markets. EPA staff attended the four conferences and EPA leadership spoke at all 

of them. The EPA, DOE, and FERC will continue to work together to ensure electric grid 

reliability in the development and implementation of state plans. The EPA has considered the 

input of FERC, DOE, and multiple stakeholders regarding reliability, infrastructure, and market 

issues as it developed the final rule. For a more comprehensive discussion of reliability issues, as 

well as the EPA’s coordination with both FERC and DOE, please see preamble section VIII.G.2. 

For a discussion of infrastructure and market issues, please see preamble section V and the GHG 

Mitigation Measures TSD. Finally, we note that the agency has addressed concerns about time 

needed to develop state plans and meet interim performance levels. Thus, with initial submittals, 

all states will have until September 6, 2018 to submit final plans, and the interim performance 

period will not begin until 2022. Additionally, the final rule adjusts the interim goals to provide a 

gradually phased-in initial reduction requirement and a more gradual glide path to the final 2030 

goals. This more gradual application of the BSER over the 2022-2029 interim period provides 

the state with substantial latitude in selecting the emission reduction glide path for affected 

EGUs over that period.
224

Comment 24: Commenters stated that the EPA's proposal encroaches on FERC's authority to 

regulate interstate transmission and wholesale sale of electric energy.

Commenters believed that EPA did not give enough consideration and deference to the role of 

the FERC, FERC's FPA-imposed authority, the functioning of wholesale capacity markets, and 

the potential for the proposal, if implemented, to undermine the effective operation of organized 

wholesale electricity markets. Commenters stated that the Proposal reflects fundamental 

misunderstandings of FERC-regulated wholesale electricity markets in RTO regions and the bulk 

power system. In developing the Proposal, commenters stated, EPA failed to consider the legal 

implications of ISOs and RTOs dispatch, all the associated rules and requirements, and the 

complexity of changing all the rules to accommodate environmental dispatch instead of 

economic dispatch.

Commenters stated that neither the preamble nor the Legal Memorandum attempted to reconcile 

the obvious conflicting directive contained within the EPA proposal and the authority conferred 

on the FERC under the FPA. Commenters also stated that the proposed regulation fails to 

provide states with meaningful guidance on how to reconcile the federal environmental 

requirements of the proposed regulation that conflict with federally approved markets, 

ratemaking standards, and reliability requirements implemented under the FPA.

Commenters stated that the proposal interferes with FERC's jurisdiction by promoting the 

development of multi-state plans to implement EPA's environmental dispatch policies in regions 

effectively established by EPA based on other criteria and by specifying rules to govern the 

development and evaluation of such plans. Commenters claimed that the EPA cannot exercise 

greater power to force regional coordination than the FPA allows FERC, nor can it indirectly 

render mandatory regional coordination that the Congress has otherwise determined must remain 

a purely voluntary state option. Commenters stated that FERC's Section 202(a) authority to 

"divide the country into regional districts" is for the "voluntary coordination" of generation 

facilities in utility operations. Commenters stated that to the extent the Proposed Rule requires 

the regional, coordinated operation of FERC-regulated generation facilities, EPA would be 

supplanting Congress' judgment that these matters be left to administration by FERC.

Commenters claimed that the proposal, particularly requirements to shut down significant 

amounts of installed capacity and pushing capacity far below target reserve margins, would place 

states and electric generators in direct conflict with responsibilities under the FPA and in direct 

conflict with FERC.

Commenters stated that any state action that EPA includes in its redefinition of BSER that 

directly or indirectly modifies the way that electricity is sold at wholesale or transmitted in 

interstate commerce could impermissibly intrude on FERC's exclusive jurisdiction and is 

inconsistent with the Supremacy Clause of the Constitution [see Mississippi Power & Light Co. 

v. Mississippi, 487 U.S. 377 (1988). ("Consequently, a state agency's 'efforts to regulate 

commerce must fall when they conflict with or interfere with federal authority over the same 
225

activity.'" Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 318-

319 (1981))]. Commenters stated that the rates, terms, and conditions of power sales and service 

provided in FERC-regulated wholesale markets (both ISO/RTO and non-ISO/RTO) constitute 

FERC-approved tariffs. Commenters stated that the "Filed Rate Doctrine" provides that a utility 

must strictly adhere to the rates, terms, and conditions for service that were filed with and 

approved by FERC [see Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953, 963 (1986)]. 

Commenters stated that under the Filed Rate Doctrine, only rates that have been fixed or 

accepted by FERC may be charged; not even the state or federal courts can authorize a utility to 

charge a different rate [see Nantahala Power & Light Co. v. Thornburg, 476 U.S. 963 (1986)]. 

Therefore, commenters stated, any attempt by the states to force specific utilities and/or 

generators to depart from the dispatch and curtailment provisions in their FERC-approved tariffs 

and service agreements to comply with a state-mandated environmental dispatch will be an 

impermissible intrusion on FERC's authority.

Commenters stated that in South Carolina Public Service Authority v. FERC, 762 F.3d 41, 59 

(D.C. Cir. 2014) (per curiam), the court held that FERC's mandatory transmission planning 

reforms under Order No. 1000 were lawful because section 202(a) only governed the 

"coordinated operation of existing transmission facilities, not to the planning of future facilities" 

and was "textually limited to coordination for purposes of generation, transmission and sale, all 

activities that require operating facilities." Commenters stated that the decision thus affirmed that 

Section 202(a) does not permit FERC to impose greater involuntary coordination involving 

existing facilities, such as operational EGUs.

Commenters stated that the CPP would also impermissibly interfere with FERC-approved 

generation dispatch and re-dispatch rules in these RTO regions; in these regions, which 

encompass nearly two thirds of the load in the U.S., the dispatch of generation resources is 

largely governed by RTO operating rules and RTO tariffs that are on file with FERC as required 

by Section 205 of the FPA and subject to modification by FERC under Section 206 of the FPA 

[see, e.g., Security Constrained Economic Dispatch: Definition, Practices, Issues, and 

Recommendations: A Report to Congress Regarding the Recommendations of Regional Joint 

Boards for the Study of Economic Dispatch Pursuant to Section 223 of the FPA, FERC (July 31, 

2006) (describing existing dispatch regimes, their emphasis on security-constrained economic 

dispatch, and the role of RTOs in administering them)]. According to the commenters, building 

block 2 requires "environmental dispatch" of generation from higher emitting sources to favor 

"EGUs with expanded low- or zero-carbon generation". Commenters noted that the Proposed 

Rule states that EPA has determined that environmental dispatch is feasible and that its costs are 

reasonable. But, according to the commenters, under Sections 205 and 206 of the FPA, FERC 

must determine if practices that significantly affect the price of its jurisdictional wholesale and 

transmission services are just and reasonable, and EPA has no role to play and cannot create one 

for itself.

Commenters stated that proposed Building Block 2 interferes with FERC's authority under 

Sections 205 and 206 in several critical ways, including by effectively determining that the price 
226

increases necessary to achieve a seventy percent NGCC utilization rate would be “just and 

reasonable,” requiring changes to the dispatch and redispatch rules approved by FERC; only 

FERC has authority to modify (or approve modifications). 

Commenters stated that Building Block 2 would also require changes to the dispatch and 

redispatch rules applicable to EGUs. Commenters stated that EPA fails to consider the legal 

implications of the fact that ISOs and RTOs dispatch EGUs and other resources pursuant to 

voluminous and detailed rules filed with FERC under Section 205 [see, e.g., FERC, Security 

Constrained Economic Dispatch: Definition, Practices, Issues, and Recommendations: A Report 

to Congress Regarding the Recommendations of Regional Joint Boards for the Study of 

Economic Dispatch Pursuant to Section 223 of the FPA As Added by Section 1298 of the Energy 

Policy Act of 2005 (July 31, 2006) (describing existing dispatch regimes, their emphasis on 

security-constrained economic dispatch, and the role of ISOs and RTOs in administering them), 

available at http://www.ferc.gov/industries/electric/indus-act/joint-boards/final-cong-rpt.pdf; 

Section III of the ISO New England Inc. Transmission, Markets, and Services Tariff ("Market 

Rule 1") ("govern[ing] the operation of New England's wholesale electricity markets and 

includes detailed information on pricing, scheduling, offering, bidding, settlement, and other 

procedures related to the purchase and sale of electricity"), available at http://www.isone.com/participate/ rules-procedures/tariff/market-rule-1].

Commenters stated that FERC-approved RTO dispatch rules may be amended only by: (1) the 

RTOs, which must voluntarily submit amendments and persuade FERC to accept them under the 

standards of section 205; or (3) by FERC, on its own initiative or in response to a third party 

complaint, under section 206. Commenters stated that EPA and individual states have no 

authority to modify these dispatch rules. Commenters asserted that states also may not compel 

utilities, including ISOs and RTOs, to make involuntary section 205 filings [see, e.g., Atl. City 

Elec. Co. v. FERC, 295 F.3d 1 (D.C. Cir. 2002)]. Commenters stated that the Guidelines directly 

invade FERC's core jurisdictional function by effectively determining that the price increases 

necessary to achieve a seventy percent NGCC utilization rate would be "just and reasonable." 

Commenters contended that this determination is for FERC, not EPA, to make.

Commenters also stated that EPA has ignored the fact that modifying redispatch rules to provide 

for the "environmental redispatch" contemplated by Building Block 2 would necessitate 

fundamental changes to existing ISO and RTO dispatch procedures that could conflict with 

FERC policies and with FERC's FPA authority. 

Commenters also stated that the CPP imposes a system of environmental dispatch that negates 

states' long-held prerogative to rely on economic dispatch. Commenters claimed that this would 

affect wholesale rates in contravention of FERC's exclusive authority.

Commenters recognized the lack of analysis that EPA employed. Commenters quoted FERC 

Commissioner Tony Clark that "EPA's self-determined role as an environmental dispatcher of 
227

energy in a wholesale energy marketplace has placed FERC and EPA on track for a 

jurisdictional 'train wreck' absent Congressional intervention."

Commenters stated that EPA has no authority to modify RTO tariffs or generation-dispatch rules 

[see, e.g., Atlantic City Electric Co. v. FERC, 295 F.3d 1 (D.C. Cir. 2002)], but that is precisely 

what the Proposed Rule attempts to do through building block 2. Commenters stated that these 

are regulatory determinations that only FERC can make under the FPA with respect to FERCjurisdictional RTOs. 

Commenters stated that the same legal considerations apply to FERC-jurisdictional public 

utilities that have not transferred control of their transmission facilities to an RTO (i.e., 

principally utilities in the southeastern and western states). Commenters stated that these utilities 

provide transmission service under tariffs that are modeled closely on FERC's pro forma openaccess transmission tariff (OATT) [see Preventing Undue Discrimination and Preference in 

Transmission Service, Order No. 890, FERC Stats. & Regs. - 31,241, order on reh'g, Order No. 

890-A, FERC Stats. & Regs. 31,261 (2007), order on reh'g, Order No. 890-B, 123 FERC -

61,299 (2008), order on reh'g, Order No. 890-C, 126 FERC 61,228, order on clarification, Order 

No. 890-D, 129 FERC - 61,126 (2009) (establishing the current version of the pro forma OATT 

used by most FERC-jurisdictional utilities that are not participating in RTOs)]. The commenters 

stated that non-RTO tariffs also include provisions governing redispatch of EGUs, and the 

curtailment of transmission customers, in certain situations [see, e.g., Id. sections 13.3, 13.6, 

15.4, 27, 30.5, and 33]. Commenters stated that, like RTO tariffs, non-RTO tariffs are filed with, 

and approved by FERC, and can be amended only by the filing public utilities or by FERC - not 

EPA or state regulators - under Sections 205 or 206; and the generation portfolios of these public 

utilities, and the dispatch of the units in these portfolios to provide retail service, are subject to 

comprehensive oversight by state utility regulatory authorities - not by state environmental 

officials and not by EPA.

Commenters stated the proposal would conflict with the voluntariness requirement of Section 

202(a) of the FPA, intrude into an area of FERC authority, and constitute an unlawful EPA 

attempt to exercise even greater power over the coordination of transmission and sale of 

electricity than the FPA gives to FERC.

Commenters stated that aspects of the proposed rule, including proposed Building Block 2, 

represent an unprecedented intrusion by EPA into areas that the FPA has made exclusively 

subject to FERC's jurisdiction. Commenters claimed that because of FERC's exclusive 

jurisdiction, many states will be unable to achieve the EPA's estimates of possible reductions 

under building block 2 without adopting laws and regulations that impermissibly intrude upon 

the exclusive jurisdiction of FERC.

Commenters stated that the proposed rule directly conflicts with FERC's regulatory authority and 

gave examples, including : 1) building block 2, which provides for EGU carbon emissions 

reductions through re-dispatch conflicts with the FPA because it effectively determines that the 
228

price increases needed to achieve a 70% NGCC utilization rate would be "reasonable" but the 

EPA lacks the authority to make this decision; and 2) building block 2 would require changes to 

the dispatch/redispatch rules applicable to EGUs, but these can only be amended as provided 

under the FPA. Commenters claimed that the proposal would require a significant change to 

dispatching based on environmental considerations rather than the least-cost economic dispatch 

rules.

Commenters stated that by building a 70% capacity factor into state targets, the EPA has stepped 

into an arena that is dedicated to the states and FERC by the FPA. Also, commenters stated that 

the FPA creates a significant role for FERC, but not for EPA.

According to the commenters, Building Block 2 represents an attempt by EPA to substitute its 

judgment for that of the competitive market on which generation plants should be utilized in 

ERCOT; commenters urged that EPA has no authority under the CAA to require this. 

Commenters stated that in the non-ERCOT areas of the state, the wholesale rates of electric 

utilities operating in Texas are market-based, but are subject to the oversight of FERC. 

Commenters stated that EPA similarly lacks authority to usurp FERC's authority over the 

wholesale rates of utilities operating in the non-ERCOT portions of Texas. Commenters stated 

that the retail rates of non-ERCOT utilities are set by the PUCT based on traditional cost of 

service principles. Commenters stated that Building Block 2 also conflicts with current Texas 

law that requires utilities to provide power to their customers at a just and reasonable rate [see 

Tex. Util. Code Ann. Section 36.003 (West 2007 & Supp. 2014)].

Commenters stated that even if EPA's proposed overhaul of RTO dispatch mechanisms were 

technically feasible, it could be approved only by FERC, not mandated by EPA or by states 

acting at EPA's behest. Commenters stated that FERC, not EPA, would have to conclude that 

environmental dispatch is just, reasonable, and not unduly discriminatory; commenters stated 

that the Proposed Guidelines' usurpation of these decisions from FERC interferes with the 

authority given to FERC by Congress in the FPA.

Response 24: We disagree with commenters. As an initial matter, the final rule does not 

interfere with federal wholesale energy market regulation or state retail regulation. As we explain 

in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an achievable 

emissions limit through the application of the BSER and do not in themselves require states or 

sources to implement the BSER. Further, the final rule does not require entities to utilize 

environmental dispatch in electricity markets. Instead, the potential to shift generation identified 

in building block 2 is entirely consistent with the existing economic dispatch protocols. 

Environmental policies can shift generation in two ways. The first is operational restrictions, 

such as permit limits on the number of hours that an EGU can operate in order to limit emissions. 

The second is changes in the relative costs of generation among different types of affected EGUs 

related to pollution reduction measures. For example, a regulation that necessitates the use of a 

control technology that requires the application of a reagent in a certain kind of EGU will 

increase the variable cost of operating that plant, which in turn may reduce the amount of 
229

generation it is called upon to deliver to the grid through security-constrained economic dispatch 

procedures. This is consistent with economic dispatch. 

The EPA is responsible for determining the level of emission limitation from the source 

category, while states have the responsibility of assigning emission requirements to their sources 

that will ensure their achievement of that level of emission limitation. States may fulfil their 

responsibility by establishing emission standards or creating plans consistent with the guidelines. 

In doing so, states will be able to choose from a wide range of emission reduction measures, 

including measures that are not part of the BSER.

Commenters assert that the final rule conflicts with the voluntariness requirement of Section 

202(a) of the FPA, intrudes into an area of FERC authority, and constitute an unlawful EPA 

attempt to exercise even greater power over the coordination of transmission and sale of 

electricity than the FPA gives to FERC. Commenters claim that the final rule intrude on FERC’s 

jurisdiction under FPA section 202(a) by promoting the development of state plans for the 

coordinated operation and dispatch of EGUs and by specifying rules to govern the development 

and evaluation of such plans. We disagree. While we believe that multi-state approaches can lead 

to more efficient implementation with lower compliance costs for affected EGUs and lower 

impacts on electricity ratepayer, the final rule does not require multi-state plans. We view the 

ability of a state to implement an individual plan or a multi-state plan as a significant flexibility 

that allows a state to tailor implementation of its state policy objectives and circumstances. In 

fact, the final rule makes clear that participation on multi-state plans is voluntary. States have 

flexibility to determine how they will design their state plans – whether that be on an individual 

state basis or participating in a regional effort. We do not agree with commenters that the rule, as 

a practical matter, effectively requires multi-state coordination nor do we agree that the final rule 

expands the scope of existing RTO dispatch. The final rule sets emission limits by apply the 

BSER. It is up to state and affected EGUs to determine how to meet the rule’s requirements. 

There is no requirements that they utilize the building blocks to do so. There is no requirement 

that they change their market structures or expand RTOs to do so. For a comprehensive 

discussion of how affected EGUs can implement the building blocks see the preamble section V 

and the Legal Memorandum. We discuss the multi-state plan issue in greater detail in preamble 

section VIII.C.5.

Comment 25: Commenters argued the CPP would require Montana lawmakers to enact energy 

laws, which is forbidden by the Federal Power Act.

Commenters stated this subsection explains how the rule's unprecedented reach extends past 

Montana's utilities and even beyond the Public Service Commission - all the way the state 

legislature. Commenters added indeed, if finalized in its current form, EPA's Clean Power Plan 

would require Montana lawmakers to enact energy laws that mandate the usage of certain types 

of energy and services in the retail electricity market.
230

Commenters stated Montana's Clean Power Plan target is based on the assumption that the state's 

utilities would achieve 1.5 percent annual reductions in demand. Commenters stated of course, 

state regulators do not possess an independent basis of authority to require minimum amounts of 

energy savings; rather, the Montana legislature must delegate such authority to state regulators. 

Commenters stated currently, they do not possess such a delegation. Commenters concluded 

because the energy efficiency goals established by the Clean Power Plan have no statutory basis 

in Montana, the rule almost certainly would require the state legislature to enact enabling 

legislation.

Commenters added notably, the D.C. Circuit recently struck down a FERC order that indirectly 

regulated utility energy efficiency programs, because the program violated the states' exclusive 

jurisdiction over retail electricity markets. Electric Power Supply Association v. FERC, 

WL___(D.C. Cir. May 23, 2014). Commenters stated by contrast, EPA's Clean Power Plan 

asserts direct authority over Montana's energy efficiency program, as is made clear in a technical 

support document attendant to the rule: the EPA is proposing that states be authorized to submit 

state plans that do not impose legal responsibility on the affected EGUs for the entirety of the 

emission performance level, but instead, by adopting what this preamble refers to as a "portfolio 

approach," impose requirements on other affected entities - e.g., renewable energy and demandside energy efficiency measures - that would reduce CO2 emissions from the affected EGUs. 

[Formatting added] Legal Memorandum for Proposed Carbon Pollution Emission Guidelines for 

Existing Utility Generating Units, at 16.

Commenters stated of course, EPA's de facto requirement that Montana enact energy laws is 

expressly forbidden by the Federal Power Act. Commenters stated and until the proposed Clean 

Power Plan, the agency never has attempted to use the Clean Air Act to compel States to pass 

energy statutes. Commenters concluded furthermore, it is wholly unclear how the agency would 

exercise this claimed jurisdiction - i.e., the authority to require Montana lawmakers to enact 

energy statutes - were the agency to impose a Clean Air Act section 111(d) federal 

implementation plan.

Response 25: We disagree that this rule is inconsistent with the Federal Power Act as we are not 

expanding our authority to include wholesale energy market regulation. Our emission guidelines 

simply reflect an achievable emissions limit through the application of the BSER and do not in 

themselves require states or sources to implement the BSER. Moreover, these emission 

guidelines provide states with the flexibility to establish, implement, and enforce standards of 

performance and do not intrude on the regulatory domain of FERC or the states. It cannot be said 

that because environmental requirements may have an effect on the wholesale energy market that 

the EPA is therefore intruding into energy regulation. Certainly, in the legislative history of the 

1970 CAA Amendments, Congress expressly identified power plants as a priority source 

category for regulation under CAA section 111. We also disagree that we requiring states to 

pass energy statutes that are inconsistent with the Federal Power Act or FERC’s exclusive 

jurisdiction over wholesale electricity rates.
231

Moreover, EPA is not finalizing the proposed “portfolio” approach, and will not accept state 

plans that attempt to impose emission standards or other CAA compliance obligations on entities 

other than affected EGUs. The state measures approach provides a path for a state to achieve the 

emission performance level as expressed as a state goal in a way that avoids placing enforceable 

emission standards on affected EGUs (unless and until the backstop is triggered). States will 

have a wide range of flexibility in choosing how to demonstrate their affected EGUs are meeting 

a state goal.

Also, as discussed in section V.B., the BSER does not include demand-side energy efficiency 

measures, which were proposed as building block 4.

Comment 26: Proposed CPP does not regulate state energy markets.

Commenters asserted that the Clean Power Rule would not "federalize" state regulation of utility 

markets, as some commenters have suggested. Commenters said that fundamentally, the concern 

expressed over EPA considering energy efficiency and renewable energy in setting state goals 

fails to differentiate between the federal government "influencing" state energy policy and the 

federal government "regulating" in areas reserved for the states. While it is true that states 

exercise authority to regulate generation and distribution for their state markets, the commenters 

asserted that states exercise that authority within a broader federally-regulated interstate market. 

Commenters added that state authority already is constrained by the requirements of federal law, 

and the Proposed Rule would not alter the relationship between the federal and state government 

with respect to regulation of electricity generation. Commenters noted that generators currently 

have to comply with federal and state environmental laws, including the Clean Air and Clean 

Water Acts, and states must devise plans to implement federal environmental laws with respect 

to a variety of criteria pollutant sources, including power plants. Commenters further noted that 

several recent federal court decisions have determined that FERC has the sole authority to 

regulate the wholesale electricity market. Commenters said that economic dispatch decisions 

already reflect environmental regulatory mandates, and that electricity markets also already 

integrate state and regional environmental requirements into their economic dispatch. 

Commenters also noted that states consider federal environmental requirements when making 

decisions about electricity generation, and that many states use integrated resource planning

(IRP), which often requires utilities, for purposes of long term planning to meet projected energy 

demand, to consider the costs for energy sources to comply with existing and potential future 

environmental regulations, demand side options, and/or environmental impacts associated with 

energy sources. 

Response 26: We appreciate commenters’ comment. We agree that the final rule would not 

“federalize” state regulation of utility markets.

Comment 27: Comments stating that the proposed rule goes beyond any federal agency's 

authority or expertise because of regional imbalance. 

Commenters said that, the Proposed Rule goes beyond any federal agency's authority or 

expertise because of regional imbalance. Commenters said, the cap-and-trade-like system that 
232

the Proposed Rule would mandate requires balancing a multitude of interests well beyond EPA's 

charge of addressing environmental impacts of specific emissions. Commenters said that, 

Congress has the sole power to authorize and debate issues that implicate state's rights, energy 

planning and policy, and our national interests with respect to other countries. 

Commenters said that, the Proposed Rule and the Waxman-Markey bill were pushed by states 

that do not generate electricity from coal-fired plants. Commenters said, such policies are not in 

the best interests of a majority of states, which is why the Waxman-Markey bill was not passed 

by Congress several years ago. Commenters said that if EPA presented this Proposed Rule to 

Congress, it too would not pass. Commenters said the Proposed Rule ignores the policy-making 

process. Commenters said EPA's proposal should be submitted to Congress for its consideration 

and debate, not unilaterally imposed by an unelected agency.

Response 27: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 28: Commenters argued that Congress did not empower EPA to determine the 

appropriate products, producers, or level of consumption as part of its authorities under the CAA, 

and Congress did not empower EPA to regulate the energy marketplace for the purpose of 

regulating emissions. Commenters argued that the decisions on the dispatch of specific EGUs 

and other measures affecting energy consumption, such as programs to require energy efficiency 

or propose generation from renewable sources (i.e., measures in building blocks 2 to 4), are 

beyond the control of the individual EGU operator. 

Response 28: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

We disagree with commenters’ characterization of our proposal and note that we have excluded 

building block 4 from the final BSER.

1.4 COMBINED CATEGORIES AND CODIFICATION IN THE CFR

Comment 1: Commenters said EPA correctly states that it has clear legal authority to 

consolidate or reorganize an already-listed source category without making new regulatory 

findings that would be required for the listing of an entirely new source category under section 

111(b)(1). Commenters noted that Section 111(b)(1)(A) directs EPA to publish, "and from time 

to time thereafter revise," a list of stationary source categories that in the Administrator's 

judgment cause or significantly contribute to pollution that endangers public health and 

welfare. Apart from the finding of endangerment required for the listing of a new, not 

previously-listed source category, commenters believed the statute places no particular limits on 

EPA's authority to "revise" the list of stationary sources over time, adding that EPA's proposed 
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consolidation of the source categories for steam electric generating units and fossil fuel-fired 

combustion turbines would neither expand nor otherwise alter in any way the universe of sources 

comprising those source categories, and would therefore not constitute the listing of a new 

source category, nor would it somehow alter the predicate endangerment finding that EPA made 

when it originally listed both source categories in the 1970's. (Although the statute does not 

require that EPA make a new finding of endangerment when regulating additional pollutants 

from an already-listed source category, EPA has provided more than ample evidence to support 

such a finding in its pending proposals to regulate carbon pollution from new and existing 

EGUs.)

Response 1: The EPA agrees that it has the legal authority to consolidate or re-organize already 

listed source categories without making the findings required to list new categories under section 

111(b)(1)(A). EPA does not, however, consider such consolidation or reorganization of already 

listed categories to be a “revision” to the list under section 111(b)(1)(A). Instead, the EPA 

considers any such consolidation or reorganization as part of its authority to establish standards 

under section 111(b)(1)(B). Section 111(b)(1)(B) does not specify that EPA must establish 

standards for the listed “source category.” Instead, the requirement is to establish standards for 

“new sources” within the listed categories. EPA concludes that this phrasing focusing on the 

sources rather than the source categories provides EPA with the flexibility to establish standards 

for new sources within groups that consolidate or reorganize the listed source categories where 

that is appropriate. EPA notes that the phrasing focusing on sources contrasts with the phrasing 

in CAA 129(a)(1), which expressly provides for EPA to establish standards and other 

requirements “for each category of solid waste incineration units.”

Comment 2: Commenters stated, the courts have held that this discretion gives EPA the ability 

to reasonably subcategorize, or not subcategorize, depending on the characteristics of the source 

category and pollutant at hand. (See Lignite Energy Council, 198 F.3d 930, 933 (D.C. Cir. 1999) 

(deferring to EPA's judgment that it was feasible and cost-effective to require all new utility 

boilers to meet the same NOx emission standards regardless of fuel type, despite past practice 

establishing varying NOx standards for different subcategories of units).) Commenters stated that 

this discretion should logically extend to the establishment of emission guidelines under section 

111(d). Commenters noted, indeed, nothing in the text of section 111(d) requires that standards 

for existing sources replicate the category framework into which EPA organizes new sources, so 

long as the sources covered by section 111(d) would be subject to "a standard of performance 

under this section [111]" if they were new sources. (42 USC - 7411(d)(1)(A)(ii)).

Response 2: The EPA agrees that the CAA and applicable case law support the Agency’s 

discretion to categorize and subcategorize (or not to) and that this discretion applies when EPA 

exercises its authority under section 111(d).

Comment 3: Further, commenters stated that EPA's 1975 Federal Register notice implementing 

section 111(d) also explicitly recognized that the categorization systems adopted under section 

111(b) and (d) need not be identical. (See 40 Fed. Reg. at 53,341 ("while there may be only one 

standard of performance for new sources of designated pollutants, there may be several emission 
234

guidelines specified for designated facilities based on plant configuration, size, and other factors 

peculiar to existing facilities.").) Commenters concluded that combining steam electric 

generating units and fossil fuel-fired combustion turbines into one source category under section 

111 would not limit EPA's authority to establish separate performance standards for distinct

subcategories of new and modified coal and natural gas-fired EGUs. Commenters supported this 

subcategorization approach in the rulemaking proposing standards for new EGUs, as well as the 

June 18, 2014 proposal for modified and reconstructed EGUs.

Response 3: EPA agrees with the commenters that the CAA provides EPA with significant 

flexibility as to how it may combine categories and subcategorize under sections 111(b) and 

111(d).

Comment 4: Commenters agreed that because the two categories are pre-existing, and EPA 

would not be subjecting any additional sources to regulation, that the combined category should 

not be considered a new category that EPA must list under Section 111(b)(1)(A). Therefore, 

commenters believed EPA should not be required to make a finding that the combined category 

causes or contributes significantly to air pollution which may be reasonably anticipated to 

endanger public health or welfare.

Response 4: The EPA agrees that it is not required to make a new listing decision, or otherwise 

invoke the provisions in section 111(b)(1)(A), to combine previously listed categories into a 

combined category.

Comment 5: Commenters stated that under section 111(b)(1)(A), EPA is expressly authorized 

(and in fact required) to "revise" those categories of sources subject to standards of performance 

under section 111. [42 U.S.C. section 7411(b)(1)(A)], and pursuant to this authority, and as 

described in EPA's 2012 proposed new source performance standards, EPA has already 

repeatedly revised its source categories for electric utility generating units. [77 Fed. Reg. 22392, 

22397 (Apr. 13, 2012)] 

Response 5: As noted above, EPA does not consider the consolidation or reorganization of 

existing categories that may occur when sources from those categories are regulated under 

section 111(b)(1)(B) as a “revision” to the list under section 111(b)(1)(A). The cited discussion 

in EPA’s 2012 proposed new source performance standards (at 77 FR 22392, 22397 (Apr. 13, 

2012) should not be read to suggest that it does. 

Comment 6: Commenters stated EPA's BSER unlawfully combines two source categories' fossil 

fuel-fired steam generating boilers and NGCC units. Commenters remarked that the plain 

language of Section 111, however, requires EPA to develop emission guidelines for existing 

sources based on the individual source category for those sources; there is nothing in the CAA 

that provides EPA with the authority to lump source categories together for the purpose of 

developing these emission guidelines. Commenters added that Section 111(b) of the CAA 

requires the administrator to establish "Federal standards of performance for new sources within 

such category" listed under Section 111(b)(1)(A), and based on the standards developed for new 
235

sources in that individual category, existing source standards can then be developed under 

Section 111(d) for the same category. Commenters specified that Section 111(d) requires states 

to develop plans which establish "standards of performance for any existing source for any air 

pollutant . . . to which a standard of performance under this section would apply if such existing 

source were a new source," and a plain reading of these provisions leads to the conclusion that 

new source and existing source standards are based on "such category" listed under Section 

111(b)(1)(A). Commenters concluded that a single emission standard and guideline cannot 

lawfully be developed for multiple source categories that are grouped together by EPA.

Response 6: As discussed above, the text in section 111(b)(1)(B) provides that EPA will 

establish standards for “new sources within such category” but does not mandate that the 

standards have to be set for the source category. EPA concludes that this phrasing focusing on 

the sources rather than the source categories provides EPA with the flexibility to establish 

standards for new sources within groups that consolidate or reorganize the listed source 

categories where that is appropriate.

Comment 7: Commenters stated that Section 111 does not authorize combining source 

categories into a single category for setting standards. 

Response 7: As discussed above, EPA concludes that the phrasing of section 111(b)(1)(B) 

focusing on the sources rather than the source categories provides EPA with the flexibility to 

establish standards for new sources within groups that consolidate or reorganize the listed source 

categories where that is appropriate. 

Comment 8: Commenters stated EPA has proposed new unit standards of performance for two 

source categories - fossil steam generating units and stationary combustion turbines (and 

particularly, NGCC facilities). Commenters believed EPA must issue a re-proposed Section 

111(d) regulation that mirrors the same two separate source categories.

Response 8: For the reasons discussed above and elsewhere, EPA disagrees that it must issue a 

re-proposed section 111(d) regulation to mirror the categories regulated under section 111(b).

Comment 9: Commenters stated that EPA aggregates disparate categories of stationary sources 

into a regulated entity that incorporates virtually all power plants, regardless of technology type 

or fuel source, and this action directly contravenes Section 111(d) implementing regulations 

requiring the agency to "subcategorize" within industries. Commenters explained that because 

the implementing regulations that mandate subcategorization are extant and therefore carry the 

force of law, EPA would have to amend them with a legislative rule before the agency could 

permissibly pursue its Clean Power Plan strategy of combining categories. Commenters 

continued, stating that until the agency does so, the proposed Clean Power Plan will remain 

impermissibly inconsistent with its underlying regulations. Commenters also stated that in 

promulgating 40 C.F.R. [Section]60.22(b)(5), it was the agency's avowed intent in to provide 

flexibility to States implementing [section]111(d) emissions guidelines by subcategorizing 
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within industrial classes. Commenters noted that this legislative rule has been neither amended 

nor rescinded since its promulgation. Commenters noted, as such, the "Executive Branch is 

bound by it, and indeed the United States as the sovereign composed of three branches is bound 

to respect and enforce it." U.S. v. Nixon at 697. Commenter added that crucially, the 111(d) 

implementing regulations define the applicability of existing source standards by referring to the 

applicability of new source standards. (Existing source standards apply to "designated facilities," 

which are defined by Section 60.21(b) as being "any existing facility (see [Section]60.2(aa)) 

which emits a designated pollutant and which would be subject to a standard of performance for 

that pollutant if the existing facility were an affected facility (see [Section]60.2(e))." 

Commenters noted, the references attendant to the definitions of both "existing facility" and 

"affected facility" direct the reader to the implementing regulations for new source standards. 

Commenters stated that an "affected facility" is "any [stationary source] to which a standard is 

applicable," while an "existing facility" is "any [stationary source] of the type for which a 

standard is promulgated in this part." Finally, as commenters noted, the definition of "standard" 

is "a standard of performance proposed or promulgated under this part" (i.e., the New Source 

Performance Standards).) Accordingly, commenters remarked, because the Carbon Pollution 

Standards apply to subparts Da and KKKK, the Clean Power Plan can apply no more broadly 

than to subparts Da and KKKK, and from there, the [Section]111(d) implementing regulations 

require EPA to "subcategorize" when appropriate, but there is no such authorization for 

aggregating categories. Commenters summarized, stating that the [Section]111(d) implementing 

rules grant EPA's only one option: subcategorizing within subparts Da and KKKK. Instead, the 

agency amalgamated these subparts into a meta-category, known as "affected EGUs." 

Commenters continued, stating that the EPA is required to address the Clean Power Plan's 

incompatibility with its underlying implementing, by either amending or rescinding 40 C.F. R. 

[Section]60.22(b)(5), and in so doing, the agency is required to conduct a legislative rulemaking 

and also to provide a "reasoned analysis." Commenters argued that until such actions are 

performed, the Clean Power Plan's inconsistency with the [Section] 111(d) implementing 

regulations evidences arbitrary and capricious decision making by the EPA.

Response 9: EPA’s authority to subcategorize within a source category consistent with the CAA 

and EPA’s implementing regulations does not limit or impact EPA’s discretion to combine 

categories. As discussed above, EPA concludes that the phrasing in section 111(b)(1)(B) 

focusing on the sources rather than the source categories provides EPA with the flexibility to 

establish standards for new sources within groups that consolidate or reorganize the listed source 

categories where that is appropriate.

Comment 10: Commenters stated that Section 111(d) does not give the EPA direct regulatory 

authority over existing sources but instead, section 111(d) directs the EPA to establish a 

"procedure" for states to submit plans establishing performance standards for existing 

sources. Commenters continued (verbatim), stating that Section 111(d) gives the states broad 

discretion to develop such plans and to implement and enforce them based on specific state 

concerns and needs. Commenters asserted that the EPA recognized this in 1975 when it 

promulgated the Subpart B regulations to interpret and implement section 111(d): "States will 
237

have primary responsibility for developing and enforcing control plans under section 111(d)."(40 

Fed. Reg. 53,340, 53,343 (Nov. 17, 1975) The EPA's proposal to establish firm CO2 intensity 

caps infringes on that intent. (79 Fed. Reg. at 34,953; Proposed 40 C.F.R. 60.5765, Table 1) 

Response 10: EPA is authorized by section 111(a)(1) and (d) to determine the degree of 

emission limitation achievable by application of the BSER, and to provide this information as 

criteria for approvable state plans in an emissions guideline document. The Agency does not 

directly impose standards of performance on units, but gives states the flexibility to establish 

such standards in a manner that is appropriate for their state, and their sources. However, the 

agency is responsible for substantively reviewing state plans to ensure they are satisfactory, that 

is, that they meet the criteria or requirements of the guidelines. If a state plan does not do that, 

then the EPA may implement a federal plan that directly imposes standards of performance on 

the affected EGUs.

Comment 11: Commenters stated that the EPA may require states to submit plans that contain 

performance standards for emissions of certain pollutants from designated facilities, but it does 

not have the authority to dictate the form and content of those performance standards. 

Response 11: EPA recognizes this as true to some extent. EPA’s guidelines give states 

considerable flexibility in the design of standards of performance actually applied to units.

Comment 12: As commenters noted, Section 111(d)(2)(A) authorizes the EPA to set substantive 

standards of performance only in situations where a state has failed to submit an acceptable plan. 

Commenters stated, Congress limited the EPA's authority to establish substantive standards of 

performance for existing sources to those limited situations where a state fails to act. Thus, 

commenters asserted, unlike the very different language in section 111(b) governing the 

standards of performance for new sources, section 111(d) gives the EPA no direct regulatory 

authority over existing sources, and instead gives states broad discretion to develop such plans 

subject to a general requirement that the state's exercise of discretion be "satisfactory." (CAA 

Section 111(d)(2)(A))

Response 12: It is unclear what the commenter means by “substantive.” EPA is not directly 

setting standards of performance for affected EGUs under the emission guidelines. EPA may 

determine the degree of emission limitation achievable in the emission guidelines and may 

review the standards of performance provided in state plans against that criterion. 

Comment 13: Commenters stated that the CAA gives the states substantial freedom to 

determine the factors to be considered in formulating a state plan and how those factors are to be 

weighed, and it does not dictate any particular outcome for the state. Commenters noted that 

states thus have significant discretion to adopt state plans that vary from the EPA's emission 

guidelines. Commenters noted, in the Proposed Guidelines, however, the EPA is imposing 

"binding" emission rates on each state. (79 Fed. Reg. at 34,844, 34,892) 
238

Response 13: Section 111(d), similar to section 110 of the statute, provides states the 

opportunity in the first instance to develop state plans to implement the agency’s emission 

guidelines. The EPA has recognized in the past, and provides in these emission guidelines, 

significant flexibility for the states in the design of their programs. However, the BSER and the 

degree of emission limitation achievable are determinations that rest with the administrator under 

section 111(a)(1). Ultimately, under section 111(d)(2), the EPA may disapprove a state plan that 

does not meet the criteria of the emission guidelines. 

Comment 14: Commenters stated that the EPA is proposing not to give states the flexibility to 

which they are entitled under the statute. Moreover, as discussed in greater detail elsewhere in 

these comments, commenters stated that the EPA would force states to violate the terms of the 

CAA by regulating sources that may not be regulated under a section 111(d) rule for existing 

fossil fuel-fired EGUs. (79 Fed. Reg. at 34,853 ("EPA is proposing that states be authorized to 

submit state plans that do not impose legal responsibility on the affected EGUs for the entirety of 

the emission performance level, but instead, by adopting what this preamble refers to as a 

'portfolio approach,' impose requirements on other affected entities (e.g., renewable energy and 

demand-side energy efficiency measures) that would reduce CO2 emissions from the affected 

EGUs.")). 

Response 14: EPA is not finalizing the proposed “portfolio” approach, and will not accept state 

plans that attempt to impose emission standards or other CAA compliance obligations on entities 

other than affected EGUs. The state measures approach provides a path for a state to achieve the 

emission performance level as expressed as a state goal in a way that avoids placing enforceable 

emission standards on affected EGUs (unless and until the backstop is triggered). States will 

have a wide range of flexibility in choosing how to demonstrate their affected EGUs are meeting 

a state goal.

Comment 15: Commenters noted, although the EPA asserts countless times in its Proposed 

Guidelines that it is giving states flexibility to adopt whatever "building blocks" it sees fit,(Id. at 

34,859) in reality, because the standard of performance is an emission intensity cap applied to 

the state based on application of the four proposed building blocks rather than on what the 

affected facilities are capable of achieving, states in most cases will have little choice but to 

impose requirements on facilities that are not fossil fuel-fired EGUs in order to meet their EPAmandated state-level emissions limits. In fact, commenters stated, in many states, it may be 

infeasible to adopt sufficient measures to achieve the EPA-mandated emissions limits, and 

therefore the EPA is in effect forcing such states either to go beyond their borders and enter into 

an emissions compact or trading program with other states or to tell the EPA it cannot meet the 

mandate and turn the program over to the EPA under the section 111(d)(2) provisions.

Response 15: The final rule lays out a number of options, variations and flexibilities that are 

intended to provide states and affected EGUs the ability to design state plans that accorded with 

states’ specific situations and policies (now and in the future), and to ensure reliability and 

affordability of electricity across the system and for all ratepayers. As described in detail in 
239

Section VIII of the preamble, the EPA is finalizing state plan options such as individual state 

plans, multi state plans, individual state plans that contemplate multi-state ties, and a number of 

compliance options for affected EGUs that provide states and affected EGUs with flexibilities to 

develop a state plan to achieve the necessary emissions reductions. The EPA believes these 

options will not force states to enter into emissions compacts or trading programs, but gives the 

states the opportunity to do so if they so choose, but otherwise provides affected EGUs sufficient 

flexibilities if a state chooses to submit an individual state plan.

Comment 16: Commenters stated, in fact, despite the EPA's claim to the contrary, it is clear that 

these proposed standards are set to meet a nationwide target, allocated among the states, rather 

than a general guideline based on the EPA's evaluation of what sources can achieve at the state 

level. Commenters noted, the EPA states that "This approach would mean that overall, the same 

nationwide level of emission reductions as proposed would be achieved."(Id. at 

34,893) Commenters asserted that nothing in section 111(d) requires or authorizes the EPA to 

achieve a nationwide level of emissions reductions. Commenters noted that Section 111(d) does 

not allow the EPA to set a nationwide limit on emissions, but rather to set guidelines for states to 

consider when they adopt their own rules. Commenters stated, it seems clear that the Proposed 

Guidelines are an attempt to set a national reduction target for CO2 emissions.

Response 16: The EPA disagrees with this commenter in that this commenter has misunderstood 

the nature of the state goals. The EPA established the BSER according to the statute, by focusing 

on technology and measures available to reduce emissions. This allowed the agency to determine 

the “degree of emissions limitation achievable,” pursuant to 111(a)(1), which in turn the agency 

has translated into state goals. The state goals are an accounting device – an arithmetic 

expression of the BSER’s degree of emission limitation achievable for each state, based on the 

unique mix of affected EGUs in that state. The state goals are not directly enforceable against the 

state. Rather, they provide a criterion against which a submitted state plan may be reviewed for 

approvability by the agency. The agency disagrees with the commenter to the extent the 

commenter is suggesting the agency used a top-down rather than bottom-up approach to 

determining the BSER. The agency’s BSER analysis is rooted in what is achievable, and that 

comports with the statute. Once this has been done, it is possible to determine the “degree of 

emission limitation achievable.” The fact is, emissions under any prior 111(d) rule can be 

aggregated and reported in such a way as to lay claim to the notion that the agency is establishing 

a “national” emission reduction target via its determination of the BSER and oversight of state 

plans. See 40 CFR 60.25(a). That is a function of the statute (the purpose of which is, in any 

case, “to protect and enhance the quality of the Nation’s air resources ...” CAA section 101(b)(1) 

(emphasis added)). Further, the agency’s emission performance rate is just that, a rate. The mass 

goal is simply an equivalent expression of the rate. States may choose to implement a rate 

system. Given these available tools in the EGs, it cannot be said that the EPA is mandating a 

particular nationwide reduction.

Comment 17: Commenters stated, as demonstrated by the numerous flaws inherent in EPA's 

attempt to use the CAA to establish a utility sector CO2 reduction program, it is clear that 
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Congressional action would be a more appropriate vehicle for establishing national climate 

policy. Commenters stated the emission guidelines and BSER determinations the EPA 

establishes are supposed to be largely procedural, and contain only nonbinding factors and 

descriptions of demonstrated systems of emission reductions for states to consider as the states 

set their own standards. Commenters noted, they are not, as the EPA has proposed, supposed to 

be binding emission rate limitations on states. Commenters said, what the Agency determines to 

be BSER is merely one of the many factors states must consider in determining the level and 

form of any existing source performance standard as applied to a specific EGU. Commenters 

noted, similarly, under the Subpart B rules, states have considerable flexibility to deviate from 

the EPA's emission guidelines in adopting plans and emission standards. For example, 

commenters noted that states may apply "less stringent emission standards or longer compliance 

schedules" to particular facilities or classes of facilities if the costs of adopting the standards 

suggested by the emission guidelines would be unreasonably costly, physically impossible, or for 

other reasons. (40 C.F.R. 60.24(f)(1)-(3)) Commenters stated that states have significant 

discretion in designing their own plans and determining how individual sources or classes of 

sources may demonstrate compliance, including taking into account the "remaining useful life of 

the existing source." (CAA 111(d)(1)) Commenters noted, in applying this criterion, states may 

grant individual sources or types of sources longer periods of time to comply, or may apply less 

stringent standards than set forth in the EPA's emission guidelines. Commenters stated that the 

Agency underscored as early as 1975 that "emission guidelines will reflect subcategorization 

within source categories where appropriate," and the guidelines 'will in effect be tailored to what 

is reasonably achievable by particular classes of existing sources . . . ." (40 Fed. Reg. at 53,343) 

Commenters stated, because a standard of performance must be "adequately demonstrated" for 

each source, the EPA has an obligation in accordance with its Subpart B rules to establish highly 

subcategorized emission guidelines within a broad source category like existing fossil fuel-fired 

EGUs. (40 C.F.R. 60.22(b)(5)) Commenters stated that the fact that the EPA has not done so 

may in fact reflect the reality that there is no appropriate standard of performance that can be set 

for existing sources. Commenters noted, while Building Block 1 is based on achieving efficiency 

improvements at the affected sources, because the efficiency of an individual generating unit is 

to a large extent driven by the unit's inherent design, there is little room for improvement and it is 

impossible to come up with a "standard" of performance for efficiency that could apply equally 

even within tight subcategories. Commenters stated lacking any other feasible measures to 

control CO2 emissions, the EPA has instead turned to actions which fall entirely outside of the 

direct control of the affected sources, by its reliance on Building Blocks 2, 3 and 4 which are not 

a "system of control," but a limitation on the productive output of the regulated sources. (The 

EPA determines that Building Blocks 2, 3 and 4 are feasible because a source "has the ability to 

limit its own operations." The EPA also states that Building Blocks 2, 3 and 4 are equally valid 

under either its "primary" approach to BSER or the "alternative" approach because "building 

blocks 2, 3, and 4 would not be components of the system of emission reduction but instead 

would serve as bases for quantifying the reduced generation (and therefore emissions) at affected 

EGUs" 40 FR 34,889.) Commenters stated that bringing non-affected sources into the proposed 

section 111(d) BSER determination and emissions guidelines is contrary to the EPA's obligation 

to adopt measures that have been adequately demonstrated for the tightly defined subcategories 
241

of existing sources. Commenters asserted, somehow, the EPA interprets the provisions in section 

111(d) and Subpart B to actually go the opposite direction in categorizing the source - rather than 

addressing the significant differences among the wide range of EGU sources (as it has done in 

numerous other regulations) by establishing appropriate subcategories, the EPA is making an 

entirely new argument here that it can wash over the differences among affected EGUs by 

instead declaring a super-category which is "all of the affected EGUs in the State." ("the EPA 

may apply the BSER to all of the affected EGUs in the state as a group.) Commenters stated, 

similarly, the implementing regulations give the EPA broad discretion to identify the group of 

sources to which the BSER is applied. Commenters noted that the regulations provide that the 

EPA "will specify different emission guidelines or compliance times or both for different sizes, 

types, and classes of designated facilities when costs of control, physical limitations, 

geographical location, or similar factors make subcategorization appropriate." Commenters 

stated that applying the BSER to the affected EGUs in each state as a group is appropriate, and 

therefore is consistent with these regulations." Commenters noted, EPA is saying here that after 

considering all of the differences among the sources in the EGU category, the answer is to 

"subcategorize" by grouping all of the facilities together in one state. 79 Fed. Reg. at 

34,891.) Commenters noted that this reasoning essentially renders the Subpart B language 

meaningless where it directs the EPA to develop appropriate categories and subcategories. "The 

Administrator will specify different emission guidelines or compliance times or both for different 

sizes, types, and classes of designated facilities when costs of control, physical limitations, 

geographical location, or similar factors make subcategorization appropriate." (40 CFR 

60.22(b)(5) Rather than address the differences between the affected EGU sources which would 

be subject to these requirements, commenters noted that the EPA has instead chosen to create a 

single broad category of "all sources within the state" and has ignored the fact that such broad 

categorization will in effect cause inequities among sources within the state which should have 

been addressed through the analysis of guidelines and compliance times applicable within 

appropriate subcategories. Commenters asserted, by its proposed actions, the EPA has 

completely eliminated the flexibility embedded in section 111(d). In the Proposed Guidelines, 

commenters stated that the EPA would set binding state emission reduction targets that cannot be 

adjusted by states once promulgated. Commenters closed, stating that the EPA's aggressive 

assumptions in the building blocks further erode state flexibility and disregards the primacy that 

Congress explicitly gave to the states over the EPA under section 111(d).

Commenters stated that rather than recognizing the significant differences between natural gas 

and coal generation, EPA is attempting to combine natural gas and coal generation into a single 

category. Commenters remarked that violating the CAA and a basic understanding of these types 

of generation technologies, that action also directly conflicts with the New-Source 111(b) Rule 

Proposal, which serves as the foundation for this Rule Proposal. Commenters explained that 

while the New-Source 111(b) Rule Proposal is flawed in numerous ways (as discussed in Part III 

of this letter), EPA was correct in realizing that it is unable to establish a single standard for both 

coal and NGCC facilities when it revised and re-proposed its New-Source 111(b) Rule Proposal; 

however, despite making this correction in the New-Source 111(b) Rule Proposal, EPA has 
242

apparently decided to proceed in this Rule Proposal under the false and illegal assumption of 

combining the generation technologies into one category. 

Response 17: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER.

While we are not re-opening the 1975 regulations, in response to comments, we explain in the 

preamble why they give the EPA broad authority to determine the BSER and, based on that, 

statewide emission limitations for sources in the state.

As we explain in section VIII.D of the final rule preamble of the CPP, our emission guidelines 

provide the substantive criteria that are intended to govern the review of the Administrator’s 

review of state plans. The interim and final goals are intended to reflect such substantive criteria.

EPA is not finalizing the proposed “portfolio” approach, and will not accept state plans that 

attempt to impose emission standards or other CAA compliance obligations on entities other than 

affected EGUs. The state measures approach provides a path for a state to achieve the emission 

performance level as expressed as a state goal in a way that avoids placing enforceable emission 

standards on affected EGUs (unless and until the backstop is triggered). States will have a wide 

range of flexibility in choosing how to demonstrate their affected EGUs are meeting a state goal.

Comment 18: Commenters stated that EPA does not subcategorize when commenters believe it 

must, and EPA proposes to lump different sources (and even non-sources) into one category 

which commenters believe is unlawful. Commenters continued that EPA's BSER combines two 

source categories' fossil fuel-fired steam generating boilers and NGCC units. Commenters said 

Section 111(d) specifically requires that the state take into consideration the "remaining useful 

lives of the sources in the category of sources to which such standard applies. [Id. Section 

7411(d) (emphasis added).] Commenters stated that the continued use of "category" in the 

singular in Section 111 indicates that the standards are to be developed by EPA for a single 

source category, not for multiple categories that are lumped together. Commenters argued that 

the CAA simply does not authorize this lumping mechanism that EPA has proposed here. 

Commenters explained that EPA's preamble for the regulations that implement Section 111(d) 

confirm that the development of emission standards for new sources applies to a single source 
243

category, and the subsequent development of emission guidelines for existing sources applies to 

that same single category. [See 40 Fed. Reg. at 53,340 ("Section 111(d) requires control of 

existing sources of such pollutants whenever standards of performance (for those pollutants) are 

established under section 111(b) for new sources of the same type.") (emphasis added); id at 

53,343 (Commenters explained that Section 111(d) standards are "techniques for the control of 

the same pollutants from the same types of sources under section 111(b).).] Commenters stated 

that the preamble to the regulations illustrates how the development of emission guidelines 

hinges on individual source categories. Commenters noted, action under section 111(d) is subject 

to a number of significant safeguards: (1) Before acting under section 111(d) the Administrator 

must have found under section 111(b) that a source category may significantly contribute to air 

pollution which causes or contributes to the endangerment of public health or welfare, and this 

finding must be technically supportable. [Id. at 53,341 (emphasis added); see also id. at 53,342 

("[T]he Administrator must find under section 111(b) that the source category covered by such 

standards may contribute significantly to air pollution which causes or contributes to the 

endangerment of public health or welfare.") (emphasis added).] Accordingly, commenters 

concluded, EPA's regulations and the preamble promulgating such regulations provide no 

indication that lumping of source categories is permissible. 

Response 18: EPA disagrees that the singular “category” is used consistently in section 111 or 

that the various passages cited by the commenter have any import on EPA’s authority to 

combine categories. In section 111(b), the singular “category” is used to (1) state that the 

endangerment/cause-contribute finding is to be made with respect to each specific category ([The 

Administrator] shall include a category of sources in such list if....”), and (2) state the timing of 

when publication of proposed standards is to occur (“[w]ithin one year after the inclusion of a 

category of stationary sources in a list under [section 111(b)(1)(A).” But, the plural “categories” 

is also used in 111(b): to state EPA’s authority to subcategorize in section 111(b)(2) and to issue 

information on pollution control techniques in section 111(b)(3). In section 111(d), the word 

“category” appears as part of the House amendment to the Section 112 Exclusion, which is 

discussed extensively in the preamble for this rule. Further, as the commenter notes, the use of 

the singular “category” appears in 111(d)(2) in the “remaining useful life” text, but that text has 

the same substantive meaning as the “remaining useful life” text in 111(d)(1), which simply 

refers to “the existing source to which the standard applies” and does not use either the singular 

“category” or plural “categories.” Thus, contrary to this comment, the singular “category” is not 

used consistently. Moreover, the use of the singular “category” or plural “categories” in section 

111 varies by context and does not indicate anything concerning EPA’s authority to combine 

categories when it promulgates regulations under 111(b) or 111(d). 

Comment 19: Commenters cited case law interpreting other CAA provisions illustrates EPA's 

error in collapsing two source categories into one as described in the following sentences. [See 

Ne. Md. Waste Disposal Auth. v. EPA, 358 F.3d 936, 943 (D.C. Cir. 2004) (stating that Davis 

Cnty. Solid Waste Mgmt. v. EPA, 101 F.3d 1395 (D.C. Cir. 1996) involved "an attempt by the 

Agency to collapse two statutory categories into one").] Commenters added that in Davis County 

Solid Waste Management v. EPA, the D.C. Circuit was tasked with determining whether the 

standards for municipal solid waste combustion exceeded EPA's authority under S. 129 of the 
244

CAA. [Davis Cnty. Solid Waste Mgmt. v. EPA, 101 F.3d 1395, 1396-97 (D.C. Cir. 1996).] 

Commenters also added EPA's regulations had categorized "units by aggregate plant [municipal 

solid waste] capacity."[Id. at 1401]. Commenters noted that the petitioners, however, argued 

that Section 129(a)(1) established separate source categories that EPA was required to separately 

develop standards for "large [municipal solid waste (MSW)] units (units with unit MSW 

capacities above 250 tons/day) and small [municipal waste combustor] units (units with unit 

MSW capacities of 250 tons/day or less)." [Id. at 1403.] Commenters said the court agreed with 

the petitioners, first noting that "Section 129(a)(1) begins by stating that the EPA shall 

promulgate standards and guidelines for 'each category of solid waste incineration units,' and 

then proceeds to identify specific types of units and the date by which standards shall be issued 

for each type."[Id.] Commenters noted, the court concluded that the "plain implication of section 

129(a)(1) is that the types of units listed are the relevant categories for determining emissions 

standards."[Id.] Commenters remarked that while Davis involved the interpretation of Section 

129 and a different standard, the court's holding is instructive to EPA's current attempt to lump 

fossil-fuel fired EGUs and NGCC units into one category. Commenters added that in Davis, the 

court determined that EPA could not collapse source categories when Congress specifically 

defined those categories in Section 129(a)(1). Here, in similar fashion, Commenters noted that 

Congress has directed EPA to develop source categories under Section 111 and then issue 

standards for each one of those categories, and here, as in Davis, EPA cannot collapse source 

categories for convenience sake when the CAA requires existing source standards for each 

source category. 

Response 19: EPA disagrees with the commenter’s analysis of this case law. Indeed, this 

commenter’s own discussion of the Davis opinion makes clear that the court’s reasoning was 

based on the creation in section 129 of statutory categories and the text in section 129(a)(1) that 

specifies that EPA is to set standards and other requirements “for each category of solid waste 

incineration units.” This text in section 129(a)(1) contains very different phrasing from the 

relevant text in section 111(b)(1)(B), which focuses on sources rather than source categories.

1.5 AFFECTED SOURCES AND APPLICABILITY

Comment 1: Commenters stated the U.S. EPA asserts in the existing source rule that this oncein-always-in interpretation must apply to all sources in any source category regulated under 

Section 111(d), not just to this rulemaking. “It should be noted that this proposal applies to any 

existing source subject to any CAA Section 111(d) plan, and not only existing sources subject to 

the CAA Section 111(d) plans promulgated under this rulemaking.” [Id. at 34903] Commenters 

stated not only is this not allowed under the plain language of Section 111, subjecting all sources 

that are covered by any Section 111(d) plan to forever be subject to that plan changes how all 

Section 111(d) programs are to be applied with real substantive consequences for the sources 

subject to the plans, and is illegal and a retroactive application of a complete regulatory program. 

Commenters stated other source categories have no notice that under the proposal for "Carbon 

Pollution Standards for Modified and Reconstructed Stationary Sources: Electric Utility 
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Generating Units: Proposed Rules" that U.S. EPA is proposing this retroactive application of 

Section 111(d) applicability. Commenters said this rulemaking approach violates the basic tenets 

of the Administrative Procedures Act (APA) and good government practices.

Response 1: In this final rule, EPA has not adopted the “once-in-always-in” interpretation.

Comment 2: Commenters stated that in determining BSER for modified and reconstructed 

sources, U.S. EPA evaluated several different control technology configurations including 

reductions in generation associated with dispatch changes, renewable generation, and demandside EE; however, U.S. EPA ultimately decided not to establish BSER as these components and 

opted for a less stringent BSER. Commenters found this counterintuitive to how BSER typically 

is defined for new, modified and reconstructed, and existing sources, explaining that U.S. EPA is 

attempting to finalize a BSER for existing sources that is more stringent than the BSER for 

modified and reconstructed sources. Commenters added that for modified sources, U.S. EPA 

proposes BSER as efficiency improvements achieved through a combination of best operating 

practices and equipment upgrades. [79 FR 34982] Commenters noted, as part of one of the 

options, U.S. EPA is providing a low end cap to ensure the final rate for these units will not be 

more stringent than the emission limit for reconstructed sources. [79 FR 34987] In their 

comments on the modified and reconstructed proposal, commenters raised concerns regarding a 

unit encroaching upon a rate that would be achievable by reconstructed units applying BSER, 

and commenters also had significant concerns regarding the potential for existing sources to 

ultimately have a more stringent emissions limit than modified or reconstructed sources under 

this proposal.

Response 2: Comments related to new, modified and reconstructed sources are beyond the 

scope of this rule. We disagree that the section 111(d) standards are more stringent than the 

section 111(b) standards. Further, we explain in the Legal Memorandum why the section 111(b) 

and (d) standards are based on different determinations of the BSER. The use of the term 

“ordinarily” in the 1975 preamble reflects the agency’s long term understanding that standards 

under 111(d) may differ from those under 111(b). In any case, the statute does not dictate that 

111(d) standards must be less stringent in all cases. Rather, Congress recognized that the agency 

would be faced with different sets of challenges in regulating existing rather than new sources. 

Congress addressed this in part by establishing a cooperative-federalism planning regime under 

section 111(d) similar to section 110. Reflecting this, the guidelines include significant 

flexibilities, including the ability to trade and relatively long periods for compliance.

Comment 3: Commenters stated that widespread opposition to this proposal is evident and it is 

nationwide, as they can see by action in the House of Representatives, the U.S. Senate, and state 

legislative actions. Commenters explained that in mid-July, the House Appropriations 

Committee passed a spending bill prohibiting EPA from using funds for carbon standards. 

Commenters also noted that, in March, the House passed legislation [H.R. 3826, or WhitfieldManchin] to repeal the proposed new source rule and stop 111(d) without congressional 

approval. Commenters stated that forty-one Republican senators have asked EPA to withdraw 

the rule, and seven Democratic senators have written the President complaining about the new 
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source performance standards for EGUs. Commenters continued, stating that over 20 states 

passed legislation or resolutions stating greenhouse gas emissions can only be regulated on a 

plant by plant basis inside the fence so to speak, not the systemwide state approach that EPA 

takes.

Response 3: The bills referenced by the commenters have not become law and therefore are not 

binding on any person. The comment otherwise expresses policy preferences. EPA has explained 

the policy advantages of this rule at length in the Preamble.

Comment 4: Commenters stated EPA proposes to regulate emissions from existing EGUs by 

recognizing that the "integrated grid" operates as a unit but this is far too simplistic. Commenters 

stated that EPA has assumed authority Congress did not grant. Commenters explained that the 

Supreme Court has clearly spoken to this point, stating that "it is axiomatic that an administrative 

agency's power to promulgate legislative regulations is limited to the authority delegated by 

Congress." Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988). Commenters asserted 

that Congress could not have foreseen the perceived need to define and regulate GHG emissions 

to combat climate change. Commenters noted, in evaluating the validity of the Federal Reserve's 

interpretation of the Bank Holding Company Act in Dimension Financial, the Supreme Court 

observed that: Congress defined with specificity certain transactions that constitute banking 

subject to regulation. Commenters stated that the statute may be imperfect, but the [Federal 

Reserve] Board has no power to correct flaws that it perceives in the statute it is empowered to 

administer. Commenters asserted that its rulemaking power is limited to adopting regulations to 

carry into effect the will of Congress as expressed in the statute. Commenters stated, if the Bank 

Holding Company Act falls short of providing safeguards desirable or necessary to protect the 

public interest, that is a problem for Congress, not the Board or the courts, to address. Dimension 

Financial Corp., 474 U.S. at 362. Commenters added that similarly here, just because the CAA is 

an imperfect vehicle for the regulation of GHGs, EPA does not have the right to expand its 

authority to include wholesale energy market regulation that is the sole domain of FERC, and by 

granting itself this authority, EPA is essentially attempting to "fix" the statute so that it may fit a 

regulatory policy into an act that Congress did not design for such a policy. Commenters closed, 

stating that similar to the Supreme Court's holding in Dimension Financial, if the CAA "falls 

short of providing safeguards desirable or necessary to protect the public interest, that is a 

problem for Congress," not for EPA to address.

Commenters stated EPA's proposal is wrongfully directing states to regulate renewable energy 

resources, demand side energy efficiency programs, and even existing and under-construction 

nuclear units by means of "emission standards." Commenters stated that is not authorized under 

Section 111(d). Commenters explained that EPA's Legal Memorandum discusses using 

renewable sources as a "reduction requirement" for NGCC units, but provides no citation of 

authority or other instance where EPA has looked to alternative non-regulated facilities for CAA 

compliance. OGC Legal Memorandum at 89. Commenters asserted that the Legal Memorandum 

acknowledges regulation of fossil-fuel fired steam generation boilers starting in 1971 and NGCC 

units in 1979, but notably identifies no statutory or regulatory authority for regulating renewable 

energy sources. 
247

Response 4: We disagree with commenters’ assertion that this rulemaking assumes authority 

Congress did not intend to grant. As explained by the Court in AEP v. Connecticut, “[t]he Act 

itself ... provides a means to seek limits on emissions of carbon dioxide from domestic power 

plants” before holding that “[t]here is no room for a parallel track” to invoke federal common 

law to curtail greenhouse gas emissions from the power sector, including from existing sources. 

131 S. Ct. at 2430. Accordingly, we disagree that Congress intended to foreclose the regulation 

of greenhouse gases under section 111(d). 

We also disagree that we are expanding our authority to include wholesale energy market 

regulation. Our emission guidelines simply reflect an achievable emissions limit through the 

application of the BSER and does not require states or sources to implement the BSER. 

Moreover, these emission guidelines provide states with the flexibility to establish, implement, 

and enforce standards of performance and do not intrude on the regulatory domain of FERC. It 

cannot be said that because environmental requirements may have an effect on the wholesale 

energy market that the EPA is therefore intruding into energy regulation. Certainly, in the 

legislative history of the 1970 CAA Amendments, Congress expressly identified power plants as 

a priority source category for regulation under CAA section 111. 

Contrary to commenters’ assertions, this rule does not regulate renewable energy sources. This 

rule simply identifies the BSER for affected sources which entails substitute generation to zeroemitting generators. It does not, however, impose emissions requirements on such sources.

Comment 5: Commenters stated that because the proposal as it stands would result in either the 

reduced utilization of EGUs beyond the ability of cooperatives to repay investments in those 

facilities and/or the premature closure of those or other cooperative EGUs, the proposal's 

requirements amount to a regulatory taking requiring compensation because of the premature 

closures and uneconomic curtailment it will require.

Response 5: For EPA’s response to this issue, see the Legal Memorandum.

1.5.1 EGU sources

1.5.2 Non-EGU sources

1.5.2.1. EPA has no legal authority to include other sources or source categories

1.5.2.1.1 Standards of performance, individual sources, and definitions

Multiple comments and multiple reasons address EPA’s legal authority to go beyond standards 

of performance for individual sources and raise specific definitional concerns, including:

Comment 1: Commenters stated the Clean Air Act forbids Section 111(d) regulations based on 

emission reductions that cannot be achieved at individual facilities (sources) and stated further 

that EPA's goal calculation to be imposed on Alabama cannot meet this requirement, but instead 
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relies on reductions by an entire system, state, and region to include facilities and state 

governments acting in tandem.

Commenters stated and concurred that EPA is pursuing a regulatory standard on one industry 

source (fossil-fuel power plants) based on potential actions taken well beyond the source's 

physical location and controlling authority, and in many cases by entities that are not directly 

subject to regulation under section 111 of the Clean Air Act, and this structure raises significant 

legal and practical questions regarding the viability of the rule. Commenters stated EPA has to 

date failed to answer such questions, and provided little to no information regarding what 

authority it is relying upon to institute such an expansive regime, and how it intends to proceed if 

it does not approve of individual state implementation plans. Commenters concluded this is 

critical information that EPA should disclose in the interest of maximizing transparency and 

continued cooperation with states and stakeholders.

Commenters questioned that EPA may not have the legal authority. Commenters stated that the 

EPA relies on interpretation of a rarely used section of the Clean Air Act, Section 111(d), as the 

basis to regulate carbon dioxide across a wide spectrum of the utility industry. Commenters 

stated, because the proposal is so outside historic EPA authority, undoubtedly there will be legal 

challenges to all or portions of the rule and will impact already tight guidelines. Finally, 

commenters stated they are concerned the proposal expands EPA's authority; rule is ambitious by 

any measure and regulates numerous activities that other federal and state agencies currently 

have authority for, and because the rule is not passed by Congress, a unilateral expansion by the 

EPA raises concerns how other federal and state agencies will respond.

Commenters stated that even if EPA legally could adopt the CPP, it has no authority to require 

actions by any entity other than the generating facility itself. Commenters stated that 42 U.S.C. 

section 7411 grants EPA authority to establish "standards of performance" to "stationary 

sources." Commenters explained (verbatim) Section 7411 defines "standards of performance" as 

"a standard for emissions of air pollutants which reflects the degree of emission limitation 

achievable through the application of the best system of emission reduction." Commenters noted

that "stationary source" means "any building, structure, facility, or installation which emits or 

may emit any air pollutant." Commenters stated that standards of performance can apply to an 

owner or operator of any stationary source that contains an affected facility, which is "any 

apparatus to which a standard is applicable." Commenters asserted, taken together, CPP 

standards may be applied to the source category as well as applicable equipment contained 

therein. Commenters stated, yet, the CPP goes beyond that as it attempts to control sources other 

than coal-fired generating units by requiring that non-generating facilities also reduce their 

emissions. Commenters stated that such a broad reading of EPA's authority is improper and 

impermissible.

Commenters stated Section 111 of the CAA speaks with absolute clarity as to the subject and 

nature of standards of performance for new and existing sources. Commenters asserted that a 

standard of performance under section 111 must be achievable for individual sources based on 

measures that the source's owner can integrate into the design or production process of the source 

itself. Commenters remarked that the Section 111 has existed, with only minor changes, for over 
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40 years, and in that time EPA has applied it with total consistency on this fundamental point. 

Commenters added that a standard of performance cannot be based on actions taken beyond the 

source itself that somehow reduce the source's utilization. Commenters noted that nor can it be 

based simply on requiring a source to reduce its operations, and yet EPA is proposing a rule that 

departs so far from the Act's clear directions as to be unrecognizable as a section 111 

rulemaking. Commenters stated the Agency's proposed approach has inverted the lawful order of 

standard-setting under section 111, and instead of defining a category of regulated sources, 

identifying the BSER that any individual source can incorporate into its design, and then 

allowing states to determine what standards are achievable for sources based on that BSER and 

other factors, EPA has started at the end by defining an inflexible emissions goal for each state 

and then requiring states to impose whatever obligations are necessary to achieve that goal. To 

effectuate this unprecedented approach, commenters stated, EPA proposes to base its emission 

guidelines on actions that reach beyond individual regulated sources and impose obligations on 

entities with no emissions at all, or to simply mandate that regulated sources curtail operations or 

cease operations altogether, and EPA's proposed approach has no basis in the statute. 

Commenters posited the rule defies reason and is inconsistent with the CAA, and EPA has 

exceeded its authority and must withdraw the Proposed Guidelines.

Commenters stated and concurred that Section 111 provides for the regulation of individual 

emission sources through performance standards that are based on what design or process 

changes an individual source's owner can integrate into its facility. Commenters asserted, the 

nature of any standard of performance under section 111 is that, at a given level of operations, 

the regulated source emits less when subject to the standard than when not. Commenters 

continued that on its face, section 111 provides only for standards that regulate the emissions 

performance of individual stationary sources in a category listed under section 111(b). 

Commenters noted the plain text of this section makes it clear that standards of performance 

apply to sources within listed categories as individual facilities and do not regulate categories or 

subcategories as a whole: NSPS apply only to "new sources within [a listed] category," while 

state standards under section 111(d) apply to "any existing source . . . to which a [NSPS] . . . 

would apply if such existing source were a new source." Id. section 111(b)(1)(B), (d)(1). 

Commenters noted, in addition, section 111(d) explicitly directs states (and EPA, in the case of a 

federal plan) to consider the "remaining useful life" of existing sources when applying any 

standard of performance, further demonstrating that this section focuses solely on what 

individual sources can do to improve their performance at reasonable cost rather than what the 

entire source category (or even other entities) can do collectively to reduce overall emissions. 

CAA section 111(d)(1), (d)(2). Commenters stated that even the titles used in these provisions 

indicate their narrow focus on individual sources. Commenters stated Section 111 is titled 

"[s]tandards of performance for new stationary sources," and section 111(d) is designated 

"[s]tandards of performance for existing sources; remaining useful life of source." Id. section 

111, 111(d). Commenters stressed section 111 also requires that any standard of performance be 

"achievable" by the sources to which it applies based on application of an "adequately 

demonstrated" system of emission reduction. Id. section 111(a)(1). Commenters stated the 

achievability requirement clearly indicates that Congress intended standards of performance to

be based on systems of emission reduction that are within the control of (and thus, incorporated 
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into the design or production process of) an individual source. Commenters asserted that a 

standard cannot be "achievable" for a source if the source must rely on measures taken by some 

other entity that it does not control, or if the source must not operate, in order to achieve the 

standard. Commenters noted, moreover, a "standard of performance" by its terms assumes that 

the source will continue to "perform." Commenters stated that a "standard of performance" 

cannot mandate "non-performance." Commenters added that this focus on measures incorporated 

into individual sources pervades other parts of section 111 as well and offers, for example, 

section 111(h) authorizes EPA to promulgate a design, equipment, work practice, or operational 

standard in cases where "it is not feasible to prescribe or enforce a standard of performance," and 

defines exactly when Congress considered it "not feasible to establish a standard of performance. 

Id. section 111(h)(1). Commenters said one such situation is where the regulated pollutant 

"cannot be emitted through a conveyance designed and constructed to emit or capture such 

pollutant" - Id. section 111(h)(2)(A) - and this provision equates a "standard of performance" 

with the use of a conveyance at the regulated source to capture and to control a portion of the 

source's emissions.

Commenters stated that EPA is a "creature of statute" and has "only those authorities conferred 

upon it by Congress." Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001). Commenters 

said EPA's decision to impose state-wide emission goals instead of emission guidelines that 

address specific sources is not legally justified under Section 111(d). Commenters asserted that 

the statutory language, EPA's own implementing regulations, and the structure for development 

and application of standards of performance under Section 111 all focus on determining 

appropriate emission guidelines applicable to individual emission sources. Commenters stated, 

by setting state goals that are not based on reference to particular sources of emissions regulated 

under Section 111(d) or the CAA, EPA has exceeded its statutory authority. Commenters said, 

first, the text of Section 111(d) and other provisions in Section 111 evince a clear focus on 

addressing individual sources, not an aggregation of disparate sources on a state level. 

Commenters noted that Section 111(d) expressly provides for states to apply standards of 

performance to "any existing source." 42 U.S.C. section 7411(d)(1)(A). Commenters noted that 

Congress has expressly limited the applicability of Section 111(d) to existing sources to which a 

standard of performance would apply if the existing source were a new source. 42 U.S.C. -

7411(d)(1)(A)(ii). Commenters stated, consistent with this requirement, Section 111(b) 

rulemakings regulating CO2 from new and modified fossil fuel-fired EGUs must be in effect 

before EPA has the authority to promulgate regulations for existing fossil fuel-fired EGUs under 

Section 111(d). Commenters stated, although EPA has proposed Section 111(b) rulemakings, see 

79 Fed. Reg. 1430; 79 Fed. Reg. 34,960, the rules have not been finalized and will almost 

certainly be subject to legal challenge, creating uncertainty on the status and applicability of any 

Section 111(d) rulemaking. Commenters asserted, if those Section 111(b) rules have not been 

finalized or remain subject to legal challenge at the time EPA seeks to issue its final Section 

111(d) rule for EGUs, the Section 111(d) rules must be held in abeyance pending completion of 

the jurisdictional prerequisite.) Commenters stated that EPA is required to permit states to take 

certain factors into account in applying a standard of performance "to any particular source." Id. 

section 7411(d)(1). Commenters said these factors include the remaining useful life of "the 

existing source" to which such standard applies. Id. Commenters stated Section 111(a) defines 
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"stationary source" as "any building, structure, facility, or installation which emits or may emit 

any pollutant." Id. section 7411(a)(3). Commenters said this plain statutory text (The sourcebased focus of Section 111(d)) is further supported in the legislative history. See, e.g., Report by 

the Committee on Interstate and Foreign Commerce to Accompany H.R. 6161 (CLEAN AIR 

ACT AMENDMENTS OF 1977), H.R. Rep No. 95-294, at 11 ("The section also makes clear 

that standards adopted for existing sources under section 111(d) of the act are to be based on 

available means of emission control (not necessarily technological) and must, unless the State 

decides to be more stringent, take into account the remaining useful life of the existing sources.") 

(emphasis added)) Commenters noted that it placed direct limits on EPA's ability to expand its 

regulatory reach beyond existing sources. See Elec. Power Supply Ass'n v. FERC, 753 F.3d 216, 

222 (D.C. Cir. 2014) (rejecting FERC interpretation of authority that would render express 

statutory limitations on authority useless). Commenters said, second, EPA's implementing 

regulations for Section 111(d) acknowledge the source-based focus in the statute: "[E]mission 

guidelines will reflect the degree of control attainable with the application of the best systems of 

emission reduction which (considering the cost of such reduction) have been adequately 

demonstrated for designated [existing] facilities." 40 Fed. Reg. 53,340, 53,340 (Nov. 17, 1975) 

(emphasis added). Commenters asserted that the emission guidelines, as EPA describes, must 

make "allowances for the costs of controlling existing sources." 40 Fed. Reg. at 53,343. 

Commenters stated EPA further stated that it will consider subcategorization under Section 

111(d) based on "sizes, types and classes of designated facilities." See 40 C.F.R. section 

60.22(b). Commenters stated that EPA provided no suggestion in its 1975 regulations that it 

could or would attempt to expand its purported authority beyond the regulation of affected 

sources as it now proposes. Third, commenters stated that the overall structure of Section 111 

demonstrates the focus on what controls may apply and what emission limits are achievable and 

adequately demonstrated at the individual sources. Commenters said Section 111 establishes a 

parallel structure in which standards of performance are derived for both new and, where 

appropriate, existing affected sources within the relevant source category. Commenters noted 

EPA confirmed in its 1975 regulations that the same general principle (application of best 

adequately demonstrated control technology, considering costs) applies to determine standards of 

performance for both new sources under Section 111(b) and emission guidelines for existing 

sources under Section 111(d). See 40 Fed. Reg. at 53,341. Commenters stated, however, 

complications arise in regulating existing sources because of the need to account for the different 

sizes, types and classes of individual sources within the larger source category. Commenters 

asserted EPA recognized that the way to ensure appropriate treatment of the disparate sources 

was to drill down to smaller subcategories of individual sources. Commenters noted that EPA 

specifically amended its regulations "to make clear that the Administrator will specify different 

emission guidelines for different sizes, types and classes of [existing sources] when costs of 

control, physical limitations, geographical location, and similar factors make subcategorization 

appropriate." Id. ("Thus, while there may be only one standard of performance for new sources 

of designated pollutants, there may be several emission guidelines specified for [existing 

sources] based on plant configuration, size, and other factors peculiar to existing facilities."). 

Commenters said grouping of different emission sources into an amorphous and expanded 

"system" that includes both jurisdictional and non-jurisdictional units and unrelated activities, 
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and then setting emission goals based solely on state boundaries as EPA has proposed, is not a 

valid means of subcategorizing because it fails to recognize the differences among units within 

particular states. Commenters stated, given the parallel process anticipated for the development 

of source-specific standards of performance for new and existing sources in the same source 

category, EPA logically anticipated that "the degrees of control represented by EPA's emission 

guidelines [for existing sources] will ordinarily be less stringent than those required by standards 

of performance for new sources." 40 Fed. Reg. at 53,341. Commenters stated that the upsidedown nature of the Proposed Rule is demonstrated by comparing the state emissions goals to the 

new source performance standards for EGUs in EPA's pending proposal under Section 111(b). 

Commenters said the final state emissions goals for more than half the states under the Proposed 

Rule are lower than the corresponding Section 111(b) emission rates proposed for NGCC units.) 

Fourth, commenters stated that EPA's prior rulemakings under Section 111(d) are fully 

consistent with the source-based focus of Section 111(d). Commenters noted, despite the 

disparate nature of the affected source categories, none of the regulations promulgated by EPA 

under Sections 111(b) or 111(d) for specific source categories over the past forty years have 

strayed from the common principle that emission guidelines are intended to lead to standards of 

performance achievable at the source. Commenters asserted that EPA's Proposed Rule for 

existing EGUs does not focus on individual source performance; rather it sets emissions 

requirements at levels unachievable for individual sources, and requires emissions reductions 

from actions taken by third-party entities that are unrelated to the source. See 79 Fed. Reg. at 

34,845 (proposing that emission guidelines be based on reduction of CO2 emissions from the 

entire "electric power sector"). Thus, commenters concluded that the Proposed Rule conflicts 

with the language, structure and historic implementation of Section 111(d) and exceeds EPA's 

statutory authority.

Commenters added that elsewhere, section 111(d) speaks to "the remaining useful life of existing 

source to which [a] standard applies CAA Section 111(d)(I)(B) and in addition, EPA's 

implementing regulations at 40 CPR 60.24(f) allow states to consider the "cost of control

resulting from plant age, location, or basic process design," difficulties in "installing necessary 

control equipment," and "other factors specific to the facility" in determining the appropriateness 

of emissions standards and compliance schedules.

Response 1: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER.
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Commenter’s arguments on section 111’s remaining useful life provision are addressed in 

section VIII.G.1 of the preamble and section IX of the Legal Memorandum.

Comment 2: Commenters stated and concurred that never before has EPA adopted emissions 

guidelines based on such outside-the-fence considerations. Commenters remarked that this is not 

surprising, since EPA's longstanding regulations focus on technological and operational 

measures that can be implemented at a specific unit. (See, e.g., 40 C.F.R. 60.21(h) (referring to 

emission control equipment and process changes, both of which are unit-specific measures). 

Commenters noted, since Section 111(d)'s enactment, EPA has promulgated regulations for 

specific source categories in 13 instances. (See Regulation of CO2 Emissions from Existing 

Power Plants Under Section 111(d) of the Clean Air Act: Program Design and Statutory 

Authority, R. Nordhaus and I. Gutherz, 44 ELR 10366, 10372 n. 57 (2014). According to the 

authors, the 13 are: Phosphate Fertilizer Plants; Final Guideline Document Availability, 42 Fed. 

Reg. 12,022 (Mar. 1, 1977); Standards of Performance for New Stationary Sources; Emission 

Guideline for Sulfuric Acid Mist, 42 Fed. Reg. 55,796 (Oct. 18, 1977); Kraft Pulp Mills, Notice 

of Availability of Final Guideline Document, 44 Fed. Reg. 29,828 (May 22, 1979); Primary 

Aluminum Plants, Notice of Availability of Final Guideline Document, 45 Fed. Reg. 26,294 

(Apr. 17, 1980); Emission Guidelines; Municipal Waste Combustors, Final Emission Guidelines, 

56 Fed. Reg. 5,514 (Feb. 11, 1991), withdrawn & superseded by 60 Fed. Reg. 65387 (Dec. 19, 

1995) (same source category); Standards of Performance for New Stationary Sources and 

Guidelines for Control of Existing Sources: Municipal Solid Waste Landfills, Final Rule, 61 Fed. 

Reg. 9,905 (Mar. 12, 1996); Standards of Performance for New Stationary Sources and Emission 

Guidelines for Existing Sources: Hospital/Medical/Infectious Waste Incinerators, Final Rule, 62 

Fed. Reg. 48,348 (Sept. 15, 1997); Standards of Performance for New Stationary Sources and 

Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration 

Units, Final Standards and Guidelines, 65 Fed. Reg. 75,338 (Dec. 1, 2000); Emission Guidelines 

for Existing Small Municipal Waste Combustion Units, Final Rule, 65 Fed. Reg. 76,378 (Dec. 6, 

2000); Clean Air Mercury Rule, 70 Fed. Reg. 28,606; Standards of Performance for New 

Stationary Sources and Emission Guidelines for Existing Sources: Other Solid Waste 

Incineration Units, Final Rule, 70 Fed. Reg. 74,870 (Dec. 16, 2005); Standards of Performance 

for New Stationary Sources and Emission Guidelines for Existing Sources: Sewage Sludge 

Incineration Units, Final Rule, 76 Fed. Reg. 15,372 (Mar. 21, 2011), and in each instance, those 

standards have been technological or operational standards that can be applied specifically to 

each designated facility. Commenters asserted such an approach harmonizes with Section 111's 

handling of stationary sources of air pollutants. Commenters offered, or instance, in its final rule 

promulgating new source performance standards and existing source emission guidelines for 

municipal solid waste landfills, EPA determined that BSER for MSW landfills comprised a welldesigned and well-operated gas collection system and [] a control device capable of reducing [the 

pollutant of concern] in the collected gas by 98 weight-percent. (49 Fed. Reg. at 9907) 

Commenters noted that operational standards for each existing landfill were also promulgated to 

ensure that each landfill was operated according to best practices to minimize emissions. (Id. at 

9907-08) Commenters stated no suggestion was made that BSER included shuttering some 

landfills in favor of others employing more modern or lower-emitting technologies, or that BSER 

could or should include efforts to minimize consumers' generation of municipal waste (even 
254

though that might have been one of the more effective measures in reducing emissions from 

MSW landfills).

Commenters stated the required standard can only extend to the specific sources at issue (here, 

fossil fuel-fired EGUs), not an entire sector, and EPA's proposed BSER extends well beyond the 

source categories that EPA can require states to address under Section 111(d) and is thus outside 

EPA's authority under the CAA. 

Response 2: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 3: Commenters stated that the EPA's proposed building blocks are not a best system 

of emission reduction as required by Section 111(d). Commenters explained (verbatim) EPA's 

proposed CO2 guidelines rely on Section 111(d) of the CAA, although it has been rarely used by 

the EPA to establish procedures whereby states can implement and enforce performance 

standards for an existing source of an air pollutant. Commenters asserted Section 111(d)(1) 

mandates that "each state submit to the Administrator a plan which (A) establishes standards of 

performance for any existing source ..." Commenters noted that "standard of performance" is 

defined as a "standard for emissions of air pollutants which reflects the degree of emission 

limitation achievable through the application of the best system of emission reduction which 

(taking into account the cost of achieving such reduction and any non-air quality health and 

environmental impact and energy requirements) the Administrator determines has been 

adequately demonstrated." 42 U.S.C. section 7411(a)(1). Commenters noted EPA has proposed 

that the best system of emission reduction ("BSER") for CO2 should be a series of four "building 

blocks" or strategies: building block 1 - reducing the carbon intensity of generation at EGUs 

through heat rate improvements (target 6% heat rate reduction); building block 2 - reducing CO2 

emissions by substituting generation from the most carbon intensive EGUs with generation from 

natural gas combined cycle units; building block 3 - reducing CO2 emissions from affected 

EGUs by expanding low and zero carbon generating capacity; and building block 4 - increasing 

demand-side energy efficiency. 79 Fed. Reg. at 34836. Commenters asserted that building blocks 

2, 3 and 4 do not constitute a "best system of emission reduction" that can be established for and 

applied to a source which emits or may emit an air pollutant, such as an EGU. Commenters 

noted that Section 111(a)(3) of the CAA defines a stationary source as any building, structure, 

facility or installation "which emits or may emit any air pollutant." Commenters suggested that 

entities which do not emit any pollutants, such as wind farms, or end users of electricity like the 

general public, cannot be treated as an "emitting source" under Section 111(a), as EPA proposes 

to do. Commenters stated that the limitation to requiring a state plan to establish standards of 

performance only for existing sources is supported by the remaining language of Section 111(d), 

requiring that "regulations of the Administrator under this paragraph shall permit the State in 

applying a standard of performance to any particular source under a plan submitted under this 

paragraph to take into consideration, among other factors, the remaining useful life of the 

existing source to which such standard applies." 42 U.S.C. section 7411(d)(1)(B)(emphasis 

added). Commenters noted that Congress expressly intended a standard of performance to be 
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established and applied to a source. Commenters asserted that Building blocks 2, 3 and 4 cannot 

in any meaningful sense be established or applied to an existing EGU. Commenters said 

substituting low- or zero-carbon generation for generation produced by an EGU does not fit the 

statutory meaning of applying emission reductions to that EGU, nor does requiring less energy 

use from consumers. Commenters said building blocks 2, 3, and 4, could be drafted into a state 

plan without even mentioning the word "source." 

Response 3: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 4: Commenters noted that EPA's proposed CO2 guidelines ignore the clear 

requirements of Section 111(d), the authority upon which it relies for the proposed CO2 

guidelines. Commenters said EPA's disregard for Section 111(d) is further shown by its failure to 

give effect to the language "the remaining useful life of the existing source to which such 

standard applies" in setting standards for building blocks 2, 3 and 4. Commenters stated that the 

EPA proposed CO2 guideline fails to specify how the EPA took into account the remaining 

useful life of sources. Commenters noted, if anything, these building blocks have the opposite 

effect by reducing the usefulness of existing coal-fired EGUs. Commenters said the reference to 

"existing useful life of a source" is further evidence that Congress did not intend that EPA could 

impose upon a state a standard of performance which is "outside the fence" of an EGU. 

Commenters noted, in consequence, EPA proposed BSER building blocks 2, 3, and 4 violate

Section 111(d) of the CAA and are in excess of the statutory jurisdiction and authority granted 

by Congress to EPA. Commenters noted that Section 111(h)(1) also provides evidence that the 

EPA cannot compel states to adopt standards of performance which are outside of a 

source/facility and thus cannot be applied to a facility. Commenters said Section 111(h)(1) states 

that if it is not feasible to prescribe or enforce a standard of performance, the Administrator may 

instead promulgate a design, equipment, work practice or operational standard, or combination 

thereof, which reflects the "best technological system of continuous emission reduction." 42 

U.S.C. section 7411(h)(1). Commenters noted that the term "technological system of continuous 

emission reduction" means "a technological process for production or operation by any source 

which is inherently low-polluting or nonpolluting," or "a technological system for continuous 

reduction of the pollution generated by a source before such pollution is emitted into the ambient 

air, including pre-combustion cleaning or treatment of fuels." 42 U.S.C. section 7411(a)(7)(A) 

and (B)(emphasis added). Commenters asserted that building blocks 2, 3 and 4 cannot be 

considered to reflect or be within the meaning of a "technological system of continuous emission 

reduction." 

Response 4: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 5: Commenters stated EPA interprets CAA Section 111 to mean "the affected sources 

must be subject to emissions standards, but the basis for those standards - the 'system of emission 

reduction' - may be any method that reduces the affected sources' emissions, as long as that 
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method is a 'system' that meets the criteria for being the 'best' that is 'adequately demonstrated.'" 

79 Fed. Reg. at 34885/3. Commenters stated this interpretation is said to pass muster under either 

Chevron step one or step two, id. at 34885-86, but it does neither. Commenters said EPA tries to 

justify its faulty interpretation of BSER by claiming "it is clear ... that anything that reduces the 

emissions of affected sources may be considered a 'system of emission reduction.'" 79 Fed. 

Reg.at 34886/1. Commenters noted, under this expansive interpretation, literally anything and 

anybody - from preventing the issuance of housing permits to requiring households to turn down 

their thermostats in the winter - could be regulated by the EPA. Commenters asserted that EPA's 

statutory analysis focuses on the term "'system,' which is not defined in the CAA," Id. at 

34885/3, but system only refers to one part of the statutory plan, not to the plan as a whole. 

Commenters said such statutory dissection is impermissible as a means to interpret statutory 

intent. American Petroleum Institute v. EPA, 52 F.3d 1113, 1119-20 (D.C. Cir. 1995)("EPA 

cannot uncouple the first sentence of [the relevant section] from the rest of the section in order to 

expand its authority beyond the aims and limits of the section as a whole."). Commenters stated 

EPA asserts that the "context in which standard of performance is found" does not "add [any] 

constraints," but allows "anything that reduces the emissions of affected sources [to] be 

considered a 'system of emission reduction' for those sources." 79 Fed. Reg.at 34886/1. 

Commenters stated, in this regard, EPA reads the highlighted portion of Section 111(d)(1)(A) 

- "standards of performance for any existing source" - as having "a more capacious meaning" 

when applied to setting standards for those sources. 79 Fed. Reg.at 34903/1. Commenters noted, 

specifically, EPA's capacious meaning of "for" would include any standards that "would have an 

effect on affected sources." Id. Commenters stated it is difficult to imagine what standards would 

not fit within this "capacious" definition. Commenters said this interpretation contradicts EPA's 

prior view that "for" should be defined to link the system of emission reduction directly to what 

can be achieved by particular existing sources, not to what might "have an effect" upon those 

sources. See State Plans for the Control of Certain Pollutants From Existing Facilities, 40 Fed. 

Reg.53340, 53341/2 (Nov. 17, 1975)("there may be several emission guidelines specified for 

designated facilities based on plant configuration, size, and other factors peculiar to existing 

facilities"); id. at 53343/3 ("EPA's emission guidelines will reflect its judgment of the degree of 

control that can be attained by various classes of existing sources without unreasonable costs" 

and "EPA's emission guidelines will in effect be tailored to what is reasonably achievable by 

particular classes of existing sources ... the result is likely to be substantial variation in the degree 

of control required for particular sources, rather than identical standards for all sources"). 

Commenters noted, as the operative language of Section 111(d)(1)(A), "standards of 

performance for any existing source," has not changed since EPA's contemporaneous 

interpretation of the originally-enacted provision, its initial narrow interpretation linking 

standards of performance to existing sources negates EPA's current reading that Congress 

intended that standards of performance would encompass any system of emission reduction that 

"affects," but is not linked to (i.e., outside the fence or beyond the fence line of), existing 

sources. Commenters stated, likewise, EPA's reading that "for" in Section 111(d)(1) means that 

"affected sources must be subject to emissions standards," 79 Fed. Reg.at 34885/3, does not 

provide any clarity.
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Commenters offered as the alternative, that EPA might treat "system" as including all units and 

facilities comprising a particular electrical generating utility. Commenters stated, though such a 

reading would be unreasonable in light of the plain language of Section 111 and judicial and 

agency interpretations of that language, EPA could, perhaps, argue that a utility is itself a sort of 

commercial system, as that term is sometimes used. Commenters stated, even so, the last three of 

EPA's proposed BSER Building Blocks cannot be part of the system, simply because the utility 

does not necessarily have control over them. Commenters said, for example, order of dispatch 

and portfolio standards "both important components of EPA's proposed BSER determination" 

exceed what an individual utility can control. Commenters stated that a single utility cannot 

control the order in which another utility dispatches its electric generating units. Commenters 

said EPA's Building Block formula would therefore require utilities to coordinate their 

operations. Commenters noted, likewise, improvements in end-use energy efficiency, another 

key Building Block, are entirely outside the universe of actions over which utilities can exercise 

any enforceable degree of control. Commenters said the scope of EPA's proposed BSER, then, is 

too broad even for the most expansive definition of system.

Response 5: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 6: Commenters stated the proposed rule appears designed to achieve 30% national 

reduction in tons of carbon dioxide vs. 2005 for the power sector as a whole but this is not what 

Section 111(d) requires. Commenters stated that Section 111(d) only authorizes standards of 

performance on individual affected sources.

Commenters stated that the CPP treats each state's power sector as an existing source, and argued 

that is contrary to the text of section 111(d), EPA's 1974-1975 implementing regulations, and 

historical practice, all of which leave no doubt that an "existing source" is a "particular source," 

i.e., a "designated facility," not an entire economic sector or interconnected marketplace. 

Commenters stated that the CPP cites directly relevant case law; however, n ASARCO Inc. v 

EPA 578 F.2d 319 (1978), the D.C. Circuit Court of Appeals struck down an NSPS rule in which 

EPA claimed flexibility to define a stationary source as "either an individual facility or 

combination of facilities" comprising an "entire plant." Commenters explained that in agreeing 

with Sierra Club, the court ruled that a source is a "single building, structure, facility, or 

installation," and EPA "has no authority to rewrite the statute in this fashion." Commenters 

stated: "And so EPA may not even define the 'stationary source' for section 111 purposes as an 

entire plant, much less as an entire state."

Commenters stated the proposed rule would extend regulation well beyond any a single category 

of emitters to encompass every electricity generator and consumer in the country, displacing the 

regulation of the Federal Energy Regulatory Commission ("FERC") along the way, and the CAA 

does not authorize this extension of EPA authority, and EPA has never previously said that it 

does. Commenters continued (verbatim) stating that Section 111(d) authorizes EPA to "prescribe 

regulations which shall establish a procedure similar to that provided by section 7410 of this 

title." 42 U.S.C. section 7411(d). Commenters stated, specifically, the Section 110 model 
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includes cooperation with the States, which submit plans specifying performance standards and 

methods for implementation and enforcement. Id. Commenters said, by its terms, this provision 

applies only to "existing sources," which it defines to include "any stationary source other than a 

new source." 42 U.S.C. section 7411(a). Commenters noted that "Stationary source" is also a 

defined term, meaning "any building, structure, facility, or installation which emits or may emit 

any air pollutant." Id. Commenters noted that this definition is crucial, and its meaning begins 

with ordinary dictionary definitions. Smith v. United States, 508 U.S. 223, 228-29(1993). 

Commenters said each noun defining the "stationary sources" subject to regulation under Section 

111(d) refers to a single location. Webster's II New College Dictionary, 149 (defining building as 

"[a] structure that is built"); 1120 (structure: "[s]omething constructed, such as a building"); 409 

(facility: "[s]omething created to serve a particular function 'a new mental health facility'"); 588 

(installation: "[a]n apparatus, as a system of machinery, set up for use."). Commenters said none 

of the definitions sweeps widely enough to allow regulation of the national network of 

electricity-producing, transmitting, and consuming entities and locations. Commenters noted, 

instead, they refer to individual buildings, or other constructed equipment that emits pollution. 

Accordingly, in order to properly rely on Section 111(d), commenters stated that regulations 

must take a form that applies to an individual "building, structure, facility, or installation." 

Commenters said, if anything, the dictionary definitions underlying Section 111(a) represent the 

outer limit of how broad those terms might be. Commenters stated canons of interpretation 

served to narrow further the meaning of "building, structure, facility, or installation," and 

achieving a reasonable reading of the statute under Chevron requires the Agency to employ those 

canons. Bell Atlantic Telephone Co. v. FCC, 131 F.3d 1044, 1047 (D.C. Cir. 1997). Commenters 

said the noscitur a sociis canon of statutory interpretation is particularly relevant. Commenters 

noted, in its simplest form, the canon mandates that "words grouped in a list should be given 

related meaning." Third Nat'l Bank in Nashville v. Impac Ltd., 432 U.S. 312, 322 (1977). Or, in 

a more faithful translation, "a word is known by the company it keeps." Gustafson v. Alloyd Co., 

513 U.S. 561, 575 (1995). Commenters stated, however expressed, the canon's purpose is to 

narrow the universe of meanings that may permissibly attach to statutory text. Id. (explaining 

that the canon serves to avoid "giving unintended breadth to the Acts of Congress"). Here, 

commenters said the canon's application is straightforward. Commenters said each of the nouns 

in the definition of "stationary source" reinforces the fact that the law applies only to individual 

locations. Commenters stated, if they appeared alone, the Agency might have some claim to 

ambiguity based on an expansive reading of a dictionary definition. But by enacting this 

particular four-word provision, commenters noted that Congress conveyed additional 

information about the type of "sources" it intended to bring within Section 111(d). Commenters 

said comparison with neighboring provisions also provides a contextual clue to the range of 

"stationary sources" covered by Section 111(d). Commenters noted, despite cross-referencing 

Section 112 for exclusionary purposes, Section 111(d) does not incorporate the definition of 

"major source" from this neighboring Clean Air Act provision. Commenters said that term, as 

used in Section 112, expressly allows the aggregation of sources "within a contiguous area" and 

is thus broader than the disaggregated stationary sources referred to in Section 111(d). See 42 

U.S.C. section 7412(a)(1). Commenters said this contextual comparison bolsters the conclusion 

that Congress did not intend to authorize regulations aimed at the entire network of energy-
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producing, transmitting, and consuming entities and locations as such. Commenters stated, 

instead, regulations must target a category of similar, individual sources and speak in terms of 

what they must do to reduce emissions. Furthermore, commenters asserted that Section 111(d)'s 

instruction that regulations "take into consideration, among other factors, the remaining useful 

life of the existing source to which such standard applies," 42 U.S.C. section 7411(d) (emphasis 

added), shows that regulations must speak in terms of individual sources. Commenters said there 

is, after all, no single "useful life" of the power grid or nationwide set of power plants as a whole. 

Commenters stated, in this case, the proposed rulemaking sets aside the long-recognized 

meaning of Section 111(d) and seeks to regulate the entire network of energy production, 

transmission, and consumption. See, e.g., 79 Fed. Reg. at 34,925 ("Instead, the EPA is proposing 

to establish state emission performance goals for the collective group of affected EGUs in a state 

... ." (emphasis added)); Id. at 34,833 ("this proposal lays out state-specific CO2 goals" 

(emphasis added)). Commenters noted that these proposed regulations say nothing about the 

"performance standards" and methods for implementation and enforcement at individual 

stationary sources. Commenters said also illustrative of the mismatch between the statutory 

authorization and the proposed rule is the Notice's lack of any discussion of each source's "useful 

life." Commenters stated that the proposed rulemaking notes the "general" rule that "remaining 

useful life and other facility-specific factors are relevant for emission guidelines in which the 

EPA specifies a presumptive standard of performance that must be fully and directly 

implemented by each individual existing source within a specified source category." Id. at 

34,925. Commenters said despite acknowledging that standard approach for complying with the 

terms of Section 111(d), "[i]n these proposed guidelines ... the agency does not take that 

approach." Id. Commenters noted, instead, because EPA reinterprets the statute to allow 

regulation aimed at "the collective group" of power plants, the Agency would defer all 

consideration of remaining useful life to the States as they implement EPA's mandate. Id. at 

34,925-26. Commenters stated, in this fashion, when considered against the text and context of 

Section 111(d), the Agency's proposed rulemaking emerges as an unprecedented expansion of 

the statute, and one largely divorced from text and past practices. Commenters said recognizing 

that context can limit the scope of a statutory term to prevent an expansion of federal law has 

become routine at the Supreme Court. E.g., Bond v. United States, 134 S. Ct. 2077, 2091 (2014) 

("We are reluctant to ignore the ordinary meaning of 'chemical weapon' when doing so would 

transform a statute passed to implement the international Convention on Chemical Weapons into 

one that also makes it a federal offense to poison goldfish."). Moreover, commenters said the 

Court recently emphasized that long-standing agency practice weighs against reading a statute in 

a novel way to expand regulatory power: "When an agency claims to discover a long-extant and 

unheralded power to regulate 'a significant portion of the American economy' ... we typically 

greet its announcement with a measure of skepticism." UARG, 134 S. Ct. at 2444 (quoting FDA 

v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000)). Commenters stated, if 

anything, the newly discovered powers on which the current proposed rulemaking relies are 

more sweeping than those at issue in UARG. Commenters noted, by seeking to regulate the 

entire network of electrical production, transmission, and consumption as a single unit, the 

proposed regulations would use a limited provision of the CAA to reach every producer, 

transmitter, and consumer in 49 States over the coming 16 years. Commenters stated that the 
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instant proposed rulemaking threatens precisely the type of expansion beyond congressional 

authorization that the Court has declined to allow.

Commenters stated that by attempting to expand BSER, and the associated Building Blocks, 

beyond the affected source category units, EPA illegally seeks to regulate the electric power 

transmission system as a whole.

Response 6: We disagree that we are illegally seeking to regulate the electric power transmission 

system as a whole. Our emission guidelines simply reflect an achievable emissions limit through 

the application of the BSER and do not require states or sources to implement the BSER. 

Moreover, these emission guidelines provide states with the flexibility to establish, implement, 

and enforce standards of performance and do not intrude on the regulatory domain of FERC. It 

cannot be said that because environmental requirements may have an effect on the wholesale 

energy market that the EPA is therefore intruding into energy regulation. Certainly, in the 

legislative history of the 1970 CAA Amendments, Congress expressly identified power plants as 

a priority source category for regulation under CAA section 111.

Comment 7: Commenters stated that their review of EPA's proposed Clean Power Plan and the 

accompanying Regulatory Impact Analysis and Technical Support Documents leads them to 

conclude that the proposed rule is ill-founded and untimely. Commenters stated that the rule 

should be limited to "inside the fence" emission reductions similar to the 2011 energy efficiency 

guidance EPA has issued for Best Available Control Technology (BACT) reviews of major new 

sources. 

Commenters stated that Section 111(d) provides EPA with narrow authority to set emission 

standards based solely on emissions reductions that can be achieved inside the fence line. 

Commenters stated, as such, only the reductions resulting from actions taken under EPA's 

proposed building block one may lawfully be recognized. Commenters stated that building 

blocks two through four, as proposed by the agency, are outside the fence line and the agency 

does not have the expansive statutory authority to recognize them as the best system of emission 

reduction.

Commenters stated and concurred that the proposed rule mandates state "goals" that go far 

beyond setting standards on the affected sources, employing a "Best System of Emission 

Reduction" extending its reach beyond the "fenceline" of affected sources.

Commenters stated that Section 111(d) only authorizes standards of performance on individual, 

affected sources, and the proposed rule mandates state goals that go far beyond setting standards 

on the affected sources, employing a best system of emission reduction which extends its reach 

beyond the fence-line of its affected sources, and including renewable and energy efficiency in 

goal-setting infringes on state and local authority.

Commenters stated that the Clean Air Act does not allow EPA to regulate greenhouse gas 

emissions from existing coal-fired power plants under Section 111(d) because coal-fired power 

plant are already regulated by EPA under Section 112 of the Clean Air Act. Commenters 

explained that even if EPA believes it has specific authority to regulate Section 111(d) allows 
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EPA to set emission standards based solely on emission reductions that can be achieved inside 

the fence line. Commenters noted, however, this proposal requires substantial reductions outside 

the fence.

Commenters stated the guidelines and the subsequent state-developed standards for stationary 

sources under Section 111 of the Clean Air Act should begin and end with the regulated source 

itself. Commenters asserted that an NSPS or existing source guideline must apply to individual 

sources, must be based on reductions that an individual source can achieve, and must be based on 

the use of a system that is incorporated into the design of the source. Commenters added that of 

the four building blocks that EPA proposes as part of its system of an emission reduction, under 

its option 1 approach, only the first building block can be applied by individual sources. 

Commenters remarked that the other three measures are out of the control of any particular 

regulated source and are predicated on actions by others. Commenters closed, stating that this is 

inconsistent with EPA's obligations under the Clean Air Act. 

Response 7: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 8: Commenters stated the EPA has interpreted BSER too broadly; Section 111 applies 

to sources within a discrete identified source category; the EPA may not create different 

standards for these sources based on their location, i.e., the EPA cannot set different state goals 

for the same types of sources; and the EPA's proposed rule to establish CO2 emission guidelines 

for existing EGUs attempts to regulate the entire energy sector under Section 

111(d). Commenters explained that Section 111 defines a standard of performance as "standards 

for emissions of air pollutants which reflects the degree of emission limitation achievable 

through the application of the best system of emission reduction [or BSER] which (taking into 

account the cost of achieving such reduction and any non-air quality health and environmental 

impact and energy requirements) the Administrator determines has been adequately 

demonstrated." Commenters continued, stating that BSER is a source-based standard and is 

limited to systems of emission reduction that can be implemented on-site by the affected facility, 

and thus, a standard of performance under FCAA Section 111(d) must be based on a set of 

emission controls that can be implemented at the source that is subject to regulation. (See e.g. 

Portland Cement Association v. Ruckelshaus, 486 F2d 375 (D.C. Cir. 1973).) Commenters 

argued that BSER cannot be read as broadly as the EPA proposes for existing sources, explaining 

that FCAA Section 111(d) directs the EPA to prescribe regulations to "establish standards of 

performance for any existing source of any air pollutant." Commenters contended that the EPA is 

not setting standards of performance for existing sources when it looks outside the fence line of 

the EGUs to establish 'building blocks' based on renewable energy and energy efficiency 

programs and uses them to establish a state goal or standard. Commenters stated that a standard 

of performance that requires emission reductions from other sources and even other source 

categories is fundamentally inconsistent with the plain language of the FCAA, and historically, 

the EPA has limited BSER to technology-based emission controls that could be installed and 

implemented at the facilities subject to regulation. Commenters asserted that EPA offers no 
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reasonable explanation for abandoning that approach in this rulemaking. Commenters cited the 

TCEQ and PUCT statements to EPA that it did not have broad discretion under the FCAA in 

setting the standards in response to EPA questions for States on Section 111(d) plan 

requirements. (TCEQ Attachment 2, Comments on CO2 Emissions for EGUs, Section 111(d) of 

the Clean Air Act, Letter from Richard A. Hyde, P.E., Executive Director TCEQ, and Brian H. 

Lloyd, Executive Director, PUCT to Gina McCarthy, EPA Administrator, January 14, 2014), and 

the TCEQ and PUCT informed the EPA that the flexibility given to states in developing plans to 

meet the standards of performance should not, and legally cannot, be used in setting BSER. 

Commenters cited "[Section] 111(d) limits EPA to establishing, 'standards of performance for 

any existing source for any pollutant ... if such existing source were a new source. Commenters 

said establishment of the performance standard must be based upon BSER on a source specific 

basis. Commenters said a 'system' standard may face additional practical and legal challenges; 

however, a 'system' approach should be allowed as a part of any state's plan on how it will apply 

the standard of performance to any particular source under the plan." Commenters remarked that 

the EPA is considering coal and gas-fired EGUs collectively in setting the state goals under 

Section 111(d), and in the proposed NSPS (79 FR 1430) under Section 111(b), the EPA 

established that coal and NGCC units are fundamentally different and cannot be combined for 

purposes of establishing a standard of performance. Having done so, commenters explained, the 

EPA cannot take an inconsistent position by combining them in setting a standard under a 

'system' approach for existing sources, and further, ceasing operation of coal-fired units cannot 

be a 'system of emission reduction' for coal-fired EGUs. Commenters believed requiring a 70% 

dispatch rate under Block 2 for all NGCC facilities will have the EPA's desired effect of shutting 

down coal-fired units, and it is not economical to operate a coal-fired EGU at partial capacity 

and this would force shut-down of these units. Commenters noted that the EPA acknowledges 

this fact in the proposal, estimating that 46 - 49 GW of coal-fired EGUs will retire by 2020 as a 

result of the rule under a state-by-state approach. Commenters said, however, the EPA has not 

shown how forcibly shutting down a source appropriately considers the 'remaining useful lives' 

of these sources, as Section 111(d)(1) allows. Commenters believed that by effectively regulating 

one source category out of existence through re-dispatch, increasing renewable energy 

production and demand side energy efficiency improvements, the EPA exceeds its delegated 

authority by making energy policy rather than environmental policy. Commenters stated that the 

state goals established in this section 111(d) proposed rule recognizes the diverse nature of the 

energy production and use section of the economy in attempting to look beyond the fence-line 

for reductions in CO2. However, beyond the identified source categories of fossil fuel-fired 

EGUs, commenters asserted that the EPA has no jurisdiction over the other identified programs. 

Commenters said these are generally exclusively under state control through state utility 

regulators. Commenters continued, stating that the proposed rule is arbitrary, capricious and 

unlawful because it will require states to regulate additional sources, including commercial 

buildings and residences, for mandatory reductions in order to achieve the emission reductions 

identified in Building Blocks 2, 3, and 4. Commenters explained that the EPA unlawfully directs 

the states to impose standards of performance on affected entities that are not fossil fuel-fired 

EGUs, and in proposed new 40 CFR Section 60.5820 (79 FR 34956), the EPA proposes to define 

"affected entities" broadly to include affected EGUs "or another entity with obligations under 
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this subpart for the purpose of meeting the emission performance goal requirements in these 

emission guidelines." Specifically, commenters remarked, the EPA directs the states to identify 

"the state emission performance level for affected entities that will be achieved through 

implementation of the plan" and to demonstrate "that each emission standard is quantifiable, 

non-duplicative, permanent, verifiable, and enforceable with respect to any affected entity," and 

as a practical matter, by incorporating these blocks into the BSER analysis, the EPA has 

proposed state emission reduction targets that cannot be achieved by imposing emission 

reduction requirements on fossil fuel-fired EGUs alone. Commenters contended that this is not 

flexibility, but instead the EPA imposing on the states performance requirements that are outside 

the EPA's authority to do. Commenters believed the EPA's entire approach to identifying BSER 

based upon individual states is arbitrary, and the EPA's proposed rule is more akin to 50 different 

state plans than the establishment of national standards for existing units within source categories 

regulated under Section 111(b). Commenters argued that the EPA does not have the authority 

under Section 111(d) to establish a different standard of performance on a state-by-state basis; 

the section 111(d) statutory directive applies to 'existing sources'; commenters noted that state 

plans must establish a standard of performance, based on BSER, "for any existing source;" 

commenters said the FCAA definition of "existing source" is any stationary source other than a 

new source;" and the term "stationary source" is also clearly defined in statute as "any building, 

structure, facility, or installation which emits or may emit any air pollutant..." Commenters 

believed Section 111(b)(2) gives EPA the authority to distinguish among classes, types, and sizes 

within categories of new sources for the purpose of establishing standards; however, the 

authority to distinguish among states for the purpose of establishing standards was clearly not 

granted to EPA for new sources, and that authority was also not granted to EPA for existing 

sources. In fact, commenters remarked, the limitation on EPA to establish standards of 

performance for existing sources are linked to limitations used to establish performance 

standards for new sources, specifying that section 111(d) limits the Administrator to 

"establishing standards of performance for any existing source for any air pollutant "... to which 

a standard of performance under this section would apply if such existing source were a new 

source..." Commenters posited that the EPA has ignored the clear source-specific intent of this 

section and proposes state-specific goals instead, based on what the EPA proposes as achievable 

by application of BSER to the energy generation mix of that state and commenters stated that 

Texas's goal of 791 lbs CO2/MWh is not based on what existing fossil fuel-fired EGUs can 

achieve, but rather a complicated EPA assumption of the state's future energy generation 

capabilities and energy efficiency efforts. Commenters believed the EPA has not asserted clear 

statutory authority to establish state by state standards of performance under section 111, and 

there is no ambiguity in the statute that would defer to the EPA the authority to make such a 

strained interpretation of the FCAA. Commenters quoted the United States Supreme Court: "We 

are not willing to stand on the dock and wave goodbye as EPA embarks on this multiyear voyage 

of discovery." (Utility Air Regulatory Group v. EPA, 134 S.Ct. 2427 (2014), p. 23.)

Commenters were concerned that EPA's Clean Power Plan as proposed may not rest on the most 

secure legal foundation and may fall outside of the authority of Section 111(d) in the following 

areas as listed below, and therefore invite legal challenge that may delay implementation of the 

rule causing further uncertainty for regulated entities such as: the definition of "source"; 
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definition of "standard of performance" on the resulting "best system of emissions reduction" 

(BSER); the definition of "adequately demonstrated"; and whether EPA has fully taken "into 

account the cost of achieving such reduction and any non-air quality health and environmental 

impacts and energy requirements." Commenters stated that if not based on a solid legal 

foundation, the proposed rule may result in the consumption of significant resources and 

expenses while promoting regulatory uncertainty in an industry which must rely on long range 

planning to remain viable.

Commenters stated that EPA has exceeded its authority and intruded on the authority of other 

agencies and of the States by attempting to regulate "beyond the fence line" of the real source 

category at issue coal-fired EGUs in a manner tantamount to regulating electric power generally. 

Commenters cited Electric Power Supply Association v. FERC, in which the District of 

Columbia Circuit held that "states retain exclusive authority to regulate the retail market" for the 

sale and delivery of electricity.(753 F.3d at 220, 221, 224 (holding that FERC's attempt to 

"regulat[e] consumption by electricity customers is a regulation of retail, not wholesale, activity," 

impinging on matters "exclusively within state control" thereby rendering FERC's attempt to 

regulate energy demand unlawful). Commenters noted, if FERC which does have important 

duties in regulating the power grid lacks authority to regulate consumer efficiency as held in 

Electric Power Supply Association, then EPA must surely lack authority to regulate the same 

thing in building block four. Commenters held that EPA similarly must lack authority to impose 

building blocks two and three, and concluded, stating it is simply not plausible that Congress 

placed these immense and unexpected powers in the definition of BSER in section 111(d) of the 

CAA. (See Whitman v. Am. Trucking Associations, 531 U.S. 457, 468 (2001) ("Congress, we 

have held, does not alter the fundamental details of a regulatory scheme in vague terms or 

ancillary provisions "it does not, one might say, hide elephants in mouse holes."))

Response 8: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

We disagree that we are expanding our authority to include regulating electric power generally. 

Our emission guidelines simply reflect an achievable emissions limit through the application of 

the BSER and do not in themselves require states or sources to implement the BSER. Moreover, 

these emission guidelines provide states with the flexibility to establish, implement, and enforce 

standards of performance and do not intrude on the regulatory domain of FERC or the states. It 

cannot be said that because environmental requirements may have an effect on the wholesale 

energy market that the EPA is therefore intruding into energy regulation. Certainly, in the 

legislative history of the 1970 CAA Amendments, Congress expressly identified power plants as 

a priority source category for regulation under CAA section 111. Finally, with respect to the 

building blocks, as we explain in sections V.A. and V.B. of the preamble, our emission 

guidelines simply reflect an achievable emissions limit through the application of the BSER, and 

do not in themselves require states or sources to implement the BSER. That is, EPA is 

responsible for determining the level of emission limitation from the source category, while 

states have the responsibility of assigning emission requirements to their sources that will ensure 

their achievement of that level of emission limitation. States may fulfil their responsibility by 
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establishing emission standards or creating plans consistent with the guidelines. In doing so, 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER. Finally, we note that the final rule does not include 

demand-side energy efficiency – building block 4 – as a component of BSER. Therefore, we are 

not responding to comments regarding its inclusion as a building block.

Comment 9: Commenters stated that the possibility of imposing the Proposed Rule through FIPs 

is a hollow one given commandeering doctrine and given the limited regulatory reach that EPA 

has to act beyond the fence line in connection with building blocks two through four.

Commenters stated that EPA's approach to regulating "outside the fence" is contrary to the 

Supreme Court's recent decision in UARG, supra, 134 S. Ct. at 2444, stating the Court explained 

that, "[w]hen an agency claims to discover in a long-extant statute an unheralded power to 

regulate a significant portion of the American economy, we typically greet it with a measure of 

skepticism." Ibid. Commenters noted, further, the Court "expect[s] Congress to speak clearly if it 

wishes to assign to an agency decisions of vast economic and political significance." Ibid. 

Commenters argued that performance standards do not and cannot apply to entities not within the 

source category of affected EGUs, yet EPA's proposal would require application to other 

sources, or else it would be impossible for New Jersey to meet the 2030 goal established by 

EPA.

Commenters stated that even in cases where EPA has allowed existing sources to comply with 

emission guidelines by using beyond-the-fenceline mechanisms such as averaging and trading, 

the agency has based the stringency of these guidelines exclusively on systems of emission 

reduction that are well within the fenceline. Commenters added that even assuming that section 

111(d) could be read to allow EPA to exercise the expansive, newfound authority it now claims, 

the dictates of statutory construction require that such significant authority be clearly established 

in the statutory language. Commenters said, in this case, neither the statute nor EPA's other 

interpretations of section 111 (including at least one that was made contemporaneously with the 

Proposed Rule) support such an expansive view of EPA's authority. Commenters noted, 

consequently, EPA's interpretation that it can base its mandatory emission guidelines on beyondthe-unit measures is unreasonable and should be withdrawn.

Response 9: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 10: Commenters stated the Supreme Court recently considered whether EPA 

permissibly interpreted the CAA to provide that a source may be required to obtain a PSD or 

Title V permit on the sole basis of its potential greenhouse-gas emissions. Commenters stated in 

finding EPA's interpretation unreasonable under Chevron, the Court stated: EPA's interpretation 

is also unreasonable because it would bring about an enormous and transformative expansion in 

EPA's regulatory authority without clear congressional authorization. When an agency claims to 

discover in a long-extant statute an unheralded power to regulate "a significant portion of the 

American economy," Brown & Williamson, 529 U.S., at 159, 120 S. Ct. 1291, we typically greet 
266

its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes 

to assign to an agency decisions of vast "economic and political significance." Utility Air 

Regulatory Group, 573 U.S. at 2427. Commenters contended that the text of the CAA simply 

does not provide the authority to regulate entities outside of the affected source categories but 

that EPA nonetheless argues that the proposal is reasonable, and EPA claims that applying BSER 

on a statewide basis is fully consistent with the principles of federalism because it provides each 

state with "significant flexibility" to take local circumstances and state policy goals into account 

in determining how to reduce emissions. [EPA Legal Memorandum, pg. 18] Commenters 

remarked that the rule does not allow the flexibility it claims but rather, this agency-issued 

regulation would impose state-specific CO2 reduction targets that preclude freezing, relaxing, or 

repealing cap and trade programs, renewable energy quota, and demand reduction policies, and 

moreover, each "SIP-like" state plan requires federal approval and allows EPA to enforce a state 

standard if the state does not. 42 U.S.C. section 7411(d)(1)(B). However, commenters explained, 

because state plans must be submitted to EPA for approval and become federally enforceable, 

EPA is attempting to assert a newfound authority to regulate the activities of numerous entities 

that do not emit CO2 or any other regulated pollutant under the Clean Air Act. Commenters 

believed that Congress did not intend such a result in promulgating the CAA. Commenters 

quoted, similar to the reasoning in UARG, allowing the regulation of beyond the fence line 

sources would render the CAA "unrecognizable to the Congress that designed" it. Utility Air 

Regulatory Group, 573 U.S. at 2444. Commenters stated, accordingly, EPA's reasoning in 

support of its authority to impose such a far-reaching regulation is fundamentally flawed.

Commenters stated and concurred that EPA's interpretation of BSER includes Building Block

actions that take place outside the fence line of the affected power plant and are outside of the 

control of the plant operator. Commenters argued that this regulatory approach far exceeds 

EPA's authority under the CAA for several reasons, explaining first, the statute and previous 

EPA rules make it clear that the emission control systems that EPA may consider to be BSER 

include only those that can be implemented at and by the source, and consequently, EPA may not 

consider re-dispatch, RE, nuclear energy, or EE to be BSER because these measures are not part 

of an inside-the-fence system of emission reduction that is within the source's control. Second, 

commenters contended, EPA may not set the BSER based on re-dispatch from coal units to 

natural gas combined cycle (NGCC) because the CAA clearly requires continuous emission 

reductions - which would not necessarily occur under a re-dispatch approach to reducing 

emissions from coal-fired EGUs, and third, EPA's alternative interpretation of BSER-that 

reduced utilization constitutes BSER-is unreasonable and would represent an unprecedented 

departure from the intent and spirit of the Act.

Commenters stated EPA's "outside the fence" proposals are inconsistent with the statutory plan 

and argues (verbatim) against three justifications EPA offers for why "outside/beyond the fence" 

measures can be included: (1) CAA Section 111 provisions "do not by their terms preclude the 

BSER from including" them; (2) "affected sources may themselves implement the measures in 

building blocks 2, 3, and 4;" and (3) "re-dispatch measures in building block 2 are limited to 
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affected sources." Id. at 34889/1. Commenters stated that the first justification resurrects a 

position that has been soundly rejected. Commenters noted, because a statute does not expressly 

preclude an agency from taking certain actions does not mean, as the CO2 guidelines appear to 

suggest, that the agency has been granted authority to take those actions: "We refuse, once again, 

to presume a delegation of power merely because Congress has not expressly withheld such 

power." Ethyl Corp. v. EPA, 51 F.3d 1053, 1060 (D.C. Cir. 1995). Commenters said nor does the 

absence of a specific preclusion create a gap that the agency may fill under Chevron step two 

analysis. "Were courts to presume a delegation of power absent an express withholding of such 

power, agencies would enjoy virtually limitless hegemony, a result plainly out of keeping with 

Chevron and quite likely with the Constitution as well." Id. (emphasis in original; citations 

omitted); see, e.g. Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001) ("EPA is a federal 

agency - a creature of statute. It has no constitutional or common law existence or authority, but 

only those authorities conferred upon it by Congress."); Atlantic City Elec. Co. v. FERC, 295 

F.3d 1, 8 (D.C. Cir. 2001)("In the absence of statutory authorization for its act, an agency's 

"action is plainly contrary to law and cannot stand.'"). Commenters noted the other reasons for 

adopting building blocks 2, 3, and 4, viz., "affected sources may themselves implement" those 

measures and "re-dispatch measures in Building block 2 are limited to affected sources," 79 Fed. 

Reg. at 34889/1, are equally unpersuasive as justifications for adopting outside the fence 

standards. Commenters said the legal question for the instant matter is not, as EPA seems to 

think, whether compliance is sufficiently far in the future to "relieve any pressure on grid 

reliability," 79 Fed. Reg. at 34899/3 (though obviously grid reliability is crucial), but, rather, 

whether the CAA gives EPA authority to promulgate outside the boundary rules requiring 

implementation by third parties, not existing sources. See Barnhart v. Sigmon Coal Co., 534 U.S. 

438, 462 (2002)("Congress, however, did not delegate authority to the Commissioner to develop 

new guidelines or to assign liability in a manner inconsistent with the statute."). Commenters 

noted, as previously discussed, building block 2 resides on implementation by third parties not 

subject to EPA's authority, but whose tariffs, including any changes to currently-approved 

dispatch protocols to accommodate the CO2 guidelines, fall within FERC's exclusive 

jurisdiction. Commenters said it follows that adoption of building block 2, which depends on 

action by ISO/RTOs, would exceed EPA's authority.

Commenters stated that Section 111 (d) limits the types of existing sources for which a standard 

of performance can be established to those already regulated under section 111 (b) (if the 

existing source was new); however, EPA does not currently regulate, nor has proposed to 

regulate, "beyond-the-unit" participants in the power market under section 111(b). Commenters 

said nor has EPA proposed to regulate CO2 emissions from non-fossil fuel-fired EGUs under 

section 111 (b), and in fact, at the present time, EPA does not regulate CO2 emissions from coal 

or natural gas-fired EGUs under section 111(b).

Commenters stated and concurred that EPA lacks the authority to set emission guidelines under 

CAA Section 111(d) based on beyond-the-unit measures outside the EGU source category, and 

EPA may not set standards based on CO2 control measures that are undertaken outside the 
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boundaries of a particular EGU, including re-dispatching from coal to natural gas combined 

cycle (NGCC) generation, increased use of renewable, nuclear, and end-use energy efficiency.

Commenters stated that Building Blocks 3 and 4 clearly fall far outside the fence line and thus 

are invalid as a means for establishing North Carolina's emission standard.

Commenters stated that Section 111(a) includes the definitions EPA must use when reading later 

portions of Section 111 of the CAA, including "standard of performance"42 U.S.C. section 

7411(a)(1) (emphasis added). Commenters stated that logically, this definition requires BSER to 

control emissions from a particular source, and not to control all tangentially related industrial 

actors, or consumers of the affected source's end product. Commenters added that the definition 

discusses the emission limitations achievable through "application of the best system of emission 

reduction." Commenters said this must mean application of the BSER to an affected source. 

Commenters observed that if the BSER could be applied beyond a particular source, then there is 

no logical reason to have specific systems of emission reduction for different source categories.

Commenters stated that Section 111(d) Proposal Constitutes an Unlawful Reorganization of 

State Energy Economies, and Section 111(d)'s text is clear: it authorizes EPA to establish a 

procedure under which states will submit to it a plan that "establishes standards of performance 

for any existing source. . . ." C.A.A. Section 111(d)(1)(A), 42 U.S.C. 7411(d)(1)(A) (emphasis 

added). Commenters stated that only the first "building block" from which EPA derives its 

proposed "state goals," heat-rate efficiency improvements, resembles the "inside-the-fenceline" 

measures authorized by Section 111(d). And even in the case of efficiency improvements, 

commenters said there is a good case that EPA is overstepping its authority. Commenters 

continued (verbatim), the Section 111(d) proposal violates the core tenet of administrative law 

that "[t]he definition of words in isolation . . . is not necessarily controlling in statutory 

construction. A word in a statute may or may not extend to the outer limits of its definitional 

possibilities." e.g., Dolan v. U.S. Postal Serv., 546 U.S. 481, 486 (2006). Rather, commenters 

said statutory terms must be construed in light of the text of the provision as a whole, its context, 

its purpose, and relevant precedent and authority. Id. Furthermore, commenters said agencies 

cannot ground a claim to regulatory power on the absence of express prohibition. e.g., Ethyl 

Corp. v. EPA, 51 F.3d 1053, 1060 (D.C. Cir. 1995). Commenters asserted that the ostensibly 

open-ended "definitional possibilities" of the word "system" cannot support EPA's attempt to 

override states' policy choices and impose energy and natural-resource policy on them.

Commenters found that the proposed regulations fail to conform to the 111(d) requirement of 

reductions from the "SOURCE", that the proposed Best System of Emission Reduction (BSER) 

goes far beyond the means available to the "source" for reductions, and in fact proposes to turn 

the current economic dispatch model into an environmental dispatch model.

Commenters stated that the [Clean Air] Act's use of term "system" in the context of emissions 

controls is not isolated to Section 111. Commenters said, in fact, this terminology is used in an 

analogous manner elsewhere in Title I, that being the definition of "best available control 

technology," or BACT, explaining that like a "standard of performance," BACT is an "emission 

limitation" which the Administrator (or permitting authority), "taking into account energy, 
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environmental, and economic impacts and other costs, determines is achievable ... through 

application of production processes and available methods, systems, and techniques." [CAA 

Section 169(3) (emphasis added)] Commenters stated, indeed, BACT and "standard of 

performance" are intrinsically linked by the Act, as the application of BACT cannot "result in 

emissions of any pollutants which will exceed the emissions allowed by any applicable standard 

established pursuant to section 7411" (i.e., Section 111). [Id.] Commenters noted that until this 

point, EPA has consistently and correctly interpreted "systems" in the definition of BACT to 

refer only to control techniques that can be applied directly to "each individual new or modified

affected emissions unit and pollutant emitting activity." ["New Source Review Workshop 

Manual" (draft), October 1990 (p. B.4). See also 40 CFR 52.210)].

Commenters stated that EPA's proposed emission reduction targets are unlawful because they are 

not based on an adequately demonstrated best system of emission reduction ("BSER") for fossil 

fuel-fired EGUs. Further, commenters remarked, to the extent that there is/any ambiguity in 

Section 111(d), they did not believe that EPA can use that ambiguity to regulate the entire energy 

sector.

Commenters stated and concurred EPA's justifications for not stopping at the fenceline are 

specious and contrary to the statutory text. See Proposal, 70 Fed. Reg. at 34,856. Commenters 

said EPA argues that the word "system" in the statutory phrase "best system of emission 

reduction" is broad enough to encompass these "outside-the-fenceline" measures. See Id. at 

34,885-86 (relying on dictionary definition of "system" as "[a] set of things working together as 

parts of a mechanism or interconnecting network"). But commenters said Section 111 does not 

actually grant EPA authority to regulate a "system." Rather, commenters noted the statute 

provides that EPA and the states may set standards for emissions based on "the application of the 

best system of emission reduction." 42 U.S.C. section 7411(a)(1) (emphasis added). Commenters 

stated that this statutory phrase directs the agency (in the new-source, 111(b) context) or the state 

(in the existing-source, 111(d) context) to establish standards of performance by applying the 

"system of emission reduction" to the individual sources with the source category being 

regulated. (In keeping with this, the 111(a) definition section defines "new source" and 

"stationary source" immediately after defining "standard of performance." Id. section 7411(a)(2), 

(3).) Commenters continued, stating that the term "standard of performance" itself can only be 

understood in context of a source-specific limit, as it is defined as "a requirement of continuous 

emission reduction, including any requirement relating to the operation or maintenance of a 

source to assure continuous emission reduction." See CAA section 302(l), 42 U.S.C. section 

7602(l) (emphasis added). Commenters stated, indeed, the meaning of the term "application" in 

the context of a standard for emissions recurs throughout the Act and can only be understood in 

the context of an individual source. Commenters said, considering again Section 169(3) of the 

Act, defining the "best available control technology" ("BACT") that must be applied to new or 

modified sources under the prevention of significant deterioration program, the Act provides that 

"[i]n no event shall application of [BACT] result in emissions of any pollutants which will 

exceed the emissions allowed by any applicable standard established pursuant to" Sections 111 

or 112. 42 U.S.C. section 7479(3) (emphasis added). Commenters noted, similarly, the definition 

of lowest achievable emission rate ("LAER") for the nonattainment new source review program 
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provides that "in no event shall the application of [LAER] permit a proposed new or modified 

source to emit any pollutant in excess of the amount allowable under applicable new source 

standards of performance." CAA section 171(3), 42 U.S.C. section 7501(3) (emphasis added). 

Commenters said, put another way, whatever the "best system" is, it must be a system that 

reduces emissions from a particular source "to which a standard of performance under this 

section would apply if such existing source were a new source." 42 U.S.C. section 

7411(d)(1)(A)(ii). Commenters stated that even if EPA did have authority to regulate a "system," 

its proposed regulation here would fail. "The definition of words in isolation . . . is not 

necessarily controlling in statutory construction. A word in a statute may or may not extend to 

the outer limits of its definitional possibilities. Interpretation of a word or phrase depends upon 

reading the whole statutory text, considering the purpose and context of the statute, and 

consulting any precedents or authorities that inform the analysis." Dolan v. U.S. Postal Serv., 

546 U.S. 481, 486 (2006). Commenters noted, in the context of emission control, the Clean Air 

Act displays a consistent and clear pattern of referring to "systems" as source-specific 

measures.32 Commenters said "Best system of emission reduction" as used in Section 111 falls 

within the statute's norm, rather than the exception: "systems" limiting emissions are sourcespecific unless indicated otherwise. Commenters said the Section governs the issuance of 

performance standards, and "standard of performance" is defined at section 7602(l) to mean "a 

requirement of continuous emission reduction, including any requirement relating to the 

operation or maintenance of a source to assure continuous emission reduction." Commenters said 

the only example given in this definition is expressly source-specific. Commenters mentioned, in 

the few instances where the Clean Air Act intends the term "system" to refer to a geographically 

dispersed "set of things," it does so expressly, as in Section 319(a) of the Act, directing the 

Administrator to "promulgate regulations establishing an air quality monitoring system 

throughout the United States." 42 U.S.C. section 7619(a). Commenters continued that in this 

regard, EPA's attempt to take the term "system" out of context is akin to the situation that the 

Supreme Court faced in MCI Telecommunications Corp. v. American Telephone & Telegraph 

Co., 512 U.S. 218 (1994). Commenters noted, there, the Supreme Court rejected the agency's 

position that its decision to make tariff filing optional for all nondominant long-distance carriers 

was within its statutory authority to "modify any requirement" under 47 U.S.C. section 203. Id. 

at 225. Despite the seeming breadth of the term "modify," commenters stated the court 

determined that the word's plain meaning is to make a moderate change, whereas the challenged 

order made a "radical or fundamental change." Id. at 228-29. Commenters asserted, instead, by 

"eliminat[ing a] crucial provision of the statute for 40% of a major sector of the industry," the 

agency had engaged in "a fundamental revision of the statute, changing it from a scheme of rate 

regulation in long-distance common-carrier communications to a scheme of rate regulation only 

where effective competition does not exist. That may be a good idea, but it was not the idea 

Congress enacted into law in 1934." Id. at 231-32. The order "is effectively the introduction of a 

whole new regime of regulation," Id. at 234. Commenters posited that by going beyond sourcelevel, inside-the-fenceline measures, EPA's proposal would expand 111(d), and specifically the 

underlying statutory term "best system of emission reduction," into "a whole new regime of 

regulation": one that regulates not only pollutant emission by sources, but a state's entire resource 

and energy sectors. And notably, commenters remarked, courts have in the past rejected a similar 
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attempt by EPA to re-define the fundamental level at which Section 111's "best system of 

emission reduction" applies by disaggregating that concept from the concept of an individual 

source as defined by statute. In ASARCO Inc. v. EPA, 578 F.2d 319, 326-27 (D.C. Cir. 1978), 

the D.C. Circuit invalidated EPA regulations interpreting Section 111(a)(3)'s definition of 

"stationary source" to "allow a plant operator who alters an existing facility in a way that 

increases its emissions to avoid application of the NSPSs by decreasing emissions from other 

facilities within the plant." Id. at 325. EPA argued that the broad statutory definition gave it 

discretion to define a stationary source as either a single facility or a combination of facilities." 

Id. at 326. (This type of aggregation is known as the "bubble concept," e.g., Id. at 

321.) Commenters stated that the court disagreed, holding that the "regulations plainly indicate 

that EPA has attempted to change the basic unit to which the NSPSs apply . . . ." Id. at 326-27 

(emphasis added). (See also Id. at 322: "The basic controversy in the cases before us concerns 

the determination of the units to which the NSPSs apply."). Commenters said, in the current 

Section 111(d) proposal, EPA takes the even more egregious action of changing the field of 

regulation from sources to a state's entire power sector. Commenters asserted, given that EPA 

lacks the authority to expand "performance standards" to apply collectively to all regulated 

facilities at a single industrial site, it is not credible to suggest that the "best system of emission 

reduction" underlying such standards can encompass measures adopted throughout the state's 

entire power sector.

Commenters remarked that States establish "standards of performance for any existing source . . . 

."(42 U.S.C. 7411(d)(1)(A) (emphasis added).); "Standard of performance" is defined as "a 

standard for emissions of air pollutants which reflects the degree of emission limitation 

achievable through the application of [BSER]."(42 U.S.C. 7411(a)(1) (emphasis added)); and 

thus, the terms of section 111 clearly require that any eligible "system of emission reduction" be 

capable of "application" to the "existing source." Commenters argued that this language is a clear 

indication that EPA may only consider at-the-unit systems of emission reduction under section 

111, and similarly, because a standard of performance must be established "for any existing 

source," each component in the definition of "standard of performance" must also, logically, be 

"for any existing source." Commenters stated that as relevant here, the "best system of emission 

reduction which . . . has been adequately demonstrated" must be a system that has been 

adequately demonstrated "for any existing source," and a system cannot be considered 

"adequately demonstrated" for a source if the implementation of that system depends on the 

actions of third parties that are not part of the source or under the source's control. Commenters 

remarked that Section 111(h), which authorizes EPA to establish design, equipment, work 

practice, and operational standards, clearly evinces congressional intent to limit EPA's BSER 

determination to at-the-unit systems of emission reduction and offers, for example, where EPA 

has determined that prescribing or enforcing a numerical NSPS would not be feasible, EPA is 

authorized to issue a design, equipment, work practice, or operational standard "which reflects 

the best technological system of continuous emission reduction."(Id. 7411(h)(1) (emphasis 

added)) Commenters added that such a standard must "assure the proper operation and 

maintenance of any such element of design or equipment,"(Id.) and the phrase "technological 

system" and "element of design or equipment" clearly evinces Congress' understanding that 

section 111 systems of emission reduction would be limited to at-the-unit systems. Commenters 
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added that the statutory phrase "not feasible to prescribe or enforce a standard of performance" is 

defined in section 111(h)(2) as "any situation in which [EPA] determines that," inter alia, "a 

pollutant or pollutants cannot be emitted through a conveyance designed and constructed to emit 

or capture such pollutant, or that any requirement for, or use of, such a conveyance would be 

inconsistent with any Federal, State, or local law"(42 U.S.C. 7411(h)(2) (emphasis added)), 

and Congress' use of the phrase "conveyance designed and constructed to emit or capture [a] 

pollutant" strongly implies that Congress intended EPA to limit its BSER consideration to 

conveyances, devices, and other such at-the-unit features of design or equipment that could be 

used to reduce emissions.

Commenters stated that EPA's proposal is also unlawful because it would permit States to 

include in their implementation plans binding legal obligations on entities other than affected 

fossil fuel-fired EGUs. Commenters stated that a central component of the flexibility touted by 

EPA is the so-called "portfolio approach" that would permit States to comply with the emission 

reduction targets by "impos[ing] requirements on other affected entities (e.g., renewable energy 

and demand-side energy efficiency measures) that would reduce CO2 emissions from the 

affected EGUs." 79 Fed. Reg. at 34,853. In other words, commenters noted, EPA would 

authorize States to implement Section 111(d) standards of performance by imposing binding 

legal obligations on an entity simply because it could either replace fossil fuel-fired electricity 

generation or reduce its own electricity consumption. Commenters contended that the proposed 

portfolio approach is unlawful because the Clean Air Act does not authorize EPA and the States 

to expand standards of performance under Section 111(d) beyond the source categories already 

subject to regulation under Section 111(b), and EPA cannot offer States the ability to regulate 

any generator or consumer of electricity (i.e. the entire economy) simply because doing so 

provides for greater emission reductions than limiting regulations to the affected fossil fuel-fired 

EGUs. Commenters contended that the plain language of Section 111(d) bars EPA's portfolio 

approach, explaining that in enacting Section 111(d), Congress imposed a series of limitations on 

the authority of EPA and the States to regulate existing sources. Commenters pointed out that 

chief among them is that standards of performance may only be established for existing sources 

"to which a standard of performance would apply if such existing source were a new source." 42 

U.S.C. Section 7411(d)(1). Further, commenters stated, EPA's assertion that its proposal to 

authorize a portfolio approach must be afforded deference is incorrect. Commenters stated EPA 

asserts that "the terms of CAA section 111(d)(1) do not explicitly address whether, in addition to 

emissions limits on affected EGUs, State plans may include other measures for achieving the 

emission performance level, nor do they address whether entities other than affected EGUs may 

be subject to requirements that contribute to reducing EGU emissions." 79 Fed. Reg. at 

34902. Commenters continued, explaining that given the broader context of Section 111, the lack 

of an explicit reference to a portfolio approach in Section 111(d) suggests that regulations should 

be limited to affected sources, not that EPA should expand regulations as it sees fit. UARG, 134 

S. Ct. at 2442 ("[R]easonable statutory interpretation must account for both 'the specific context 

in which - language is used' and the broader context of the statute as a whole." Robinson v. Shell 

Oil Co., 519 U.S. 337, 341 (1997).). Commenters noted that the central regulatory focus of 

Section 111 is on source categories, and Congress prescribed a detailed process that EPA and the 

States must go through to impose regulations on a given source category: EPA must make a 
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significant contribution endangerment determination for the pollutant and source category, EPA 

must establish standards of performance for new sources, and only then may EPA and the States 

establish standards of performance for existing sources. 42 U.S.C. Section 111(b), (d). 

Commenters stated, when viewed in this broader context, the absence of a specific reference to 

the regulation of other source categories under Section 111(d) does not suggest a statutory gap. 

Commenters said, instead, it is fully consistent with the implicit understanding that Section 

111(d) would only be applied to existing sources in a source category for which EPA had made 

an endangerment determination and established standards of performance for new sources. Thus, 

commenters concluded, EPA and the States are foreclosed from basing implementation plans on 

a portfolio approach that imposes legal obligations on any entities other than the fossil fuel-fired 

EGUs in the source categories covered in EPA's January 2014 proposal under Section 111(b) 

because these are the only source categories for which EPA has taken any action at all to regulate 

GHG emissions under Section 111. Commenters asserted, unless and until EPA conducts a 

significant contribution endangerment determination and establishes standards of performance 

for new sources under Section 111(b), it cannot authorize States to use Section 111(d) to impose 

binding legal obligations to reduce GHG emissions on nuclear electricity generators, renewable 

electricity generators, or electricity consumers. Further, commenters said it is unlikely that EPA 

could ever regulate GHG emissions from these sources categories under Section 111 because, as 

the Agency has recognized, they produce either zero- or near-zero emissions of CO2 and, 

therefore cannot contribute significantly to the endangerment of public health or the 

environment. Commenters concluded, thus, under Section 111, neither EPA nor the States have 

the authority to unilaterally impose emission reduction obligations on any existing sources other 

than affected fossil fuel-fired EGUs, the only source categories currently subject to regulation 

under Section 111(b). 

Response 10: To the extent this comment objects to the portfolio approach, which the EPA is 

not finalizing, the comment is moot. Otherwise, for the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history. 

Comment 11: Commenters asked if EPA employs a portfolio approach, does Section 111(d) 

permit state plans that place enforceable requirements on entities other than EGUs. [79 Fed. Reg. 

34830, at 34901-34903] Commenters stated that although EPA has not issued many rules under 

Section 111(d), [Id. at 34844] it has never interpreted "standards of performance for any existing 

source..." to apply to third party entities beyond the fence and this appears to be a tortuous 

reading of the statute and one that Congress likely did not intend. 

Commenters stated that the language is clear on its face - the Section 111(d) standard must be 

"for existing facilities" in a regulated source category (i.e., fossil fuel-fired EGUs), not the entire 

"integrated electricity system" and not facilities outside the subject source categories.
274

Commenters stated that the language and legislative history of the CAA show that Congress 

granted EPA the authority only to regulate individual sources of pollution; not to rely on the 

phrase "system of emission reduction" to treat the grid as a "system" it can regulate. Commenters 

provided two explanations. First, commenters noted that Section 111 requires EPA to create a list 

of "categories of stationary sources" which "cause[], or significantly contribute to, air pollution 

which may reasonably be anticipated to endanger public health or welfare."[42 U.S.C. section 

7411(b)(1)(A)] "Stationary source" is defined as a "building, structure, facility, or 

installation."[40 C.F.R. section 60.2] Commenters said, second, and only after listing a source 

category, EPA is to establish standards of performance for new sources within such 

category."[42 U.S.C. section 7411(b)(1)(B) (emphasis added)] Commenters asserted, unlike EPA 

posits, this does not mean that the entire utility system is a "source category" to be regulated. 

Commenters said that a "source category" would be a coal facility-and natural gas, nuclear 

facilities, renewable facilities, and energy efficiency measures are not components of a coal 

facility. Commenters observed that under this theory, EPA could set performance standards for 

any source category that requires production cuts based on the fact that we should use less of that 

particular product or should substitute another product, and commenters asked "What would 

prevent EPA from taking this one step further and demanding that certain facilities are only able 

to run a set number of hours per day, or days per year?" Commenters believed not even EPA's 

strictest standards can require this, yet it is a logical next step here given EPA's interpretation of 

its power under section 111(d). [42 U.S.C. Section 7412(d)(3) (stating restrictive MACT 

standards require facilities to install control technology to match "emission control that is 

achieved in practice" by best-controlled sources)].

Commenters stated EPA's novel "systems" approach to BSER in the proposed guidelines raises 

legal questions about EPA's authority to base standards for existing units on reductions that can 

be achieved only by units not regulated under the CAA or through changes in the end-use of a 

product. Commenters explained that because EGUs cannot, on their own, achieve the level of 

reductions necessary to comply, the proposed guidelines effectively require states, utilities 

owning EGUs and, in many cases, consumers and organizations that are totally unrelated to an 

existing EGU to undertake new programs and measures to meet the emission rate goals. 

Commenters said that never before have the BSER provisions of the CAA been applied to 

authorize EPA to regulate states and markets in this way, and these legal issues, which are 

discussed in more detail in section IV, below, eventually will be addressed by the inevitable 

litigation of the proposed 111(d) guidelines.

Commenters stated that standards promulgated under Section 111 must be source-based and 

reflect measures that the source's owner can integrate into the design or operation of the source 

itself. Commenters said a standard cannot be based on actions taken beyond the source itself that 

somehow reduce the source's utilization. Commenters said nor can it be based simply on 

requiring a source to reduce its operations. Commenters noted that a "standard of performance" 

cannot mandate "non-performance." Moreover, commenters noted that requiring a source to 

operate at reduced capacity would effectively order a fundamental redesign of the facility, which 

EPA has no authority to do. Commenters continued, stating that standards of performance apply 

to sources within listed categories and cannot regulate categories or subcategories in the 
275

aggregate or in combination with other entities outside the source category. Commenters asserted 

that the Act narrowly confines the stationary sources that may be regulated under Section 111 to 

any individual "building, structure, facility, or installation which emits or may emit any air 

pollutant." Commenters said this definition of "stationary source" does not extend to 

combinations of these facilities or to non-emitting entities such as states or consumers of 

electricity. Commenters asserted that EPA's Proposed Guidelines would unlawfully impose 

federally enforceable obligations on a broad, undefined class of "affected entities" beyond the 

regulated category of existing EGUs in order to effectuate the Agency's policy goal of reducing 

aggregate CO2 emissions. Commenters added that Section 111 of the CAA also requires that any 

standard of performance be "achievable" by the sources to which it applies based on applying an 

"adequately demonstrated" system of emission reduction. Commenters said a standard cannot be 

"achievable" for a source if, in order to achieve the standard, the source must rely on measures 

taken by some other entity that it does not control, or must simply cease to operate. Commenters 

stated that the Agency's past rulemakings pursuant to Section 111 reflect the provision's singular 

focus on individual sources. Commenters noted, in over 40 years of EPA's implementation of the 

CAA, every single standard of performance has been based on a "system of emission reduction" 

that is incorporated into the design or operation of individual sources. Commenters added the 

Agency's radical redefinition of what measures may constitute a "system of emission reduction" 

is impermissible in light of the past four decades of contrary implementation and section 111's 

exclusive focus on what individual sources can achieve. Commenters remarked the broad 

program of energy resource management and economy-wide demand reduction that EPA has 

proposed to create and administer in the Proposed Guidelines bears no resemblance to the 

source-focused regulatory program that Congress established in section 111. Commenters stated 

that the Proposed Guidelines would violate the D.C. Circuit's holding in ASARCO Inc. v. EPA, 

578 F.2d 319 (D.C. Cir. 1978). Commenters said there the court invalidated EPA's attempt to 

change the basic unit to which the section 111's new source performance standards ("NSPS") 

apply from a single building, structure, facility, or installation to a combination of such units. 

Commenters stated the D.C. Circuit held that EPA "has no authority to rewrite the statute in this 

fashion." 

Commenters stated that the CAA's other provisions confirm the narrow scope of what and how 

EPA may regulate under Section 111. Commenters asserted that nothing in the remainder of the 

Act authorizes EPA to regulate emissions from stationary sources by basing standards of 

performance on measures that are not implemented by the regulated source itself. Commenters 

said, likewise, there is no provision of the CAA under which the Agency may base a standard of 

performance on reduced operations. Commenters noted that standards of performance cannot be 

based on enforceable limitations on hours of operation or on electricity production. Commenters 

said the CAA's other programs establishing emission standards for new and existing sources 

focus solely on achieving emission reductions at individual sources. Commenters said these 

programs regulate emissions from sources based on what other individual sources can or already 

have achieved. Commenters mentioned, for example, emission standards for hazardous air 

pollutants must be based on the maximum achievable control technology and reflect the 

application of "measures, processes, methods, systems or techniques" directly to individual 

sources. (5 These measures include those that: "(A) reduce the volume of, or eliminate emissions 
276

of, such pollutants through process changes, substitution of materials or other modifications, (B) 

enclose systems or processes to eliminate emissions, (C) collect, capture or treat such pollutants 

when released from a process, stack, storage or fugitive emissions point, (D) are design, 

equipment, work practice, or operational standards (including requirements for operator training 

or certification) . . ., or (E) are a combination of the above." CAA section 112(d)(2). Notably, all 

of these measures can be implemented at an individual source.) Id. section 112(d)(2). 

Commenters noted that standards for visibility-impairing pollutants must reflect the "best 

available retrofit technology . . . for controlling emissions from [each eligible] source," 

considering the costs, existing control technology, and remaining useful life for that source. Id. 

section 169A(b)(2)(A). Commenters stated, under the CAA's PSD program, new and modified 

sources must implement the "best available control technology" ("BACT"), which the permitting 

authority must identify on a case-by-case basis for each source and which must reflect 

"application of production processes and available methods, systems, and techniques" at the 

source. Id. sections 165(a)(4), 169(3). Commenters said, although a source may accept 

operational limits in its preconstruction permit under the PSD provisions in order to avoid 

qualifying as a "major emitting facility" and having to implement BACT, under no 

circumstances may the BACT standard itself be based on reduced utilization of the unit. See id. 

section 169(3), 40 C.F.R. section 52.21(b)(12). Commenters noted that the BACT program is 

particularly relevant as evidence of Section 111's scope because Congress explicitly tied the 

BACT emission standards to Section 111. Commenters said standards of performance under 

Section 111 provide a regulatory floor for BACT standards. CAA section 169(3). But, as 

commenters asserted, if a standard of performance relies on a "system of emission reduction" 

that goes beyond the source itself, it cannot meaningfully inform a BACT standard for sources in 

that category. Commenters stated, in contrast, in the few regulatory programs where Congress 

did authorize emission control measures that go beyond a specific source for the purpose of 

meeting aggregate emission reduction goals, it spoke clearly and precisely. Commenters said, for 

example, when Congress took action in the 1990 CAA Amendments to cap sulfur dioxide 

emissions and establish a program for emissions allowances and trading, it added an entirely new 

title to the Act (Title IV) spelling out the requirements and implementation procedures for that 

program in great detail. See id. sections 401-416. Commenters stated, unlike Title I of the CAA, 

in which Section 111 is found, Congress's statement of purpose in Title IV specifically includes 

"encourag[ing] energy conservation, use of renewable and clean alternative technologies, and 

pollution prevention as a long-range strategy, consistent with the provisions of this subchapter, 

for reducing air pollution." Id. section 401(b). Commenters said that Congress also gave EPA 

explicit instructions on how to credit sources for compliance with emission requirements based 

on avoided emissions from renewable energy and energy conservation. Id. section 404(f). 

Commenters said Section 111 contains no such instructions. Commenters said, likewise, the 

CAA's provisions regarding implementation of the national ambient air quality standards 

("NAAQS") authorize states to take broad measures to attain and maintain compliance with those 

standards, and even contemplate that some existing stationary sources may need to reduce 

operations or retire in order for an area to achieve those standards. See id. Section 110. But in 

establishing the NAAQS program, commenters stated that Congress explicitly authorized EPA to 

promulgate health-based standards for ambient concentrations of certain pollutants at a level 
277

"requisite to protect the public health" with "an adequate margin of safety." Id. section 109(b). 

And commenters noted that Congress directed states to enact any "emission limitations and other 

control measures, means, or techniques (including economic incentives such as fees, marketable 

permits, and auctions of emissions rights) . . . as may be necessary or appropriate to meet" these 

standards, without singling out for regulation any specific sources of the regulated pollutants. Id. 

section 110(a)(2)(A). Commenters stated, in contrast, Section 111 regulates emissions from 

specific sources, not overall concentrations or amounts of pollutants. Commenters closed, statin 

its technology-based standards of performance are driven by what emission limitation those 

sources can achieve during their performance at reasonable cost, using adequately demonstrated 

measures, rather than by requirements dictated by public health or welfare.

Commenters stated EPA's long and consistent history of implementing Section 111 confirms the 

plain language of the statute and has also given shape to this regulatory program. Commenters 

said the Agency's past rulemakings reflect the program's singular focus on individual sources. 

Commenters noted, in fact, in the 44-year history of the Act, EPA has limited the scope of 

Section 111 to the regulated source in every rulemaking it has undertaken. Commenters made 

multiple points. First, commenters said the Agency's 1975 Subpart B regulations in which EPA 

established a procedural framework for states to adopt standards of performance for existing 

sources share the statute's exclusive focus on standards that are achievable by individual sources. 

Commenters stated that Subpart B directs EPA to publish a "guideline document containing 

information pertinent to control of the designated pollutant form [sic] designated facilities [i.e., 

existing sources subject to regulation under Section 111(d)]." 40 C.F.R. section 60.22(a) 

(emphasis added). Commenters stated, echoing the statutory text, emission guidelines under 

Subpart B must "reflect[] the application of the best system of emission reduction (considering 

the cost of such reduction) that has been adequately demonstrated for designated facilities." Id. 

section 60.22(b)(5) (emphasis added). Commenters stated, acknowledging Section 111's 

statutory command to consider the "remaining useful life" of regulated existing sources, Subpart 

B also notes that states may tailor standards of performance for individual designated facilities to 

account for "[u]nreasonable cost of control resulting from plant age, location, or basic process 

design," "[p]hysical impossibility of installing necessary control equipment," or "[o]ther factors 

specific to the facility (or class of facilities) that make application of a less stringent standard or 

final compliance time significantly more reasonable." Id. section 60.24(f). Commenters stated, in 

adopting this provision, EPA noted that such flexibility to depart from emission guidelines was 

necessary because "controls cannot be included in the design of an existing facility and because 

physical limitations may make installation of particular control systems impossible or 

unreasonably expensive in some cases." 40 Fed. Reg. at 53,344. Commenters said this discretion 

reflects Subpart B's focus on identifying what emission reductions individual existing sources 

can achieve themselves. Commenters continued that Subpart B also specifies that compliance 

with any state standard of performance for existing sources will be shown through a series of 

"[i]ncrements of progress," which are "steps to achieve compliance which must be taken by an 

owner or operator of a designated facility." 40 C.F.R. section 60.21(h). Commenters said these 

increments of progress include awarding contracts, initiating on-site construction or installation, 

and completing on-site construction or installation of emission control equipment or process 

changes. Thus, commenters said Subpart B makes clear that compliance with standards of 
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performance is achieved through on-site measures taken by regulated sources. Second, 

commenters noted, out of the nearly 100 NSPS and emission guidelines EPA has promulgated 

and subsequently revised since 1970, every single standard of performance has been based on a 

"system of emission reduction" that is incorporated into the design or operation of individual 

sources. Commenters said, for example, when the Agency promulgated and later revised NSPS 

for kraft pulp mills, it never considered basing the standard of performance on requiring 

increased use of recycled paper to reduce kraft pulp mill operations, even though such a measure 

arguably would have reduced emissions from kraft pulp mills. See 43 Fed. Reg. 7568 (Feb. 23, 

1978); 79 Fed. Reg. 18,952 (Apr. 4, 2014). Commenters said, likewise, on each past occasion in 

which EPA has promulgated or revised NSPS for the categories of EGUs at issue in this 

proposed rulemaking a timeframe spanning from 1971 to 2012 the Agency's analysis has focused 

entirely on the use of emission control technology or low-sulfur fuels at individual sources.(See, 

e.g., 36 Fed. Reg. 24,876 (Dec. 23, 1971) (promulgating Subpart D); 44 Fed. Reg. 33,580 (June 

11, 1979) (promulgating Subpart Da); 44 Fed. Reg. 52,792 (Sept. 10, 1979) (promulgating 

Subpart GG); 63 Fed. Reg. 49,442 (Sept. 16, 1998) (amending Subpart Da); 71 Fed. Reg. 38,482 

(July 6, 2006) (promulgating Subpart KKKK); 77 Fed. Reg. 9304 (Feb. 16, 2012) (amending 

Subpart Da).) Commenters stated, despite pervasively regulating EGUs under Section 111 over 

the past forty years, EPA has never before even considered basing a standard of performance for 

emissions from these sources on reduced utilization or shifting generation to lower-emitting 

sources. Commenters said nor has EPA's focus on individual sources changed in recent years. 

Commenters noted, in an NSPS rulemaking that took place just weeks after the Proposed 

Guidelines were published, EPA once again reaffirmed that standards of performance "apply to 

sources" and must be "based on the BSER achievable at that source." 79 Fed. Reg. 36,880, 

36,885 (June 30, 2014). Commenters stated, because of the nature of Section 111(d), EPA has 

conducted very few rulemakings under that provision. But on the few occasions that EPA has 

issued emission guidelines for existing sources, commenters said it has maintained the same 

focus on measures that the regulated source can incorporate into its design or otherwise 

implement by itself. Commenters stated that adopting the same approach is not only appropriate 

but required, given that the CAA defines "standard of performance" identically for new and 

existing sources. Commenters said, since 1970, EPA has only published valid emission 

guidelines under section 111(d) for five source categories, and in all five of these rulemakings 

the emission guidelines were based on the application of pollution control technology or other 

process controls at individual sources. (41 Fed. Reg. 19,585 (May 12, 1976) (guidelines for 

phosphate fertilizer plants based on "spray cross-flow packed scrubbers"); 41 Fed. Reg. 48,706 

(Nov. 4, 1976) (guidelines for sulfuric acid production units based on "fiber mist eliminators"); 

43 Fed. Reg. 7597 (Feb. 23, 1978) (guidelines for kraft pulp mills based on process controls and 

two-stage black liquor oxidation system); 45 Fed. Reg. 26,294 (Apr. 17, 1980) (guidelines for 

primary aluminum plants based on "effective collection of emissions, followed by efficient 

fluoride removal by dry scrubbers or by wet scrubbers"); 61 Fed. Reg. 9905, 9907 (Mar. 12, 

1996) (guidelines for municipal solid waste landfills based on "(1) [a] well-designed and welloperated gas collection system and (2) a control device capable of reducing [non-methane 

organic compounds] in the collected gas by 98 weight-percent").) Commenters noted that even 

EPA's short-lived CAMR under section 111(d) did not adopt a broader approach to establishing 
279

standards of performance. Commenters said, although CAMR did authorize an emissions trading 

program as a tool for compliance with standards of performance, the "system of emission 

reduction" that was used to set the emission guidelines themselves was limited to pollution 

control technology that could be installed at individual sources. 70 Fed. Reg. at 28,617-20, 

28,621 (final guideline was "based on the level of Hg emissions reductions that will be 

achievable by the combined use of co-benefit (CAIR) and Hg-specific controls"). In sum, 

commenters stated that the plain text of Section 111 of the CAA establishes a program that is 

focused on reducing the rate of emissions from new and existing stationary sources through the 

application of systems that can be integrated into the design or operation of the source itself. 

Commenters noted that the overall context of the CAA and EPA's unwavering commitment to 

this approach outside of the present rulemaking confirm this focus. Commenters closed, stating 

the notion that a source must be able to comply with a standard of performance through measures 

under its own control is so fundamental to Section 111 that it pervades every aspect of that 

provision's language and history of implementation.

Commenters stated the broad program of energy resource management and economy-wide 

demand reduction that EPA proposes to create and administer in this rule bears no resemblance 

to the source-focused regulatory program that Congress established in Section 111 and that EPA 

has consistently implemented over the past four decades. Commenters noted, in the Proposed 

Guidelines, the Agency has defied precedent and logic by rewriting some parts of the Act and 

completely ignoring others in order to embark on a multiyear voyage of discovery that far 

exceeds EPA's lawful authority. See UARG v. EPA, 134 S. Ct. at 2446. Indeed, commenters 

remarked, as noted in the introduction to this section of UARG's comments, EPA's proposal 

would invert the Act's regulatory process under Section 111 for controlling emissions from 

existing sources. Commenters stated, in the lawful course of regulation, reducing emissions from 

existing sources under Section 111(d) would proceed such that: (1) EPA specifies a source 

category and identifies achievable source-based performance measures that can reduce sources 

emissions through design or process changes; (2) the state determines which measures are 

appropriate for particular sources based on cost, remaining useful life, and other factors; (3) 

individual regulated sources implement those measures based on standards of performance 

promulgated by states; and (4) emission reductions result from individual sources operating at a 

reduced emission rate. Commenters said yet EPA's Proposed Guidelines would begin at the end, 

by mandating a specific level of CO2 emissions from each state at the outset, and only deviate 

farther from the Act from there. Commenters stated EPA's approach is that: (1) the Agency 

specifies a permissible CO2 emissions rate for each state expressed in lb/MWh; (2) the state 

determines what entities whether EGUs or other commercial, institutional, corporate, or 

governmental entities it will subject to enforceable obligations; and (3) the state requires a broad 

and undefined range of emission-reducing or operational measures at those entities as necessary 

to achieve the desired emissions level. Commenters asserted that this backwards approach 

plainly exceeds the Agency's authority under the CAA. Commenters stated that nearly every 

aspect of the Proposed Guidelines is inconsistent with the Act and with EPA's binding legislative 

rules. Commenters stated, in particular, the Agency's radical redefinition of what measures may 

constitute a system of emission reduction is plainly impermissible in light of Section 111's 

exclusive focus on what individual sources can achieve and the past four decades of contrary 
280

implementation. Likewise, commenters added, EPA's claim that it may apply BSER to a state as 

a whole rather than to individual sources in a source category lacks any legal merit. And, 

commenters stated, finally, the fact that the Proposed Guidelines required emission reductions 

cannot be enforced without dramatically expanding the universe of entities subject to obligations 

under Section 111 underscores the extent to which EPA has strayed from the scope of regulation 

permitted under the CAA. Commenters stated, together, these defects reflect the Agency's 

disregard for the statutory and administrative bounds of its own authority. Commenters closed, 

stating the Proposed Guidelines would bring about an enormous and transformative expansion in 

EPA's regulatory authority without clear congressional authorization, and therefore it must be 

withdrawn. Id. at 2444.

Commenters stated and concurred that perhaps the most fundamental departure from the law in 

EPA's Proposed Guidelines is the Agency's assertion that the "best system of emission reduction" 

for the sources in a designated source category under Section 111 may include measures that 

would (either directly or indirectly) reduce a source's utilization and that are not within the 

control of individual sources. Commenters stated, of the four "building blocks" that make up 

EPA's proposed statewide BSER for existing EGUs, only Building Block 1 (heat rate 

improvements at coal-fired EGUs) falls within the scope of measures contemplated in the Act 

and could therefore provide the foundation for a legally defensible emission guideline. 

Commenters asserted that the others mandating redispatch of generation from coal-fired units to 

NGCC units, displacing generation from affected EGUs with generation from renewable energy 

sources, and reducing electricity demand through energy efficiency measures all impermissibly 

rely on measures that go beyond the boundaries of individual affected EGUs and that are not 

within the control of individual EGU owners and operators. Commenters said the measures in 

Building Blocks 2, 3, and 4 are all based on implementation of statewide energy policies that 

would confiscate the available generating capacity of existing EGUs. Commenters stated, indeed, 

the Proposed Guidelines impose undefined regulatory obligations on a broad swath of 

unspecified "affected entities" in addition to the fossil fuel-fired EGUs that are the source 

category for this rule. Commenters said many of these "affected entities" do not emit CO2 in any 

appreciable amount. Commenters asserted that this "beyond-the-source" approach would allow 

EPA to restructure every aspect of the states electric power markets and regulate any electricity 

user - effectively, to administer the entire national economy - for the purposes of reducing 

demand for and generation by sources in the listed source category (i.e., existing fossil fuel-fired 

EGUs). Commenters stated that this is impermissible and would transform Section 111 into 

something untethered to its statutory language and unrecognizable to the Congress that created it. 

Commenters said the genesis of this novel claim to regulatory power lies in the Agency's attempt 

to rewrite what constitutes a "system of emission reduction" for the purposes of Section 111. 

Commenters stated, as noted above, under that section, a standard of performance must "reflect[] 

the degree of emission limitation achievable through the application of the best system of 

emission reduction" that has been adequately demonstrated for sources in the regulated category. 

CAA Section 111(a)(1) (emphasis added). Commenters asserted, in this rulemaking, however, 

EPA "claims to [have] discover[ed] in [this] long-extant statute an unheralded power to regulate 

a significant portion of the American economy," a practice that courts have looked upon 

skeptically in the past. UARG v. EPA, 134 S. Ct. at 2444. Commenters stated EPA asserts here 
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that because the word "system" is not explicitly defined in the CAA, the Agency may freely 

apply that word's abstract dictionary definition: "a set of things working together as parts of a 

mechanism or interconnecting network; a complex whole. ("Legal Memorandum for Proposed 

Carbon Pollution Emission Guidelines for Existing Electric Utility Generating Units at 51 

(undated) (emphasis added), Docket ID No. EPA-HQ-OAR-2013-0602-0419 ("EPA Legal 

Memorandum"). Commenters noted EPA applies this definition in the abstract to conclude that a 

"system of emission reduction" can be "virtually any set of things that reduce emissions," 

including anything from "add-on controls . . . to measures that replace production or generation 

at the affected sources." Id. at 51-52 (emphasis added). Commenters noted the Agency even 

claims that it may require "reduced utilization" of a source as part of a "system of emission 

reduction," presumably including a prohibition on utilizing a specific regulated source. Id. at 79; 

79 Fed. Reg. at 34,889. Commenters stated that the breadth of EPA's unprecedented assertion of 

authority is staggering, particularly in light of Section 111's singular focus on regulating 

individual sources of emissions. Commenters stated, under EPA's asserted definition of a 

"system of emission reduction," standards of performance for sources in a regulated source 

category would become a mere pretext for imposing a wide range of demand-reducing 

obligations on countless entities across the entire nation. Commenters noted, under EPA's 

interpretation, EPA would be able to require any "affected entity" to implement any "set of 

things" that the Agency believes would reduce the operation of sources in the listed source 

category and hence emissions from that category no matter how far removed the required actions 

are from the source itself. Commenters noted that in the context of EGUs, these measures could 

include anything from capping annual generation from certain EGUs, to ordering the shutdown 

of some EGUs or other affected entities altogether, to regulating how individuals use electricity 

or consume other goods and services that require electricity. Commenters asserted that applying 

this "beyond-the-source" approach to other source categories as this rulemaking suggests EPA is 

likely to attempt leads to similarly expansive outcomes. Commenters said, for example, this 

approach could lead EPA to adopt standards of performance for kraft pulp mills that are based on 

efforts to reduce demand for new paper, such as requiring office buildings to implement paper 

recycling programs or encouraging credit card companies to provide paperless billing to 

customers. Commenters said or it could allow EPA to adopt standards of performance for oil and 

gas production facilities that are based on reducing demand for gasoline, such as mandating 

carpooling programs or requiring additional state investments in public transportation 

infrastructure. Commenters stated that these beyond-the-source measures are inconsistent with 

the regulatory program Congress provided for in Section 111 of the CAA. Commenters stated, 

although the dictionary definition of "system," if considered in the abstract and devoid of any 

statutory or historical context, might theoretically embrace statewide, regional, or even national 

reduction programs, the word as used in Section 111 can refer only to reductions resulting from 

measures that are incorporated into the source itself. EPA's claim that nothing in the language or 

context of Section 111 limits the Agency's expansive redefinition of "system of emission 

reduction" is patently false, and it suggests that EPA has ignored the statute and its own past 

rulemakings. See EPA Legal Memorandum at 51-52. Commenters stated, indeed, Section 111's 

clear focus on measures that are achievable by the regulated source itself pervades every aspect 

of that provision's language, its statutory context, and EPA's legislative rulemakings 
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implementing that provision. Commenters said, as described above in Section III.A, Section 111 

is a narrow program designed to improve the emissions performance of new and existing sources 

in specific categories based on the application of achievable measures implemented in the design 

or production process of the source at reasonable cost. Commenters asserted that EPA 

completely ignored these factors when addressing the meaning of the word "system" as it is used 

in Section 111, and in developing its proposed BSER. Commenters noted that Building Blocks 2, 

3, and 4 of the proposed BSER are based on beyond-the-source measures that cannot be achieved 

by individual sources, and accordingly, they cannot be used to support a rulemaking under 

Section 111 of the CAA. Commenters stated, as noted above, Section 111 requires that emission 

guidelines and standards of performance be "achievable" by "any existing source" in the 

regulated category not by only some sources, by a state, or by the category in the aggregate or in 

combination with other "entities." Commenters said an emission guideline that requires regulated 

sources to obtain emission reductions offsite in order to comply with an otherwise unachievable 

standard would unambiguously contravene the plain text of the CAA. Commenters said yet EPA 

failed to acknowledge how the achievability requirement limits the systems of emission 

reduction that may provide the basis for Section 111 regulation. Commenters noted Building 

Blocks 2, 3, and 4 of the proposed BSER require measures that go beyond individual existing 

EGUs. Commenters said the owner of an individual coal-fired utility boiler cannot control the 

dispatch of NGCC units relative to other fossil fuel-fired EGUs. Commenters said nor can it 

make changes in the design or production process of its boiler to generate renewable energy or to 

lead consumers to use less electricity. Therefore, commenters noted that Building Blocks 2, 3, 

and 4 cannot support an achievable emission guideline. Commenters said, indeed, when EPA has 

attempted in the past to group individual sources together for the purposes of applying standards 

of performance, these attempts have been soundly rejected by the courts. See ASARCO, 578 

F.2d at 327. Commenters noted, in ASARCO, the D.C. Circuit invalidated EPA's attempt to 

"change the basic unit to which the NSPSs apply from a single building, structure, facility, or 

installation - the unit prescribed in the statute - to a combination of such units," holding that EPA 

"has no authority to rewrite the statute in this fashion." Id. (emphasis in original). Commenters 

noted that the Agency must be "guided by a reasoned application of the terms of the statute it is 

charged to enforce, not by an abstract dictionary definition." Id. at 324 n.17. Commenters said if 

the Agency is concerned about the need for flexibility in order for sources to comply with a 

standard, the solution is to alter the stringency of the standard rather than the scope of the source 

to which that standard applies. Id. at 328-29. Moreover, commenters asserted that EPA failed to 

acknowledge the other ways in which the language and overall statutory context of Section 111 

render its beyond-the-source approach unreasonable. Commenters said it is a "fundamental 

canon of statutory construction that the words of a statute must be read in their context and with 

a view to their place in the overall statutory scheme." UARG v. EPA, 134 S. Ct. at 2441 (internal 

quotation marks omitted). Commenters said yet EPA myopically limits its discussion of the 

"context in which . . . system of emission reduction is found" to Section 111(d)(1) of the CAA in 

isolation, and states that nothing in that subsection constrains the Agency from applying a 

beyond-the-source regulatory approach. EPA Legal Memorandum at 52. Commenters stated, as 

an initial matter, this conclusion is simply inaccurate. Commenters said Section 111(d)(1) 

specifies that its standards of performance must apply to "any existing source" and directs states 
283

to account for the remaining useful life of each regulated source when applying these standards 

to the source, demonstrating that Section 111(d) is concerned with achievable measures that 

individual sources can take to reduce their rate of emissions. But more importantly, commenters 

asserted that it is unreasonable for EPA to limit the context of this statutory provision to a single 

paragraph in Section 111, or even to a single section of the CAA, particularly when that term is 

used repeatedly throughout the Act. As discussed above, commenters stated that Section 111 

unambiguously limits standards of performance, and thus the systems of emission reduction on 

which they are based, to individual sources. Commenters said, likewise, the CAA's other similar 

programs for regulating emissions from stationary sources - including programs for hazardous air 

pollutants, visibility-impairing pollutants, and prevention of significant deterioration of air 

quality - are limited to measures incorporated into the design or production processes of 

individual sources. Commenters said nowhere in the Proposed Guidelines does EPA 

acknowledge that its claimed authority to base standards on beyond-the-source measures 

fundamentally conflicts with its entire 44-year history of rulemaking under Section 111. 

Commenters noted that EPA's Subpart B regulations speak exclusively in terms of requirements 

that apply to, and are implemented by, individual designated facilities. Commenters asserted that 

emission guidelines must be based on "the application of the best system of emission reduction . 

. . that has been adequately demonstrated for designated facilities," and EPA committed itself to 

address "different sizes, types, and classes" of existing sources by "specify[ing] different 

emission guidelines or compliance times" when "costs of control, physical limitations, 

geographical location, or similar factors" warrant the application of different guidelines. 40 

C.F.R. section 60.22(b)(5) (emphasis added). In addition, commenters stated that every single 

NSPS or emission guideline that EPA has ever issued - spanning over four decades, multiple 

comprehensive amendments to the CAA, and nearly 100 subparts within EPA's regulations has 

been based on measures that individual sources can implement through design or process 

measures at the source itself. Commenters stated that the Agency's only reference to precedent is 

to note that some of its emission guidelines for municipal waste combustors, which were 

promulgated jointly under Sections 111 and 129 of the CAA, have included provisions 

concerning emission rate averaging, tradable emission credits, and waste management plans. 

EPA Legal Memorandum at 63. Commenters noted that these rules do not support the position 

EPA has adopted in the Proposed Guidelines. Commenters said, contrary to the Agency's 

implication, none of the emission guidelines for municipal waste combustors were based on 

measures similar to Building Blocks 2, 3, and 4. Commenters said, rather, the emission 

guidelines for existing hospital/medical/infectious waste incinerators were based on "good 

combustion" and wet scrubbers of varying efficiency levels, 62 Fed. Reg. 48,348, 48,371 (Sept. 

15, 1997), while the emission guideline for existing commercial and industrial solid waste 

incinerators was based on "the use of a wet scrubbing system, or other equivalent emission 

control technology," 65 Fed. Reg. 75,338, 75,344 (Dec. 1, 2000). Critically, commenters asserted 

that the emission rate averaging and tradable emission credits that EPA included in its emission 

guidelines for municipal waste combustors were merely flexible compliance tools and were not 

used to determine the stringency of the standard itself, as EPA seeks to do here. Thus, 

commenters stated that these rulemakings only serve to reinforce - not to contradict - Section 

111's narrow focus on measures that individual sources can implement (and have implemented in 
284

the past). Commenters said this focus is unsurprising in joint rulemaking under Sections 111 and 

129, given that standards of performance under both provisions are required to reflect the 

"degree of reduction in emissions of air pollutants" that the Administrator determines is 

"achievable" for individual sources. Compare CAA section 111(a)(1) with CAA section 

129(a)(2). Commenters noted that EPA also points to the now-defunct emission guidelines under 

CAMR as an example of regulations under Section 111 that EPA claims are based on a beyondthe-source emission trading program. EPA Legal Memorandum at 63 n.51. But, commenters 

stated, like the emission guidelines for municipal waste combustors described above, CAMR's 

trading program was merely a tool for compliance: the actual standards were set based on the 

application of pollution control technology at individual EGUs. Commenters noted that the 

systems of emission reduction that were used to set CAMR's emission guidelines were (1) the 

co-benefit mercury reductions of installing scrubbers and selective catalytic reduction ("SCR") at 

individual units under the Clean Air Interstate Rule ("CAIR") (for the first phase of CAMR) and 

(2) the installation of mercury-specific pollution control technologies such as activated carbon 

injection (for the second phase). 70 Fed. Reg. at 28,617-20, 28,621. Thus, commenters asserted 

that EPA's reasoning in CAMR does not support a beyond-the-source approach to standardsetting under Section 111. Commenters said it confirms the source-focused nature of Section 

111, and further demonstrates that, after setting achievable emission standards for individual 

sources, EPA may allow states to adopt flexible programs (such as emissions trading) to comply 

with standards that those individual sources are otherwise capable of achieving without resorting 

to those flexible programs. Commenters stated Section 111 could not be clearer that its standards 

of performance for new and existing sources must be achievable by individual sources using 

measures that are implemented into the sources themselves. Commenters stated, when compared 

to the narrow regulatory program that Congress created in Section 111 and to which EPA has 

given shape through its consistent administrative implementation, the authority that the Agency 

now claims under its novel redefinition of "system of emission reduction" is plainly unlawful. 

Commenters closed, stating that EPA's beyond-the-source approach "would bring about an 

enormous and transformative expansion in EPA's regulatory authority without clear 

congressional authorization "indeed, despite clear congressional language and regulatory history 

contradicting that claim of authority. See UARG v. EPA, 134 S. Ct. at 2444. Therefore, EPA 

must withdraw the Proposed Guidelines.

Commenters stated that EPA's proposal for modified and reconstructed sources under S. 111(b) 

is not sufficient to justify the S. 111(d) proposal. Commenters stated, although the CAA defines 

the term "new source" to include a modified source, CAA Section 111(a)(2), the proposed 

guidelines seek to regulate systems, states, and sources other than individual EGUs. Commenters 

noted that the proposed guidelines define an "affected entity" as any entity with an enforceable 

obligation under a state plan. Commenters said this could include nearly any type of entity, "e.g., 

an entity that is regulated by the state, such as an electric distribution utility, or a private or 

public third-party entity." By contrast, commenters noted that the Section 111(b) proposal for 

modified and reconstructed facilities define the designated facility as a fossil fuel-fired EGU. 

Commenters believed this is an unlawful mismatch, explaining that EPA cannot regulate or 
285

require the regulation of a different type of source under Section 111(d) than the type of source 

that is regulated as a new (or modified or reconstructed) source under Section 111(b). 

Commenters posited that because EPA has not met these legal prerequisites for proposing and 

finalizing Section 111(d) emission guidelines for CO2 emissions, the proposal is unlawful and 

must be withdrawn.

Commenters stated that the Clean Air Act and its regulations define "stationary source," as "any 

building, structure, facility, or installation which emits or may emit any air pollutant." (69 40 

C.F.R. 60.2), and emissions controls under Section 111(d) must apply directly to "a single 

building, structure, facility, or installation" the unit prescribed in the statute, rather than to a 

combination or agglomeration of such units.(70 Asarco Inc. v. EPA, 578 F.2d 319, 322 (D.C. 

Cir. 1978)) Commenters believed that EPA's implementing regulations make it clear that these 

standards and reductions apply to individual units and offers the example, when EPA's 

regulations speak of "increments of progress" toward compliance with a standard of 

performance, they refer expressly to the steps "which must be taken by an owner or operator of a 

designated facility" in order to achieve that compliance. (71 40 C.F.R. 60.21) Commenters stated 

that the regulations call for each state plan to "adopt emission standards and compliance 

schedules applicable to designated facilities," to obtain information about compliance at 

designated facilities, and to require testing and recordkeeping at designated facilities (72 40 

C.F.R. 60.26).

Commenters stated that arguing that the definition of source and system is unique between 

111(b) and 169(3) applications versus what EPA chooses to apply under 111(d) in this instance 

only leads to the City's uncertainty in this rule's outcome, especially in light of the Supreme 

Court's recent decision reversing in large part the Tailoring Rule.

Commenters stated that through its four building blocks contained in the proposed rule, EPA 

defines the Best System of Emission Reduction ("BSER") for coal-fired EGUs as a combination 

of emission reductions from efficiency upgrades at coal-fired units, increased utilization of 

natural gas units, extending the life of nuclear plants, installing more renewable power and 

significant gains in demand-side energy efficiency, and this so-called "integrated electricity 

system" approach for defining BSER stretches so far beyond the fence-line of a regulated facility 

that literally every consumer of electricity in the U.S. could be implicated as a potential 

compliance option for EPA's rule. Commenters remarked that certainly heavy manufacturers 

such as steel and forging would be forced into a State's compliance plan. Commenters closed 

stating that this approach is not only unprecedented, it is unlawful, and commenters requested 

that EPA reevaluate its proposed method for establishing BSER and limit any guidance in setting 

performance standards to actions that can reasonably take place within the fence-line of a 

regulated facility.

Commenters stated that EPA's "system-based" approach in the proposed ESPS that looks to CO2 

reductions from entities in building blocks 2-4 beyond the "affected facility" is inconsistent with 

past precedent, incompatible with the statutory provisions, and ultimately results in the 

regulation of a wide range of entities that are not "existing sources" to meet the proposed ESPS.
286

Commenters stated that even the broadest interpretation of the term "system" does not support 

this precedential expansion of EPA's Section 111 authority and requires EPA to side-step its 

statutory obligation to consider costs at the source, and as a result, EPA has proposed an 

unreasonable and excessively stringent standard of performance that will result in the closure of 

coal-fired EGUs. Commenters added that EPA gleans much of its authority to reduce generation 

at coal-fired EGUS from a broad reading of the best system of emission reduction. Commenters 

said, however, even if one accepts EPA's premise that EGUs are part of an electrical "system" (a 

point that Newmont does not concede), it does not follow that EPA has the authority to use that 

"system" to require the listed source category to reduce production or close its doors. 

Commenters noted, similarly, using the entire "system" as a means of spreading costs across a 

state's electrical grid does not properly account for the costs that the "affected EGU" must 

shoulder to comply with the standard of performance. Commenters continued, stating that prior 

to this rulemaking, EPA has consistently used its authority under Section 111 to require control 

technologies (historically referred to as "best demonstrated technology") at the source and has 

never applied a standard of performance to intentionally reduce production. Commenters stated, 

as EPA developed this rulemaking, however, it began moving away from technology-based 

standards under Section 111 to focus on BSER: The level of control prescribed by Section 111 of 

the [Clean Air Act] historically has been referred to as "Best Demonstrated Technology" or 

BDT. Commenters noted, to better reflect that Section 111 was amended in 1990 to clarify that 

'best systems' may or may not be 'technology,' the EPA is now using the term 'best systems of 

emission reduction' or BSER. Commenters contended that EPA's new reliance on the phrase 

"system" does not provide the requisite authority to treat the entire grid - or even each state grid -

as a "system" (including the entire population of electrical consumers) over which EPA can 

spread the costs of BSER. Commenters stated that none of the example source categories EPA 

cites provide a precedent for vastly expanding the scope of Section 111(d). (For example, EPA 

cites to Clean Air Act Section 129 regulations for hospital/medical/infectious waste incinerators, 

62 Fed. Reg. 48,348, 48,359 (Sept. 15, 1997), and for commercial and industrial solid waste 

incinerators, 65 Fed. Reg. 75,338, 75,341 (Dec. 1, 2000), which require the incinerators would 

adopt waste management "plans." See e.g. 65 Fed. Reg. at 48,359 (noting that "recycling and 

pollution prevention measures could yield greater reductions in emissions than add-on controls 

alone.").) Commenters asserted that these plans are limited to the sources in question, and not the 

entire industrial system within which they operate, and they do not require regulated sources to 

cut back operations in order to further reduce emissions. Commenters concluded that EPA's 

previous rulemakings do not provide precedent for EPA's expansive reading of its Section 111(d) 

authority.

Commenters stated that EPA notes that it wants to give states broad discretion to implement the 

Section 111(d) program, including through the portfolio approach EPA has developed to reflect 

the Building Blocks it used to identify BSER. Id. at 34,917. Commenters stated EPA goes on to 

admit, however, that the program it has envisioned may prove challenging to implement. Id. 

Commenters added that EPA suggests that it is a key state consideration, therefore, to figure if 

the program as imagined by the Agency could be workable. Commenters said EPA has it 

backwards. In developing the Proposed Guidelines, commenters stated that EPA should have 

done the work necessary to determine if the program it has devised is practical. Commenters 
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noted, under Section 111(d), EPA cannot seek to impose stringent emission control requirements 

on states without knowing if the plans needed to implement those requirements can be 

developed. Commenters closed, stating that this is the antithesis of Section 111's requirement 

that performance standards reflect levels of emission control that are achievable and 

demonstrated.

Commenters stated that EPA lacks statutory authority (and is limited by its own regulations) to 

issue emission guidelines seeking reductions of CO2 emissions from coal-based EGUs in a 

manner based on something other than an adequately demonstrated reduction system for such 

EGUs. 

Commenters stated the proposed guidelines would require the regulation of sources that extend 

far beyond the coal- and gas-fired EGUs addressed in the Agency's January 2014 Section 111(b) 

proposal, and that it is clear that EPA intends for the Section 111(d) performance standards to 

apply to "affected entities," not only to "affected EGUs."(5050 See, e.g., Proposed 40 C.F.R. 

60.5780(a) ("Your state plan shall include emission standard(s) that are quantifiable, verifiable, 

non-duplicative, permanent, and enforceable with respect to each affected entity."); 

Id. 60.5780(f) ("An emission standard is enforceable against an affected entity if: (1) A 

technically accurate limitation or requirement and the time period for the limitation or 

requirement is specified; (2) Compliance requirements are clearly defined; (3) The affected 

entities responsible for compliance and liable for violations can be identified; (4) Each 

compliance activity or measure is enforceable as a practical matter; and (5) The Administrator 

and the state maintain the ability to enforce violations and secure appropriate corrective actions . 

. . .") (emphasis added).) Commenters posited that EPA has no authority, under either Section 

111(d) or the Subpart B regulations, to adopt a nonnegotiable, binding "emission limitation" for 

states as it proposes to do. Commenters noted that Subpart B does not even mention the term 

"emission limitation." Commenters said both Subpart B and Section 111(d) speak in terms of 

"standards of performance." Commenters stated, under Section 111(a)(1), the standard of 

performance must reflect the degree of "emission limitation" that is achievable. Commenters 

stated, under Section 111(d), states are to establish standards of performance applicable to 

sources. Commenters closed, stating that EPA's approach disregards both the statute and its own 

implementing regulations and would apply to states a binding emission limitation, and states 

must then apply standards of performance to any "affected entity" it wishes, without fealty to the 

restriction that the regulated entity must be identical in the Section 111(b) and Section 111(d) 

regulations. 

Commenters stated that EPA has established a BSER methodology that sets state-specific 

emission rates, and EPA is, in effect, claiming that while the rate was set based on the particular 

state's circumstances, it need not evaluate whether those circumstances actually are consistent 

with the mix of BSER blocks the EPA has determined are achievable. Commenters contended 

that the proposed guidelines do not establish that the four BSER Building Blocks can be 

implemented together as an achievable, adequately demonstrated, cost-effective "system" for 

each state.
288

Commenters believed the CPP is illegal because it depends on "outside the fence line" 

mechanisms - not controls at the sources of the emissions - to achieve the vast majority of 

emission reductions. See generally 79 Fed. Reg. 34,856-34,858. Commenters stated, in its 

proposal, EPA mandates CO2 reductions for individual states. Id. at 34,833 (the proposed rule 

"lays out state-specific CO2 goals that each state is required to meet?") Commenters asserted 

that EPA repeatedly refers to these as "goals" even though they are actually "binding," not 

optional as the word "goal" implies, based on four building blocks, only one of which involves 

reduction of emissions at the source. Id. at 34,892. "EPA's Proposed Clean Power 

Plan: Implications for States and the Electric Industry," The Brattle Group, June 2014, page 3, 

Table 1 (building block 1 accounts for only 12% of the total BSER CO2 reductions in the Clean 

Power Plan). Commenters argued that the majority of the reductions are achieved from building 

blocks that are beyond the source of the CO2 emissions, and further, EPA also employs these 

same building blocks as the compliance mechanisms upon which states are to rely for developing 

compliance plans.

Commenters stated that EPA has not described the mechanisms states can use to develop and 

implement a plan that will reliably demonstrate compliance. Commenters believed that Building 

blocks 3 and 4 are not enforceable against designated facilities, explaining that EPA's proposal 

takes the form of a "portfolio approach" under which states would apply traditional "emission 

standards" to affected EGUs, and other requirements to other "affected entities" that, taken as a 

whole, will achieve the required level of emission performance. (79 Fed. Reg. at 34,891) 

Commenters stated, alternatively, EPA suggests that a "standard of performance" could be 

adopted by the states that places the entire burden of achieving the level of performance reflected 

in the state goals on affected sources. Commenters said EPA proposes that states can create other 

"compliance entities" to assume those responsibilities, (79 Fed. Reg. at 34,901) but does not 

explain how these entities (which emit nothing that is subject to regulation under the CAA) 

became subject to the jurisdiction of the environmental regulators, or how states could rely on 

activities by unrelated third parties to reduce emissions at independently operated facilities. 

Commenters remarked that this framework raises a number of unanswered questions, including 

who is the entity being regulated, and who has enforcement responsibility.

Commenters stated EPA proposes to redefine the term "emission standard" beyond its historic 

meaning to include "any requirement applicable to an affected entity other than an affected 

source that has the effect of reducing utilization of one or more affected sources, thereby 

avoiding emissions from such sources, including, for example, renewable energy and demandside energy efficiency measures requirements." 40 CFR 60.5820 (proposed), 79 Fed. Reg. at 

34,956. Commenters stated, coupled with this is EPA's proposed definition of a whole new 

category of "affected entities," other than "affected sources," that would become subject to CAA 

Section 111(d) regulation even though these "affected entities" (1) do not comprise any part of 

the CO2 emitting affected sources subject to CAA Section 111(d) regulation and (2) may not 

even emit CO2 at all. Commenters did not believe there is evidence of support in Section 111 of 

the CAA for the "overreach" of these new definitions. 
289

Commenters also stated that CAA Section 111 addresses "new" (Section 111(b)) and "existing" 

(Section 111(d)) "stationary sources." Commenters quoted the term "stationary source" means 

"any building, structure, facility, or installation which emits or may emit any air pollutant." CAA 

Section 111(a). Commenters added that Section 111 authorizes EPA to establish "standards of 

performance" for "categories of stationary sources." In other words, commenters said the 

standards of performance apply to defined "stationary sources," i.e., facilities that emit air 

pollutants ("affected sources"), not facilities that merely consume electricity ("affected entities" 

under EPA's proposed new definition). Commenters argued that EPA's proposed definitions of 

"emission standard" and "affected entities": go far beyond any historic interpretation of the reach 

of CAA Section 111 and are simply not supported by any reasonable interpretation of that 

statute.

Commenters stated EPA proposes to regulate sources that are not affected sources, and some of 

these sources are gas-fired units that operate below a 33% capacity factor, RE sources that will 

be required to operate in lieu of fossil-fueled sources, and demand side improvements (i.e., 

Building Blocks 2, 3 and 4) to accomplish the targets set by EPA. Commenters believed it is 

clear that Congress intended a standard of performance to be something that would be 

established and applied to a source, and substituting other generation from less carbon intensive 

sources does not establish a standard for an EGU. Commenters explained that substituting low or 

zero carbon generation for generation produced by an EGU does not apply anything to the EGU. 

Commenters stated that reducing generation from an affected EGU by requiring less energy use 

from consumers does not apply anything to the EGU. Commenters argued that EPA's proposed 

CO2 guidelines ignore the clear requirements of Section 111(d) upon which it relies for its 

authority to propose the CO2 guidelines, and EPA does not have legal authority to regulate nonaffected sources and should not do so in the final rule either as proposed or in an expanded 

fashion.

Commenters stated that each component of the definition of "standard of performance" must also 

be "for any existing source", and consequently, under the statute, the "best system of emission 

reduction which ... has been adequately demonstrated" must have been adequately 

demonstrated "for any existing source." Commenters stated that they fail to see how the beyondthe-unit systems that EPA identifies in building blocks two, three, and four can be considered 

"adequately demonstrated" for EGUs if the implementation of those systems depends on the 

actions of third parties (e.g., RE generators or end-users) that are neither part of the source nor 

under the source's control.

Commenters stated that while regulated utilities can and often do encourage demand-side 

efficiency measures, they generally have no license or capability to restrict any given end-user's 

demand. Commenters stated, consequently, building blocks 2, 3, and 4 are plainly not "within 

[the] control" of affected sources.

Commenters stated EPA does not have authority to subject entities that are not "affected EGUs" 

to regulation and enforcement under Section 111(d). Commenters contended that EPA is 

attempting to regulate the retail electricity sector, over which the states have exclusive 

jurisdiction. 
290

Response 11: To the extent this comment objects to the portfolio approach, which the EPA is 

not finalizing, the comment is moot. Otherwise, for the reasons discussed in section V.A. and 

V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of the statutory text, statutory 

context, statutory purpose, and legislative history. 

Comment 12: Commenters stated that while the industry supports flexible mechanisms for 

power plants to meet their compliance obligations under the Existing Source proposal, such as 

counting of renewable energy produced from landfill or biogas towards the renewable energy 

component of individual compliance plans, they do not support any regulatory compliance 

obligations on other entities that are not affected EGUs (i.e., fossil fuel-fired EGUs). 

Commenters’ concerns with this approach were enumerated. First, commenters found EPA's 

description of the role of "other entities" to be vague and open-ended. For the most part, EPA 

emphasizes situations that would leverage actions already being taken in states by an array of 

"other entities." Commenters said these include potentially requiring utility distribution 

companies to comply with a state's Renewable Portfolio Standards (RPS) or Energy Efficiency 

Resource Standards (EERS); requiring an established private non-profit entity to administer enduse energy efficiency (EE) and/or renewable energy (RE) deployment programs, or requiring a 

state agency or authority to implement an EE or RE program to reduce emissions. [State Plan 

Considerations TSD, p. 15-16] Commenters stated, however, there is nothing in the draft rule 

that limits EPA or the states from being more expansive in their approach toward "other entities." 

Commenters stated, in fact, EPA itself appears to be soliciting additional information on what 

types of entities might be relevant. Commenters said, for example, EPA seeks comment 

"whether the Agency should provide guidance on enforceability considerations related to 

requirements in state plans for entities other than affected EGUs (and, if so, which types of 

entities). Commenters noted this statement is troubling for many reasons, not least of which are 

(1) EPA's failure to reveal their own view of "other entities," and (2) the EPA's open-ended 

request for stakeholders to broaden the types of other entities. Second, commenters did not agree 

that EPA has the authority to designate ill-defined "other entities" to reduce emissions that are 

properly the responsibility of the affected EGUs. 

Commenters stated and concurred that their legal concerns are magnified by EPA's vague and 

open-ended description of "entities other than affected EGUs." Commenters stated, in the 

preamble and supporting materials, EPA focuses discussion of other entities on those that are 

already implementing EE and RE policies at the state level. (For example, pp. 15-16 of the State 

Plan Considerations TSD includes discussion of potentially requiring utility distribution 

companies to comply with a state RPS or EERS; requiring an established private non-profit 

entity to administer end-use EE and/or RE deployment programs on behalf of a state, or 

requiring a state agency or authority to implement an EE or RE program to reduce emissions.) 

Commenters stated that there is nothing in EPA's language, however, that limits EPA or the 

states from being more expansive in their approach towards "other entities." In fact, commenters 

remarked, EPA itself appears to be soliciting additional information on what types of entities 

might be targeted for regulation. Commenters said, for example, EPA seeks comment "whether 

the Agency should provide guidance on enforceability considerations related to requirements in 
291

state plans for entities other than affected EGUs (and, if so, which types of entities).(79 FR 

34911) (Emphasis added.) Commenters asserted that this statement is troubling for many 

reasons, not least of which are (1) EPA's failure to reveal their own view of "other entities," and 

(2) the Agency's open-ended request for stakeholders to expand the scope of other entities that 

could be affected by the rule.

Response 12: As explained in Section VIII.C. of the preamble, the EPA is not finalizing the 

portfolio approach that was included in the proposed rulemaking, 79 FR 34830, 34902 (June 18, 

2014). In the proposal, the EPA noted that the portfolio approach raised legal questions. 79 FR 

34830, 34902-03. After reviewing comments, the EPA agrees with commenters that legal 

questions remain.

Comment 13: Commenters stated that EPA should not expand greenhouse gas regulations to 

other source categories. Commenters said not only does the CPP extend the EPA's reach 

unnecessarily and without authority in one sector, they believed there is no legal obligation for 

EPA to address other source categories. Commenters stated that other source-specific regulations 

would and should require a much broader, more complex consideration by the EPA and potential 

stakeholders. Commenters noted that rolling other source categories into the existing power plant 

rule does not to consider the complexity these multiple source categories present. Commenters 

closed suggesting that should the EPA insist on moving forward with this provision, and 

suggested a state compliance plan should allow for exemption under any potential future Section 

111 regulations.

Commenters stated that EPA is seeking not only to regulate existing electric generating units, but 

is greatly expanding the scope to extend to other non-regulated and non-emitting entities. 

Commenters observed that EPA's building block l seeks to regulate existing electric generating 

units (EGUs) in the traditional manner; however, in blocks 2, 3, and 4 EPA is seeking to 

determine how EGUs are to be dispatched, what resources are to be installed and how consumers 

use electricity, and this approach is so counter to the Congressional intent of the Section 111 

standards and structure that EPA must withdraw this proposal.

Commenters stated (verbatim) EPA argues that its unprecedented interpretation of Section 

111(d) is supported by the addition and subsequent removal of the word "technological" from 

Section 111's definition of "standard of performance." (See Legal Memorandum at 56) 

Commenters stated, as a principal matter, it is illogical for EPA to draw a conclusion about the 

standard that applies to existing sources by referring to a change in the standard for new sources. 

Commenters said, however, even assuming that this legislative history could be read to support 

the idea that BSER can include non-technological systems of emission reduction, it clearly does 

not support EPA's conclusion that the CAA authorizes beyond-the-unit measures. Commenters 

stated, rather, the removal of the term "technological" during the 1990 Amendments from the 

definition that applied to new sources (66 As EPA correctly points out, the definition of standard 

of performance applicable to existing sources has never included the term "technological." See 

Legal Memorandum at 55-56. Consequently, Congress' decision to remove the term from the 

definition that previously applied to new sources has no bearing on the interpretation of the term 

as it applies to existing sources) was simply meant to clarify that other available at-the-unit 
292

methods of reducing emissions' other than "technological" end-of-stack improvements (such as 

fuel switching to lower-sulfur coals) could be components of BSER. Commenters stated the 

legislative history of Section 111 demonstrates conclusively that this narrower interpretation 

represents the true intent of Congress. Commenters noted that Congress first used the phrase 

"best system of emission reduction" in the 1970 Amendments to the CAA. (Clean Air 

Amendments of 1970, Pub. L. No. 91-604, S. 111, 84 Stat. 1676, 1683 (codified as amended at 

42 U.S.C. 1857, et seq. (currently codified at 42 U.S.C. 7401, et seq.))) Commenters noted, 

according to the official "Summary of the Provisions of Conference Agreement on the 1970 

CAA Amendments," Section 111 authorized EPA to require sources to achieve performance 

standards "based on the latest available control technology, processes, operating methods, and 

other alternatives."(CAA Amendments of 1970, Conference Report, 116 Cong. Rec. 42,381, 

42,384 (1970) (emphasis added)) Commenters said the 1970 Senate Committee on Public Works' 

description of the Senate provisions that would later be combined into Section 111 (These 

provisions were included in Sections 113 and 114 of the Senate bill) also indicates that the 

absence of the word "technological" from the original definition of "standard of performance" 

was meant to allow consideration of additional at-the-unit process and operational changes that 

would not have been considered "technological." Commenters said, according to the Committee, 

"'[s]tandards of performance' . . . refers to the degree of emission control which can be achieved 

through process changes, operation changes, direct emission control, or other methods." (S. Rep. 

No. 91-1196 at 17 (emphasis added). See also id. ("The Secretary would be directed to review 

and promulgate new or modified standards whenever new technology processes or operating 

methods become available.") (emphasis added); H.R. 17255, 91st Cong. Section 113(b)(2) (as 

amended and passed by Senate Sept. 22, 1970) (requiring the establishment of performance 

standards reflecting "the greatest degree of emission control which the Secretary determines to 

be achievable through application of the latest available control technology, processes, operating 

methods, or other alternatives") (emphasis added)) Commenters said the same Committee Report 

emphasizes that both technological and non-technological at-the-unit systems of emission 

reduction were to be applied at existing sources: "Emission standards developed under this 

section would be applied to existing stationary sources. Commenters noted, however, the 

Committee recognizes that certain old facilities may use equipment and processes which are not 

suited to the application of control technology." (S. Rep. No. 91-1196, at 19 (emphasis added)) 

Commenters stated, because the definition of "standard of performance" in the 1970 

Amendments and current law are nearly identical, and because this aspect of the definition for 

existing sources (unlike the definition for new sources) has not changed since 1970, it is clear 

that the absence of the word "technological" from the definition of "standard of performance" in 

the current statute does not imply that beyond-the-unit measures can be designated as BSER. 

Rather, commenters said the decision not to use the word "technological" in the definition of 

standard of performance only serves to clarify that non-"technological" systems of emission 

reduction could also be considered BSER so long as they could be "applied" at and by the 

regulated source. Commenters stated that the addition and subsequent removal of the word 

"technological" to the requirements for new sources does not alter this analysis. Commenters 

said Congress added this word to Section 111 out of concern that power plants would lack 

incentives to install "technological" methods of pollution control (such as scrubbers) because 
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they could meet the then-applicable emission limits by substituting from high-sulfur coal to lowsulfur coal (See, e.g., H.R. Rep. No. 95-294, at 188 (May 12, 1977) ("In order to effectuate the 

purposes stated above in the promulgation (and revision) of new source standards of 

performance, the committee has specified that standards under section 111(b) must require use of 

the best technological system which has been adequately demonstrated. This means that a major 

new stationary source may no longer meet NSPS requirements merely by use of untreated oil or 

coal. Instead, employment of a technological system would become a mandatory aspect of the 

NSPS requirements for such a source.").) not out of concern that sources EPA would base future 

NSPS on beyond-the-unit measures (a concept that clearly never occurred to the authors of 

section 111). Commenters stated, as the Congressional Record clearly demonstrates, Congress 

added the word "technological" as a signal that future NSPS could not be based solely on use of 

non-technological, at-the-unit compliance options such as fuel switching from high-sulfur fuel to 

low-sulfur fuel. Importantly, commenters noted that the addition and subsequent removal of this 

term to the requirement for new sources did not change the fundamental intent of the statute, 

which was and is to limit required control techniques under Section 111 to those that can be 

implemented at the unit and under the control of the owner or operator of the regulated source. 

Commenters noted that the legislative history of the 1990 Amendments further confirms this 

interpretation. Commenters stated, for example, Section 501 of the 1990 Amendments clearly 

uses the term "technological" as a contrast to other methods of at-the-unit emission reduction 

approaches, such as "work practices" (See 1990 Amendments, Pub. L. No. 101-549, S. 507, 104 

Stat. 2399, 2645-46 (codified as amended at 42 U.S.C. 7401, et seq.) (requiring EPA to approve 

state "small business stationary source technical and environmental compliance assistance" 

programs if the state includes, among other things, "[p]rocedures for consideration of requests 

from a small business stationary source for modification of . . . (A) any work practice or 

technological method of compliance . . . .") (emphasis added)) not as a contrast to "beyond-theunit" measures. In addition, commenters noted that language in several pre-1990 Committee 

Reports demonstrates that Congress used the term "technological" as a way of differentiating 

scrubbers, precipitators, and other end-of-stack treatments (i.e., "technological" systems) from 

other types of at-the-unit processes and systems that a regulated source could employ to reduce 

emissions. (See, e.g., S. Rep. No. 100-231, at 232 (Nov. 20, 1987) ("The technologies, practices 

or strategies which are to be considered in setting emission standards under [section 112] go 

beyond the traditional end-of-the-stack treatment or abatement system. The Administrator is to 

give priority to technologies or strategies which reduce the amount of pollution generated 

through process changes or the substitution of less hazardous substances. A second class of 

control requirements focusing on the enclosure of emissions points or other secondary 

containment systems is also to be considered before systems to collect, capture or treat the 

emissions are reviewed. Considering municipal waste combustion as a potential category of 

major sources to illustrate these concepts (even though standards for [Municipal Waste 

Combustors] are set independently by another provision of this legislation): source separation 

and good combustion are examples of process modifications; covered facilities for ash handling 

and negative air flow are examples of enclosure and secondary containment; and scrubbers, 

precipitators and selective catalytic reduction are examples of end-of-the-stack treatment 

systems."); S. Rep. No. 101-228, at 168 (Dec. 20, 1989) (substantially the same language)) 
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Commenters noted, finally, EPA itself also clearly contemplated that emission guidelines would 

be based on at-the-unit systems of emission reduction. EPA's implementing regulations, which 

were issued five years after the 1970 Amendments became law, require EPA's emission 

guideline to reflect "the application of the best system of emission reduction . . . that has been 

adequately demonstrated for designated facilities." In addition, commenters noted that the 

regulations require EPA to provide information on the costs and effects of "applying each system 

[of emission reduction] to designated facilities" as well as the time needed "for the design, 

installation, and startup of identified control systems." Commenters said this language from 

EPA's own regulations conforms with EPA's and Congress' past, consistent position that BSER 

can include only those technologies and practices that can be implemented at the regulated 

source and under the control of the source's owner or operator. Commenters said examples of 

such at-the-unit methods in the EGU context include operating or work practices that could 

improve heat rate or lower the parasitic consumption of electricity used for pollution control 

equipment and other ancillary facilities. Commenters stated that these kinds of methods involve 

the application of some control measure or practice at the EGU, and would be within the full 

control of the EGU operator. Commenters noted that redispatch, renewable energy additions, 

nuclear generation, and end-use energy efficiency, by contrast, are neither at-the-unit 

improvements nor are they within the typical source's power to control. Commenters said, 

consequently, these "systems of emission reduction" are outside the scope of the term BSER, and 

may not be considered in establishing emission guidelines under section 111(d).

Commenters stated that they have concerns about EPA expanding the traditional boundaries for 

BSER beyond not only the electric generating unit but also going to generating sources and 

segments of the economy, not specifically regulated by the Clean Air Act.

Commenters posited that EPA's proposal exceeds legal authority under the Clean Air Act. 

Commenters stated, by this proposal, EPA attempts to require actions by entities which are not 

directly subject to the regulation on the Clean Air Act.

Commenters posited that the final rule should indicate, explicitly, that EPA and states do not 

have the legal authority to require emissions reductions outside the EGU sector.

Commenters stated that even under a permissive reading of Section 111's BSER requirement, 

EPA is limited to regulating within a distinct source category but EPA's Proposed Rule goes 

beyond the limits of the specified source category to define BSER based on its highly inexpert 

assumptions as to how States could or should regulate renewable energy sources, nuclear power 

plants, and end-user energy efficiency improvements. Commenters argued it is difficult to 

discern how a regulation intended to limit CO2 emissions from fossil-fuel-fired power plants 

arrives at such far-reaching regulation of EGUs, non-emitting power generators, energy markets, 

electric transmission and gas infrastructure, and even energy consumers, that are not within the 

identified source category, contending that the effect of EPA's definition is to lump nearly every 

conceivable producer and user of electric energy together as a single "source category" for BSER 

purposes, and that the definition is ultimately unworkable, since it renders the term source 

category a nullity and results in EPA regulating the generation, dispatch, and consumption of 
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energy, rather than just "systems of emission reduction" designed to reduce specific sources 

emissions.

Response 13: EPA’s source category for this rule is limited to the affected EGUs. For the 

reasons discussed in section V.A. and V.B. of the preamble and in the Legal Memorandum, our 

interpretation of the BSER is reasonable and within the scope of EPA’s authority in light of the 

statutory text, statutory context, statutory purpose, and legislative history. 

Comment 14: Commenters stated that in the Proposed Rule, EPA asserts that both at-the- unit 

and beyond-the-unit measures that reduce CO2 emissions from EGUs can be considered 

"systems of emission reduction." (Proposed Rule, 79 Fed. Reg. at 34,886) Commenters stated 

EPA is proposing that the combination of four "building blocks" - three of which involve actions 

that are beyond the control of the affected EGU- constitute BSER. (Proposed Rule, 79 Fed. Reg. 

at 34,836) Commenters stated that this interpretation appears to be precluded by the terms of 

Section 111 and is also contrary to EPA's past interpretations of the term - including the agency's 

interpretation of BSER in the New and Modified Unit Proposals that EPA issued in tandem with 

this Proposed Rule. (Standards of Performance for Greenhouse Gas Emissions From New 

Stationary Sources: Electric Utility Generating Units, Proposed Rule, 79 Fed. Reg. 1430 Gan. 8, 

2014) [hereinafter "New Unit Proposal"]; Carbon Pollution Standards for Modified and 

Reconstructed Stationary Sources: Electric Utility Generating Units, Proposed Rule, 79 Fed. 

Reg. 34,960 Gune 18, 2014) [hereinafter "Modified Unit Proposal"]) Commenters concluded that 

EPA should revise its approach to BSER by setting emission guidelines based only on actions 

that can be applied at and by the regulated source.

Commenters stated that Building Blocks 2 and 3 lie far afield of any lawful authority EPA may 

exercise under Section 111(d). Commenters stated that as the Supreme Court recently held in 

striking down EPA's PSD/Title V Tailoring Rule, which, like the present proposed regulation, 

would radically expand EPA's authority compared to what Congress intended, "EPA's 

interpretation is "unreasonable because it would bring about an enormous and transformative 

expansion in EPA's regulatory authority without clear congressional authorization. Commenters 

said when an agency claims to discover in a long-extant statute an unheralded power to regulate 

'a significant portion of the American economy,' they typically greet its announcement with a 

measure of skepticism. Commenters expected Congress to speak clearly if it wishes to assign to

an agency decisions of vast 'economic and political significance.' Commenters remarked that the 

holdings of UARG and American Trucking Associations apply with force here. Commenters 

stated that in the proposed rule, EPA transforms a provision allowing the States considerable 

flexibility in establishing standards of performance for specific existing sources into a vast 

program giving EPA unprecedented and almost limitless power, and it would effectively allow 

EPA to take control of the nation's electric grid for the sole purpose of achieving reductions in 

the emissions of a single pollutant, without regard to reliability or other generation or dispatch 

considerations. To that end, commenters closed stating, EPA specifies not only the level of 

emission reductions that it expects at each designated facility through heat-rate improvements, 

but also how electricity generation dispatch decisions are to be made which is unlawful. 
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Commenters stated that Building Block 4, which requires increases in end-user energy efficiency 

and other efforts to reduce demand for electricity, sits egregiously outside of EPA's lawful 

authority and looks to derive emission reduction from something over which utilities have no 

enforceable control: efficiencies that might be gained by consumer efforts, and when the Agency 

calls for demand reduction as a means of controlling emissions from the production of a good, it 

is calling for the regulation of millions of small actions, by entities that are not even sources 

under the Clean Air Act, before they hit the grid. Commenters contended this is the type of gross 

expansion of regulatory authority rejected by the UARG Court.

Response 14: The EPA is not finalizing building block 4 as part of the BSER. Further, as we 

explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an 

achievable emissions limit through the application of the BSER and do not in themselves require 

states or sources to implement the BSER. That is, EPA is responsible for determining the level of 

emission limitation from the source category, while states have the responsibility of assigning 

emission requirements to their sources that will ensure their achievement of that level of 

emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER. 

For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 15: Commenters stated that Section 111's language, which specifically focuses on 

individual sources, does not allow EPA to regulate any of these entities directly. Commenters 

added that if a state does not act in a timely manner to provide an approvable plan that includes 

enforceable measures, then EPA is mandated by the Act to create a federal plan. However, 

commenters said EPA would not have the authority to implement any measure in Building Block 

2, 3, or 4 as it cannot regulate, for instance, a state's energy consumers.

Commenters stated that EPA coverage of Building Blocks 3 and 4 is inappropriate, citing 

Section 111(d)(2) of the statute, which requires EPA to establish a federal Section 111(d) plan 

for any state that fails to submit a "satisfactory" plan of its own. [42 U.S.C. section 

7411(b)(1)(A)]. Commenters explained that EPA has no authority or ability to require increased 

renewable or nuclear generation or to implement demand-side energy efficiency programs, and 

that these are traditional areas of state legislation and regulation and areas over which EPA and 

the regulated Section 111 source categories have no control. As a result, commenters concluded, 

if a federal plan were to apply, affected EGUs subject to a BSER standard based on such 

federally unenforceable programs or activities would bear the full stringency of the resulting 

limits, and therefore would be forced to limit generation in order to achieve compliance, and this 

in turn threatens the reliability of the electricity grid, a result incompatible with BSER's express 

consideration of "energy requirements" and the foundational prerequisite that standards be 

"adequately demonstrated." [42 U.S.C. section 7411(a)(1)] Commenters contended that EPA 

may not stretch its authority to extend to regulation of resources and activities over which it has 

no jurisdiction, [See Elec. Power Supply Ass'n v. FERC, 753 F.3d 216, 221 (D.C. Cir. 2014) 
297

(concluding that agency could not read its authority to "lure' non-jurisdictional resources" into its 

regulatory sweep)] and because any "system" of emission reduction that reaches beyond EPA's 

regulated source categories cannot be implemented by EPA, neither can it satisfy BSER when 

establishing emission guidelines for state compliance.

Response 15: The EPA is not finalizing building block 4 as part of the BSER. Further, as we 

explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an 

achievable emissions limit through the application of the BSER and do not in themselves require 

states or sources to implement the BSER. That is, EPA is responsible for determining the level of 

emission limitation from the source category, while states have the responsibility of assigning 

emission requirements to their sources that will ensure their achievement of that level of 

emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER. 

For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 16: Commenters stated that 88 Section 103(g) of the CAA confers on EPA limited 

authority to address energy conservation with respect to research and other non-regulatory 

activities. 42 U.S.C. section 7403(g)(1). Commenters said EPA has relied upon this authority in 

carrying out its Energy Star Program, EPA's flagship effort to reduce consumer electricity 

demand, and has generally acted through voluntary public/private partnerships to promote energy 

efficiency. Commenters noted, in 2005, Congress expressly authorized the Energy Star Program, 

specifically conferring on EPA specific energy conservation authority. See Energy Policy Act of 

2005, Pub. L. No. 109-58, section 131, 119 Stat. 594, 620-21 (2005). Commenters stated, where 

Congress has delegated such specific and limited authority, EPA cannot presume that it has any 

broader authority to direct energy conservation. Cf. Am. Petroleum Inst. v. EPA, 52 F.3d 1113, 

1119 (D.C. Cir. 1995) ("EPA cannot rely on its general authority to make rules necessary to 

carry out its functions when a specific statutory directive defines the relevant functions of EPA 

in a particular area."); Am. Petroleum Inst. v. EPA, 706 F.3d 474, 479 (D.C. Cir. 2013) ("[A] 

broad programmatic objective cannot trump specific instructions."). Commenters asserted, as 

such, EPA has no authority to require energy efficiency measures through 111(d) or other 

regulatory provisions.

Response 16: EPA is not mandating particular forms of energy conservation. As we explain in 

sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an achievable 

emissions limit through the application of the BSER and do not in themselves require states or 

sources to implement the BSER. That is, EPA is responsible for determining the level of 

emission limitation from the source category, while states have the responsibility of assigning 

emission requirements to their sources that will ensure their achievement of that level of 

emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures.
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Comment 17: Commenters stated that some of their specific issues include that the proposed 

rule appears designed to achieve a 30 percent national reduction in tons of CO2, first in 2005 for 

the power sector as a whole, and this is not what Section 111(d) requires. Commenters believed 

Section 111(d) only authorizes standards of performance on individual, affected sources and 

adds that the proposed rule mandates state goals that go far beyond setting standards on the 

affected sources, employing a best system of emission reduction which extends its reach beyond 

the fence-line of its affected sources.

Response 17: The commenters misinterpret EPA’s statements about expected overall reductions 

from the program. These are projections about how much emissions reduction will occur under 

the rule, not a binding or mandatory target in and of itself. 

Comment 18: Commenters stated that EPA bases the proposed state-wide emission reductions 

on beyond-the-fence measures that EPA itself has no authority to mandate, including reductions 

in consumer use of electricity, changes in the states' generation resource mix and the dispatch of 

generation resources. Commenters added that through its four building blocks EPA defines the 

BSER for fossil-fuel-fired power plants as a combination of emission reductions from efficiency 

upgrades at coal-fired power plants, increased utilization of natural gas plants, extending the life 

of nuclear plants and completing construction of new nuclear units, installing more renewable 

power and significantly increasing demand side energy efficiency, and this so-called "integrated 

electricity system" approach for defining BSER stretches so far beyond the fence-line of a 

regulated facility that literally every consumer of electricity in the United States could become 

part of state compliance plans mandated by EPA's rule. Commenters remarked that it is one thing 

to give States the flexibility to use alternative methods, such as increased nuclear or renewable 

energy, to help demonstrate compliance with an emission reduction obligation; it is quite another 

for EPA to base reduction requirements on alternative methods that the Agency itself - if it were 

authorized to establish the final performance standards - could not mandate (or enforce) under 

the Act. Commenters believed EPA must reevaluate its proposed method for establishing BSER 

and limit any guidance in setting performance standards to actions that can reasonably take place 

within the power plant's fence-line, explaining that the unprecedented nature and expansive 

scope of the Proposal demonstrate how far from EPA's delegated authority the Agency has 

attempted to travel. Commenters asserted that Section 111(d) does not authorize EPA to regulate 

entire sectors of the economy. Commenters cited the U.S. Supreme Court which recently noted: 

"[w]hen an agency claims to discover in a long-extant statute an unheralded power to regulate 'a 

significant portion of the American economy,' ... we typically greet its announcement with a 

measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency 

decisions of vast 'economic and political significance.'"

Response 18: The EPA is not finalizing a building block 4 as part of the BSER. Further, as we 

explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an 

achievable emissions limit through the application of the BSER and do not in themselves require 

states or sources to implement the BSER. That is, EPA is responsible for determining the level of 

emission limitation from the source category, while states have the responsibility of assigning 

emission requirements to their sources that will ensure their achievement of that level of 
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emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER. 

For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 19: Commenters stated Section 111(d) does not require a 30% or "meaningful" 

national reduction in power sector carbon dioxide emissions; nor does Section 111(d) call for a 

regulatory program based on "opportunities" for large emissions reductions. Commenters stated 

that Section 111(d) is very specific on what it authorizes and requires. Commenters said Section 

111(d) calls for state plans that establish standards of performance for certain existing sources. 

Commenters noted, in this rulemaking, the only potentially eligible existing source categories are 

electric utility steam generating units and stationary combustion turbines - because these are the 

only two source categories for which EPA has proposed (but has not yet finalized) Section 

111(b) federal standards of performance for new sources. Thus, commenters asserted that EPA is 

only authorized to apply 111(d) to electric utility steam generating units and stationary 

combustion turbines. Commenters said, yet, the proposal's preamble and other docket materials 

make it clear that the regulation is designed to achieve a "meaningful" emission reduction, or 

about a 30% emission reduction in tons, by 2030, compared with 2005 (or a "greater" emission 

reduction than alternatives as discussed below), and that the best ways to reduce emissions are to 

"look at the power system as a whole" - rather than reducing emissions by means of standards of 

performance for the two potentially eligible existing source categories as required by Section 

111(d). 

Commenters stated not only does U.S. EPA expect states to impose emission limits on a wide 

range of affected entities to meet the state's performance goal under the proposed emission 

guideline, but U.S. EPA arrived at the BSER, comprised of the four building blocks, that also 

incorporates obligations imposed on those affected entities. Commenters stated that Building 

Blocks 2 (dispatch changes) and 3 (increased RE), for example, require regulating entities across 

the entire power system, and not just the EGUs alone. Commenters remarked that in no other 

Section 111(d) rule have sources other than those that, if new, would be regulated under a 

Section 111(b) standard of performance been subject to an emission limit. Commenters posited 

that by essentially requiring states to impose emission limits on affected entities, as well as using 

obligations on affected entities to arrive at the BSER, the proposed emission guideline exceeds 

U.S. EPA's statutory authority by regulating sources to which the NSPS would not apply if those 

sources were new.

Commenters stated that while it has long been common industry practice for system operators to 

choose from among multiple EGUs when deciding which EGU to "dispatch" to generate the next 

increment of electricity needed - the well-established practices of the industry that support EPA's 

evaluation of "re-dispatch" of generation from coal-fired steam EGUs to NGCC units as a 

potential component of the basis for the BSER to reduce CO2 emissions from existing EGUs - is 

what got us all here, in this predicament in the first place. Commenters stated that wind and solar 
300

generation cannot be categorized under this ruling, yet the Clean Power Plan leaves open the 

consideration of the expansion of Zero-emission EGUs beyond the phase-in period and a 

reduction in the need for expensive and environmentally burdensome nuclear EGUs, and even 

Natural Gas Combined Cycle (NGCC).

Commenters stated that Section 111 of the CAA defines "existing source" as "any stationary 

source other than a new source." 42 U.S.C. Section 7411(a)(6), and a "new source" is defined as 

"any stationary source, the construction or modification of which commenced after the 

publication of regulations (or, if earlier, proposed regulations) prescribing a standard of 

performance under this section which will be applicable to such source." 42 U.S.C. Section 7411 

(a)(2). Moreover, commenters added, the CAA defines "stationary source" as "any building, 

structure, facility or installation which emits or may emit any air pollutant." 42 U.S.C. Section 

7411(a)(3), and therefore, by definition under Section 111(d), nuclear energy, renewable energy 

and energy efficiency (the measures grouped in Building Blocks 3 and 4) cannot be existing 

stationary sources pursuant to a CO2 rule because none of them "emit or may emit" CO2.

Response 19: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

The final rule limits federal enforceability to emission standards for affected EGUs, whether in 

the context of an emission standard type plan, a state measure type plan, the federal backstop, or 

a federal plan

1.5.2.1.2 Section 111(d) process 

Comment 1: Multiple comments question EPA’s use of 111(d) process:

Commenters stated the regulations provide that states may apply "less stringent emission 

standards or longer compliance schedules" to individual facilities or classes of facilities if

adopting the standards reflecting the emission guidelines would be unreasonably costly, 

physically impossible, or for other reasons.(40 C.F.R. 60.24(f)(1)-(3).) Commenters noted 

that EPA must permit states to take into consideration the "remaining useful life of the existing 

source," (42 U.S.C. 7411(d)(1)(B)) and in doing so, permit states to grant individual sources or 

classes of sources longer periods of time to comply, or to apply less stringent standards than set 

forth in EPA's emission guidelines. Commenters stated EPA's regulations also require that its 

emission guidelines address subcategories of "different sizes, types, and classes" of existing 

sources where factors like "costs of control, physical limitations, [or] geographical location" 

warrant the application of different guidelines. (40 C.F.R. 60.22(b)(5).) The Proposed Rule does 

not do any of these things.

Commenters stated that EPA claims that the four BBs are mere guidelines for the states and that 

states are afforded maximum flexibility in choosing how to meet the standards; however, the 
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guidelines proposed by EPA are mandatory and extraordinarily stringent. Commenters explained 

that the four BBs are the basis of the proposed mandatory emission limiting goals, and rather 

than affording flexibility as EPA claims, they constitute a regulatory straightjacket, and further, 

EPA intends to deny the states statutory flexibilities contained in CAA Section 111(d) that allow 

the states to take into account specific state factors that would allow the states to require less 

stringent emission limiting standards for certain plants based on the life of the unit and other 

factors. Commenters remarked that EPA regulations outline other flexibilities to be afforded the 

states, including costs, physical limitations or "other" factors. Commenters said, however, the 

flexibilities that EPA insists the states have under the proposed rule are illusory given the 

stringency of the mandatory emission limiting goals.

Commenters stated EPA has no authority to propose standards for the states or state goals, which 

EPA maintains are mandatory requirements, based on actions that are outside of the CO2 

emitting EGU sources. Commenters believed EPA is expected to provide guidelines to the states 

so that the states can develop a state plan to meet state-established source specific standards, with 

the states provided great flexibility in terms of developing the means of meeting those source 

specific standards. Commenters believed that EPA is imposing mandatory goals on the states to 

meet instead of providing procedural guidance to states for standards that the EGUs will be 

required to meet, contrary to the statutory design of Section 111, and EPA, rather than offering 

guidance towards development of state plans, has instead dictated the stringency and content of 

state plans through its bizarre determination of BSER. Commenters contended that the four BBs 

that are the basis of EPA-designed standards become instead the actual state plan with very little 

room to alter the mandatory goals. Commenters noted that Section 111 requires source-specific 

regulation of CO2 emitting EGUs, and the statute requires states to "establish standards of 

performance for any existing sources for any air pollutant." Commenters concluded that EPA is 

not authorized under the statute to regulate "outside the fence" or to include non-emitting 

sources, reduced utilization or end use energy efficiency improvements or demand reductions as 

components of the BSER. 

Commenters stated because the Clean Air Act does not authorize EPA or states to impose 

emission reduction requirements onto sources outside the fence line, EPA cannot require states to 

incorporate such obligations into state plans. Commenters continued, stating that BSER and 

emissions rate reduction targets cannot be set using emissions reductions EPA would be unable 

to achieve in a federal implementation plan. Commenters added that because EPA has no 

authority to establish or enforce these measures, which are solely within the province of the 

states, EPA lacks authority to include these measures in its BSER analysis or in setting emission 

rate reduction targets.

Commenters stated that the statute dictates that Section 111(d) emissions standards be designed 

to be cost-effective, be adequately demonstrated, and be achievable at each specific source or 

electric generating unit (EGU), and such a standard requires source-specific analysis. 

Commenters believed that EPA did not undertake this level of analysis, instead relying on 

national modeling, averaging of data and assumptions of achievability that were not grounded in 

unit-specific assessments, that EPA has established mandatory goals for states based on 
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assumption of authorities that are not granted to EPA under the law, and that these assumptions 

result in reductions that are far more stringent than could be imposed if EPA followed the CAA 

statute, which has been interpreted by both the Agency and the courts to require source-specific 

standards confined to fossil fuel sources. 

Commenters stated and concurred that if a state fails to submit a "satisfactory plan" under 

111(d), EPA is authorized to directly prescribe a plan itself. C.A.A. Section 111(d)(2), 42 U.S.C. 

S. 7411(d)(2), but EPA lacks authority to directly regulate the substance of all but its first 

building block, e.g., to require the development of new renewable generation or to require enduse efficiency measures. Commenters explained that these measures are the traditional subject of 

state police powers, with federal regulation authorized only where Congress has expressly done 

so, and for this reason, EPA would likely be limited to measures under the first block, i.e., 

inside-the-fenceline efficiency improvements at individual sources, which would not be 

sufficient to achieve EPA's binding state-by-state emission goals. Commenters added that any 

attempt to do so would disproportionately burden the regulated sources, create highly inequitable 

treatment of one state's sources compared to another, and violate Congress' intent in affording 

EPA the authority to directly prescribe federal plans, and because EPA has that authority, the 

only reasonable reading of Section 111(d) is that the measures embraced in EPA's proposed best 

system of emission reduction should be the type of measures which the agency could directly 

regulate itself under its 111(d)(2) authority, should the need arise. Commenters concluded that 

the disconnect between the current proposal and EPA's ability to directly regulate under (d)(2) 

confirms that the proposal exceeds the agency's authority under Section 111(d).

Commenters stated that the CPP deviates from EPA's 1975 implementing regulation: Whereas 

the implementing rule authorizes the division of new-source categories into existing-source 

subcategories in order to match designated facilities to appropriate pollution control standards, 

the CPP aggregates sources from different categories and mixes in non-sources outside of any 

category to maintain the fiction that a state power sector is an existing source. Commenters 

stated, while there may be only one standard of performance for new sources of designated 

pollutants, there may be several emission guidelines for designated facilities based on plant 

configuration, size, and other factors peculiar to existing facilities. Commenters remarked that as 

discussed elsewhere in the preamble, EPA's emission guidelines will reflect sub-categorization 

within source categories where appropriate, taking into account differences in sizes and types of 

facilities and similar considerations, including differences in control costs that may be involved 

for sources located in different parts of the country. Thus, commenters stated that EPA's 

emission guidelines will in effect be tailored to what is reasonably achievable by particular 

classes of existing sources ... However, commenters said the CPP pursues an opposite approach. 

Commenters asserted that it aggregates coal power plants, NGCC power plants, nuclear power 

plants, wind and solar power plants, grid managers, and even retail consumers into a vast, 

unnamed grab-bag category for the purpose of setting a 'performance standard' (actually an 

emissions cap) for an entire state. Commenters stated "This won't fly", explaining that the courts 

will compare the CPP to EPA's implementing regulation and wonder how the same agency could 

read section 111(d) so differently. 
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Commenters stated that since EPA's proposed Section 111(b) new unit rule applies only to fossilfired units, there is no basis for EPA to establish existing unit standards for non-emitting sources 

such as wind, solar or nuclear generation, let alone energy efficiency, under Section 111(d). 

Commenters added that EPA does not explain how it is possible for their existing unit standard 

to be more stringent for many states than the proposed national new unit standard, something 

Congress clearly did not intend. Commenters added that by going "outside the fence line" in 

setting standards, EPA developed standards for existing units that are more stringent than new 

unit new source performance standards (NSPS), which establishes a policy with no basis in the 

statute or no precedent under regulatory guidance. Commenters closed, stating EPA offers no 

justification for developing source specific standards under Section 111(b) and source specific 

standards for the modification and reconstruction rule but not for Section 111(d).

Response 1: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

As we explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect 

an achievable emissions limit through the application of the BSER and do not in themselves 

require states or sources to implement the BSER. That is, EPA is responsible for determining the 

level of emission limitation from the source category, while states have the responsibility of 

assigning emission requirements to their sources that will ensure their achievement of that level 

of emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a

wide range of emission reduction measures, including measures that are not part of the BSER.

EPA is not finalizing the proposed “portfolio” approach, and will not accept state plans that 

attempt to impose emission standards or other CAA compliance obligations on entities other than 

affected EGUs. The state measures approach provides a path for a state to achieve the emission 

performance level as expressed as a state goal in a way that avoids placing enforceable emission 

standards on affected EGUs (unless and until the backstop is triggered). States will have a wide 

range of flexibility in choosing how to demonstrate their affected EGUs are meeting a state goal.

EPA recognizes that each state has unique factual circumstances that will shape the development 

of a state’s plan. We look forward to working with the states to account for these factual 

circumstances in developing satisfactory state plans.

1.5.2.1.3 Enforcement

Comment 1: Comments raise enforcement issues:

Commenters stated that EPA does not recognize that State agencies charged with enforcing the 

Proposed Rule have no authority to enforce outside the fence reductions, and by proposing to 

regulate outside the fence, the Proposed Rule exceeds the scope of EPA's authority under the 

CAA.
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Commenters stated that past Clean Air Act (CAA) actions impacting EGUs, as with other NSPS 

regulated industries, have been imposed inside-the-fence at the affected unit, and that these 

compliance strategies and tools are familiar to the state and regulated entities because once the 

Section 111(d) plans step outside that fence line, the landscape becomes more difficult, 

particularly when moving beyond traditional state environmental and utility authorities. When 

factoring into the equation municipal electric systems and rural electric cooperatives that do not 

fall under state RE and EE standards because of local governance, commenters believed U.S. 

EPA is essentially proposing a wholesale reworking of each state's individual enforcement 

authorities. Commenters stated that at the forefront are the problems associated with enforcing a 

standard that is directed at controlling emissions at an existing EGU against a non-affected 

facility, such as a manufacturing facility, commercial building, and the like, and if a demand-side 

regulation was not met, and that was a contributing factor in a state's failure to meet its assigned 

CO2 goal, who would the state, or U.S. EPA, seek to sanction? Commenters contended that it is 

difficult to imagine an enforcement action against a non-EGU based on an EGU NSPS from 

either a legal or practical standpoint, and difficult to imagine an enforcement action against an 

EGU for the actions of an entity accountable for improvements in EE. Commenters closed, 

stating that as with other sections of the proposal, the approach of enforcing an EGU NSPS 

against a non-EGU puts the U.S. EPA in the position of establishing energy and economic 

policy, an action outside the realm of environmental policy and well beyond existing legal 

authorities.

Commenters stated that the CAA does not authorize EPA or citizen enforcement actions against 

non-stationary sources, that EPA lacks authority to make non-EGU entities subject to federal 

enforcement actions, and although Section 111(d) authorizes EPA to enforce the provisions of 

state "plans" where the state fails to enforce them, (42 U.S.C. 7411(d)(2)(B)) this provision is 

clearly intended to authorize EPA to enforce only "standards of performance" that apply to the 

stationary sources identified in state plans. Commenters continued (verbatim), nothing in Section 

111 authorizes EPA to enforce other types of state or local regulations (for example, RPS 

requirements or energy efficient building codes) that may be incorporated in state plans, if those 

regulations are not "standards of performance" for "stationary sources." Thus, commenters 

stated, although a state could enforce the non-"performance standard" rules or regulations that 

may be necessary to achieve EPA's emission goal, EPA itself may not directly enforce these 

rules or regulations against the non-stationary source entities that may be responsible for those 

specific actions under the state plan. Moreover, commenters noted that non-EGUs included in 

state plans clearly cannot be subject to federal citizen suits for failure to meet state plan 

requirements. Commenters said neither Section 111(d) nor Section 304 (which relates to citizen 

suits) authorizes citizen suits against non- "stationary source" entities for failure to comply with 

the requirements of state plans. Commenters stated, indeed, by its terms, Section 111(d) only 

authorizes EPA to enforce state plans. Commenters said, in addition, as applicable here, the 

CAA's citizen suit provisions only authorize citizen suits to be brought for a violation of an 

"emission standard or limitation,"(Id. 7604(a)(1)(A). Commenters stated that citizens may also 

bring suit for alleged violations of EPA or state orders, for failure of EPA to perform a nondiscretionary act or duty, and for construction of a source without a required federal air permit or 

for violation of such a permit. Id. 7604(a). However, commenters said none of these causes of 
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action are directly relevant to the Section 111(d) context which the CAA defines as a 

"requirement established by the State or the Administrator which limits the quantity, rate, or 

concentration of emissions of air pollutants on a continuous basis, including any requirement 

relating to the operation or maintenance of a source to assure continuous emission reduction." 

(135 Id. 7602(k)) Commenters said, since an RPS, EERS, or other "portfolio" requirement on 

non-EGUs would not be a "requirement . . . which limits the quantity, rate, or concentration of 

emissions of air pollutants," such a requirement cannot be considered an "emission standard or 

limitation" and thus cannot form the basis of a citizen suit against the entity. Commenters stated, 

consequently, any requirements in state plans other than an explicit emission limitation that is 

directly applicable to an affected EGU cannot be the subject of a citizen suit. Commenters 

asserted, to the extent that EPA's proposal would allow such suits against non-EGUs, the 

proposal exceeds EPA's statutory authority.

Response 1: The federal enforceability considerations raised in the comment arose primarily 

under the proposed portfolio approach for state plans. As explained in section VIII.C of the 

preamble, the EPA is not finalizing the portfolio approach, which would have allowed state plan 

submittals to include federally enforceable measures that apply to entities that are not affected 

EGUs. However, as further explained in section VIII.D, if the state is adopting the state measures 

type plan, the state plan submittal will need to specify, in the supporting materials, the state 

enforceable measures that the state is relying upon in conjunction with any federally enforceable 

emission standards for affected EGUs to meet the emission guidelines. The existing guidance 

documents pertaining to enforceability include: (1) September 23, 1987 memorandum and 

accompanying implementing guidance, “Review of State Implementation Plans and Revisions 

for Enforceability and Legal Sufficiency;” (2) August 5, 2004 “Guidance on SIP Credits for 

Emission Reductions from Electric-Sector Energy Efficiency and Renewable Energy Measures;” 

and (3) July 2012 “Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies 

and Programs into State and Tribal Implementation Plans, Appendix F. The final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements 

for its affected EGUs.

1.5.2.1.4 FIP Issues

Comment 1: Comments raise FIP issues: 

Commenters stated that EPA has not provided a model rule or plan for implementation of the 

Clean Power Plan by each state, and part of the difficulty the commenters expected to face in 

developing any future state plan is related to this decision not to issue a model rule - on which 

any Federal Implementation Plan ("FIP") might be based - that would allow states to assess how 

their own plans compare. [See Supplemental Proposal for the Rule to Reduce Interstate 

Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule), 69 Fed. Reg. 32,684, 

32,709 (June 10, 2004) (discussing advantages of model rule for SO2 and NOx Clean Air 

Interstate Rule)] Commenters surmised that this lack of a model rule stems in part from the fact 

that EPA lacks statutory authority to impose the building blocks (beyond building block one) on 

sources (and especially on non-sources), and that it would therefore not be possible for EPA to 

implement a FIP based on all four building blocks. [See 42 U.S.C. Section 7411(a)(3) (defining 
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"stationary source"); 40 C.F.R. Section 60.27(e) (requiring regulations proposed and 

promulgated by the Administrator to prescribe emission standards of the same stringency as the 

corresponding emission guideline(s) specified in the final guidance document).] This leads the 

commenters to the conclusion that EPA should not consider beyond the fence line, third-party 

measures in determining the stringency of state goals. [The Commission does not believe that the 

state goals set using all four building blocks as EPA had done are attainable through the 

implementation of only Building Block 1, even taking all EPA assumptions related to Building 

Block 1 as feasible.]

Response 1: The EPA is proposing a federal plan and model rule that will demonstrate how the 

degree of emission limitation determined by the BSER can be carried into effect through an 

emissions trading program in which enforceable emission standards are applied only to the 

affected EGUs. 

Comment 2: Commenters stated that EPA lacks authority to impose a State-specific demandside energy efficiency program as part of a federal implementation plan. Commenters said, first, 

as EPA recognizes in the proposed rule, EERS programs, like RPS programs, are adopted and 

implemented at the State level and reflect the exercise of authority that was reserved by the 

States. Commenters said this is consistent with the general federal approach to energy efficiency, 

which has focused on voluntary programs, such as tax incentives and grants, rather than 

mandatory adoption of energy efficiency measures. (See DSIRE Database for State Incentives 

for Renewables and Efficiency, Financial Incentives for Energy Efficiency, available at 

http://www.dsireusa.org/summarytables/finee.cfm.) In contrast, commenters stated that Congress 

has only authorized one federal energy efficiency program, which is administered by the 

Department of Energy, not EPA. See 42 U.S.C. 6291 et seq.; 10 C.F.R. pt. 431. Second, 

commenters noted that there is nothing in the Clean Air Act to suggest that EPA has authority to 

require States to implement mandatory energy efficiency obligations. Commenters said nor has 

EPA ever asserted that it possessed such authority in the past. In fact, EPA's website highlights 

State programs, such as energy efficiency portfolio standards, as means to improve energy 

efficiency. (EPA, Energy Efficiency, available at http://www.epa.gov/statelocalclimate/state

/topics/energy-efficiency.html.)

In sum, commenters stated that the authority to impose energy efficiency requirements on retail 

consumers of electricity rests exclusively with the States and, to the extent that there is any 

federal role at all with respect to mandatory energy efficiency standards, it is exercised by 

agencies other than EPA.

Response 2: The CAA section 111(d) phrase “system of emission reduction” is deliberately 

broad in meaning. The provisions of CAA section 111(d)(1) and (a)(1) do not explicitly include 

renewable energy use, but they do not include any specific emission reduction measures. The 

absence of specific provisions does not mean that Congress did not intend the BSER to include 

any of those types of measures. Rather, this contrast supports viewing a “system of emission 

reduction” under CAA section 111 as sufficiently broad to encompass a wide range of measures 

for the purpose of emission reduction of a wide range of pollutants from a wide range of 
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stationary sources. Renewable energy is one potential measure that may be employed, consistent 

with the state flexibility principle that is central to this program.

Comment 3: Commenters stated CAA neither Section 110 nor CAA Section 111 addresses the 

contents of a FIP or describes the types of requirements EPA may establish through a FIP, and 

those sections identify the situations in which EPA may impose a FIP, but do not grant the power 

to adopt or enforce specific measures in a FIP. Commenters stated, for that, EPA must rely on 

other sections of the Act. Commenters continued, stating EPA's FIP authority is limited by CAA 

Section 307, which provides that FIPs must not be "arbitrary, capricious, an abuse of discretion, 

or otherwise not in accordance with law." 42 U.S.C. Section 7607(d)(9); North Dakota v. EPA, 

730 F.3d 750, 758 (8th Cir. 2013); it would be arbitrary, capricious, an abuse of discretion and 

not in accordance with law for EPA to impose a FIP that regulates beyond the fence line because 

the Act does not grant EPA the power to do so. Commenters believed EPA may exercise only the 

authority delegated by Congress. La. Pub. Serv. Comm'n., 476 U.S. at 374; Ctr. for Biological 

Diversity, 722 F.3d at 413 (Kavanaugh, J. concurring). Commenters added EPA may not 

exercise authority "in a manner that is inconsistent with the administrative structure that 

Congress enacted into law." ETSI Pipeline Project v. Missouri, 484 U.S. 495, 517 (1988). 

Commenters concluded, stating that the administrative structure of the Clean Air Act allows for 

the regulation of individual stationary sources and their direct emissions. Indirect regulation of

air emissions is authorized only rarely, and only when expressly called for by the Clean Air Act.

Commenters stated and concurred EPA proposes to make all requirements in state plans 

"federally enforceable," including those requirements that would apply to entities other than 

affected EGUs under a "portfolio" approach. (See Proposed Rule, 79 Fed. Reg. at 34,901) 

Commenters stated EPA does not define what it means by "federally enforceable"; however, this 

language could be interpreted to mean that non-EGU entities identified in state plans (which 

could include local distribution utilities, renewable energy providers, energy efficiency 

providers, or state agencies) could be subject to federal enforcement actions by EPA (See 42 

U.S.C. 7413) or by citizen groups under the CAA's citizen suit provision. (See Id. 7604) 

Commenters noted that under section 111(d), EPA may only require states to issue performance 

standards for "sources" of air pollutants, and read in the context of the rest of the Act, Section 

111(d)'s reference to "sources" is clearly intended to designate stationary sources," (See 42 

U.S.C. 7411(a)(2)) (limiting the definition of "new source" to stationary sources); Id. 7411(a)(6) 

(limiting the definition of "existing source" to stationary sources)) which Section 111 defines as 

"any building, structure, facility, or installation which emits or may emit any air pollutant."(Id. 

7411(a)(3)) Thus, commenters concluded, EPA does not have authority to regulate entities like 

local distribution utilities or nuclear generators that fall outside of the definition of a "stationary 

source." Commenters noted that Section 111 also does not authorize states to regulate such 

entities, and although states may generally regulate such entities under their own sovereign state 

powers, EPA may not require states to do so under Section 111 of the CAA.

Commenters stated that the Proposed Rule encourages states to submit a plan that contains what 

EPA calls "portfolio" measures, and these measures would be used, for instance, to dramatically 

increase the use and deployment of renewable energy and EE throughout the state, targeting their 
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state's citizens and businesses as necessary agents in the reduction of electric consumption. 

Commenters said, however, upon EPA approval of a state's CAA Section 111(d) Plan, these 

measures would become "federally-enforceable" against those agents (citizens and businesses) 

required to implement them. Commenters stated that CAA Section 111(d) does not provide EPA 

the authority to create federally enforceable obligations on entities that do not own or operate 

facilities within the regulated source category but rather, CAA Section 111 authorizes standards 

to be set for facilities within EPA-listed source categories. Commenters closed, stating that 

CAA Section 111 does not apply to, nor can it permissibly reach, any other facilities or entities 

that are not part of the listed source category.

Response 3: The federal enforceability considerations raised in the comment arose primarily 

under the proposed portfolio approach for state plans. As explained in section VIII.C of the 

preamble, the EPA is not finalizing the portfolio approach, which would have allowed state plan 

submittals to include federally enforceable measures that apply to entities that are not affected 

EGUs. However, as further explained in section VIII.D, if the state is adopting the state measures 

type plan, the state plan submittal will need to specify, in the supporting materials, the state 

enforceable measures that the state is relying upon in conjunction with any federally enforceable 

emission standards for affected EGUs to meet the emission guidelines. The final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements 

for its affected EGUs. Consistent with longstanding practice under the Clean Air Act, if a 

regulated entity does not meet a requirement, the EPA will address the matter on a case-by-case 

basis, to determine the appropriate response and resolution.

1.5.2.1.5 Other Legal Authority Issues

Comment 1: Commenters believed EPA's proposed rules under Section 111(d) to reduce 

greenhouse gases from both power plants and beyond power plants is legally and technically 

flawed, and that the EPA appears to recognize the legal vulnerabilities by proposing to make 

each of the building blocks independently severable, as if realizing they will be vacated by the 

Court during judicial review.

Commenters stated that EPA determined each individual state's emission reduction target using 

2012 data for several building blocks, including: 6 percent heat rate improvements at existing 

coal plants; redispatching existing natural gas combined cycle plants to 70 percent capacity; 

increasing the use of renewable energy; ensuring the continued operation of nuclear plants; and 

enhancing energy efficiency programs. Commenters said EPA's plan emphasizes that states will 

have flexibility in the means chosen to meet the carbon dioxide target goals, through these and 

other measures. Commenters stated, however, with the exception of the heat rate improvements, 

the other measures only serve to shift generation away from existing coal-fired EGUs. 

Commenters recognized EPA's limited authority to regulate carbon dioxide emissions under the 

CAA and expresses concerns related to establishing CO2 reduction targets under Section 111(d) 

that force the development of a State Energy Plan rather than the regulation of affected fossil 

fuel-fired EGUs. Commenters continued that this is an unprecedented method of establishing 

control requirements for existing sources from a source category that is subject to New Source 
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Performance Standards under Section 111(b) of the CAA. Commenters believed the Section 

111(d) state plan should not be the State Energy Plan; rather, the Section 111(d) plan should be 

part of a state's energy plan. Commenters stated they have developed a White Paper entitled 

Recommended Framework for the Section 111(d) Emissions Guidelines Addressing Carbon 

Dioxide Standards for Existing Fossil Fuel-Fired Power Plants. Commenters said it was sent to 

EPA Administrator Gina McCarthy on April 10, 2014, and has received a significant attention in 

the national press. In that paper, commenters recommended and urged EPA establish emission 

guideline targets based upon actions that can be taken directly by operators at existing sources 

that would actually be subject to the Section 111(d) emission guidelines, explaining that this 

approach is consistent with previous emissions guidelines promulgated under the CAA by EPA 

for other source categories. 

Commenters stated EPA argues that it bases its proposed "building blocks" on measures that 

states are already undertaking - Proposal, 79 Fed. Reg. at 34,856 - but a state's exercise of its 

own policy discretion cannot confer regulatory authority on a federal agency, and EPA expresses 

concern that, if it limited its proposal to heat-rate improvements achieved inside the fence at 

individual coal-fired plants, a "rebound effect" would increase operations at these plants and lead 

to smaller overall reductions. Id. at 34,856 & n.93. Commenters said the "rebound effect" is 

nothing new in environmental law. See, e.g., 75 Fed. Reg. 74,152, 74,316-20 (Nov. 30, 2010) 

(providing detailed discussion of "rebound effect" in fuel-efficiency context). Commenters stated 

that it has never been used as a justification to set state energy policy or otherwise enlarge EPA's 

authority, and it cannot bear that weight here. Commenters noted EPA also asserts that its 

additional, beyond-the-fenceline "building blocks" promise additional emission reductions "by 

significant amounts and at lower costs" than some strategies within the first, inside-the-fenceline 

"building block." Proposal, 79 Fed. Reg. at 34,856. But commenters said even assuming this is 

true, it is only a reason to propose these measures if they are within the agency's power to 

propose.

Commenters noted that in striking down EPA's Clean Air Interstate Rule, the D.C. Circuit noted 

that it is "entirely arbitrary" to base standards on "irrelevant factors." North Carolina v. EPA, 531 

F.3d 896, 930 (D.C. Cir. 2008). Commenters explained that in the CPP proposed rule, two of the 

four building blocks (Building Blocks 3 and 4) impact units or entities that do not emit CO2 and 

some do not emit anything at all. Commenters believed EPA has no authority to require actions 

from non-emitting units or entities under the CAA and continues (verbatim) EPA's contention 

that, under Section 111, these other units are somehow relevant to the regulation of emissions 

from fossil-fuel-fired EGUs further supports the fiction that it is establishing an existing source 

performance standard. EPA argues that these building blocks "displace or avoid the need for 

generation from those sources and thereby reduce the emissions from those sources." Legal 

Memorandum, supra note 21, at 14. Commenters stated, by this logic, EPA could include any 

number of things under this rule, including electric vehicles, global climate patterns and geopolitics, all of which may "avoid the need for generation from those sources and thereby reduce 

emissions from those sources." Commenters said, as the court in North Carolina noted, "lest EPA 

forgot, it is 'a creature of statute' and has only those authorities conferred upon it by Congress." 

North Carolina, 531 F.3d at 922. Commenters stated that EPA may not take, even in the public 
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interest, the power to regulate "a significant portion of the American economy," much of which it 

currently does not and cannot regulate directly. Brown & Williamson, 529 U.S. at 159. 

Commenters stated, by including national projections for non-emitting units and entities into 

state standards for fossil-fired EGUs, EPA is constructing a goal that is entirely theoretical and 

arbitrary.

Commenters stated that the assumption that all EGUs are fungible as part of an interconnected 

grid - such that increasing generation from natural gas and renewable power or reducing retail 

demand will reduce coal-fired generation - does not apply to the Commenter's Power 

Plant. Commenters continued, stating that Building Blocks 2, 3, and 4 are entirely outside of 

commenters’ control because it is not associated with a utility distribution system, and that it is 

neither technically feasible nor reasonable to impose on an affected facility an emission standard 

generated through assumptions that are simply inapplicable to that facility. Commenters’ unique 

position further supports a finding that it is not an "affected" EGU and should not be included 

within the scope of this rulemaking.

Response 1: The commenters are incorrect. This rule is for the reduction of carbon dioxide from 

the affected power plants, not any other facility. Further, for the reasons discussed in section 

V.A. and V.B. of the preamble and in the Legal Memorandum, our interpretation of the BSER is 

reasonable and within the scope of EPA’s authority in light of legal precedent, the statutory text, 

statutory context, statutory purpose, and legislative history.

1.5.2.2. EPA has legal authority to include flexible beyond-the-fence compliance 

approaches

Comment 1: Commenters stated in earlier comments to EPA, the Alabama Governor's office 

and Alabama Department of Environmental Management (collectively, "the Administration") 

questioned the legal basis for the proposal.(7 See, e.g., Alabama's Opposition to U.S. EPA's

Clean Power Plan, Testimony by Blaine Galliher, Senior Advisor to Governor Robert Bentley, 

available at http://governor.alabama.gov/newsroom/2014/07/governor-bentley-sends-senioradvisor-testify-epas-public-hearing-clean-power-plan-regulations/) Commenters noted, indeed, 

Alabama is one of 12 states that have brought suit against the proposal, notwithstanding the legal 

hurdles to challenging a non-final rule. (Neela Banerjee, 12 States sue the EPA over proposed 

power plant regulations, L.A. Times (Aug. 4, 2014), available at 

http://www.latimes.com/business/la-fi-epa-lawsuit-20140805-story.html.) Commenters stated the 

Administration's purported legal critique involves two basic arguments: (1) EPA cannot regulate 

power plant carbon dioxide emissions under Clean Air Act section 111(d) because EPA has 

promulgated emission standards for power plant hazardous air emissions under section 112; and 

(2) section 111(d) requires controls on emission sources only, and does not authorize "beyond 

the fence line" compliance flexibility. (Id.) Commenters said each of the Administration's 

arguments is flawed. First, commenters stated EPA interprets section 111(d) to limit 

development of standards of performance for specific pollutants regulated under section 112, 

rather than for entire categories of sources regulated under that section. Commenters said EPA's 
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interpretation is a permissible construction that, in fact, is the most natural reading of the statute 

and best effectuates each of the statutory provisions. Second, commenters noted that EPA's broad 

interpretation of "best system of emission reduction" to include beyond-the-fence-line 

compliance approaches is a logical and permissible reading of these generically defined statutory 

terms. Commenters said, to demonstrate the flaws in Administration's attempted legal critique, 

these comments will first briefly outline the applicable statutory and regulatory framework for 

section 111 before addressing the state's specific criticisms. Commenters stated that Clean Air 

Act section 111 directs EPA to establish "standards of performance" limiting emissions of 

harmful air pollutants in three phases. Commenters said, first, EPA must identify categories of 

stationary sources that cause or contribute significantly to "air pollution which may reasonably

be anticipated to endanger health or welfare."(42 U.S.C section 7411(b)) Second, commenters 

said EPA must establish national standards of performance for new sources in each such 

category. (Id.) Finally, commenters stated that once EPA has developed standards of 

performance for new sources in a category, it must then prescribe regulations under which states 

develop standards of performance for existing sources in the same source category. (Id. section 

7411(d)) Commenters said Section 111(d) provides that EPA "shall prescribe regulations which 

shall establish a procedure . . . under which each State shall submit [to EPA] a plan which . . . 

establishes standards of performance for any air pollutant . . . to which a standard of performance 

under this section would apply if such existing source were a new source." (Id. (emphasis added) 

Commenters said Congress exempted two categories of air pollutants from this mandate: any air 

pollutant (1) for which air quality criteria have been issued or which is listed under section 

108(a); or (2) emitted from a source category covered under the hazardous air pollutant 

provisions of section 112.(Id.) Commenters said neither exemption applies here. Commenters 

noted that EPA regulations implementing section 111(d) establish a broad framework under 

which EPA establishes emission guidelines for each covered pollutant.(40 C.F.R. section 

60.22(a)) Commenters said the guidelines set minimum required emissions limitations based on 

the best adequately demonstrated systems of emission reductions.(Id. section 60.22(b)) 

Commenters said states then have flexibility to tailor their own plans to implement the standards 

of performance, so long as they meet or are equivalent to EPA's emission guideline.(Id.) 

Commenters stated that EPA's implementing regulations also provide for case-by-case variances 

from an emission guideline to allow for "significantly more reasonable" compliance options, (40 

C.F.R. section 60.24(f)(3)) such as where necessary to take into account the remaining useful life 

of an existing source that would be subject to the performance standard. (42 U.S.C. section 

7411(d)(1)(B)) Commenters noted, although EPA promulgated its guidelines for implementing 

section 111(d) in 1975, the agency has issued few performance standards for existing sources. 

Thus, commenters stated, while this is EPA's default approach, it has not been extensively 

elaborated or refined through a long history of prior rulemakings; and nothing in the Clean Air 

Act requires EPA to adhere rigidly to this approach for each air pollutant or each existing source 

category. Commenters stated, in fact, EPA may adopt any reasonable approach to develop, issue, 

and implement existing source standards, so long as they meet the minimum requirements of the 

Clean Air Act and the agency adequately explains its approach and rationale through appropriate 

notice and comment rulemaking. (See, e.g., FCC v. Fox Television Stations, Inc. 566 U.S. 502, 

515 (2009) (an agency may change its position so long as it provides "good reasons" for doing 
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so)) Commenters noted, in this instance, EPA's rationale for using 111(d) as a legal basis to 

establish guidelines of performance for existing power plant sources of carbon dioxide is fully 

consistent with the Clean Air Act, EPA's implementing regulations, and past practice. In 

particular, commenters stated that "Congress amended Section 111 [in 1990] to remove the word 

'technology' from its definition of performance standards, indicating that standards need not be 

technology-based."(Id.) Thus, commenters said not only there is no support in the statute for the 

Administration's overly restrictive reading of the statute, accepted principles of statutory 

interpretation refute the Administration's contention. Commenters noted, additionally, section 

111(d) explicitly provides that the procedure for implementing standards of performance for 

existing sources "shall . . . be similar to that provided by section 7410 [section 110] of this title." 

(42 U.S.C. section 7411(d)(1)) Commenters stated that the process prescribed under section 110 

grants states great latitude to fashion state implementation plans so long as they will achieve air 

quality protections that are at least equivalent to minimum federal standards, and specifically 

authorizes flexible compliance approaches "including economic incentives such as fees, 

marketable permits, and auctions of emission rights."(U.S.C. section 7410(a)(2)(A)) 

Commenters stated, based on well-established practice, states have, in fact, exercised this 

flexibility to implement pollutant reductions required under section 110 through a variety of nonsource-specific mechanisms, including renewable portfolio standards, demand-side management, 

utility planning, and other indirect emission reduction systems. (See EPA Roadmap for 

Incorporating Energy Efficiency/Renewable Energy Policies and Programs into State 

Implementation Plans/Tribal Implementation Plans (2011); EPA Guidance on SIP Credits for 

Emissions Reductions from Electric-Sector Energy Efficiency and Renewable Energy Measures 

(2004)). Commenters noted that these guidance documents have been successfully implemented 

in Texas, Shreveport, Louisiana, and the Washington, D.C. region, all of which modified their 

SIPs to receive credit for reductions achieved through energy efficiency and renewable energy 

measures, and there is no question that EPA has similar flexibility in suggesting and in some 

cases implementing through Federal Implementation Plans' flexible compliance approaches, as 

section 111(d)(2) accords EPA the same authority granted to the states in order to fashion a 

federal "backstop" program for existing sources. Thus, commenters stated that contrary to the 

Administration's unsupported criticisms, there is little question that "EPA has the authority to 

outline flexible structures in its [section 111(d)] guidance to states on existing source regulation, 

either in the form of a specific preferred option or by listing several alternative options."

Commenters stated EPA also correctly takes a system-wide approach. Commenters supported 

the EPA's decision to look beyond the fence line of individual plants in identifying the best 

system of emission reduction, and because of the integrated nature of the electric grid, reductions 

in generation at a particular fossil fuel facility must be balance with either increased generation 

or with demand reduction elsewhere on the grid. Commenters added that because of this, the 

carbon intensity of generation cannot be considered in isolation, and setting goals and ultimately 

determining compliance should rightly consider the entire system.Commenters stated regarding 

regulating beyond the fence line, NCDENR erroneously claims that "[t]he plain language of the 

Act as well as legal precedent precludes EPA and States from designing a standard that relies on 

reductions made outside of the emissions unit." Commenters continued (verbatim), tellingly, 

NCDENR does not identify the "plain language" or the legal precedent that purportedly limits 
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EPA to developing unit-specific guidelines and constrains EPA from creating flexible 

compliance options. Commenters said the reason for this omission is simple - it does not exist. 

Commenters stated, in contrast to NCDENR's unsupported argument, "[t]here is widespread 

agreement in the academic community that Section 111 authorizes the use of many types of 

flexible approaches."(G. Wannier, J. Schwartz, N. Ricardson, M. Livermore, & D. Burtaw, 

Prevailing Academic View on Compliance Flexibility under Section 111 of the Clean Air Act, 

Institute for Policy Integrity, New York University School of Law Discussion Paper No. 2011/2 

at 1) Commenters stated, to the extent the Clean Air Act defines the terms used in section 111(d), 

it does so broadly, leaving EPA wide latitude to interpret them in any reasonable manner that

effectuates the pollution reduction goals of the Act. Commenters noted, in section 111(a), 

Congress defined "standard of performance" to mean "a standard for emissions of air pollutants 

which reflects the degree of emission limitation achievable through the application of the best 

system of emission reduction (taking into account the cost of achieving such reduction and any 

non-air quality health and environmental impact and energy requirements) the Administrator 

determines has been adequately demonstrated." 42 U.S.C. section 7411(a)(1). Commenters noted 

that the general definitions in Clean Air Act section 302 define "standard of performance" to 

mean "a requirement of continuous emission reduction, including any requirement relating to the 

operation or maintenance of a source to assure continuous emission reduction. 42 U.S.C. section 

7602(l) (emphasis added). Commenters stated, on the face of the statute, EPA has broad 

discretion to identify the best system of emission reduction and is limited only to the extent the 

standard is achievable and considers certain factors such as cost and other non-air quality 

impacts. Commenters asserted that the applicable definitions do not, as NCDENR argues, limit 

EPA to developing unit-specific guidelines. And commenters said courts should not infer such an 

unexpressed limitation on the agency's discretion to reasonably interpret its statutory mandate. 

Chevron U.S.A. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 863 (1984); see Texas Rural 

Legal Aid Inc. v. Legal Serv. Corp., 940 F.2d 685, 694 (D.C. Cir. 1991) ("Under Chevron 

[courts] normally withhold deference from an agency's interpretation of a statute only when 

Congress has 'directly spoken to the precise question at issue.'"). Commenters stated, to the 

extent Congress has spoken on the issue of EPA's discretion to fashion flexible compliance 

approaches under section 111(d), "it has removed, rather than added, barriers to flexible 

mechanisms in EPA regulations." G. Wannier, et al., Prevailing Academic View on Compliance 

Flexibility under Section 111 of the Clean Air Act, supra. at 4. Commenters noted, in particular, 

"Congress amended section 111 [in 1990] to remove the word 'technology' from its definition of 

performance standards, indicating that standards need not be technology-based." Id. Thus, 

commenters stated that not only is there no support in the statute for NCDENR's overly 

restrictive reading of the statute, accepted principles of statutory interpretation refute NCDENR's 

contention. Additionally, commenters noted that Section 111(d) explicitly provides that the 

procedure for implementing standards of performance for existing sources "shall . . . be similar 

to that provided by section 7410 [section 110] of this title." 42 U.S.C. section 7411(d)(1). 

Commenters said the process prescribed under section 110 grants states great latitude to fashion 

state implementation plans so long as they will achieve air quality protections that are at least 

equivalent to minimum federal standards, and specifically authorizes flexible compliance 

approaches "including economic incentives such as fees, marketable permits, and auctions of 
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emission rights." 42 U.S.C. section 7410(a)(2)(A). Commenters asserted, based on wellestablished practice, states have, in fact, exercised this flexibility to implement pollutant 

reductions required under section 110 through a variety of non-source-specific mechanisms, 

including renewable portfolio standards, demand-side management, utility planning, and other 

indirect emission reduction systems. See EPA Roadmap for Incorporating Energy 

Efficiency/Renewable Energy Policies and Programs into State Implementation Plans/Tribal 

Implementation Plans (2011); EPA Guidance on SIP Credits for Emissions Reductions from 

Electric-Sector Energy Efficiency and Renewable Energy Measures (2004) (These guidance 

documents have been successfully implemented in Texas, Shreveport, Louisiana, and the 

Washington, D.C. region, all of which modified their SIPs to receive credit for reductions 

achieved through energy efficiency and renewable energy measures). Commenters stated that 

there is no question that EPA has similar flexibility in suggesting - and in some cases 

implementing through Federal Implementation Plans - flexible compliance approaches, as 

section 111(d)(2) accords EPA the same authority granted to the states in order to fashion a 

federal "backstop" program for existing sources. 42 U.S.C. section 7411(d)(2); see G. Wannier, 

et al., Prevailing Academic View on Compliance Flexibility under Section 111 of the Clean Air 

Act, supra. at 4. Thus, commenters said, contrary to NCDENR's unsupported criticisms, there is 

little question that "EPA has the authority to outline flexible structures in its [section 111(d)] 

guidance to states on existing source regulation, either in the form of a specific preferred option 

or by listing several alternative options." G. Wannier, et al., Prevailing Academic View on 

Compliance Flexibility under Section 111 of the Clean Air Act, supra at 4.

Commenters stated that Oklahoma DEQ does recognize that absent such an approach, most 

existing subject facilities located in Oklahoma will not be able to achieve the proposed CO2 

emission limitations. Commenters believed that if outside the fence-line reductions are 

determined to be impermissible, then the proposed goals would need to be adjusted drastically in 

order for the state or the subject facilities to have any reasonable chance to comply with EPA's 

requirements, and consequently, to the extent that such an approach is determined to be within 

the legal confines of the Clean Air Act, ODEQ supports the ability to consider such reductions in 

developing and implementing a state Section 111(d) plan. However, commenters stated, if 

outside the fence-line reductions are determined to be impermissible, then EPA's Proposed Rule 

should be withdrawn. Commenters contended that standards for existing sources set under 

Section 111(d) are supposed to be similar to those for new, modified, or reconstructed sources 

set under Section 111(b). Commenters added that it appears that the corresponding emission 

rates for existing sources that would result from implementation of the Proposed Rule would 

actually be significantly more stringent than those contained in the related rule proposed for new 

sources. Commenters stated that the question is whether Section 111(d) allows for indirect or 

direct regulation of sources that are not regulated under the corresponding Section 111(b) 

standard, and if existing sources are not allowed to include reductions obtained outside of the 

fence-line (i.e., EE, DSM, etc.), then it will be difficult (if not impossible) for many existing 

sources to comply.

Response 1: Some of these statements are supportive of the rule and we appreciate them. We 

explain in section V. of the preamble our authority under section 111(d) and (a)(1) to include 
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building blocks 2 and 3 as part of the BSER. We also explain in the preamble that sources would 

be encouraged to take advantage of certain compliance alternatives, including demand-side 

energy efficiency measures, in lieu of implementing the BSER. We disagree that the section 

111(d) standards are more stringent than the section 111(b) standards. 

1.5.2.3. Including non-EGU sources will have negative economic impacts

Comment 1: Commenters stated that they are concerned that EPA has requested appropriations 

to develop emissions limits for other industries, including petroleum refining, pulp and paper, 

solid waste landfills, iron and steel production, CAFOs, and Portland cement manufacturing. 

Commenters stated that regulation of additional source categories is not necessary, as emissions 

from these sectors are at least an order of magnitude lower than those for fossil fuel-fired EGUs 

and EPA cannot make a source category-specific significant contribution endangerment 

determination for these sectors based on the quantity of GHGs emitted. Commenters stated that 

many of the targeted sectors are energy intensive, trade exposed industrial and manufacturing 

sectors; in the face of stiff global competition, even small increases in operating costs due to 

compliance with additional environmental standards should shift the competitive structure of 

these industries and drive production overseas. Commenters stated that such an outcome could 

have the perverse effect of increasing rather than decreasing overall GHG emissions due to 

"carbon leakage" as production shifts to foreign countries with fewer regulations designed to 

reduce GHG emissions. Commenters stated that manufacturing and industrial sectors are less 

homogenous than fossil fuel-fired EGUs, and rely on a much broader range of designs, 

processes, feedstocks, and products; as a result, it is difficult to identify and apply broadly 

applicable "best systems of emissions reduction" for these sectors. Commenters stated that at a 

minimum, EPA must carefully coordinate among the various NSPS programs and ensure that 

manufacturing and industrial sectors are not punished in subsequent NSPS and ESPS 

rulemakings for any demand-side energy efficiency improvements that they undertake as a result 

of mandatory or voluntary actions taken to assist States in complying with the ESPS for fossil 

fuel-fired EGUs.

Commenters stated that imposing uniform GHG standards of performance on other source 

categories could disadvantage these sectors by making them less competitive on the global stage, 

and new regulations with high compliance costs that do not account for trade exposure will 

translate into significant job losses and reductions in economic activity without actually reducing 

GHG emissions.

Commenters stated that because the proposed rule regulates greenhouse gas emissions outside 

the fence, it sets an impossible precedent for future regulation of greenhouse gases for the 

manufacturing sector. Commenters explained that the rule's precedent would require industrial 

sources to reduce greenhouse gases in amounts that are above what we could reduce through 

manufacturing technology, equipment, and practices, and be required to accept responsibility to 

achieve higher greenhouse gas reductions by reducing emissions outside their fence line, 
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and their customers are all over the world, and this regulation imposes costs that our global 

competitors would not have.

Response 1: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 2: Commenters stated they believe that taking the actions proposed through the 

111(d) rulemaking process will lead to extensive regulatory uncertainty, particularly for 

entities/industries that may be targeted for reductions through the outside the fence line portfolio 

approach, and this uncertainly will lead to a chilling effect on capital investment and 

manufacturing growth opportunities throughout the US economic base.

Commenters stated EPA should not expand GHG performance standards to other source 

categories, explaining that by usurping the role of States under 111(d) and requiring reductions at 

the source category (here, fossil fuel-fired generating units) achievable only with outside-thefence measures at unregulated entities, EPA's Proposal sets dangerous precedent for other source 

categories. Commenters asserted that EPA should not proceed with additional GHG standards of 

performance for other source categories unless and until its legal authority and methodology for 

imposing such reductions on the utility sector are upheld. Commenters added that source 

categories in the manufacturing sector require consideration of impact by a broad range of 

factors that EPA has not considered and in some cases has not had to consider in its Proposal for 

power plants, such as industry economics, geography, federal and state incentives, transportation 

systems, ownership structures, foreign competition, profit margins, and customer bases, and 

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 initiatives. Commenters believed that 

imposing uniform GHG standards of performance on other source categories could disadvantage 

these sectors by making them less competitive on the global stage, and new regulations with high 

compliance costs that do not account for trade exposure will translate into significant job losses 

and reductions in economic activity without actually reducing GHG emissions. Commenters 

remarked that if EPA were to proceed with regulations for other sectors, however, then the 

Agency, at a minimum, should first proceed with an Advanced Notice of Proposed Rulemaking 

(ANPR) for any particular source category. Commenters said an ANPR would allow for notice 

and public comment from impacted stakeholders, as well as a source-category specific 

endangerment determination for GHG emissions.

Response 2: To the extent the comment objects to the portfolio approach, which the EPA is not 

finalizing, the comment is moot. With respect to arguments about regulatory uncertainty and 

hypothetical future consequences, as we explain in section V. B. of the preamble and in the 

Legal Memorandum, we have refined our analysis of the BSER, and we do not believe our 

interpretation will lead to unreasonable future actions for any source category. In accordance 

with our interpretation, we undertake a pollutant-specific and source-category-specific 

evaluation. As a result, the BSER is unique to each industry and even may be different for new 

and existing sources.
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1.5.2.4. Including non-EGU sources is necessary

Comment 1: Commenters supported EPA's consideration of the potential for shifts in dispatch, 

low or zero carbon generation, and energy efficiency in the wider electricity system to assess 

emissions reduction potential, stating. Commenters said EPA's approach provides needed 

flexibility and will lead to more cost-effective reductions than an approach that is limited to 

actions that can be taken at the electric generating units alone.

Commenters stated they believe the proposed rule is well within EPA's statutory authority and is 

in fact legally and scientifically required and disagrees strongly with claims asserted by other 

industry groups that EPA has exceeded its authority by looking to the full electric system for 

reductions, or by proposing the rule at all. 

Commenters supported the approach of allowing entities, other than affected EGUs, to help 

achieve emission performance goals. Additionally, commenters supported recognition by U.S. 

EPA of renewable energy (Building Block 3) and energy efficiency (Building Block 4) 

measures, such as GHP systems, as implementation measures that should be available for states 

to incorporate, at their option, into state implementation plans. Commenters believed giving 

states flexibility to use a full-range of greenhouse gas emission reduction tools will aid in 

reaching goals while potentially reducing costs and allowing state-specific tailored approaches, 

and the proposed framework allows states to develop an implementation plan that fits their 

situation while nationally achieving the Clean Air Act objectives of protecting and enhancing the 

quality of the Nation's air resources so as to promote the public health and welfare and the 

productive capacity of its population.

Response 1: Some of these statements are supportive of the rule; we appreciate them. As 

explained in the preamble, we are not finalizing building block 4. We explain in section V. of the 

preamble our authority under section 111(d) and (a)(1) to include building blocks 2 and 3 as part 

of the BSER. We also explain in the preamble that sources would be encouraged to take 

advantage of certain compliance alternatives, including demand-side energy efficiency measures, 

in lieu of implementing the BSER.

1.5.2.5. State goals are improper and inequitable

Comment 1: Commenters stated that identifying BSER as a system that includes the regulation 

of non-emitting and non-affected entities is arbitrary, capricious, and contrary to law.

Commenters believed that EPA must set BSER based on emission reductions achievable inside 

the fence line of the source category and then allow states to achieve the reductions through 

whatever means it chooses in its SIP. Commenters argued that the proposed rule illegally and 

unfairly reverses this process. Consequently, commenters concluded, Ohio's target for reductions 

is unattainable and in implementation, inflexible. Commenters said further analysis of each 

building block illustrates this problem.
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Commenters stated that although the proposed rule does not explicitly require that states 

implement any or all of the building blocks proposed by U.S. EPA, the manner in which U.S. 

EPA applied BSER to each building block to establish the goal for each state does require states 

to implement strategies beyond what can be achieved through a single building block, and as a 

result, the statewide average emission rates proposed by U.S. EPA would be impossible to meet 

by implementing the only building block that can be legally implemented and enforced, that 

being Building Block 1. Clearly, commenters remarked, the proposed rule is intended to regulate 

activities beyond the fence line and beyond the control of the affected sources, and Federal law 

does not authorize this intent.

Commenters stated EPA proposed a unique approach for existing sources under Section 111(d) 

that calculates an emission rate target for each state, and this nontraditional, formulaic approach 

produces different targets for each state. Commenters stated that the fact that an EGU is colocated in a state with an impressive record of capturing energy efficiency or a robust renewable 

portfolio standard does not necessarily impact the environmental impact of that EGU's CO2 

emissions; nor, given the interstate nature of the electric system, does it necessarily indicate that 

the given EGU's generation may more easily be displaced by cleaner and carbon-free resources. 

Commenters believed EPA would be better served by applying CO2 standards on existing 

sources in Section 111(d) uniformly throughout the nation as it has proposed under Section 

111(b).

Response 1: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

To the extent this comment objects to the portfolio approach, which the EPA is not finalizing, the 

comment is moot. While it is the case that the emissions reductions contemplated by this rule 

cannot be met by building block 1, as explained in Section VIII of the preamble, states have 

various options they can use in developing their state plans. 

1.5.2.6. Guidance and clarification needed from EPA

Comment 1: Commenters stated that many of the operating practices and equipment upgrades 

that are the basis of the Agency's assertion that 4 to 6 percent heat rate improvements are 

achievable are not included in a Subpart Da affected facility, and for this reason, EPA lacks 

authority to regulate such equipment under Section 111(d). Commenters stated that Subpart Da is 

the codification of the NSPS for electric utility steam generating units, and these pieces of 

complicated equipment, logically enough, generate steam. Commenters noted that the "affected 

facility" is "each electric utility steam generating unit." [40 C.F.R. 60.40Da.] Commenters noted 

that equipment within the boiler island is the Subpart Da affected facility, while equipment 

beyond the boiler island is not. Commenters agreed with UARG's comments that the following 

equipment is specifically beyond the purview of this rule: steam turbines, water purification 

equipment, water-supply systems, air cleaning and cooling apparatuses, condensers, main 

exhaust and main steam piping, water screens, motors, and moisture separators for turbine steam. 
319

Commenters asserted that EPA's attempt to require improvements in these components' 

efficiency for building block 1 is contrary to law. 

Commenters stated that Section 111(d) requires each state's plan to establish standards of 

performance for the existing stationary sources that are subject to Section 111(d) within its 

jurisdiction. Commenters explained that the only potentially eligible existing stationary source 

categories for regulation under Section 111(d) are electric utility steam generating units and 

stationary combustion turbines - because these are the only two source categories for which EPA 

has proposed (but has not yet finalized) Section 111(b) standards of performance for new 

sources.

Response 1: In this rulemaking, the EPA is combining the sources from the two existing source 

categories for the affected EGUs, as listed in 40 CFR subpart Da and 40 CFR subpart KKKK, 

into a single location, 40 CFR subpart UUUU, category for purposes of addressing the CO2 

emissions from existing affected EGUs. The EPA is also codifying all of the requirements for the 

affected EGUs in a new subpart UUUU of 40 CFR part 60 and including all GHG emission 

guidelines for the affected sources—fossil fuel–fired electric utility steam generating units, as 

well as natural gas-fired stationary combustion turbines—in that newly created subpart.

For the EPA’s response to claims about “equipment beyond the boiler island,” see section 1.9.4.

1.5.2.7. Other issues

Comment 1: Commenters stated that the precedent EPA's new interpretation would set is not 

limited to just the power sector, that it would apply to setting existing-source performance 

standards throughout the economy, and every source category that EPA regulates could, in 

theory, be forced to reduce production if EPA, based on an economy-wide "BSER" analysis, 

determines that substitutes are available. Commenters offered that EPA, for instance, could 

determine, under the guise of adopting performance standards, that petroleum refineries must 

reduce production because EPA thinks that the use of more electric vehicles is "adequately 

demonstrated" and cost-effective.

Commenters stated that because EGUs cannot, on their own, achieve the level of reductions 

necessary to comply, the proposed guidelines effectively require states, utilities owning EGUs, 

and, in many cases, consumers and organizations that are totally unrelated to an existing EGU, to 

undertake new programs and measures to meet EPA's proposed standards.

Commenters stated that EPA cannot hold affected EGUs solely responsible for meeting the 

entirety of a state's emission reduction goal. Commenters explained that in setting the state goals, 

EPA relied upon emission reduction measures that could be achieved through mechanisms 

outside of affected EGUs, such as redispatch to NGCCs and RE as well as avoided generation 

through EE programs, and as a result of EPA's use of these mechanisms in its BSER analysis, 

EPA set state goals that the commenters cannot meet solely through emission reduction measures 

achievable at affected EGUs, short of wholesale retirement of existing fossil fuel-fired 

generation, given that several state goals are well below the CO2 emission rate achievable by 

fossil fuel-fired generation, even for new NGCCs. Commenters believed that EPA does not have 
320

the authority to enforce the entire emission reduction commitments against affected units even 

though affected units are the only entities within EPA's jurisdiction. Commenters continued, 

stating that EPA proposes that each state plan must include a "demonstration that each emission 

standard is quantifiable, nonduplicative, permanent, verifiable, and enforceable with respect to 

an affected entity" and commenters explained that 1) proposed section 60.5740(a)(iii)(6) 

(emphasis added). EPA further proposes that "[o]nce a state receives the EPA's approval for its 

plan, the provisions in the plan become federally enforceable against the entity responsible for 

noncompliance, in the same manner as the provisions of an approved SIP under CAA Section 

110." 79 Fed. Reg. at 34,844, and 2) due to the proposed broad definition of "affected entity," 

EPA's proposal would transform emission reduction measures in state plans that are the 

responsibility of non-affected EGU entities into federally enforceable requirements. Commenters 

opposed this approach. Commenters stated that an "affected entity" is "an affected EGU, or 

another entity with obligations under this subpart for the purpose of meeting the emissions 

performance goal requirements in these emission guidelines" (Proposed section 60.5820), and 

the category would include entities that EPA has no authority to regulate under Section 111(d), 

such as electric distribution utilities and independent non-profit entities that administer RE and 

EE programs. (See State Plan Considerations TSD at 10.) While commenters agreed that states 

should be able to rely on emission reductions achieved by affected entities to achieve compliance 

with their state goals, commenters believed that EPA does not have the authority to make these 

emission reduction commitments federally enforceable.

Response 1: The federal enforceability considerations raised in the comment arose primarily 

under the proposed portfolio approach for state plans. As explained in section VIII.C of the 

preamble, the EPA is not finalizing the portfolio approach, which would have allowed state plan 

submittals to include federally enforceable measures that apply to entities that are not affected 

EGUs. However, as further explained in section VIII.D, if the state is adopting the state measures 

type plan, the state plan submittal will need to specify, in the supporting materials, the state 

enforceable measures that the state is relying upon in conjunction with any federally enforceable 

emission standards for affected EGUs to meet the emission guidelines. The final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements 

for its affected EGUs. Consistent with longstanding practice under the Clean Air Act, if a 

regulated entity does not meet a requirement, the EPA will address the matter on a case-by-case 

basis, to determine the appropriate response and resolution.

Further, for the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

We do not believe our interpretation will lead to unreasonable future actions for this or any other 

source category. In accordance with our interpretation, we undertake a pollutant specific and 

source category specific evaluation. As a result, the BSER is unique to each industry and even 

may be different for new and existing sources.

Comment 2: Commenters stated that the first thing to be noted under this standard is that EPA 

has not considered the possibility that there will be widespread state refusal to issue SIPs 
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implementing building blocks two through four. Commenters noted that in 2010, Arizona passed 

a law precluding state regulation of GHGs without approval of the legislature (See A.R.S. S. 49-

191). Commenters stated the director of the Arizona Department of Environmental Quality has 

recently testified before Congress: "In the end, should EPA choose not to make adjustments to 

the final rule based upon our real implementation concerns, litigation remains an option for 

Arizona." State Perspectives: Questions Concerning EPA's Proposed Clean Power Plan; Hearing 

Before the Subcomm. on Energy & Power of the H. Comm. on Energy & Commerce, 113th 

Cong. 33 (2014) [hereinafter State Perspectives: Questions Concerning EPA's Proposed Clean 

Power Plan] (testimony of Henry B. Darwin, Dir., Ariz. Dept. of Envtl. Quality), available at 

http://democrats.energycommerce.house.gov/sites/default/files/documents/PreliminaryTranscript-EP-EPA-Clean-Power-Plan-2014-9-9.pdf). Commenters explained that under existing 

law, Kansas, Kentucky, Louisiana, Missouri, and West Virginia may not shift pollution control 

costs to other parts of the economy but must limit reductions to the specific source. Commenters 

noted, on June 6, 2014, the Attorney General of West Virginia addressed a letter to the 

Administrator opining that the Proposed Rule is beyond the authority of EPA (Letter from 

Patrick Morrissey, West Virginia Attorney General, to Gina McCarthy, Administrator, U.S. 

Envtl. Prot. Agency (June 6, 2014), available at 

http://www.ago.wv.gov/publicresources/Documents/Letter%20to%20 

EPA%20on%20section%20111%28d%29%20authority.pdf). Commenters noted, on June 16, 

2014, nine state governors wrote the President protesting the rule (Letter from Governors of 

Alaska, Indiana, Louisiana, Mississippi, North Carolina, North Dakota, Pennsylvania, Texas, and 

Wyoming to President Barack H. Obama II from Governors of the States of Alaska, Indiana, 

Louisiana, Mississippi, North Carolina, North Dakota, Pennsylvania, Texas, and Wyoming (June 

16, 2014), available at http://www.ncair.org/rules/EGUs/Gov_Energy_Letter6.16.14%20FINAL.pdf). Commenters said thirteen Attorneys General wrote the Administrator 

on August 25, 2014, protesting the failure of EPA to comply with 42 U.S.C. 7607(d) by 

including in the docket as of the date of publication of the Proposed Rule all data in the record on 

which the agency relies (Letter from Attorneys General of Alabama, Indiana, Kansas, Louisiana, 

Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, West 

Virginia, and Wyoming to Gina McCarthy, Administrator, U.S. Envtl. Prot. Agency (Aug. 25, 

2014), available at http://www.ago.wv.gov/pressroom/Documents/ Section%20 

307%20Letter%20(August%2025,%202014).pdf). Commenters said on September 9, 2014 the 

Governors of fifteen states wrote the President protesting the Proposed Rule and challenging 

EPA's authority to issue it (53 Letter from Governors of Alabama, Alaska, Arizona, Idaho, 

Indiana, Mississippi, New Mexico, North Carolina, North Dakota, Oklahoma, Pennsylvania, 

South Carolina, Utah, Wisconsin, and Wyoming to President Barack H. Obama (Sept. 9, 2014), 

available at http://governor.alabama.gov/assets/2014/09/RGA-Letter-to-POTUS.pdf). 

Commenters noted that nine States have challenged the settlement that provided the basis for the 

Proposed Rule in the United States Court of Appeals for the District of Columbia Circuit and 

have supported a complementary challenge in the same forum seeking an extraordinary writ 

against the Proposed Rule (See, e.g., West Virginia v. EPA, No. 14-1146 (D.C. Cir. 2014); In re 

Murray Energy Corp., No. 14-1112 (D.C. Cir. 2014)). Commenters noted that on October 29, 

2014, the three commissioners of the Kansas Corporation Commission sent a letter to the 
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Administrator stating "that Kansas ratepayers will face a future of exorbitantly high electricity 

costs and unreliable electric service" (Cover Letter, Comments of the Staff of the Kansas 

Corporation Commission on the Proposed Clean Power Plan, EPA-HQ-OAR-2013-0602 (Oct.

29, 2014), available at http://www.eenews.net/assets/2014/10/31/document_ew _01.pdf). 

Commenters stated that the Commissioners attributed this threatened EPA regulatory harm to the 

fact that "the EPA has inserted itself into a regulatory field occupied by the states for decades in 

which the states have proven expertise." Commenters said the Commissioners also noted their 

"legal duty and obligation to look out for the energy future of Kansas and the Kansas economy." 

Commenters concluded listing by stating that Legislative proposals hostile to the approach now 

taken by EPA are pending in many States and EPA may not simply ignore this important part of 

the problem. 

Response 2: Consistent with the cooperative federalism structure of section 111(d) the EPA can 

and will implement a federal plan imposing standards of performance on affected EGUs in states 

that do not submit approvable state plans. See Texas v. EPA, 726 F.3d 180, 193 (D.C. Cir. 2013) 

(where a state has “no intention of revising its SIP because of its disagreement with EPA’s 

regulation of greenhouse gases under the [Clean Air] Act],” “invoking ‘cooperative federalism’ 

... rings hollow”). 

Furthermore, we disagree that we are expanding our authority to include wholesale energy 

market regulation. Our emission guidelines simply reflect an achievable emissions limit through 

the application of the BSER and do not in themselves require states or sources to implement the 

BSER. Moreover, these emission guidelines provide states with the flexibility to establish, 

implement, and enforce standards of performance and do not intrude on the regulatory domain of 

the states. It cannot be said that because environmental requirements may have an effect on the 

wholesale energy market that the EPA is therefore intruding into energy regulation. Certainly, in 

the legislative history of the 1970 CAA Amendments, Congress expressly identified power 

plants as a priority source category for regulation under CAA section 111. 

Finally, for the EPA’s response to comments regarding docketing requirements under CAA 

section 307(d), see section 1.13.

1.5.3 Affected entities under Building Block 2

1.5.3.1: Legal authority

Comment 1: Commenters asked what state or federal legal authority (emphasis on legal 

authority) can EPA cite that can force the owner of a combined cycle natural gas plant to operate 

their unit at 70 percent of capacity if they decide not to. Commenters concluded that if EPA can't 

cite that law, then how can we have a best available system of emission reductions that is both 

enforceable and measurable as EPA requires.

Response 1: We disagree with commenters. As an initial matter, we note that we are not 

requiring any NGCC unit to operate at 70 percent of capacity if they determine not to. As we 

explain in sections V.A. and V.B. of the preamble, our emission guidelines simply reflect an 
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achievable emissions limit through the application of the BSER and do not in themselves require 

states or sources to implement the BSER. That is, EPA is responsible for determining the level of 

emission limitation from the source category, while states have the responsibility of assigning 

emission requirements to their sources that will ensure their achievement of that level of 

emission limitation. States may fulfil their responsibility by establishing emission standards or 

creating plans consistent with the guidelines. In doing so, states will be able to choose from a 

wide range of emission reduction measures, including measures that are not part of the BSER. 

Further, we note that the building blocks are not based on an individual unit basis. Instead, the 

calculation is an average with substantial additional headroom available. Therefore, if a number 

of NGCC units decide not to, or are unable to, operate at 70 percent, this does not mean that the 

70 percent is not achievable or unreasonable. For a comprehensive discussion of building block 

2, please see the preamble section V.D.

Comment 2: Commenters stated that EPA cannot include Building Block 2 in a federal 

implementation plan because it does not have the authority to make electricity dispatching 

decisions, explaining that the authority is reserved for the States in the FPA. 16 U.S.C. -

824(b)(1). Commenters cited Congress' recognition of the States' "traditional responsibility in the 

field of regulating electrical utilities for determining questions of need, reliability, cost and other 

related state concerns" in Pac. Gas & Elec., 461 U.S. at 205. Commenters continued, stating 

that States have the fundamental authority to determine whether to operate a vertically integrated 

or competitive market system and to establish parameters under which those systems operate, 

and, in many cases, the States have partnered with ISOs or RTOs to manage aspects of electricity 

dispatching and transmission and to ensure the consistent and reliable delivery of electricity to 

consumers. Commenters said, within this context, States retain the authority to determine the 

rules and priorities for dispatching various electricity generating units, taking into account cost, 

reliability, and other priorities such as the generation of renewable energy. Thus, commenters 

concluded, EPA cannot rely on increasing utilization at existing NGCC facilities as part of a 

federal implementation plan when dispatching decisions are made by the State and implemented 

by the States or ISOs and RTOs. Commenters added that to the extent that there is any residual 

federal authority over dispatching decisions at the federal level, it does not belong to EPA. See, 

e.g., New York, 535 U.S. at 19-20 ([T]he text of the FPA gives FERC jurisdiction over the 

transmission of electric energy in interstate commerce and the sale of electric energy at 

wholesale in interstate commerce. (Quoting 16 U.S.C. - 824(b))). Commenters provided 

example, to the extent that States participate in RTOs with interstate transmission of electricity, 

changes to dispatching priorities would be subject to federal oversight through FERC, not EPA. 

See 16 U.S.C. -- 824d, 824e. Commenters posited that the division of authority between federal 

and State authorities under the FPA is clear, and leaves no role for EPA to play. Commenters 

said, in light of this clear statement from Congress in the FPA, there is no basis to suggest that 

Congress intended to give EPA broad authority to regulate electricity dispatching as a means of 

controlling pollution under Section 111(d). See Whitman v. Am. Trucking Association, Inc., 531 
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U.S. 457, 468 (2001) (Congress does not alter the fundamental details of a regulatory scheme in 

vague terms or ancillary provisions- it does not, one might say, hide elephants in mouse holes.).

Response 2: The EPA disagrees that its approach to the BSER in the Clean Power Plan conflicts 

with the FPA or otherwise places the CAA in tension with that law. As explained in Section VII 

of the Legal Memo, the BSER is a technical determination of what means are best to achieve 

emission reductions from a particular class of facilities. At the point of implementation of the 

emission standard, either in a state or federal plan under section 111(d), the source still retains 

the flexibility to determine how it will meet the standard. Neither the state air regulator, nor the 

agency, will need to or be required to regulate specific dispatch decisions in order to meet the 

requirements of the final rule. For example, in a state implementing a mass-based emission 

trading program, the agency’s determined emission performance levels may set the mass budget, 

but the primary compliance obligation on the source is simply to hold allowances sufficient to 

cover emissions. Failure to do so could subject a source to state or federal CAA enforcement. 

But that need not involve the air regulator in any of the other choices the owners and operators of 

the affected EGUs make regarding their operations or level of generation. So, to complete the 

commenter’s analogy, there is no “elephant.” (And in any case, section 111(d), is not a 

“mousehole.” See AEP v. Connecticut, 131 S. Ct. 2527, 2539 (2011) (“It is altogether fitting that 

Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of 

greenhouse gas emissions.”) (citing section 111(d)).

1.5.3.3: 111(b)/111(d) issues

Comment 1: Commenters stated Indiana is assuming that when a new NGCC unit goes online 

after 2016-2017, that unit will be subject to 111(b) and not subject to 111(d). Commenters 

explained that through conversations with U.S. EPA staff, it has been conveyed that states will 

have the option to include new NGCC units into the 111(d) planning process, thus making them 

subject to 111(d) standards. Commenters added that in order to prepare a compliant state plan, 

Indiana needs to see this matter explicitly addressed in the rule, including how states can avoid 

legal pitfalls associated with regulating affected entities under both elements of Section 111 (new 

and existing).

Response 1: Section VIII of the preamble discusses how new EGUs covered under the CAA 

section 111(b) rule are not allowable measures in section 111(d) state plans because the EPA 

believes it would result in increased emission leakage. However, to address emission leakage 

under mass based state plans, Section VIII.J. also discusses how states may regulate sources 

subject to 111(b) as a matter of state law in order to ensure obligations regarding affected EGUs 

regulated under a section 111(d) state plan are met.

Comment 2: Commenters stated that a unit cannot be both a new unit and an existing unit. 

Commenters noted, under Section 111(a)(6), "[t]he term 'existing source' means any stationary 

source other than a new source." (Emphasis added.) Commenters said, in contrast, Section 

111(a)(2) defines a "new source" as "any stationary source, the construction or modification of 
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which is commenced after the publication or regulations (or, if earlier, proposed regulations) 

prescribing a standard of performance under this section which will be applicable to such 

source." Thus, commenters concluded, EPA has no authority to subject new units to regulation 

under both Sections 111(b) and 111(d).

Commenters stated that Section 111(a)(6) states that an "existing source" means any stationary 

source "other than a new source." Commenters remarked that the plain statutory meaning is that 

"new sources" and "existing sources" are entirely separate categories of sources that cannot be 

combined. Commenters explained that in the Preamble, EPA asks for comment on whether EPA 

should, at some point, fold new units governed by Section 111(b) into the proposed Section 

111(d) existing unit program. Commenters said EPA indicates that while they are not proposing 

that new NGCC capacity is "part of the basis supporting the BSER," they state that many new 

NGCC units are being built and will likely be used as a CO2 mitigation strategy. Commenters 

said EPA then states, "Therefore, we invite comment on whether we should consider 

construction and use of new NGCC capacity as part of the basis supporting the BSER. Further 

we take comment on ways to define appropriate state-level goals based on consideration of new 

NGCC capacity." Commenters believed this would, in effect, create a statewide cap on the state 

CO2 emission rate. Commenters argued EPA does not have the authority to combine these 

statutorily separated programs, given that the statute states that an "existing source means any 

stationary source other than a new source" and commenters explained that bringing new gas 

units into the existing unit program would radically change Section 111 and the entire existing 

unit program as to its nature, reach and stringency with huge policy, feasibility and cost 

implications, creating a nationwide cap on CO2 emissions from fossil EGUs. Section 111(d) 

applies to existing units only.

Response 2: We have not finalized new natural gas as part of the BSER nor are we finalizing an 

approach whereby modified sources would remain existing sources.

Comment 3: Commenters stated EPA's proposal is unlawful because it would permit states to 

impose binding legal obligations on entities other than affected fossil fuel-fired EGUs. 

Commenters explained that a central component of the flexibility touted by EPA is the so-called 

"portfolio approach" that would authorize states to impose binding legal obligations "on other 

affected entities (e.g., renewable energy and demand-side energy efficiency measures) that 

would reduce CO2 emissions from the affected EGUs." 79 Fed. Reg. at 34,853. Commenters 

believed this approach is unlawful because EPA and the states are prohibited from expanding 

standards of performance under Section 111(d) beyond the source categories already subject to 

regulation under Section 111(b). Commenters stated that EPA proposes to define "affected 

entity" as "an affected EGU, or another entity with obligations under this subpart for the purpose 

of meeting the emissions performance goal requirements in these emission guidelines." Proposed 

40 C.F.R. Section 60.5820, 79 Fed. Reg. at 34956 (emphasis added). Commenters stated that the 

State Plan Considerations Technical Support Document (TSD) indicates that EPA intended to 

limit the scope of an affected entity to a "utility entity that is not regulated by a state public 

utility commission, such as a municipal utility or a utility cooperative. Commenters said it could 
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also be a private non-profit entity established to administer end-use energy efficiency and 

renewable energy deployment programs' non-profit entities [that] are created by state legislation 

and overseen by state public utility commissions or state-regulated private utilities." [State Plan 

Considerations Technical Support Document, at 16-17] However, commenters said the proposed 

regulatory language defines an "affected entity" broadly to any other entity identified by the state 

to help meet its emission goals. 79 Fed. Reg. at 34956. Commenters noted that the regulatory 

text does not specifically limit it to the types of entities listed in the TSD, thus leaving the door 

open for a state to impose enforcement requirements on third parties such as industrial end users. 

[state must ensure that any compliance activity or measure must be enforceable for affected 

entities that are not affected EGUs. 79 Fed. Reg. at 34953.] Commenters remarked that while the 

states and EPA are prohibited from imposing binding GHG emission reduction obligations on 

any entities other than affected EGUs, if EPA decides to include other affected entities in the 

final Section 111(d) rule, commenters recommended that EPA revise its proposed regulatory 

definition of "affected entity" to align with EPA's intent as explained in the TSD and limit its 

scope to the utility entities that are not regulated by a state public utility commission, such as a 

municipal utility or a utility cooperative, private non-profit entities established to administer enduse energy efficiency and renewable energy deployment programs, or entities that are created by 

state legislation and overseen by state public utility commissions or state-regulated private 

utilities. Commenters added that EPA and the states must make clear -both in these regulations 

and in state implementation plans- that third-party participation in emission reduction programs 

is on a voluntary basis. Commenters said, by making participation voluntary EPA and the states 

can ensure that no third-party entity inadvertently becomes subject to regulatory obligations 

without its consent. Commenters agreed with EPA that electricity transmission and distribution 

efficiency improvements, the use of biomass-derived fuels, and new NGCC units should be 

available voluntary compliance options that are eligible to participate voluntarily in a state 

implementation plan. See 79 Fed. Reg. at 34,923. Commenters observed that if EPA proceeds to 

finalize guidelines that permit states to allow for other entities such as electricity consumers to 

participate voluntary in emission reduction program, EPA and states needs to recognize the GHG 

emission reduction efforts in subsequent regulations.

Commenters stated that EPA should allow states to average emissions from non-Section 111(d) 

generating units with emissions from "affected entities" for purposes of demonstrating 

compliance, and EPA should clarify in the final rule that states have the option to average 

emissions from generating units that are not subject to regulation under Section 111(d) with 

emissions from affected EGUs for the purposes of calculating compliance. Commenters 

suggested this could include, for example, modified EGUs, reconstructed EGUs, and small units 

that do not meet the definition of "affected EGU" under Section 111(d). Commenters said this 

would allow states to use these units in their compliance calculations under Section 111(d), 

giving states employing a rate-based standard the flexibility to determine how best to shift 

generation away from fossil-fuel fired EGUs to more efficient EGUs like new NGCCs. 

Commenters stated that allowing a state to include non-Section 111(d) generating units in their 

compliance calculations would not make these units subject to regulation under Section 111(d), 

nor would it require them to be factored into a state's goal calculation. Rather, commenters 
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stated, allowing states to include non-Section 111(d) generating units in their compliance 

calculations furthers EPA's "portfolio approach," under which "[t]he state has flexibility...in 

imposing requirements on other [non-affected EGU] entities - as long as...the required emission 

performance level is met." 79 Fed. Reg. at 34,853, and indeed, EPA does not have the authority 

to subject non-Section 111(d) units, like new, modified, and reconstructed units, to regulation 

under both Sections 111(b) and 111(d). Commenters stated, accordingly, the Class of '85 objects 

to EPA's proposal that "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)." 79 Fed. Reg. at 

34,903. Further, commenters observed, the Group opposes the proposed incorporation of redispatch to new NGCCs, which are regulated under Section 111(b), into Building Block Two. 

See NODA, 79 Fed. Reg. at 64,550. Commenters believed EPA's plan to subject modified and 

reconstructed units to requirements under both Sections 111(b) and 111(d) contravenes the clear 

statutory language in Section 111 and is beyond the scope of EPA's authority under the CAA, 

explaining that the CAA establishes two avenues for applying standards of performance to 

sources: (1) regulation of "new sources" under Section 111(b), see 42 U.S.C. section 

7411(b)(1)(B), or (2) regulation of "existing source[s]" under Section 111(d), see S. 

7411(d)(1)(A), and these two avenues are mutually exclusive. Commenters stated that a unit 

cannot be both a new unit and an existing unit. Commenters said, under Section 111(a)(6),"[t]he 

term 'existing source' means any stationary source other than a new source." (emphasis added). 

Commenters noted, in contrast, Section 111(a)(2) defines a "new source" as "any stationary 

source, the construction or modification of which is commenced after the publication of 

regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this 

section which will be applicable to such source." [EPA's proposal to consider modified and 

reconstructed units to be both "new" units and "existing" units at the same time is yet another 

example of how far EPA has strayed in this Proposed Rule from the authority granted to it by 

Congress under Section 111.] In light of the clear statutory language, commenters concluded, 

EPA cannot interpret Section 111(d) to apply to both new and existing units. [Chevron, 467 U.S. 

at 842-43 ("If the intent of Congress is clear, that is the end of the matter; for the court, as well as 

the agency, must give effect to the unambiguously expressed intent of Congress.")] Commenters 

contended that EPA has provided no justification for its proposed approach of subjecting 

modified and reconstructed units to compliance obligations under both Sections 111(b) and 

111(d), and EPA's not providing any legal basis or policy justification for its determination that 

sources can simultaneously be subject to requirements under both Sections 111(b) and 111(d) of 

the CAA clearly violates CAA Section 307. Commenters noted Section 307(d)(3) requires that 

proposed rules "shall be accompanied by a statement of its basis and purpose." Further, 

commenters said the statement of basis and purpose must include a summary of "the major legal 

interpretations and policy considerations underlying the proposed rule." Commenters believed 

EPA does not do so here and commenters argued that prior to finalizing the Proposed Rule, EPA 

must make available its legal interpretation of how sources can be subject to both Sections 

111(b) and 111(d) and provide the public with an opportunity for review and comment.
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Response 3: To the extent the comment objects to the portfolio approach, which the EPA is not 

finalizing, the comment is moot.

Comment 4: Commenters stated that any emissions standard promulgated pursuant to the 

authority of Section 111(d) of the Clean Air Act must utilize an "inside the fence" methodology 

to establish emission standards at each effected generating unit ("EGU"), and while compliance 

plans can and should allow states to achieve compliance through activities beyond the fence line, 

using facilities outside the plant site to establish emission standard at such existing stationary 

sources exceeds EPA's authority under 111(d). Commenters added that while Building Block 2 

attempts to regulate behavior inside the fence by directing the dispatch of a state's generation 

resources, it exceeds EPA's authority under 111(d) by not establishing emission standards at the 

EGU.

Response 4: For the reasons discussed in section V.A. and V.B. of the preamble and in the 

Legal Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history. 

We disagree that including building block 2 as part of the BSER does not lead to an emission 

standard applicable to affected EGUs. Pursuant to section 111, emission guidelines reflect the 

application of the BSER. These emission guidelines are provided to assist states in preparing 

satisfactory plans which establish standards of performance for affected sources within their 

jurisdiction under section 111(d). In accordance with these plans, sources will need to comply 

with applicable emission standards, which could include application of the BSER or other 

acceptable compliance measures. 

1.5.4 Affected entities under Building Block 3

Comment 1: Commenters 23394 stated that regarding Block 3, except possibly for renewable 

generation technologies such as biomass, EPA has no Section 111 authority over these 

generation technologies (nuclear, renewable) at all. Commenters said that first, they do not 

release any air pollution, preventing the EPA from making an endangerment finding involving 

these units under Section 111. Commenters said that further, the definition of stationary source 

requires that the source "emits or may emit any air pollutant." Commenters said since nuclear 

and non-biomass renewable generation emit no air pollutants of any type, it forecloses the ability 

of EPA to propose any rules regarding these generation technologies.

Commenters stated, renewable energy and nuclear power should not be included in the 

determination of BSER. Commenters said, EPA assumes in Building Block 3 that states can 

lower carbon emissions by deploying renewable energy sources and zero-emitting sources such 

as nuclear power plants. Commenters did not believe that Building Block 3 - non-emitting 

sources - should be included in the determination of BSER because these "affected entities" 

would not be "affected electric generating unit(s)" as defined in the proposed rule. Commenters 

said, existing non-emitting sources, such as nuclear, hydroelectric (hydro) and other RE 

generation sources have little effect on the emissions of existing affected EGUs. Commenters 
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said, new nuclear, hydro, and RE generation may reduce the dispatch of existing affected 

sources.

Response 1: As explained in the final rule, we are not including nuclear energy within building 

block 3. In section V of the preamble we explain the basis for our inclusion of renewable 

energy. 

Comment 2: Commenters stated Building Block 3 is outside the intent and precedence of 

Section 111 of the Act and should not be part of setting the performance standard for this rule. 

Commenters said it would involve developing NEW generation facilities rather than measures to 

control emissions from existing units.

Commenters stated the CPP assumes as BSER the displacement of coal by other generation, the 

addition of renewable energy and demand side management programs (building blocks 2-3) 

which are not control technologies and should not be considered to establish the BSER.

Commenters believed renewable energy programs are a matter of state policy and outside the 

scope of the EPA's regulatory authority under CAA 111(d). Commenters said, thus EPA should 

remove renewable energy from the Best System of Emission Reduction (BSER) process used to 

set state goals, but allow renewable energy to be used for goal compliance.

Response 2: For the reasons discussed in section V.A. and V.B. of the preamble and in the Legal 

Memorandum, our interpretation of the BSER is reasonable and within the scope of EPA’s 

authority in light of the statutory text, statutory context, statutory purpose, and legislative history.

Comment 3: Commenters stated the expansion of renewable energy projects is beyond the 

authority of the EPA as required by the rule. Commenters said EPA cannot set an RPS for 

Wyoming, as this goes beyond the jurisdiction of EPA. 

Response 3: For the Reasons explained in Section V of the Preamble and the legal memo, EPA 

has concluded that its determination of BSER is well within the authority delegated to it under 

section 111 of the Clean Air Act. Contrary to the assertion in the comments EPA is not 

mandating that any state establish an RPS. Rather EPA has provided states with significant 

flexibility in designing their state plans. Renewable energy is one potential measure that may be 

employed, consistent with the state flexibility principle that is central to this program. This rule 

does not regulate renewable energy sources. It identifies the BSER for affected sources, which 

entails substitute generation to zero-emitting generators, but it does not impose emissions 

requirements on such zero-emitting generators. 

Comment 4: Commenters stated including renewables and energy efficiency in goal-setting 

infringes on state and local authority. 
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Commenters stated given Florida's existing statutory framework, and EPA's failure to take this 

into account, its application of BSER in Florida is unlawful. Commenters said with regards to 

Building Block 3, no Florida agency has authority to establish RPS. Commenters said unlike 

some state utility commissions, the FPSC does not directly oversee integrated utility resource 

planning, although it annually reviews Ten-Year Site Plans submitted by all electric utilities and 

it reviews resource planning decisions on an ad hoc basis when electric utilities petition for need 

determinations for new steam electric generating capacity. Commenters said although the FPSC 

briefly had authority to propose an RPS, the Legislature repealed that authority in 2012. See Ch. 

2012-117, Laws of Fla. (repealing portions of Section 366.92, F.S., relating to RPS). 

Commenters said legislative action would be required before this building block could be 

implemented under Florida law.

Response 4: We disagree with commenters. As an initial matter, we note that the final rule does 

not include demand-side energy efficiency – building block 4 – as a component of BSER. For 

the reasons explained in Section V of the Preamble and the legal memo, EPA has concluded that 

its determination of BSER is well within the authority delegated to it under section 111 of the 

Clean Air Act. Contrary to the assertion in the comments EPA is not mandating that any state 

establish an RPS. Rather EPA has provided states with significant flexibility in designing their 

state plans. Renewable energy is one potential measure that may be employed, consistent with 

the state flexibility principle that is central to this program. This rule does not regulate renewable 

energy sources. It identifies the BSER for affected sources, which entails substitute generation to 

zero-emitting generators, but it does not impose emissions requirements on such zero-emitting 

generators.

Comment 5: Commenters stated the CPP violates the RE Act and over sixteen additional 

statutes establishing the federal mandate that rural electric cooperatives reliably serve rural 

America. Commenters said the CPP will force G&Ts like Hoosier Energy to violate the RE Act 

mandate, FERC requirements and state laws requiring reliable service. Commenters said the 

FERC, NERC, Regional Transmission Organizations (RTOs), Independent System Operators 

(ISOs) and state reliability analyses have all identified significant reliability concerns with the 

CPP. Commenters said because of their location far from other sources of generation, and 

because of the unique cost constraints faced by many rural electric cooperatives, gas-fired and 

RE sources are often unavailable. Commenters said this makes the emission reductions that EPA 

assumes can be obtained from Building Blocks 2 and 3 unrealistic. Commenters said if rural 

electric cooperatives retire coal units to achieve the CPP's goals, inaccessibility of NGCC and

RE sources will make it difficult, if not impossible, to continue to provide reliable service to their 

members.

Response 5: The EPA does not agree with commenters that the final rule will cause reliability 

issues. The rule does not impede current dispatch protocols about how these units are operated, 

and provides many flexible options for compliance, such as emission rate credits, so that these 

entities can work with their respective states during state plan development. So the commenter is 
331

incorrect to maintain that reliable operation of their units is in conflict with their 

mandates. Moreover, the rule addresses reliability in both planning and potential unanticipated 

emergencies (See Section VII.G.2).

Comment 6: Nuclear: EPA lacks authority to include nuclear facilities in Building Block 3

Commenters said the EPA unlawfully encroaches upon the regulatory domain of the NRC by 

implicitly assuming that about 30% of existing nuclear capacity, which is due to expire before 

2030, will be available. Commenters said the EPA can only rely on the continuation of this 

existing nuclear reactor capacity by assuming that the NRC will approve as safe the extension of 

those reactor licenses. Such an assumption undermines the NRC's statutory responsibility to deny 

license renewal applications if the NRC concludes they would pose an unreasonable risks to 

public health and safety. Commenters said NRC has conceded that renewal of a reactor license 

should not be allowed unless the licensee can demonstrate that it has taken measures to address 

"the detrimental effects of aging" during the reactor's license renewal term. See Final Rule, 

Nuclear Power Plant License Renewal; Revisions, 60 Fed. Reg. 22,461, 22,464 (May 8, 1995). 

See also 10 C.F.R. Section 54.29(a)(1) (requiring a reasonable assurance finding regarding a 

licensee's program for "managing the effects of aging" on certain reactor components. 

Commenters said EPA should avoid trespassing on NRC's unique regulatory domain by 

presuming a positive outcome for NRC license renewal reviews. Commenters said even 

assuming for purposes of argument that such encroachment is lawful, it would be extremely poor 

public policy for the EPA to build extended operation of aging and increasingly dangerous 

reactors into its regulatory scheme as a fait accompli. 

Response 6: We disagree with commenters. Further, the final rules does not include nuclear in 

building block 3. For a more comprehensive discussion of this issue, please refer to preamble 

section V.A.

Comment 7: Commenters stated that EPA cannot include Building Block 3's reliance on 

avoided retirement of nuclear facilities in a federal implementation plan because it does not have 

the authority over the operation of such facilities. Commenters noted, under the Atomic Energy 

Act, the NRC is given the authority to issue, renew, and, if necessary, revoke commercial 

licenses for nuclear energy facilities. 42 U.S.C. - 2133. Further, commenters stated that the 

savings clause in the Atomic Energy Act states that "this section shall not be deemed to confer 

upon any Federal, State, or local agency any authority to regulate, control, or restrict any 

activities of the Commission." Id. S. 2018. Thus, commenters concluded that EPA lacks the 

authority to compel a nuclear energy facility to remain in operation and could not overrule a 

decision by the NRC not to renew an existing facility's license. Given EPA's lack of authority 

over nuclear energy generation, commenters asserted that it cannot rely on avoided nuclear 

generating capacity as part of a legally enforceable federal implementation plan.

Commenters contended that EPA's interpretation of its authority under Section 111(d) conflicts 

with the Federal Power Act, the Public Utility Regulatory Policies Act, and the Atomic Energy 

Act. Commenters added that pursuant to the Atomic Energy Act, Congress granted the NRC 
332

exclusive authority to regulate radiation hazards associated with the construction, operation, and 

decommissioning of nuclear facilities, (42 U.S.C. Section 2011-2296b) and despite this explicit 

grant of authority over radiation safety, Congress made sure to preserve the existing division of 

responsibility between the federal government and states over resource planning and over the 

energy sector more generally, providing in Section 271 that nothing in the Atomic Energy Act 

"shall be construed to affect the authority or regulations of any Federal, State, or local agency 

with respect to the generation, sale, or transmission of electric power produced through the use 

of nuclear facilities licensed by the [Nuclear Regulatory] Commission." (Id. at 2018) 

Commenters said this exclusion was explained by Senator Hickenlooper, the floor manager of 

the Senate bill, as follows: "Once [electricity] is produced it should be subject to the proper 

regulatory body, whether it be the Federal Power Commission [FERC] in the case of interstate 

transmission, or State regulatory bodies if such exist, or municipal regulatory bodies. We feel 

that there is no difference and that it should be treated as all other electricity which is regulated 

by the public . . . [Section 271] is designed to keep the regulatory authority exactly as it is now, 

traditionally and under the law." (100 Cong. Rec. 11567 (1954) (statement of Sen. Bourke 

Hickenlooper)) Thus, commenters stated, when Congress has intended to authorize federal 

regulation of electric power, it has done so explicitly, and it has vested that authority in other 

agencies. More importantly, commenters added, Congress has just as clearly reserved to the 

states the authority to regulate the production of electric power, including the type of generating 

facilities, within their borders. Commenters stated, if Congress has to date been unwilling to give 

FERC or the NRC authority over generation resource planning, including demand-side 

programs, it cannot possibly have intended to vest that authority in EPA in 1970 under Section 

111(d) of the CAA without having said.

Commenters also believed that EPA should not proceed with additional GHG standards of 

performance for other source categories, saying that in addition to the fact that it has no legal 

obligation to do so, the EPA should opt not to propose GHG standards of performance for other 

source categories for the reasons identified below. 

Response 7: We disagree with commenters. Additionally, the final rules does not include 

nuclear in building block 3. For a more comprehensive discussion of this issue, please refer to 

preamble section V.A. We note that the additional steps the EPA may or should take with respect 

to GHG standards of performance for other source categories is outside the scope of this 

rulemaking. As the Agency has previously explained, however, it is taking a step by step 

common sense approach to regulating GHG emissions. These common sense steps are laid out 

in the Climate Action Plan and the President’s Methane Strategy. 

1.5.5 Affected entities under Building Block 4

Comment 1: Commenters said, the current laws of their states do not facilitate the ability to 

meet building block 4 and mandate residential energy efficiency measures. Commenters said, the 

proposed rule is based on actions the state cannot currently initiate and has created an 
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unattainable goal that cannot be a valid standard of performance. Commenters said, due to this 

fact they recommend either removing or modifying building block 4.

Commenters stated, building block #4, energy efficiency (EE), plays an important role in EPA's 

development of state-by-state CO2 reduction requirements. Commenters said, however, EPA has 

identified no authority for regulating customer end-uses of electricity. Commenters said, energy 

policies that include EE programs and goals are traditional areas of regulation reserved for states 

under the Tenth Amendment, and included in integrated planning processes in states with 

vertically integrated utilities. Commenters said, thus, the use of building block #4 in setting the 

Section 111(d) proposed standards is not appropriate.

Commenters stated that NERC notes that EPA has projected that energy efficiency will grow 

faster than electricity demand, which NERC characterizes as an assumption with "complex" 

implications. Commenters said NERC states that if EPA's aggressive rate of efficiency growth 

cannot be met, it will be necessary to adopt additional CO2 emission reduction measures,

presumably through further reductions in fossil fuel generation that may not themselves be 

achievable.

Commenters believed energy efficiency programs are a matter of state policy and outside the 

scope of the EPA's regulatory authority under CAA 111(d). Commenters said, thus EPA should 

remove energy efficiency from the BSER process used to set state goals, but allow energy 

efficiency to be used for goal compliance.

Commenters stated, the Proposed Regulation is based on an unprecedented and unsupportable 

legal interpretation that the "best system of emissions reduction" for existing sources can include 

homeowners and retail customers that neither generate any power nor produce emissions. 

Commenters said, the Proposed Regulation asserts that statutory provisions for the regulation of 

existing generation facilities that are sources of emissions can apply more broadly to, and make 

subject to federal enforcement, other entities, citizens, and activities. [79 Fed. Reg. 34,901.] 

Commenters said, for example, homeowners' installation of more efficient windows or light 

bulbs, which are common energy efficiency measures, would be subject to federal enforcement 

under EPA's proposal. Commenters said, this stretches the Clean Air Act beyond recognition and 

forces the carbon emission rates proposed for Virginia so low that, as discussed above, the rate 

for existing sources is far more stringent than the rate for new sources using the best available 

control technology. 

Commenters stated, including energy efficiency as part of a "best system of emission reduction" 

also changes the "standard for emissions of air pollutants" for existing sources of emissions from 

a measurable standard for which accountability can be ensured to a compliance requirement 

based on layer upon layer of assumptions and estimates. Commenters said, the Proposed 

Regulation and supporting documents recognize that "many states with energy efficiency 

programs use different input values and assumptions" to estimate energy savings from such 

programs. [Technical Support Document, State Plan Considerations at 42.] Commenters said, 

this is because estimates of energy savings from these programs are just that - estimates. 
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Commenters stated to use such estimates - which require many assumptions about, among other 

things, how retail customers would have acted but for such energy efficiency programs - to 

calculate an emission standard for existing sources of pollutants moves an emission standard 

from science to, at best, a realm of art where there are many different schools of thought.

Commenters stated, in light of intervening guidance of the Supreme Court in its Utility Air 

Regulatory Group decision, the EPA need not, and should not, wait until a subsequent court 

decision - as proposed in the Proposed Regulation [79 Fed. Reg. 34,892.] - to sever the energy 

efficiency building block. Commenters said, although legitimate state and federal initiatives can 

be undertaken to encourage energy efficiency, the EPA's proposal to subject such consumer 

activity to regulation enforceable under the Clean Air Act is ultra vires and unworkable.

Response 1: As explained in Section V.B. of the preamble we are not including demand-side 

energy efficiency – building block 4 - as a component of BSER. We disagree with the comment 

that the section 111(d) standards are more stringent than the section 111(b) standards applicable 

to new sources. Further, we explain in the Legal Memorandum why the section 111(b) and (d) 

standards are based on different determinations of the BSER. 

Comment 2: Commenters stated regardless of the EE savings levels proposed by EPA, no EE 

savings will be achieved unless current state- and administrator-run EE programs are both 

continued and expanded. Commenters explained that the regulatory environment in each state 

determines the size of the budget for customer-funded EE programs; the budget determines the 

scope and breadth of the EE programs, and regulatory frameworks that support utility 

investments in EE programs (through cost recovery mechanisms or performance incentives), 

therefore, are the key to achieving actual EE savings. Commenters remarked that EPA's analysis 

does not make any mention of this relationship between supportive regulatory policies and EE 

savings, and refers to KDHE and KCC comments, which explain that KDHE does not have 

authority for the energy efficiency programs in Kansas that authority resides with the KCC. In 

addition, commenters remarked, both the KDHE and KCC state that authority does not reside at 

EPA. 

Commenters stated that under Building Block 4, EPA established demand-side energy efficiency 

requirements for the states; and these are modeled on the current Energy Efficiency Portfolio 

Standards in the 26 states that have them. Commenters believed that EPA does not have the 

authority to require any actions outside those imposed on existing sources; setting aside this legal 

argument, the methodology the EPA uses to set these state efficiency standards is arbitrary and 

highly flawed.

Commenters stated that while they strongly support voluntary demand-side energy efficiency 

improvements, they believe significant portions of the proposed rule are unlawful because the 

EPA lacks the authority to fundamentally restructure the energy sector under CAA Section 

111(d). Commenters agreed the EPA is authorized to regulate existing sources within a specific 

source category (here fossil fuel-fired EGUs), and for this reason, commenters believed that the 

ESPS will not withstand judicial scrutiny. Commenters cited Utility Air Regulatory Group v. 
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EPA, 134 S. Ct. 2427, 2444 (2014) (Justice Scalia delivering the opinion of the Court with 

respect to Parts I and II, warned "[w]hen an agency claims to discover in a long-extant statute an 

unheralded power to regulate 'a significant portion of the American economy,' Brown & 

Williamson, 529 U.S., at 159, 120 S. Ct. 1291, we typically greet its announcement with a 

measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency 

decisions of vast 'economic and political significance.' Id., at 160, 120 S. Ct. 1291.... ").

Commenters believed that EPA lacks authority under the CAA to impose requirements beyond 

the boundaries of the "affected sources" subject to Section 111 regulation, in this case, the 

category of existing EGUs. Moreover, commenters believed states lack any authority that could 

mandate energy efficiency requirements on consumers of electricity.

Response 2: As explained in Section V.B. of the preamble, we are not including demand-side 

energy efficiency – building block 4 as a component of the BSER. 

Comment 3: Commenters stated that EPA's proposal to expand BSER beyond the fence line is 

impermissible. Commenters asked, "by what metrics will EPA, a State, or a source evaluate 

demand reduction? How will they distinguish between demand growth and efficiency 

improvements?" Commenters asserted that nowhere has EPA attempted to answer these 

questions. Commenters believed such an all-encompassing plan to reduce demand is not within 

the experience, competence, or jurisdiction of EPA. Commenters said there is neither the 

administrative record nor the programmatic structure to support such an initiative. Commenters 

said, to call such ill-defined, untested efforts a "best system of emission reduction" is to deny any 

meaning or sense to the term. Commenters noted (verbatim) that vital to the Supreme Court's 

decision in UARG that EPA may regulate greenhouse gases at least to some extent was the 

Court's observation that EPA was "not talking [in the rules before the Court] about extending 

EPA jurisdiction over millions of previously unregulated entities, but about moderately 

increasing the demand EPA . . . can make of entities already subject to its regulation." [134 S. Ct. 

at 2448-49] Commenters said the Court emphasized that EPA should not interpret its narrow 

decision largely upholding EPA's rules to allow a vast jurisdictional expansion. In particular, 

commenters said the Court rejected EPA"s assertion of "newfound authority to regulate millions 

of small sources' including retail stores, offices, apartment buildings, shopping centers, schools, 

and churches." [Id. at 2446] Yet, commenters observed, that is the jurisdictional expansion EPA 

contemplates in Building Block 4. Commenters stated that when the Agency calls or demand 

reduction as a means of controlling emissions from the production of a good, it is calling for the 

regulation of millions of small actions, by entities that are not even "sources" under the Clean 

Air Act, before they hit the grid, and this is the type of expansion of regulatory authority rejected 

by the UARG Court.

Commenters stated that including energy efficiency as part of a "best system of emission 

reduction" changes the "standard for emissions of air pollutants" for existing sources of 

emissions from a measurable standard for which accountability can be ensured to a compliance 

requirement based on layer upon layer of assumptions and estimates. Commenters explained that 

the Proposed Regulation and supporting documents recognize that "many states with energy 
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efficiency programs use different input values and assumptions" to estimate energy savings from 

such programs. [Technical Support Document, State Plan Considerations at 42], and this is 

because estimates of energy savings from these programs are just that - estimates. Commenters 

said that to use such estimates to calculate an emission standard for existing sources moves an 

emission standard from science to, at best, a "realm of art" where there are many different 

schools of thought. Commenters continued, stating that at the accountability stage, the inclusion 

of demand-side energy efficiency programs becomes even more problematic and unsupported by 

the Clean Air Act. Commenters asked, "What if the retail customers and homeowners integral to 

these programs do not act the way they are assumed or expected to" [See, e.g., The Breakthrough 

Institute, Energy Emergence: Rebound & Backfire as Emergent Phenomena (Feb. 2011)] Under 

the Clean Air Act, how can either these homeowners (who are not within the scope of 111(d)) or 

the existing carbon emitters (who are within the scope of 111(d), but are not responsible for the 

actions of homeowners) be held accountable? Indeed, most aspects of a homeowner's everyday 

life that affect his or her electricity consumption are not matters of interstate commerce, much 

less the regulatory construct of the Clean Air Act." Commenters asserted that the Proposed 

Regulation would place plainly excessive demands on state governmental resources for the 

foreseeable future, and it would transform EPA's regulatory authority by expanding it beyond the 

fence line of existing power plants (and other actual emitters) and into, among other things, the 

homes of citizens. Commenters closed, stating that in light of intervening guidance of the 

Supreme Court in its Utility Air Regulatory Group decision, the EPA need not, and should not, 

wait until a subsequent court decision - as proposed in the Proposed Regulation's - to sever the 

energy efficiency building block. Commenters stated that although legitimate state and federal 

initiatives can be undertaken to encourage energy efficiency, the EPA's proposal to subject such 

consumer activity to regulation enforceable under the Clean Air Act is ultra vires and 

unworkable.

Response 3: As explained in Section V.B. of the preamble, we are not including demand-side 

energy efficiency – building block 4 as a component of the BSER. In the preamble and the Legal 

Memorandum we describe why the remaining building blocks 1, 2, and 3 constitute the BSER. 

Comment 4: Commenters stated EPA's reliance on demand response as part of the source of BB 

No. 4 reductions is especially untimely since the D.C. Court of Appeals has recently found that 

the Federal Power Act does not grant the FERC authority over demand response, and for EPA to 

establish an enforceable goal, based on the expected exercise of authority that Congress has 

reserved exclusively for states, raises significant legal questions. 

Response 4: As explained in Section V.B. of the preamble, we are not including demand-side 

energy efficiency – building block 4 as a component of the BSER. Building block 4 does 

however remain an important compliance options that states will be able to evaluate in 

developing their state plans. We note that the Supreme Court has granted cert. in the referenced

matter and oral argument is expected this fall. 

Comment 5: Commenters stated that if EPA authorizes States to regulate additional sources 

beyond affected EGUs and make them responsible for mandatory reductions, electricity 
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consumers - including those in the manufacturing and industrial sectors - that implement energy 

efficiency measures with this rulemaking should be exempted from, or given credit towards, 

compliance with any subsequent GHG regulation for other sectors under CAA Section 111.

Response 5: While states may decide to regulate additional sources as part of a state measures 

approach, we have concluded that making such limits federally enforceable would be 

inappropriate. Questions regarding what EPA would do in a subsequent Section 111 standard are 

beyond the scope of this rulemaking.

1.5.6 Other

Comment 1: Commenters stated that in formulating its state goals, EPA assumed building block 

2 reductions (i.e., shifting to NGCC generation) would be accomplished by 2020. Commenters 

believed there are significant impediments to this, and, as reflected in the NODA, EPA now 

recognizes two of them and concedes this is a significant problem for states like Texas where 

"building block 2 results in large amounts of the overall required CO2 reductions relative to 

other building blocks."[79 Fed. Reg. at 64,544] Commenters remarked that the NODA identifies 

two significant issues that prevent states from meeting the 2020 interim deadline that EPA 

proposed - the need for additional infrastructure and stranded assets - and as a work-around to 

these obvious issues, EPA suggests a "glide path" in lieu of the currently calculated reduction 

mandated in 2020. Commenters agreed that these are critical flaws in EPA's proposal, but the 

quick fix EPA is suggesting is not adequate nor can meaningful comment be developed until 

EPA issues an actual proposal to address these issues. Commenters encouraged EPA to address 

them in a revised proposal that is published for public comment. Commenters stated that EPA 

acknowledges that infrastructure improvements are needed before natural gas units could be 

ramped up to operate at a higher capacity factor but EPA's proposed glide path is not the answer 

to this issue. Commenters argued that EPA does not have the authority, nor is it appropriate, for 

EPA to direct a state's infrastructure development through Section 111(d). Commenters stated, 

whether EPA exceeds its authority by requiring the infrastructure in 2020 or in 2030, it is still 

coloring outside the lines of the authority that Congress provided in the CAA.

Response 1: We disagree with commenters. However, in the final rule, we address timing 

concerns, in part, by adjusting the compliance timeframe from a 10-year interim period that 

begins in 2020 to an 8-year interim period that begins in 2022, and by refining the approach for 

meeting interim CO2 emission performance rates to be a gradual glide path separated into three 

steps, 2022-2024, 2025-2027, and 2028-2029, that is also achievable “on average” over the 8-

year interim period. In response to the concerns of commenters that the proposal’s 10-year 

interim target failed to afford sufficient flexibility, the final guidelines’ approach will provide 

states with realistic options for customizing their emission reduction trajectories.

Comment 2: Commenters asserted that the EPA is required to identify a “best system of 

emission reduction ... adequately demonstrated” (BSER) for each affected EGU. Commenters 

stated that in light of the diversity of the electric power industry, the EPA might be obliged to 
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make numerous subcategorizations, with a separate BSER for each one. Commenters stated that 

this process is necessary to avoid imposing unreasonable costs on any individual affected EGU.

Response 2: We disagree with this comment. We may identify a set of measures as the BSER as 

long as their costs meet the D.C. Circuit’s cost criteria across the industry, even if the costs are 

higher for individual sources. In this rule, however, this issue is moot because the costs for a 

typical EGU are reasonable, and all sources have a wide range of methods available to achieve 

the emission performance standards, whether through implementation of the BSER or 

otherwise. In part because we reasonably expect states to authorize emission trading, few, if any, 

individual EGUs may be expected to find the costs of compliance with emission standards that 

reflect the emission performance rates in the guidelines to be greatly in excess of the costs to a 

typical plant. The various mechanisms that individual affected EGUs can use to access all of the 

building blocks are discussed in section V.A.5., V.C., V.D., and V.E. of the preamble and in the 

Legal Memorandum.