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Table of Contents 

1.11 State Plan Enforceability Considerations ........................................................................... 2

1.11.1 Legal issues ......................................................................................................................... 2

1.11.2 Federal enforceability of renewable energy and demand-side energy efficiency 

measures........................................................................................................................... 52

1.11.3 Plans with state commitments......................................................................................... 72

1.11.4 Ongoing applicability of CAA Section 111(d) state plan .............................................. 91

1.11.5 Obligations on affected EGUs ....................................................................................... 105

1.11.6 Parties regulated by the state other than affected EGUs ........................................... 117

1.11.7 Private or public third-party entity not regulated by the state ................................. 124

1.11.8 State agency, authority, or entity.................................................................................. 132

1.11.9 Multi-state approaches .................................................................................................. 138

1.11.10 Other ............................................................................................................................. 149

1.12 Promulgation of rules not proposed ................................................................................ 161

1.13 CAA 307(d) ........................................................................................................................ 169

1.14 Request for extension of comment period ...................................................................... 191

1.15 Other .................................................................................................................................. 204

1.15.1 CAA/Section 111(d) issues ............................................................................................. 204

1.15.2 APA issues...................................................................................................................... 241

1.15.3 Constitutional issues ...................................................................................................... 262

1.15.4 General illegality/exceedance of EPA authority.......................................................... 273

1.15.5 Data and information .................................................................................................... 280

1.15.6 Economic/industry issues .............................................................................................. 283

1.15.7 State-specific issues ........................................................................................................ 286

1.15.8 Recommend EPA delay, modify, withdraw proposal ................................................. 298

1.15.9 Recommend EPA strengthen proposal ........................................................................ 308

1.15.10 Information Quality Act Comments .......................................................................... 310
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1.11 STATE PLAN ENFORCEABILITY CONSIDERATIONS 

1.11.1 Legal issues 

Comment 1: Commenters argued that EPA's Subpart B rules require state emission standards to 

be generally no less stringent than the emission guidelines, but they cannot be binding and 

enforceable against any source. Commenters argued that because the EPA has stated that “[T]he 

interim and final goals will be binding emission guidelines for state plans,” they are not, by 

definition, guidelines. 

Commenters argued that EPA's Subpart B rules generally require state emission standards to "be 

no less stringent than" the emission guidelines set forth by EPA. Commenters stated, when it first 

adopted its section 111(d) regulations, EPA took pains to emphasize that, in contrast to the 

"emission standards" that states adopt under their section 111(d) plans, emission guidelines are 

not "legally enforceable," (emphasized by the fact that the term emission guideline was used in 

place of emission limitation). Commenters noted that what the Administrator 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 argued 

that EPA's Section 111(d) guideline document is supposed to contain an "emission guideline" for 

designated facilities. 

Commenters argued that EPA itself recognized state primacy in 1975 when it promulgated the 

Subpart B regulations to interpret and implement section 111(d): "States will have primary 

responsibility for developing and enforcing control plans under section 111(d)[.]" Commenters 

stated, on the other hand, EPA's role under its own regulations is to set "guidelines," not binding 

emission standards for existing sources. Commenters noted that EPA itself defined an “emission 

guideline” as “a guideline . . . which reflects the degree of emission reduction achievable through 

application of the best system of emission reduction . . . .” Commenters said, by contrast, EPA’s 

regulations separately define an “emission standard” as “a legally enforceable regulation setting 

forth an allowable rate of emissions into the atmosphere.” Commenters said, yet, by EPA’s own 

admission, its proposal would establish legally enforceable (“binding”) allowable emission rates 

for each state. Commenters argued that, thus, applying EPA's own definitions, the proposal 

establishes "emission standards," not guidelines, which contravenes section 111(d) and EPA's 

stated role for itself under 40 C.F.R. section 60.22. 

Response 1: We disagree that the proposal established “emission standards” in contravention of 

CAA section 111(d). In any case, we do not take the position in the final rule that we have 

established binding requirements on any source. 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; they do not impose any 

requirements directly onto any source. The interim and final goals are intended to reflect such 

substantive criteria.
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Comment 2: Commenters argued that despite the clear requirements of section 111(d), the CPP 

would include emission reduction standards based almost entirely on measures that cannot be 

incorporated or achieved by individual units. Commenters stated, specifically, three of the four 

Building Blocks that comprise EPA's proposed BSER are not directed at existing coal-fired 

EGUs. Commenters argued that such a system-wide approach inappropriately commingles all 

elements of electricity production and distribution into a single "source category" and removes 

from the states and EPA the authority to implement the final three Building Blocks. Commenters 

argued that this is especially problematic because the proposed regulations would require each 

state to demonstrate, in its state plan, that it has the legal authority to carry out the plan. See 40

C.F.R. 60.26. Commenters argued that because individual facilities cannot implement Building 

Blocks 2 through 4 under any circumstances, there is nothing that states can require of facility 

owners and operators that will enable compliance with the CPP. 

Response 2: We disagree with these comments. We explain in section V.B of the final rule 

preamble of the CPP how affected EGUs can implement building blocks 2 and 3. 

Comment 3: Commenters argued that EPA's BSER interpretation under section 111(d) is 

inconsistent with the structure of section 111(d) because the BSER includes measures that the 

EPA has determined the Agency itself cannot require of states and sources as part of a Federal 

Plan if a state fails to submit a plan or submits a plan that is not approved by EPA. Commenters 

said, for example, EPA's proposed Building Block 3 requires the construction of new renewable 

generation, and under the CAA, EPA does not have authority to impose RES requirements on 

utilities within a state, nor require new renewable energy construction through the integrated 

resource planning process. Commenters said, similarly, with respect to Building Block 2, EPA 

has no control over wholesale electric market rules to impose changes in the dispatch of units. 

Commenters stated, finally, the EPA does not have control over customer decisions about how 

much power they use or even the ability to approve rate recovery for utilities to invest in EE 

programs such as efficient appliance rebates. 

Commenters argued that EPA's lack of authority for a system-wide approach is evident from its 

approach to BSER in the section 111(b) rulemakings, where the EPA is the exclusive regulating 

authority for the same pollutant and source categories, but for which the Agency explicitly 

rejected system-wide approaches to determining BSER as inappropriate. See 79 Fed. Reg. at 

34,983. Commenters argued that this is telling, because it shows that EPA's BSER approach in 

the proposed guidelines is inconsistent with both its own prior determinations and the structure 

of CAA section 111. Commenters argued that EPA's actions regarding sources regulated under 

CAA section 111(b) show that the Agency tacitly recognizes the limits on its own authority, and 

that its BSER interpretation in the proposed guidelines is inconsistent with the structure of CAA 

section 111 by requiring actions of states that the Agency cannot take itself. 

Commenters noted that in order to receive EPA approval, "a state plan must contain enforceable 

measures that reduce EGU CO2 emissions," and once approved by the Agency, its provisions 

- including its requirements for affected entities - would then generally become federally 

enforceable by EPA and by private individuals in citizen suits. Commenters argued that it is 
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unclear what kind of "enforceable" obligations a state could impose on affected entities in order 

to implement Building Blocks 2, 3, and 4, or how those requirements could be enforced in the 

event they are not implemented; therefore, it may well prove impossible for states to submit 

plans that are "approvable" under EPA's criteria. 

Commenters argued that the EPA acknowledges that state and federal enforceability of measures 

applied against affected entities other than EGUs may present practical challenges, but the EPA 

does not attempt to resolve these issues. For instance, state agencies are immune from suit under 

the CAA's citizen suit provision. Further, commenters questioned, if a state imposes renewable 

energy investment obligations on a third party other than a state agency, would an investment 

obligation alone be sufficient to ensure federal enforceability, or would more, such as a specific 

amount of renewable generation capacity, be required? How would such obligations be enforced 

by a court? 

Commenters argued that these uncertainties are present because section 111 was never intended 

to be used in the manner the EPA contemplates. Commenters argued that section 111 is a 

narrowly focused provision intended to be based on design or process changes that only 

individual sources within listed categories can implement to reduce their own emissions. 

Response 3: We disagree with these comments. The state plans that adopt emission standards 

impose either emission rates or mass limits on affected EGUs, and those measures are 

enforceable by the states and by the EPA. The affected EGUs may achieve their emission limits 

by taking various types of actions to implement the building blocks, and it is not necessary that 

those actions themselves be enforceable by the state or by the EPA. We are not finalizing the 

portfolio approach. We explain in the Legal Memorandum why the section 111(b) rule does not 

rely on the building blocks as the BSER.

Comment 4: Commenters believe EPA has overstepped its authority with the portfolio 

approach, and cannot legally require emission reductions from any source outside of fossil-fuel 

fired EGUs. Commenters stated that they would support the ability of sources not subject to 

regulation under the CPP to voluntarily opt-into a State plan, if that option were to be included in 

the final CPP, and it was clear that such action would be taken solely at the discretion of the nonregulated source, and under no circumstances would be required by any State. In return, 

commenters suggested that States should have the discretion to provide non-regulated sources 

that voluntarily opt-in with incentives, such as offsets or exclusion from future State plans 

directly targeting the sector. 

Response 4: The EPA is not requiring or authorizing state plans to impose federally enforceable 

requirements on non-affected EGUs Also, as explained in section V.B of the final rule preamble 

to the CPP, the EPA is not finalizing the proposed portfolio approach and any comments on that 

proposed approach to 111(d) state plan design are therefore moot. 

Comment 5: Commenters stated, EPA's broad approach is authorized, at least in part, by section 

111(d)'s specific reference to state implementation plans under section 110 as a model. 
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Specifically, the commenters stated that the statute directs the Administrator to "prescribe 

regulations which shall establish a procedure similar to that provided by [Clean Air Act section 

110] under which each State shall submit to the Administrator a plan..." 42 U.S.C. section 

7411(d)(1).Commenters said, under section 110, EPA uses its expertise in safeguarding public 

health and welfare to set NAAQS for designated criteria pollutants that states must attain through 

implementation of emission limits set forth in their SIPs. Commenters said, EPA does not set 

source-specific emission limitations; that is left to the states. Commenters said, following that 

lead, the Proposed Rule sets statewide emission goals that represent the BSER for each state, and 

leaves it to the states to determine how to allocate individual emission limitations to meet those 

goals. Commenters said, by specifically referencing section 110 and providing no further 

guidance, it can be inferred that Congress intended to encourage this statewide goal-setting and 

compliance paradigm. 

Response 5: These comments are generally supportive of EPA’s proposal. 

Comment 6: Building blocks 2-4 do not qualify as standards of performance because they are 

not “for” the affected source. 

Commenters stated that EPA's argument that RE and EE measures are "for" EGUs because they 

would have an effect on affected sources is contrary to section 111 in at least two ways: 

1. Section 111(d) plans are supposed to "establish[ ] standards of performance" for 

existing sources; however, renewable energy generating technologies and 

demand-side energy efficiency measures such as energy efficiency programs, 

building energy codes, state appliance standards, tax credits, and benchmarking 

requirements for building energy use are not "standards of performance." The 

commenters stated that a "standard of performance" is "a standard for emissions 

of air pollutants" or "a requirement of continuous emission reduction." 

2. The Act makes clear that "standards of performance for any existing source" must 

be standards that are applied to those existing sources, and not merely standards 

that "have an effect on" those sources. The commenters noted that there are only 

four sentences in section 111(d), and stated that two of those sentences make this 

conclusion crystal clear: "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. ... In promulgating a standard of performance under a plan 

prescribed under this paragraph, the Administrator shall take into consideration, 

among other factors, remaining useful lives of the sources in the category of 

sources to which such standard applies." 

The commenters concluded that when viewed in context, section 111(d) standards of 

performance are standards that apply to sources in the relevant source category, not just 

requirements that affect such sources. 
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Commenters said that EPA is not clear whether the portfolio measures would be considered 

standards of performance under the approach that measures on sources outside the regulated 

category are "for" sources within the regulated source category. The commenters said that 

although in the first full paragraph of page 34,903 EPA signals that under this justification 

portfolio measures would not be considered standards of performance, the commenters presume 

that they would be since EPA tries to justify these measures as "standards of performance for any 

existing source." The commenters stated that either the measures contained within the portfolio 

approach are (a) standards of performance or measures to implement or enforce those standards, 

in which case they can be included in a state plan, or (b) they are not, in which case they can't. 

The commenters indicated that in any event, there is no possible reading of the term "for" in the 

context in which it is used in section 111(d) that could convert a standard for a facility in a nonlisted source category into a standard that applies to and is therefore "for" facilities in a listed 

source category). Commenters stated that the 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). 

Commenters argued that building blocks 2, 3, and 4 do not quality as a standard of performance, 

charging that EPA is using a circular logic to defend their position because blocks 2, 3, and 4 as 

implementation measures are not part of BSER but still are used to calculate the goals. The 

commenters stated that these measures are needed to meet the standards but will be difficult to 

implement and enforce, e.g., to avoid double counting and to account for entities in different 

states. 

Regarding the suggestion that state emission performance levels (i.e., the "state goals") could be 

considered "standards of performance," commenters stated that the agency presumably intends to 

argue that if the state goals are "standards of performance," then EE and RE measures would be 

"implement[ing] measures that could be included in the state plans. The commenters said this 

argument is flawed, and that "standard of performance" does not mean "a requirement that 

concerns emissions"; it means, "a standard for emissions of air pollutants" or "a requirement of 

continuous emission reduction." The commenters said that state goals cannot be "standards of 

performance" because state goals are not requirements on individual electric generating units. 

Commenters indicated that what EPA calls "standards of performance" are more akin to state 

implementation plan measures. The commenters indicated that the portfolio measures cannot be 

called performance standards, and that state plan requirements that create obligations on third 

parties are not "standards for emissions of air pollutants." 

Commenters stated that EPA goes far beyond any reading of the term "standard of performance" 

in the proposed rule. 

Commenters stated, the fundamental tenet of guidelines under Section 111(d) is that they set 

standards of performance for existing sources that are achievable by that source. Commenters 

said, EPA ignores the very essence of the section 111 regulatory program-regulation of sources 
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in a source category. Commenters said, EPA has severed the link between the standard of 

performance and the source category and instead effectively sets a standard of performance for 

the state, not the source category. Commenters said, in EPA's view, "[a]lthough "for" could be 

read as meaning that standards must apply to affected sources, "for" is also reasonably 

interpreted to have a more capacious meaning: Standards (such as energy efficiency and 

renewable energy) are reasonably considered to be "for" affected sources if they would have an 

effect on existing sources ... by decreasing the amount of generation needed from affected 

EGUs." Commenters argued this is an unprecedented and tenuous interpretation of EPA's 

authority over setting standards for stationary sources under Section 111. 

Commenters stated, in attempting to support the suite of measures not directly tied to the source, 

EPA also compares its approach to the kind of measures adopted in state implementation plans 

("SIPs") under Section 110. Commenters said, this argument only highlights the problems with 

EPA's argument. Commenters said, first, to suggest such an expansive reading of the word "for" 

renders it meaningless. Commenters said, more fundamentally, the argument regarding the SIP 

comparison fails because under Section 110, it is the state that must develop a state plan to 

achieve a national ambient air quality standard for the state, not a standard of performance for a 

source in a source category subject to an emission guideline. Commenters said, thus, it is logical 

in the SIP context for a state to develop a suite of measures that apply to particular sources in the 

state or other measures that taken together combine to achieve an ambient standard in that state. 

Commenters said, under Section 111, however, Congress has only authorized establishment of 

standards of performance (or guidelines under 111(d)) for stationary sources that reflect the 

application of BSER for the source, not some general target of emissions reduction from all 

sources that may in some way help reduce GHG emissions. Commenters said, EPA is not 

establishing an ambient standard under Section 111 (d), nor can it. 

Response 6: We disagree with these comments. See section V.B of the final rule preamble to 

the CPP for EPA’s response to this comment. Also, as explained in section V.B of the final rule 

preamble to the CPP, the EPA is not finalizing the proposed portfolio approach and any 

comments on that proposed approach to 111(d) state plan design are therefore moot. 

Comment 7: Commenters stated, the Clean Air Act as a whole is based on cooperative 

federalism, emphasizing the "primary responsibility" of the states to control air pollution, 

consistent with governing federal standards. See 42 U.S.C. section 7401 (a). Commenters said, 

section 111(d) markedly relies on this model. Commenters said, unlike new sources of emissions 

in covered sectors, which are regulated by uniform federal standards of performance, see id. 

section 7411(b), designing appropriate plans for existing sources, which may be less amenable to 

uniform retrofit requirements, often requires more creativity. Commenters said, state planners are 

better able to respond to this complexity with plans designed for the particular existing source 

populations in their states. Commenters said, recognizing this reality, Congress gave the states 

primary responsibility to implement and enforce standards of performance for these sources, 

subject to U.S. EPA oversight. Commenters said, the contrast between section 111(b)'s federal 
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mandates and section 111(d)'s broad delegation to state planning authorities underlines 

Congress's cooperative federalism approach in this context. 

Commenters stated, although U.S. EPA is to evaluate state plans to determine whether they are 

"satisfactory," in the sense that they reduce emissions to the required "best system of emissions 

reduction" (BSER) level and comply with other requirements, the standards of performance 

contained within these plans are to be "establishe[d]" by the states. See id. section 7411(d)(1). 

Commenters said, a state plan will not be "satisfactory" if it does not "establish" standards that 

"reflect the degree of emission limitation achievable through the best system of emission 

reduction," id. section 7411(a)(1) & (d)(1). Commenters said, but there are many potential plan 

designs that could deliver this required level of performance. 

Commenters stated, the Act leaves that design question to the states, subject to U.S. EPA 

approval. Commenters said, the Act provides that state plans must "provide for the 

implementation and enforcement" of standards "for any existing source" consistent with BSER 

reduction levels. Id. section 7411(d)(1). Commenters said, the statute does not say what 

constitutes a plan "for" any existing source, nor does it specify particular mechanisms for state 

implementation and enforcement. Commenters said, thus, ARB staff agrees with U.S. EPA that 

the requirement that state standards be "for" sources affords U.S. EPA discretion to approve a 

range of plans that satisfactorily address existing source emissions. See 79 Fed. Reg. at 34,903. 

Commenters said, although a plan would not be "satisfactory" if its implementation and 

enforcement design failed to guarantee that BSER emissions levels were achieved and 

maintained, the form of the plan and its standards is otherwise primarily up to the state. 

Commenters stated, the statute does not provide much further substantial direct guidance on the 

content of the state plans. Commenters said, although the "procedure" under which they are 

submitted is to be "similar to that provided by section 7410" (section 110) for criteria pollutant 

plans, id. section 7411(d)(1), it is not required to be identical, and no particular requirements are 

provided by statute. Commenters said, state planners under section 110 are already vested with 

substantial discretion, so section 111 (d)'s cross-reference to that section further demonstrates 

Congress's intent. See, e.g., Union Electric Co. v. U.S. EPA, 427 U.S. 246,267 (1976) ("[the] 

state has virtually absolute power in allocating emission limitations so long as the national 

standards are met"); Texas v. U.S. EPA, 690 F.3d 670, 684 (5th Cir. 2012) (the Clean Air Act 

"supplies the goals and basic requirements of state implementation plans, but the states have 

broad authority to determine the methods and particular control strategies they will use to 

achieve the statutory requirements"); Luminant Generation Co., LLC v. U.S. EPA, 714 F.3d 841, 

845-46 (5th Cir. 2013) (affirming this principle). Commenters said, indeed, the design flexibility 

for section 111 plans is likely greater than that afforded to section 110 plans. Commenters said, 

this is because the statute sets out a long list of requirements for section 110 planning, see 42 

U.S.C. section 7 411 (a)(2)(A)-(M), but does not provide a similarly directive list under section 

111, noting only that procedures for those plans should be "similar" to section 110. Id. section 

711(d)(1). 
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Commenters stated, it is especially reasonable for U.S. EPA to consider creative state plan 

designs for greenhouse gas emissions from EGUs because of the nature of the best system of 

emission reduction for these sources. Commenters said, as U.S. EPA discusses at length in the 

proposal, the most effective systems for controlling power plant emissions include actions that 

modify the functioning of the electrical grid that links together these sources, and regulates 

which sources are used at which times. Commenters said, grid-level actions that displace the 

need for higher emitting sources can enable very substantial reductions at the sources 

themselves. 

Commenters stated, to capture these reductions- that is, to be "satisfactory"- states' plans thus 

must operate in the larger world of the electric system, and so relate in a complementary way to 

the many regulators and regulations, state and federal, that also govern the grid. Commenters 

said, state and federal energy regulators have long adapted their planning processes to 

accommodate Clean Air Act mandates. Commenters said, the section 111(d) state plans will 

benefit from this experience. Commenters said, states should be allowed to design these plans in 

ways that achieve Congress's mandate to employ the "best system of emission reduction" to 

address these Clean Air Act requirements while working within the structure of electric system 

regulation set out by state and federal laws, including the Federal Power Act. See, e.g., Morton v. 

Mancari, 417 U.S. 535, 551 (1974) (statutes are to be interpreted harmoniously). 

Commenters stated, clearly U.S. EPA has the discretion to consider for approval a broad range of 

state plan types given: the principles of cooperative federalism at the foundation of the Clean Air 

Act; the marked contrast between the national, one-size-fits-all standards for new sources under 

section 111(b) versus the state plan approach in section 111(d) which provides even greater 

latitude in some respects to states than in the section 110 context; the statute's reliance on the 

best system of emission reduction, a term that on its face extends beyond the bounds of any 

particular source; and, in the particular context of this rule, the interconnected nature and 

diversity of EGUs and the need to harmonize emission reductions with other statutory directives. 

Commenters said, there is, in other words, every indication that state plans may use a wide array 

of approaches provided that they guarantee enforceable emission reductions. 

Response 7: These comments generally support EPA’s proposal. The EPA thanks the 

commenter for these comments. 

Comment 8: Building blocks 2-4 qualify as standards of performance because they are “for” the 

affected source. 

Commenters stated that although the "for" in setting performance standards "for" affected 

sources could reasonably be read as meaning that the standards must apply to affected sources, 

"for" is also reasonably interpreted to have a more capacious meaning to include standards with 

an effect on affected sources. Commenters indicated that standards such as those for renewable 

energy, are reasonably considered to be "for" affected sources if they would have an effect on 
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affected sources by, for example, causing reductions in affected EGUs' carbon emissions by 

decreasing the amount of generation needed from affected EGUs. Commenters said that under 

EPA's specific interpretation, and depending on the specific provisions of a state's plan, 

renewable energy would be "for" fossil fuel-fired EGUs, even if the standards do not apply 

directly to fossil fuel-fired EGUs. 

Commenters agreed with EPA's proposal that section 111(d)(1) allows state plans to include 

measures that would reduce emissions from affected sources, even if those measures are neither 

"standards of performance for existing sources" nor measures "for the implementation and 

enforcement of such standards of performance." 

Commenters said that standards of performance for affected sources are reasonably read to 

include the emission performance level (i.e., the state goal) on the grounds that the level is a 

standard for emissions. Commenters said it is in the nature of a requirement that concerns 

emissions and it is "for" the affected sources because it helps determine their obligations under 

the plan. Commenters said that measures, such as renewable energy deployment, may be 

considered "implement[ing]" measures in state plans if they are not directly tied to emission 

reductions that affected sources are required to make through emission limits, and if they are 

requirements on entities other than the affected sources. 

Response 8: These comments generally support EPA’s proposal. The EPA thanks the 

commenter for these comments. 

Comment 9: Commenters said that, EPA makes clear in the proposal, and they support, that 

states have substantial flexibility to determine the most cost-effective means to meet the 

applicable target based on the specific resources and opportunities in a state. Commenters said 

that, consistent with the applicable case law, in the proposed rule EPA provides states with many 

choices on how to comply. Commenters said that, the proposal establishes a state emission target 

and allows states to implement any combination of the measures that constitute BSER or include 

measures that were not part of EPA's BSER determination as long as the state can demonstrate 

that the affected EGUs meet the applicable emission target. Commenters said that, one state may 

elect not to use energy efficiency measures as a means to comply but rather impose a mass-based 

target on affected EGUs. Commenters said that, another state may elect to continue to develop 

renewable energy generation as a compliance mechanism in combination with a rate-based 

trading program that encourages the displacement of higher emitting sources with lower emitting 

generation. Commenters said that, as long as a state can demonstrate that its compliance choices 

can achieve its applicable emission reduction level, EPA appropriately proposes to recognize 

those measures as compliance options. 

Commenters said that, given the flexibility Congress intended for states in designing compliance 

plans under 111(d), it is essential that EPA design the final rule to encourage states to implement 

their compliance plans most cost-effectively based on the specific state dynamics and utilizing 
11 

 

proven market-based regulatory approaches and existing tools where appropriate, such as the 

regional transmission operator (RTO) structure. 

Commenters said that, allowing states significant compliance flexibilities for reducing or 

displacing emissions, is analogous to the approach Congress specified for the consideration of a 

wide variety of transportation control measures available to States in formulating their SIPs 

under section 110, which Congress referenced in section 111(d). Commenters said that, for 

example, as part of a SIP, states can consider any of the transportation control measures listed in 

section 108(f) of the Act or any other measure that reduces emission from the transportation 

sector by reducing vehicle use or changing traffic flow or congestion conditions. Commenters 

said that, Congress intended that such measures receive the same credit as those which depend 

upon actual tailpipe reductions. Commenters said that, this recognition by Congress that a broad 

range of measures can lead to a reduction in emissions is consistent with EPA's approach of 

providing significant flexibility for states to demonstrate compliance in the section 111(d) plans. 

Response 9: These comments generally support EPA’s proposal. The EPA thanks the 

commenter for these comments.

Comment 10: EPA's Inclusion of Energy Efficiency and Renewable Energy Programs is 

Inconsistent with "Cooperative Federalism." 

Commenters stated that the Clean Air Act was built on the principle of "cooperative federalism" 

in which the federal government and individual states would work together to control air 

pollution. Commenters said that when enacting the CAA in 1970, 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." Commenters said that as a federal appeals court recently explained, "Congress chose 

a balanced scheme of state-federal interaction to implement the goals of the Clean Air Act." 

Commenters stated that the CAA establishes a cooperative framework whereby EPA and the 

states work in partnership to achieve air quality objectives. Commenters said that the CAA's 

"cooperative federalism structure is a defining feature of the statute." Commenters said 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." 

Commenters said that in the statute, Congress stated that the purposes of the CAA are: 

(1) to protect and enhance the quality of the Nation's air resources so as to promote the public 

health and welfare and the productive capacity of its population; 

(2) to initiate and accelerate a national research and development program to achieve the 

prevention and control of air pollution; 
12 

 

(3) to provide technical and financial assistance to State and local governments in connection 

with the development and execution of their air pollution prevention and control programs; and 

(4) to encourage and assist the development and operation of regional air pollution prevention 

and control programs. 

Commenters said that further, Congress stated that a "primary goal" of the Act is "to encourage 

or otherwise promote reasonable Federal, State, and local governmental actions, consistent with 

the provisions of this chapter, for pollution prevention." 

Commenters stated that EPA, in its CPP, does more than encourage or promote state actions - it 

federalizes them. Commenters said that 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 said besides being simply unnecessary, another major problem exists with 

it - by requiring states to include their state-regulated EE and RE programs into its federallyenforceable SIP, EPA effectively subjects state programs to federal enforcement. Commenters 

said that the EE programs and many of the RE programs have to date been wholly state 

programs. 

Commenters stated that the Federal Power Act, which grants regulatory authority of the interstate 

electricity grid to FERC, not EPA, places specific limits on that authority (see Section IV). 

Commenters said in the recent case Electric Power Supply Association v. FERC, the D.C. Circuit 

Court of Appeals ruled that the Federal Power Act "unambiguously restricts" FERC from 

regulating retail electricity demand, stating that retail markets are a matter that Congress left 

"exclusively within state control." 

Commenters stated that EPA deviates from this prohibition in the proposed rule. Commenters 

said by regulating state-run EE and RE programs, which EPA argues affect CO2 emissions from 

the source category by reducing demand of electricity generated from fossil-fuel fired EGUs, 

EPA is failing to respect the state's explicit authority to regulate its own retail electricity demand. 

Commenters said that FERC Commissioner Tony Clark stated in his testimony before the House 

Energy and Commerce Subcommittee on Energy and Power that: 

"More than any regulation I have seen during the time I have been involved in the energy sector, 

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...What was once a relationship of interacting and cooperating 

entities will be one in which there is a clear senior partner...[States] will have entered a 

comprehensive "mother-may-I relationship with the EPA that has never before existed." 

Commenters stated that this "Mother-may-I" relationship will have profound implications 

beyond just the CPP. Commenters said that Clark went on to explain: 
13 

 

"To use just one example, if a future legislature decides that its renewable portfolio standard is 

not working for the citizens of its state, that legislature may effectively be prevented from 

changing course, because its 'EPA-approved' RPS will still be in full effect; and likely 

enforceable by either the EPA or subject to a private party lawsuit. The same would apply to any 

future state utility commission action to the degree it implicates an EPA approved plan. And 

because basically everything in the electricity sector affects carbon output in some manner, if a 

state 'plays ball' with the EPA, the proposed rule could effectively lock a state into a 

comprehensive carbon integrated resource plan that can only be changed with the acquiescence 

of the EPA." 

Commenters stated that these are powerful and insightful words to hear from a federal energy 

regulator, and they articulate a crystal clear vision of what will result from EPA's oversight of 

state electricity regulation. Commenters said that if FERC, the federal energy agency, lacks 

authority to regulate electricity demand under the FPA, EPA most certainly does not have the 

authority under its emission statute - the Clean Air Act. 

Response 10: The EPA disagrees with these comments. See section V.A and V.B of the final 

rule preamble of the CPP for the EPA’s response to this comment. In addition, 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. 

Further, to the extent that this comment relates to energy efficiency, we note that we are not 

including building block 4 as a component of BSER in the final rule, but EE may be available as 

a compliance measure. The EPA has the clear authority from Congress, recognized by the 

Supreme Court, to regulate GHGs from the affected EGUs. 

The rule is consistent with the cooperative federalism structure throughout the CAA. EPA’s 

oversight authority is plainly provided in the text of the statute, see section 111(d)(2). 

We disagree that we are expanding our authority to include wholesale energy market regulation. 

We also note that we are not finalizing the portfolio approach. 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. For a more comprehensive discussion of 

cooperative federalism and the final 111(d) rule, please see EPA’s response to comments in 

section 1.2.
14 

 

Comment 11: Commenters stated that the CAA empowers states, not EPA, to apply 

appropriately tailored standards to individual sources, explaining that under some provisions of 

the CAA, EPA itself sets federal standards that apply directly to individual sources - for instance, 

under Section 112, or under Section 111(b), which empowers the agency to set performance 

standards for new sources but under the Section 111(d) system, EPA is limited to establishing a 

procedure for states to submit plans under which the states will set performance standards for 

existing sources within their jurisdiction, taking into account plant-specific characteristics such 

as the remaining useful life of each facility. Commenters contended that the states are expressly 

afforded this discretion by the statute, and the agency has reflected this in its general regulations 

implementing the statute. Commenters said only if a state fails to submit a "satisfactory" plan 

may EPA impose its own, federal plan, and that federal plan may only remain in force until the 

state corrects its plan. Commenters stated that the current proposal upends this by setting binding 

and inflexible state "goals" in the form of statewide limits on CO2 emissions for a state's entire 

power sector, and this contradicts Congress's intent to respect and harness states' local 

knowledge. Commenters remarked that even assuming that Section 111 contemplates beyondthe-fence, grid-wide "systems of emission reduction" - which, as explained above, it does not - 

Congress's design of the statute makes clear that it would never have wanted the agency to make 

the intensely detailed, state-specific projections of what each individual state can achieve 

through alteration of its energy policy. Commenters continued, stating that it is telling that EPA 

does not invite states to submit proposals of what reductions they think are achievable from their 

existing sources. Commenters said, instead, states are relegated to a purely ministerial role in 

achieving the limits handed down from the federal government. Commenters stated that this gets 

Section 111 entirely backwards: 111(d) was designed to establish cooperative state-federal 

regulation, with less of a role for the federal government than under 111(b), and the CPP imposes 

cookie-cutter regulation. 

Commenters stated that significant uncertainties exist regarding the design, implementation, and 

demonstration of compliance strategies to achieve the Building Block 3 goals, and this includes 

uncertainty regarding who has the regulatory authority to require the development and operation 

of specified amounts of renewable resources and nuclear power, how such requirements are 

designed in context with RTO/ISO and state-dispatch regulations, how compliance is to be 

demonstrated, and where the compliance obligation resides. 

Commenters stated that even though EPA invokes Section 111(d)(2) for the Administrator's 

authority to implement "a satisfactory plan as he would have under section 7410 of this title in 

the case of [a State's] failure to submit an implementation plan," the Clean Air Act still requires 

the Administrator to have the authority to impose individual elements of that plan. Commenters 

believed that regardless of how serious the problem an administrative agency seeks to address, it 

may not exercise its authority "in a manner that is inconsistent with the administrative structure 

that Congress enacted into law." Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 

529 U.S. 120, 125, 120 S. Ct. 1291, 1297, 146 L. Ed. 2d 121 (U.S. 2000) (citing ETSI Pipeline 

Project v. Missouri, 484 U.S. 495, 517, 108 S.Ct. 805, 98 L.Ed.2d 898 (1988)). Commenters 

argued that the CAA granting EPA authority "to impose a plan" does not confer on the Agency 
15 

 

the authority to impose elements of a plan that the States may have authority to impose but for 

which the Administrator lacks authority. Commenters offered the following example: the fact 

that a State may have authority through its Public Service or Public Utility Commission to 

control retail markets or the generation of electricity or the basis for transmission of electricity in 

the state (prices, reserves, a preference for environmental dispatch over lower-cost electricity) 

does not confer that authority on EPA should the State fail to exercise that authority. 

Commenters argued that EPA's authority under CAA Sections 110 and 111 are confined to 

establishing "emissions standards" applicable to "affected sources"; the State PUC or PSC is not 

an "affected source" that EPA has authority over; nor are the elements of Blocks 2,3, or 4 such as 

the production and sale of electricity, authority for licensing nuclear facilities and wind farms an 

"emission standard," which is defined by the Act 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 emissions reduction and any design, equipment, work practice or 

operational standard promulgated under this chapter." Id. at 7602 (k). 

Response 11: See section V.A and V.B of the final rule preamble of the CPP for the EPA’s 

response to this comment. The CAA, in both text and structure, as interpreted by the Supreme 

Court, supports the agency’s action. Brown & Williamson is distinguishable for a variety of 

reasons.

Comment 12: Commenters stated that Michigan has the capability to import hydroelectric 

generation from Canada and believes that the final rule should reflect and acknowledge 

international trading of electricity, as well as allow for the purchase of RE credits from other 

nations such as Canada. Commenters explained that while Michigan's current Renewable 

Portfolio Standard does not consider out-of-state hydropower as eligible, allowing international 

trading of low or non-emitting electricity generation to count toward meeting their state's 

emission reduction goal would encourage Michigan to continue to build upon progress already 

made in offsetting fossil fuel-fired generation with cleaner RE alternatives. 

Response 12: See section VIII.K of the final rule preamble of the CPP for the EPA’s response 

to this comment.

Comment 13: Comments stating that section 111 does not allow EPA to reestablish BSER as 

part of "out-year" requirements beyond an alternative 2025 performance goal. 

Commenters noted that in connection with the alternative state goals, for the years after 2027, 

EPA requests comment on the same "out-year" issues and concepts for maintaining or improving 

emission performance over time that are described for the final goal (i.e., whether a state plan 

should provide for emission performance after 2025 solely through post-implementation 
16 

 

emission checks that do not require a second plan submittal, or whether a State should also be 

required to make a second submittal prior to 2025). 

The commenters stated that EPA lacks legal authority under Section 111 to establish a 

subsequent BSER based on levels of improved performance (i.e., section 111 does not permit 

EPA to reestablish a second BSER or performance goal). The commenters noted that EPA refers 

to the 8-year review provision in Section 111(b) as authority to re-issue NSPS for existing units. 

The commenters contended that this view is misplaced because EPA cannot re-issue a NSPS for 

new sources that have already gone through the process. Likewise here, the commenters stated 

that existing sources that have undergone a section 111(d) process cannot be forced to undergo it 

again. 

The commenters stated that the only legally permissible alternative is post-implementation 

emission checks. When goal exceedances arise due to unforeseen circumstances the commenters 

stated that goals should be adjusted accordingly. For other exceedances, the commenters 

suggested that post-implementation checks coupled with state readjusted plans are appropriate. 

Response 13: See section VIII.B of the final rule preamble of the CPP for the EPA’s response to 

this comment. See section V.A. of the final rule preamble for the final BSER determination and 

sections VI and VII of the final rule preamble and the CO2 Emission Performance Rate and Goal 

Computation TSD for CPP Final Rule for more information regarding the final performance 

rates and goals. 

Comment 14: Portfolio approach is not allowed under section 111(d) 

Commenters indicated that EPA cannot approve and make federally enforceable nonperformance measures, and the section 110 authority which gives states discretion to include 

various types of measures in their SIPs to attain NAAQS is a fundamentally different program. 

The commenters stated that Congress specifically gave states the authority to formulate any 

measures they wish to meet the NAAQS, but under section 111(d), state plans must include 

"standards of performance" which is a defined term with a specific regulatory context. The 

commenters stated that no CAA authority exists for section 111(d) plans to contain other types of 

federally enforceable substantive measures. 

Response 14: The EPA has decided not to finalize the portfolio approach to designing a state 

plan under this guideline, so any comments objecting to the portfolio approach are moot. 

Comment 15: Comments on the enforceability of a federal plan containing the proposed 

Portfolio approach 
17 

 

The commenters stated that Section 111(d) presumes that the BSER established by the EPA will 

be within the authority granted EPA and so capable of being enforced through a FIP if a State 

declines to act. Commenters questioned EPA's authority to develop and implement a Federal 

Implementation Plan (FIP) based on the portfolio approach. Commenters stated that it is unclear 

from the proposal whether EPA believes it could impose portfolio measures in a federal plan. 

Commenters argued that the EPA does not have the authority to implement a FIP based on the 

portfolio approach and believed that "an interpretation of the CAA that permits the issuance of a 

BSER that cannot be enforced through a FIP runs contrary to one of the oldest plain statement 

rules in American jurisprudence: 'we must generally assume, in the absence of a plain indication 

to the contrary, that Congress when it enacts a statute is not making the application of the federal 

act dependent on state law'." Commenters stated that the recognition that "federal statutes are 

generally intended to have uniform nationwide application" and the concern "that the federal 

program would be impaired if state law were to control" "apply with substantial force to an 

interpretation of section 111 that would permit a BSER that depends upon the States willingness 

to exercise police powers that EPA does not possess and cannot assume." 

Commenters stated the issue of plan enforceability is further complicated in the event a state 

does not submit a plan or a state is not on track to meet its interim state goal. Commenters said 

the EPA needs to identify how it will handle such situations. Commenters stated the EPA does 

not have jurisdiction over retail sales of electricity and does not have jurisdiction to compel nonEGU entities to participate in an emissions reduction program applicable to EGUs. Commenters 

said in light of these constraints, they did not believe the EPA would be able to include RE and 

EE measures in a federal plan that replaces a state plan because it would require commandeering 

jurisdiction from other regulators. Commenters stated when the EPA attempted to require state 

regulators to implement federal transportation control plans in the 1970s, courts held that the 

EPA could not require state officials to affirmatively implement vehicle inspection and 

maintenance programs because it commandeered state agencies in violation of the 10th 

Amendment. Commenters said, EPA cannot impose requirements on states that the agency itself 

does not have the authority to enforce. 

Commenters noted that without their inclusion in a state compliance plan, EPA could not on its 

own regulate any of the areas implicated by blocks two, three, or four through a federal plan. The 

commenter argued that even under a mass-based system, EPA would effectively be regulating by 

proxy: because mass-based plans must be equivalent to rate-based plans, [Without their inclusion 

in a state compliance plan, EPA could not on its own regulate any of the areas implicated by 

blocks two, three, or four through a federal plan.] a state would still be required to make changes 

across the entire electricity sector in order to meet EPA's proposed emission targets. Commenters 

said that the necessary regulatory authority to implement building blocks two through four is, in 

many states, conferred through statutory provisions to commissions or other entities established 

by state constitutions and not to the federal government. Commenters cautioned that states might 

not participate, and as was the case with the Patient Protection and Affordable Care Act, might 

not prefer state flexibilities (state exchanges) to federal implementation. Commenters questioned 

how EPA would make re-dispatch federally enforceable in a federal plan. 
18 

 

Commenters stated that if a state chooses not to file a SP, it risks the loss of authority over its 

electricity market when EPA imposes a FP to implement the rule. Commenters stated that it is 

unclear how the EPA would exercise its "claimed jurisdiction, i.e., the authority to require 

Colorado lawmakers to enact energy statutes" were the Agency to impose a CAA 111(d) federal 

implementation plan. 

Commenters stated concern with potential federal requirements for demonstrating compliance 

with 111(d) rules based on renewable electricity consumption will preempt state renewable 

portfolio standard rules, which typically vary considerably from one state to the next. 

Commenters said it will not be possible for the EPA to honor the RPS rules for each state while 

maintaining a coherent national policy regarding what renewable electricity is eligible for use in 

compliance with 111(d). Commenters stated as a result, states and utilities will have a strong 

incentive to revise their renewable electricity procurement strategies towards those strategies that 

comply with both state RPS and federal 111(d) rules, effectively preempting state-specific RPS 

rules that were put in place to reflect the specific interests and goals of that state. 

Commenters stated in addition, there is the potential for the development of clean energy 

resources, such as incremental hydro upgrades at existing dams, to be used for compliance with 

111(d) while not being eligible for compliance with state RPS programs. Commenters said as a 

result, the eventual consumer of this electricity may not be known nor would any RECs be 

generated by the facility or purchased and retired by an electricity consumer. Commenters stated 

a perfect example of this already exists in Montana, where PPL Montana completed a capacity 

expansion at its Rainbow Dam in 2013, increasing its nameplate capacity from 35 MW to 60 

MW. Commenters said however, the incremental electricity generation from Rainbow Dam's 25 

MW of additional capacity is not considered an eligible renewable energy resource under 

Montana's RPS and Rainbow's increased electricity sales are sold as null power on the wholesale 

market alongside PPL Montana's other electricity generation. Commenters stated Montana can 

clearly take credit for the incremental generation from the Rainbow Dam upgrade if 111(d) 

compliance is based on where renewable electricity generation occurs. Commenters said 

unfortunately, it's unclear what state would be able to take credit for Rainbow Dam's incremental 

electricity generation if 111(d) compliance is based on the procurement and consumption of 

renewable electricity or RECs. Commenters stated in others words, state RPS programs and 

111(d) may be inconsistent in terms of verification and accounting. 

Commenters stated that the option to decline to participate by not formulating a state plan is not 

truly available under the Clean Air Act, because if the State does not create a state 

implementation plan that meets with EPA's approval, EPA would mandate a federal plan and 

could sanction the State if its citizens fail to meet the federal standards. Commenters stated, if 

the state refuses to participate, the Proposed Rule will abrogate its sovereignty and impose 

federal control. 
19 

 

Response 15: The EPA is not finalizing the portfolio approach for state plans, and does not 

intend to propose use of the concept of a portfolio approach to implement or enforce a federal 

plan. Therefore, any comments about the portfolio approach in either a state plan or a federal 

plan are moot. EPA anticipates that any proposed federal plan will rely on emission standards 

that apply to affected EGUs. To the extent that the commenters are asserting the EPA 

implementing a federal plan of any sort somehow impairs a state’s sovereignty, EPA disagrees. 

EPA only has authority to promulgate a federal plan in a state when that state has declined to 

submit an approvable state plan. In effect the state has made a choice not to participate in 

implementing this guideline, and consistent with the cooperative federalism structure of the CAA 

as it has operated for decades, EPA is then left with the task of implementing the guideline. EPA 

would not infringe upon a state’s choice not to participate in implementing the guideline, but 

would rather take over that duty. As described in section VIII of the final rule preamble of the 

CPP, EPA is not requiring states to adopt any measures that EPA itself could not enforce. States 

may choose to use state measures to reduce emissions, but those measures must be backstopped 

by standards on affected EGUs. EPA would not exert enforcement authority over any entity 

other than affected EGUs. 

Comment 16: Commenters stated that standards must be enforceable, not just by the EPA, but 

by citizens, including groups like the American Lung Association. 

Commenters stated that in the final rule, the EPA must make it clear who ultimately has the 

responsibility for meeting the targets, from getting the targets and taking the actions required by 

state plans to meet the goals of those plans. Commenters said ambiguous responsibility will lead 

to emission reduction goals not being met. Commenters said that progress reducing pollution and 

the Clean Air Act has not only been the result of independent actions by EPA states, but also the 

citizens holding responsible the parties accountable to Section 304 of the Act. Commenters said 

together we need to be able to hold accountable power from these states and third parties for 

making the target plans work. Commenters said the programs intended to achieve state targets 

must be directly enforceable by citizens against sources and other parties responsible for 

achieving reductions under the provisions of the state or federal implementation plans. 

Commenters said EPA must also provide explicit requirements in the final rule to assess 

quarterly agencies that are promoting obligation and timing for establishing a plan for states that 

have inadequate plans or that fail to submit any plan. 

Commenters stated that EPA must amend its proposed regulations to ensure that emissions 

standards are enforceable by citizens. Commenters said EPA has proposed a regulation which 

would mandate that each state plan include emissions standards that satisfy certain criteria, 

including the requirement that emission standards must be "enforceable with respect to each 

affected entity." Commenters said the proposed regulation provides that an emission standard is 

"enforceable against an affected entity if," among other things, "[t]he Administrator and the state 

maintain the ability to enforce violations and secure appropriate corrective actions pursuant to 

sections 113(a) through (h) of the Act." Commenters said the proposed regulation omits any 
20 

 

requirement that the emission standards are enforceable by citizens. Commenters said the Clean 

Air Act provides that citizens may sue for violation of "an emission standard or limitation under 

this chapter," and defines "[e]mission standard or limitation under this chapter" to include "any 

requirement under section [111] or [112] of this title." Commenters said that if the state plans 

establish emission standards without ensuring that citizens have the ability to enforce violations 

and secure appropriate corrective actions pursuant to section 304 of the Act, citizens may not be 

able to enforce those standards as a practical matter. Commenters said EPA must cure this 

omission. 

Commenters stated that correcting the proposed regulations by including a requirement that 

emission standards be enforceable by citizens would also be consistent with longstanding EPA 

practice, as reflected in the existing enforcement guidance which the proposed rule describes as 

"serv[ing] as the foundation for the types of emission limits that the EPA has found can be 

enforced as a practical matter." Commenters said the guidance provides that emission reductions 

that create obligations for sources are considered enforceable if, among other things, "[c]itizens 

have access to all the emissions-related information obtained from the source [and] can file suits 

against the source for violations." Commenters said that reductions achieved through energy 

efficiency or renewable energy actions for which a party other than a source bears responsibility 

are considered enforceable if, among other things, "[c]itizens have access to all the required 

activity information from the responsible party [and] can file suits against the responsible party 

for violations." 

Commenters stated there is also uncertainty as to whether the state-driven portfolio approach 

under the proposed rule allows citizen suits against states (or non-EGUs). Commenters said this 

potential for citizen suits could result in significant additional costs. 

Commenters stated in a portfolio approach, where entities covered by an energy sector measurean RPs, for example-are included in a state plan, do these entities have citizen suit liability if 

they do not comply? Commenters asked, relatedly, if the state wishes to alter an energy policy 

contained with the plan, what EPA approval process would be applicable? 

Response 16: In the proposed regulatory text describing the enforcing measures that states must 

include in state plans, the EPA inadvertently excluded a required demonstration that states and 

other third parties can enforce against violations of an emission standard included in a state plan 

via civil action pursuant to CAA section 304. Commenters noted the EPA’s intent to require this 

demonstration based on statements in both the proposal preamble text and “State Plan 

Considerations” TSD1

 and based on the requirements of CAA section 304. We are finalizing a 

requirement for a demonstration that states and other third parties can enforce against violations 

of an emission standard included in a state plan via civil action as part of the required plan 

component demonstrating enforceability. We are finalizing this requirement as a logical 

 

1

 State Plan Considerations technical support document for the Clean Power Plan Proposed Rule: 

http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule-state-plan-considerations. 
21 

 

outgrowth of proposal preamble text, the proposal preamble citation to existing enforceability 

guidance documents that discuss this requirement, comments received, and the clear statutory 

foundation. 

As explained in section V.B and VIII of the preamble, the EPA is not finalizing the proposed 

portfolio approach and any comments on that proposed approach to 111(d) state plan design are 

therefore moot. Instead, the EPA is finalizing an option to submit either an “emission standard” 

plan type, which imposes requirements solely on affected EGUs in the form of federally 

enforceable emission standards, and a “state measures” plan type, under which a mass CO2

emission goal may be partially or entirely achieved through state measures that impose 

requirements on entities other than affected EGUs that are not included in the federally 

enforceable 111(d) state plan, provided the state submits standards of performance for CO2

emissions from affected EGUs in the form of a federally enforceable “backstop” that would be 

triggered if the state measures fail to achieve the required CO2 emission performance level. 

Under a state measures plan, the backstop emission standards constitute the standards of 

performance required by section 111(d), and the state plan provides for the implementation and 

enforcement of such standards of performance by specifying the trigger mechanism and 

conditions under which the backstop emission standards apply to affected EGUs. Upon EPA 

approval of a state measures plan under section 111(d), the backstop emission standards become 

federally enforceable requirements, which EPA and citizens may enforce against affected EGUs 

under section 113 and section 304The final emission guidelines require that all 111(d) state 

plans, including state measures plans, specify CO2 emission monitoring, reporting and 

recordkeeping requirements for affected EGUs, demonstrate that plan measures are enforceable, 

and contain the process, content and schedule for state reporting to the EPA on plan 

implementation and progress toward meeting the required CO2 emission performance level. For 

state measures plans in particular, the final emission guidelines also require states to submit 

annual reports to the EPA that address periodic programmatic milestones to show progress in 

program implementation; see section VIII. The EPA intends to review each submitted state plan 

on a case-by-case basis to determine whether it satisfactorily addresses the Act’s enforceability 

requirements. Final EPA action on any submitted 111(d) state plan, including a state measures 

plan, is subject to judicial review under section 307(b) of the Act. 

Commenters argue that the language of section 304 of the Act necessarily requires that every 

collateral measure a state takes in order to reduce CO2 emissions from affected EGUs must be 

made federally enforceable through section 304. We disagree. In relevant part, section 304(a) 

provides that “any person may commence a civil action on [their] own behalf against any person 

... who is alleged to have violated (if there is evidence that the alleged violation has been 

repeated) or to be in violation of an emission standard or limitation under this chapter.” 

“Emission standard or limitation under this chapter” is defined in relevant part in section 304(f) 

as “any requirement under section [111] ... (without regard to whether such requirement is 

expressed as an emission standard or otherwise) ... which is in effect under this chapter.” In 

turn, the relevant “requirement[s] under section 111 ... which are in effect under this chapter” 
22 

 

are those in a state plan that are necessary to satisfactorily “provide for ... enforcement” of the 

standards of performance. 

Because the phrase “provide for ... enforcement” is ambiguous, EPA has been delegated 

authority to interpret what elements in a state plan are necessary to satisfactorily provide for 

enforcement of the standards of performance. Under the emission standards plan type, those 

requirements are the emission standards on affected EGUs along with the associated monitoring, 

recordkeeping, and reporting requirements that ensure enforceability. Under the state measures 

plan type, those requirements are the trigger and the backstop. The backstop must satisfy the 

same enforceability criteria as the emission standards in an emission standards plan type. The 

trigger must be capable of being activated by EPA and citizens. Details of the interpretation of 

section 111(d)(1) with respect to the state measures approach are provided in the Legal 

Memorandum. 

 Finally, we note that a requirement in a state plan is not federally enforceable until EPA has 

approved it as part of the federally enforceable plan. In other words, measures in a state plan are 

not “in effect under this chapter” for the purposes of section 304 until EPA has made them part 

of the federally enforceable plan. As a result, under the emission standards plan type, the 

emission standards and associated monitoring, recordkeeping, and reporting that EPA has 

approved into the federally enforceable plan are “requirements under section 111 which are in 

effect under this chapter,” and are thus enforceable under section 304. Under the state measures 

plan type, the trigger and backstop are approved into the federally enforceable and are therefore 

“requirements under section 111 which are in effect under this chapter” and are thus enforceable 

under section 304. 

Comment 17: Commenters stated that a mix of entities might have enforceable obligations 

under a state plan. Commenter said various provisions of EPA's proposed Clean Power Plan rely 

on the assumptions that states themselves may take responsibility for obligations under a section 

111(d) plan, and that such states would be subject to citizen suit if they failed to fulfill those 

obligations. Commenters provided the example EPA solicits comment on a "state commitment 

approach" to section 111(d) plans, under which states would commit to implement, say, RE and 

demand-side EE programs "that would achieve a specified portion of the required emission 

performance level on behalf of affected EGUs." Commenters said EPA explains that those 

commitments would not be part of the state plan, per se, and would not be federally enforceable; 

however, EPA asserts, states "fail[ing] to achieve the expected emission reductions ... could be 

subject to challenges-including by citizen groups-for violating CAA requirements and, as a 

result, could be held liable for CAA penalties." Commenters said EPA suggests, states could 

"impose the full responsibility for achieving the emission performance level on the affected 

EGUs, but ... credit the EGUs with the amount of emission reductions expected to be achieved 

from, for example, RE or demand-side EE measures" and "then assume responsibility for that 

credited amount of emission reductions ...." Commenters said EPA's proposal ignores important 

restrictions on the ability to sue state agencies under the Clean Air Act's citizen suit provisions. 
23 

 

Commenters said Section 304 of the Clean Air Act authorizes "any person" to commence 

"citizen suits" against "any person (including ... any ... governmental instrumentality or agency to 

the extent permitted by the Eleventh Amendment to the Constitution) ... who is alleged to have 

violated ... or to be in violation of-certain requirements of the Clean Air Act. Commenters said 

the relevant provisions of section 304 would permit suit only for violations of "an emission 

standard or limitation" or "an order issued by the Administrator or a State with respect to such a 

standard or limitation [...]Emission standard or limitation under this chapter" is defined, in 

section 304(f)(3), to include "any requirement under section 7411 or 7412 of this title (without 

regard to whether such requirement is expressed as an emission standard or otherwise)[.]" See 42 

USC Section 7604. Commenters said Section 304 does not, however, provide citizens the ability 

to sue state agencies for failure to administer section 111 requirements. Commenters said in 

Sierra Club v. Korleski (681 F.3d 342, 351 (6th Cir. 2012)), the U.S. Court of Appeals for the 

Sixth Circuit held that "[Section]7604(a)(1) does not permit citizen suits against state regulators 

qua regulators. Instead," the court held, "[Section]7604(a)(1) is only a means by which "parties 

may enforce the substantive provisions of the [CAA] against regulated parties[.]" 

Commenters asked what are the consequences for an entity assigned responsibility in a state plan 

that has failed to perform? Commenters asked if the mix of responsible entities in a state plan 

includes local, state, regional, and federal organizations, what authority will a state have to 

evaluate, judge, and penalize non-performance? 

Response 17: As explained in section VIII.C of the final rule preamble of the CPP, the EPA is 

not finalizing the proposed state commitment approach or crediting approach for state plan 

design. Therefore, any comments about the state commitment or crediting approach in a state 

plan, and any related comments about citizen suits against states, are moot. Under the final 

emission guidelines, only affected EGUs have federally enforceable obligations under a 111(d) 

state plan. See section VIII.

Comment 18: EPA is usurping state authority to set standards of performance. 

Commenters argued that the proposed rule usurps the rights of states to set performance 

standards. Commenters argued that under Section 111(d), the states, not EPA, have the authority 

to establish standards of performance for existing sources. Commenters stated that EPA does not 

and cannot identify anything in section 111(d) or elsewhere in the CAA that authorizes it to 

displace states' legal authority to establish emission standards. Commenters quoted Am. Library 

Ass'n v. FCC, 406 F.3d 689, 698 (D.C. Cir. 2005) noting that an agency's "power to promulgate 

legislative regulations is limited to the scope of the authority Congress has delegated to it." 

Commenters said, EPA cannot grant itself authority unless Congress delegated to 

EPA. Commenters stated the CAA itself directly addresses the interrelationship between EPA 

and other federal agencies, and EPA and the states. Commenters said, section 310 of the CAA 

states that the CAA "shall not be construed as superseding or limiting the authorities and 
24 

 

responsibilities, under any other provision of law, of . . . any other Federal officer, department, or

agency." Commenters quoted the Supreme Court regarding the balance of state and EPA 

authority: "Section 111(d) allows each State to take the first cut at determining how to best 

achieve EPA emissions standards within its domain" and, "For existing sources, EPA issues 

emissions guidelines; in compliance with those guidelines and subject to federal oversight, the 

states then issue performance standards for stationary sources within their jurisdiction, Section 

7411(d)(1)."Am. Elec. Power Co. v. Connecticut, 131 S. Ct 2527, 2537 - 39 (2011). 

Commenters stated that the rule diminishes the role of states in managing natural resources 

and energy generation and distribution, and is beyond the scope of reach allowed by the law. 

Commenters stated that a state's authority to determine how it uses its natural resources is a 

central component of state sovereignty. Commenters stated that EPA should not make any 

unlawful assertions of authority regarding the allocation of resource attributes located within a 

state. Commenters stated that while a state may choose under certain circumstances to agree to 

allocate an attribute of its resources to other states, this prerogative belongs to the states and not

the EPA. Commenters stated that many factors lead to the development of a state's natural 

resources, including state tax credits, state infrastructure investment, and other state incentives. 

Commenters stated that whenever state resources are involved, the EPA should defer to state 

authority to develop state agreements and plans that cooperatively address any reallocation of 

these resources or resource attributes. 

Commenters argued that the EPA would exceed its lawful authority by establishing the standards 

of performance itself and specifying binding, statewide emission reduction goals, providing 

states with little leeway for determining how those standards apply to each individual existing 

source and no flexibility to adjust the emission reduction goals in the event that affected facilities

cannot fully implement any element of BSER. 

Commenters noted that EPA's authority under 111(d) is clearly limited to "establishing 

procedures" by which states submit plans establishing standards of performance. 

Commenters argued that the EPA has long recognized that its role in developing state-specific 

existing source emission guidelines is limited. Commenters stated that in the preamble to EPA's 

1975 rules (Subpart B) establishing the framework for developing existing source emission 

guidelines, EPA explained that it used the term "emissions guidelines" rather than "limitations" 

to make it clear that the guidelines were not intended to be binding requirements but rather 

"criteria for judging the adequacy of State plans." 

Commenters argued that 40 CFR Section 60.22 (Subpart B) specifically authorizes EPA to issue 

only a nonbinding "guideline document" that "contain[s] information pertinent to control of the 

designated pollutant from designated facilities." Commenters argued that the use of the words 

"guidance" and "information," rather than "standards" or similar words meant to convey an intent 

to bind, indicates that information is all EPA may provide to States in its final emission 

guideline, and these words cannot reasonably be read to authorize EPA to issue binding 

statewide emission reduction goals that are "guidelines" in name only. Commenters stated that 

under CAA section 111(a)(1) and EPA's Subpart B rules, the Agency is authorized only to set 
25 

 

"emission guidelines" addressing factors relevant to the states' determination of the "best system 

of emission reduction" that has been "adequately demonstrated" and is "achievable" for each 

source type. Commenters said that EPA's guidelines are not legally binding or directly 

enforceable on sources, and that they simply set out considerations for states to address in 

adopting their own standards for existing sources. 

Commenters stated that in the proposed rule, however, EPA grossly oversteps their authority and 

sets EPA-developed, state-specific emission reduction targets that the states have no ability to 

alter, and has set binding "limits" that both the statute and EPA's regulations prohibit. According 

to the commenters, the only authority that EPA cites for establishing mandatory "goals" is the 

EPA regulations to implement section 111(d) of the CAA. Commenters notes that these 

regulations provide for EPA to promulgate "guidelines" that states must follow, and that under 

these EPA regulations, a "guideline" "reflects the application of the best system of emission 

reduction (considering the cost of such reduction" that has been adequately demonstrated." In 

other words, according to the commenters, the "guideline" is a performance standard. 

Commenters noted EPA's statement that goals are "based on an assessment of the amount of 

emissions that can be reduced at existing fossil fuel-fired EGUs through the application of the 

BSER" and stated, that is exactly what a standard of performance is under the statute: "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 said that EPA's claim that the measures that create obligations on third parties are 

"standards of performance" because they reduce emissions from the regulated source category 

only serves to emphasize that EPA's "goals" are no different from performance standards. The 

commenters said that EPA's point is that states can meet the "goals" by (a) setting rate-based or 

mass-based limits on the regulated source category, (b) adopting "portfolio" measures which 

have the effect of reducing generation (and therefore emissions) from the source category, or (c) 

some combination of both approaches. Commenters stated that whatever plan the state submits, 

it must ensure that emissions from the regulated source category must decline to the level of the 

goals, and that therefore, 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 stated that as a result, EPA is promulgating performance standards within the 

meaning of section 111(a), which is authority that Congress gave to states, not EPA. 

Commenters argued that, by EPA's own admission, the proposed rule would establish legally 

enforceable ("binding") allowable emissions rates for each State. Commenters argued that 

applying EPA's own definitions, the proposal establishes "emission standards," not guidelines, 

which contravenes EPA's stated role for itself under 40 C.F.R. Section 60.22. 

Commenters said, EPA has made clear that when it issues the final rule it will set a final number 

in the guideline for each state and that the state plan must meet that number saying clearly "Once 
26 

 

the final goals have been promulgated, a state would no longer have an opportunity to request 

that EPA adjust its CO2 goal because they will represent the application of BSER for the states' 

affected sources." 

Response 18: See section V.A and V.B of the final rule preamble to the CPP for EPA’s response 

to this comment.

Comment 19: EPA has the legal authority to set binding emission guidelines for states 

Commenters stated that EPA may reasonably establish binding emission guidelines, and that, as 

a preliminary matter, EPA reasonably interpreted section 111(d) in its 1975 regulations to 

provide for the promulgation, after notice and comment, of binding emission guidelines that 

specify the emissions performance level that is required of standards of performance included in 

state plans. Commenters indicated that section 111(d) provides for EPA to review state plans, 

approve them if "satisfactory," and requires EPA to issue a federal plan if a state fails to submit a 

satisfactory plan. Commenters stated that these provisions authorize EPA to apply substantive 

criteria, not only procedural criteria, in making the determination whether a state plan is 

"satisfactory." Commenters also stated that it is "the Administrator" who determines the "best 

system of emission reduction." Commenters stated that given that EPA may apply substantive 

criteria in its approval/disapproval decision after a state submits a plan, it is within EPA's 

discretion to articulate the criteria that will govern its approval/disapproval decisions beforehand, 

in emission guidelines adopted through notice and comment. 

Commenters continued to explain that Congress recognized and approved the guidelines' setting 

process that EPA established in its 1975 regulations, when amending the CAA in 1977 and 1990. 

Commenters stated that in 1977, the House committee explained that under section 111(d) the 

Administrator would establish guidelines as to what is the best system for each category of 

existing sources. Commenters stated that in 1990, in CAA section 129, Congress directed EPA to 

adopt standards for solid waste combustion through a process that expressly refers to guidelines 

under section 111(d). Commenters noted that CAA section 129(b)(1) requires EPA to 

promulgate guidelines "pursuant to section 7411 (d) of this title and this section [that] shall 

include . . . emissions limitations" and requires each state to submit to EPA a plan to implement 

and enforce those guidelines within a year following their promulgation. Commenters also noted 

that an attack on the 1975 regulations would now be time barred. 

Commenters stated, EPA's longstanding interpretation of its authority, as set forth in its 

implementing regulations (Subpart B), further affirms that EPA is, at a minimum, allowed to 

establish substantive guidelines. Commenters said, in its initial rulemaking proposal to establish 

general procedures under section 111(d), EPA explained that it would publish guideline 

documents setting minimum emission guidelines that reflect the best available demonstrated 

systems of emission control. Commenters said, EPA reiterated in the preamble to its final 
27 

 

implementing regulations that the agency has the statutory authority to set minimum emission 

guidelines for state emission standards included in state plans. Commenters said in responding to 

industry comments questioning EPA's authority to prescribe more than procedural requirements 

for state plan adoption and submittal, EPA correctly reasoned that its interpretation was 

necessary to implement section 111(d) effectively. Commenters said, if EPA had no authority to 

set minimum substantive guidelines, the states would be able to set "extremely lenient standards" 

for air pollutants subject to regulation only under section 111(d) - which would leave "a gaping 

loophole in a statutory scheme otherwise designed to force meaningful action." Id. at 53,343. 

Commenters said, EPA has followed this approach in emission guidelines it has promulgated 

pursuant to section 111(d), repeatedly establishing substantive requirements in its final emission 

guidelines for each state to include in its respective plan. 

Response 19: We agree with these comments.

Comment 20: Proposed rule conflicts with the Tenth Amendment 

Commenters expressed concern that the EPA had seized authority from states granted by the 

CAA and the Tenth Amendment. Commenters believed that by proposing binding state emission 

rate limits, EPA is violating state sovereignty principles under the Tenth Amendment. 

Commenters stated that the rule raises substantial Constitutional issues under the Tenth 

Amendment's reservation of local regulatory powers to the states. Commenters noted that the 

Tenth Amendment "clearly places limits on the authority of the federal government by reserving 

to states all powers not specifically delegated to Congress by the Constitution" and added that the 

CPP "rests on questionable legal authority." 

Commenters stated that the proposed rule attempts to coerce the States into implementing a 

federal regulatory program in violation of the Tenth Amendment. Commenters stated that, if 

finalized, the proposed rule would violate the Tenth Amendment because it would compel State 

regulatory (and likely legislative) activities that lie at the heart of the States' sovereign authority 

to regulate the retail electricity market. 

Commenters said that since the proposed CO2 emission reductions were determined by EPA and 

not individual states, the decreases violate the Tenth Amendment. Commenters stated that each 

state knows best its own capabilities and should be able to ensure the reliability, safety, and 

affordability of its electric system. 

Commenters stated that the fundamental purpose of the Constitution's federal structure is to 

secure to citizens the liberties that derive from the diffusion of sovereign power. Commenters 

said the Tenth Amendment codifies that concept by reserving to the States and the people all 

powers not delegated to the United States by the Constitution. Commenters indicated that if a 

power is an attribute of state sovereignty reserved by the Tenth Amendment, it is necessarily a 
28 

 

power the Constitution has not conferred on Congress, and, having the power to make decisions 

and to set policy is what gives the state its sovereign nature. The commenters cited New York v. 

U.S., 505 U.S.144 (1992), FERC v. Mississippi, 456 U.S.742 (1982) and the Constitution in 

support of their argument. 

Commenters believed that re-dispatch from coal EGUs to NGCCs or low-emission sources and 

implement and enforce demand-side efficiency programs were precluded by the federal structure 

of the Constitution itself, and the Tenth Amendment. 

Commenters indicated that the courts have repeatedly rejected federal attempts to compel the 

States to enact or administer a federal regulatory program, and cited New York. Commenters also 

noted that in Printz v. U.S., 521 U.S. 898 (1997), the Court invalidated a statute attempted to 

direct state law enforcement officers to participate in the administration of a federally enacted 

regulatory scheme, and stated that the federal government may neither issue directives requiring 

the states to address particular problems, nor command the states' officers to administer or 

enforce a federal regulatory program. 

Commenters indicated that the courts have not hesitated to strike down attempts by EPA to 

dictate to the states actions that they must take to reduce pollution, and cited Brown v. EPA, 521 

F.2d 827 (9th Cir. 1975). Commenters also referenced Arizona v. EPA, 521 F.2d 825 (9th Cir. 

1975); District of Columbia v. Train, 521 F.2d 971 (D.C. Cir. 1975); and Maryland v. EPA, 530 

F.2d 215 (4th Cir. 1975). Commenters said, to avoid "serious constitutional issues," the court 

refused to construe the statute to grant EPA power to compel California to undertake certain 

tasks assigned to it by the Agency. Commenters also cited Maryland v. EPA, 530 F.2d 215 (4th 

Cir. 1975) and indicated the Fourth Circuit rejected EPA's attempt to require Maryland to enact 

similar regulatory programs pursuant to a transportation control plan, and stated that the court 

did not believe that an Act of Congress may be construed to permit a U.S. agency to direct a state 

legislature to legislate. Commenters also referenced District of Columbia v. Train, 521 F.2d 971 

(D.C. Cir. 1975), where the D.C. Circuit held EPA's regulations invalid to the extent they 

required unconsenting states to administer and enforce the EPA-promulgated transportation 

control programs, because the Constitution contemplates direct federal regulation of the 

offending activity and not coerced state policing of the details of an intricate federal plan. 

Commenters stated that the fact that the proposed rule would require states to enact a host of new 

laws makes clear that the proposed rule would impermissibly intrude on core, sovereign state 

prerogatives protected by the Tenth Amendment. Commenters noted that only 25 states have 

some form of law requiring a minimum percentage of retail electricity load to come from 

renewable sources, and that to comply with the proposed rule, the remaining states could be 

forced to enact RPSs, which would require action by state utility regulatory commissions, 

legislatures or citizen ballots. Commenters stated the same is true of state energy efficiency 

standards. Commenters stated that under the Tenth Amendment, the decision to enact a law lies 

with the state legislature, not unelected federal officials. 
29 

 

Commenters stated that the proposed rule would violate the Tenth Amendment even in states that 

would not need to enact new legislation to meet EPA's prescribed targets. Commenters stated 

that these cases reflect not only the structure of dual sovereignty that is built into the 

Constitution, but also the fact that political accountability would suffer if the federal government 

could strong-arm the states into acting on its behalf, and quoted again from New York and Printz. 

Commenters said, the Supreme Court made clear in Printz that commandeering state executive 

and regulatory authority is no less a Tenth Amendment violation than commandeering a state 

legislature. Commenters stated that EPA can no more direct state PUCs or other regulatory 

bodies to enact its programs than it can require state legislatures to do so, and also cited MCI 

Telecom. Corp. v. Illinois Bell Tel. Co., 222 F.3d 323, 343 (7th Cir. 2000) (the federal 

government "cannot 'commandeer' state regulatory agencies ... [by] forcing them to regulate"). 

Commenters stated that EPA has no authority to change the dispatch order of power plants, to 

mandate that power plants be utilized a certain percentage of time, to delay the retirement of 

nuclear plants, to require that a certain percentage of each state's power be generated through 

solar and wind power, or to require that citizens reduce their demand for electricity, and that 

EPA cannot accomplish the same result by commandeering the States to take steps that EPA 

could not take itself. Commenters also cited Printz to point out that commandeering violates the 

Constitution. Commenters stated that in this instance the Agency has set standards that even EPA 

itself could not mandate. Commenters stated that as a result, states do not have the option of 

simply leaving regulation to the federal government. Commenters contended that absent express 

congressional authorization, it is unprecedented for EPA to rely on public utility commissions 

and other state and local agencies to impose measures necessary to achieve emissions reductions. 

Commenters stated that because state public utility commissions and other state and local 

agencies are not delegated the authority to implement the CAA, for EPA to promulgate a 

program that can be implemented only through their action is a form of direct commandeering at 

odds with the Tenth Amendment. 

Commenters said that defining a specific rate for each state and then mandating that each state 

meet that predetermined rate runs counter to the Constitution and cases that stand for limitations 

the Constitution places on federal agencies when they seek to press state governments into 

federal service. D.C. v. Train, 521 F. 2d 971 (CADC 1975); New York (1992); Printz (1977 

[sic]). Similarly, commenters stated that the proposal exceeds federal constitutional authority and 

cited and quoted Printz at 935 (". . . The Federal Government may neither issue directives 

requiring the States to address particular problems, nor command the States' . . . to administer or 

enforce a federal regulatory program.") 

Commenters stated that the proposed rule would violate or at least create substantial questions 

under the Tenth Amendment because it would require states to enact legislation or exercise 

authority in particular ways, forcing state legislators to make policy choices that they would not 

otherwise make. Commenters referenced Printz and noted that the Constitution does not 

empower Congress to command state governments to implement legislation enacted by 

Congress. Commenters indicated that forcing states to regulate interstate commerce in particular 

ways is in conflict with Tenth Amendment anti-commandeering precedents, and that the 
30 

 

proposed rule would be struck down as constitutional commandeering. Commenters provided an 

example problem of where a facility that is forced to close blames the State, even though the 

State was acting under federal compulsion. Commenters said that canon of constitutional 

avoidance would compel a reviewing court to reject the EPA's interpretation of section 111(d). 

Commenters also provided a several page summary of agencies' authority to implement statutes, 

particularly as it relates to the traditional balance of power between states and the federal 

government. 

Commenters also stated that in Reno v. Condon, the Court reaffirmed that Congress may not 

"control or influence the manner in which States regulat[e] private parties." Commenters stated 

that applying that principle, the Court upheld a law regulating resale and disposal of personal 

information contained in DMV records. Commenters said that the court explained that the law 

"regulate[d] the States as the owners of data bases," and did not "require the States in their 

sovereign capacity to regulate their own citizens." Commenters said that the court thus 

distinguished between permissible federal regulation of interstate commerce and impermissible 

regulation of States in their "sovereign capacity" as "regulat[ors of] their own citizens." 

Commenters said that the U.S. Constitution specifically limits EPA's authority to exercise 

authority reserved to the States ("powers not delegated to the United States by the Constitution, 

nor prohibited by it to the States, are reserved to the States respectively, or to the people"). U.S. 

CONST. Amend. X. See New York v. United States, 505 U.S. 144, 156, 112 S. Ct. 2408, 2417, 

120 L. Ed. 2d 120 (1992) (If a power is delegated to Congress in the Constitution, the Tenth 

Amendment expressly disclaims any reservation of that power to the States; if a power is an 

attribute of state sovereignty reserved by the Tenth Amendment, it is necessarily a power the 

Constitution has not conferred on Congress.) Commenters stated that EPA would violate the 

Tenth Amendment because the authority over the production and sale of electricity is reserved to 

the states. 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." Gregory v. Ashcroft, 501 U.S. 452, 460-61, 

111 S. Ct. 2395, 2401, 115 L. Ed. 2d 410 (1991). Commenters also quoted Atascadero State 

Hospital v. Scanlon, 473 U.S. 234, 242 (1985)), and others, "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 stated that EPA's consideration of the potential for energy efficiency and renewable 

energy to contribute to state BSER goals that may incentivize states to adopt such policies does 

not offend the Tenth Amendment, nor the balance struck between areas of state and federal 

jurisdiction in the power sector. Commenters said the Illinois Commerce Commission, is 

instructive on this point. Commenters continued there, the court dismissed plaintiffs' Tenth 

Amendment argument as "frivolous," and found that a FERC action that "provides a carrot states 

won't be able to resist" is a "far cry" from "the federal government's conscripting a state 

government into federal service" by, for example, "ordering states to build transmission lines the 

federal government wants to use for its own purposes." Commenters paralleled the argument to 
31 

 

this proposal and said here, the same may be said of EPA's action-it may provide an irresistible 

carrot, but it cannot be said to constitute a stick, where states have discretion in using the energy 

efficiency and renewables building blocks in formulating their state plans. Commenters said see 

also Texas v. EPA, 726 F.3d 180, 196-97 (D.C. Cir. 2013) (rejecting argument that EPA 

permitting regulations for greenhouse gases emitted by major stationary sources violated the 

Tenth Amendment); Friends of the Earth v. Carey, 552 F.2d 25 (2d Cir. 1977) (citing the Clean 

Air Act's cooperative federalism model in rejecting Tenth Amendment claim by city challenging 

state's adoption of implementation plan to control pollution from transportation sector). 

Response 20: For the reasons stated in the Legal Memorandum, the EPA disagrees that this rule 

coerces or commandeers states in violation of the Tenth Amendment. 

Comment 21: Rule violates the principle of cooperative federalism 

Commenters stated EPA cannot set a standard for state implementation plans that EPA itself 

lacks the authority to implement in a federal implementation plan. Commenters stated that 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 (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.' Michigan v. 

EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)."). Commenters pointed out that under CAA section 

111, EPA only has authority to regulate emissions of air pollutants from existing fossil fuel-fired 

EGUs and cannot mandate emissions reduction from other sources, including those addressed in 

Blocks 2, 3, and 4. For example, the commenters pointed out the following: 

• EPA does not have the authority to regulate the retail electricity market, because the 

Federal Power Act grants this right to states. 

• EPA is not authorized to make decisions about decommissioning nuclear power plants 

• EPA lacks authority to amend state renewable portfolio standards 

• EPA cannot mandate demand-side energy efficiency programs 

Thus, if a state fails to submit a satisfactory implementation plan, commenters contended that 

EPA will lack the legal authority to impose the emissions reduction requirements necessary to 

meet the state's emissions reduction target. Commenters concluded that because EPA lacks the 

authority under the CAA to implement the standards of performance necessary to achieve the 

state emissions reduction targets, it is unlawful for EPA to use the CAA to require States to do 

so. Commenters cited American Trucking Ass'n v. Whitman, in stating that Congress would not 

have hidden an elephant (i.e., an exception to cooperative federalism) in the regulatory mouse 

hole that is CAA section 111(d). 

The proposed rule prevents States from exercising their primary policymaking responsibility for 

developing plans that establish standards of performance. The EPA does not have authority 
32 

 

under Section 111(d) to override a state plan establishing a standard of performance because it 

disagrees with the "factors" that a State deems important or relevant. For instance, the EPA 

cannot directly or indirectly override a State's determination of the mix of electricity generation 

required to provide the most reliable and efficient power supply needed to serve its citizens. And 

it certainly cannot require, in the guise of setting performance standards for existing coal 

generators, significant increases in the use of NGCCs, renewable resources, nuclear resources, 

and energy efficiency programs. Such resource-planning decisions are reserved to the States. The 

proposed rule, however, would establish emissions "goals" that States cannot adjust, and that are 

so stringent that they can be met only by an EPA-mandated approach -an approach that 

necessarily strips States of their policymaking role and runs afoul of the CAA. 

Commenters stated that proposed rule would vanquish state policymaking authority in other 

ways as well. Commenters said, for example, many States will be unable to implement the EPA's 

proposal without changing their laws or extensively coordinating among state agencies. 

Commenters stated, to the extent the EPA is even authorized to co-opt State legislators in this 

manner, these splits of authority will require significant additional time and coordination, beyond 

that envisioned by the EPA, to address through new or revised state legislation or regulation, 

before the State can even begin to develop its Section 111(d) plan. Commenters also stated that 

the rule violate the principles of cooperative federalism because it allow direct federal intrusion 

into generation resource planning, which is a core state function that cannot be intruded upon 

without a clear statement from Congress. 

Response 21: See section III.B and VIII.G of the final rule preamble of the CPP for EPA’s 

response. 

Comment 22: Commenters stated that the proposed rule's requirement of a State Plan, and the 

imposition of a Federal Plan, would constitute commandeering within the meaning of New York 

v. United States, 505 U.S. 144 (1992), and Printz v. United States, 521 U.S. 898 (1997). 

Commenters pointed out that the U.S. Supreme Court has held that Congress cannot 

"commandeer the legislative processes of the States by directly compelling them to enact and 

enforce a federal regulatory program." Hodel v. Virginia Surface Mining & Reclamation Assn., 

Inc., 452 U.S. 264, 288 (1981). Commenters stated that the Court warned that accountability is 

diminished when, due to federal coercion, elected state officials cannot regulate in accordance 

with the views of the local electorate in matters not preempted by federal regulation. (New York 

v. United States, 505 U.S. 144, 169 (1992). Commenters stated that a state must be able to 

choose to implement a federal program under its own will and not under the strain of undue 

federal influence per Steward Machine Co. v. Davis, 301 U.S. 548, 590 (1937). In this case, the 

federal influence would be the threat of a federal standard that would remove the state's ability to 

regulate its own electricity markets and risk the loss of affordable and reliable power. 

Commenters stated that the U.S. Supreme Court just recently provided the federal government 

with a reminder that the Constitution provides some protections against federal intrusion into 

areas that have historically been the regulatory province of the states. Bond v. U.S., 134 S.Ct. 
33 

 

2077 (2014). Commenters pointed out that although Bond is a criminal case, the decision 

confirms that Congress must be "reasonable explicit" if it wants to readjust the balance of federal 

and state authority; and commenters see no intent of Congress in the CAA to intrude upon the 

historic authority of the states to establish energy policy at the state level. 

Commenters maintained that EPA cannot use section 111(d) to compel states to do what the 

federal government is not authorized to do, i.e., regulate electricity generation policies that are 

expressly reserved to the states. Commenters stated that the proposal violates both the Tenth 

amendment and the principle of cooperative federalism and cited a number of court decisions 

(many of them cited below by other commenters) to justify their position. Commenters stated 

that the rule would violate the anti-commandeering doctrine of District of Columbia v. Train and 

usurp powers of the states by requiring states to adopt legislation and regulations to implement a 

federal regulatory program for power generation and distribution over which EPA has no legal 

authority. Commenters stated that air quality regulation under the CAA is an exercise in 

cooperative federalism, and indicated that the proposed rule departs from that principle. 

Commenters’ arguments in this regard are included in their comments on the Tenth Amendment 

(also under Section 1.11.1 of their comments). Commenters cited Dominion Transmission, Inc. v. 

Summers, 723 F.3d 238, 240 (D.C. Cir. 2013); accord Sierra Club, 681 F.3d at 343; Luminant 

Generation Co., LLC v. EPA, 675 F.3d 917, 921 (5th Cir. 2012) in support of their statement that 

the CAA is intended to be a model of cooperative federalism. 

Response 22: For the reasons stated in the Legal Memorandum, the EPA disagrees that this rule 

coerces or commandeers states in violation of the Tenth Amendment. For reasons provided in 

section 1.2 of this response to comments, EPA similarly disagrees that this rule violates aspects 

of cooperative federalism under the CAA.

Comment 23: Commenters stated that under section 111(d), neither state nor EPA officials 

possess sufficient authority on their own to determine both the appropriate methods for obtaining 

and the degree of emission reductions that can be obtained from existing units. Commenters 

stated that instead, section 111(d) embodies the principle of cooperative federalism, making 

distinct and exclusive delegations of authority to federal and state officials that complement one 

another in establishing standards for existing sources. Commenters stated that with its proposed 

rule, EPA blatantly violates this principle, effectively usurping from the states all power to 

determine what emission reductions can be obtained from existing units. Commenters stated that 

the proposed rule relegates states to the ministerial role of implementing and enforcing the 

substantive standards of performance and specific, state-wide emission reduction goals that EPA 

has predetermined in the rule, which cannot be squared with the cooperative federalism 

principles the Clean Air Act embodies. Commenters added that the rule requires states to enact 

laws to change resource planning decisions that already are adopted pursuant to state planning 

authorities. 

Response 23: See section V.A of the final rule preamble of the CPP for the EPA’s response to 

this comment.
34 

 

Comment 24: Commenters stated that EPA cannot legally coerce the states to regulate any 

entity other than affected existing EGUs because it violates the principle of state sovereignty 

guaranteed by the Commerce Clause of the Constitution. Commenters contended that the 

Constitution does not give Congress the ability to commandeer the legislative process of the 

States by directly compelling them to enact and enforce a federal regulatory program and that 

Congress cannot require States to govern according to Congress' instructions. Commenters went 

to say that the federal government may encourage States to act through the spending power, but 

even in that context States may not be coerced. But because of the anti-commandeering doctrine, 

commenters stated that the EPA cannot, through the promulgation of CAA implementation 

plans, oblige a non-consenting State to adopt law or regulations, or invest enforcement resources, 

to implement a federal policy under pain of penalty. Even if a State initially agreed to issue a 

SIP, and even though a SIP becomes federal law unamendable without EPA consent under the 

CAA, commenters stated that there is a third set of constitutional doctrines that prevent state 

police powers from being permanently transferred to a federal agency: the rule against legislative 

entrenchment that prevents one legislature or administration from binding a later one and the 

doctrine of reserved powers that prevents the legislature from prospectively limiting, or 

relinquishing to another, a State's police power. 

Commenters stated, the agency must also reexamine the Proposed Rule to address any other 

potential constitutional defects, such as Commerce Clause issues, created by its crafting of 

optional compliance paths for states. 

Response 24: For the reasons stated in the Legal Memorandum, the EPA disagrees that this rule 

coerces or commandeers states in violation of the Tenth Amendment. See section VI.A and V.B 

of the final rule preamble for the EPA’s response to this comment.

Comment 25: Commenters said EPA has directed States to incorporate into SIPs assurances that 

the States will alter their laws to provide for enforcement under state police power. Commenters 

said EPA pursues this route because it cannot itself promulgate the Clean Power Plan as a FIP, as 

Congress gave EPA no authority over power generation or distribution. Commenters said, 

because the Clean Power Plan relies almost completely on state authority to reach its 30 percent 

reduction target, and a present state legislature cannot bind future state legislatures, the rule 

likely is unable to work nationally as intended and thus is inherently arbitrary and capricious. 

Commenters stated that it is clear that no State can be required to adopt a SIP in the first 

instance. Commenters said, furthermore, even where a State adopts a SIP, the argument that SIPs 

become federal law which may not be amended without approval of EPA should not be 

sufficient to prevent a State from ceasing to employ its police powers that are beyond the direct 

powers of EPA. Commenters noted that the Sixth Circuit recently had occasion to observe that 

the anti-commandeering rule is applicable to the CAA. Commenters said the same should be true 

for the rule against legislative entrenchment. As a consequence, commenters stated that EPA will 

encounter States that will not issue SIPs or, if they do so initially, will not continue their 
35 

 

subordination of the grid to the authority of EPA. Accordingly, commenters maintained that EPA 

does not have the authority to establish the rule requirements through a FIP. 

Response 25: We disagree with this comment. If a state fails to submit a state plan or does but 

the EPA disapproves it, the EPA has authority to promulgate a federal plan that would consist of 

emission standards that the sources could achieve by implementing the building blocks or taking 

other approaches. The EPA would not need to – and could not – assert authority over power 

generation or distribution. If action by a state legislature is needed to develop an approvable state 

plan, it could take such action, including putting in place emission requirements on sources that 

are not time-limited, and therefore may extend into future years. This frequently occurs under the 

section 110 and 111 provisions of the CAA and is not dependent on a state legislature binding 

subsequent state legislatures. Additionally, for the reasons stated in the Legal Memorandum, the 

EPA disagrees that this rule coerces or commandeers states in violation of the Tenth 

Amendment.

Comment 26: Commenters stated that EPA does not have the legal authority to require states to 

submit a SIP for this rule. Commenters stated that because of the flexibility granted to states to 

account for differences among states, CAA assumes two legal facts: that the political officers of 

the States can say no., i.e., cannot be commandeered into legislating or executing federal policy, 

and that the BSER determined by the Administrator is within the delegated authority of EPA to 

promulgate and, if necessary, enforce. Commenters said a standard of performance premised 

upon a BSER that EPA lacks the power to promulgate in the first instance or enforce through a 

FIP results in a rule that is only operative in willing States for as long as they remain willing. 

Commenters said, as a matter of federal agency rulemaking, particularly rulemaking aimed at 

addressing national issues that know no political boundaries, this dependency upon the political 

decisions of the States is arbitrary and capricious, contrary to the terms of the CAA, and an 

improper exercise of EPA regulatory authority. 

Commenter 23542 said, cooperative federalism lies at the heart of the CAA Section 111(d) 

process and therefore it is critical that any emission guideline proposed by EPA should respect 

that principle. Commenter 23542 said, states and local air agencies have the primary 

responsibility for regulating sources in their jurisdictions and the CAA affords them wide 

discretion. 

Commenter 33118 stated, the principle of cooperative federalism embedded in the Act and 

longstanding EPA regulations implementing Section 111(d) is rooted in "reality and humility: 

the reality that no Washington agency can ever efficiently attain the local knowledge necessary 

to make prudent judgments concerning the effective implementation of BSER across the entire 

national electricity generation sector, and the humility to recognize this reality." 
36 

 

Response 26: EPA agrees that this guideline must be implemented consistent with the principles 

of cooperative federalism. No state is obligated to submit a state plan under this guideline. If, 

however, a state fails to submit an approvable plan, EPA has the responsibility to promulgate and 

implement a federal plan. EPA would, of course, prefer that states develop their own plans for 

many of the reasons the commenters cite, such as in-depth knowledge of local circumstances. 

But failing that, EPA has been careful to structure this guideline so that a plan can ultimately be 

based on emission standards enforced at affected EGUs, a structure EPA can rely on if the 

responsibility falls to EPA to administer a plan in a state.

Comment 27: Chevron allows EPA's interpretation of building blocks 2-4 as BSER 

Commenters said that section 111(d)(1) does not explicitly address whether, in addition to 

emission limits on affected EGUs, state plans may include other measures for achieving the 

required emission performance goals, and that the CAA does not address whether entities other 

than affected EGUs may be subject to requirements that contribute to reducing EGU emissions. 

Commenters stated that consistent with the U.S. Supreme Court determination in Chevron U.S.A. 

Inc. v. NRDC (1984), where the statute leaves a gap the agency has discretion to fashion an 

interpretation that is a reasonable construction of the law. Commenters stated that EPA's 

reasonable construction of 111(d) is a valid interpretation. 

Response 27: We are not finalizing the portfolio approach, as described in sections V.B and 

VIII of the final rule preamble of the CPP.

Comment 28: Chevron does not justify the portfolio approach because the lack of a prohibition 

in the CAA does not allow EPA broad powers 

Commenters said EPA's assertion that its proposal to authorize a portfolio approach must be 

afforded deference is incorrect. Commenters said, the fact that Congress did not specifically 

address the merits of a "portfolio approach" does not mean that there is a statutory gap for EPA 

to fill. Commenters stated that EPA cannot claim authority to exercise rulemaking power merely 

because that authority is not expressly denied to it. Ethyl Corp. v. EPA, 51 F.3d 1053, 1060 

(D.C. Cir. 1995). 

Commenters disagreed with EPA's arguments that section 111(d) does not explicitly prohibit 

states from including measures other than performance standards and implementation and 

enforcement measures, and that the principle of cooperative federalism provides EPA the 

authority to regulate outside the affected source category. Commenters pointed to Michigan v. 

EPA, 268 F.3d at 1081 as establishing that EPA has "only those authorities conferred upon it by 

Congress." Commenters said that in section 111(d), Congress conferred authority on EPA to 

prescribe regulations under which states would submit plans that include (1) "standards of 

performance" and (2) "[provisions] for the implementation and enforcement of such standards of 

performance." Commenters said Congress did not authorize EPA to prescribe regulations under 

which states may submit plans that include measures other than performance standards and 
37 

 

implementation and enforcement measures. Commenters said, because Congress did not give 

EPA that authority, EPA does not have that authority. Commenters said that while it is true that 

states may choose to pass their own laws to reduce the CO2 emissions of electric generating 

units in those states, such laws would not be part of any section 111(d) plan if they did not 

constitute performance standards, or implementation and enforcement measures for performance 

standards. 

Commenters also cited Michigan v. EPA, at 1082, and quoted from Ethyl Corp. v. EPA, 51 F.3d 

1030, 1060 (D.C. Cir. 1995), "Were courts to presume delegation of power absent an express 

withholding of such power, agencies would enjoy virtually limitless hegemony...", and stated 

that Congress' silence on this matter does not presume a delegation of such vast authority to 

regulation the energy market. 

Commenters stated that EPA's primary argument in applying the "portfolio approach" that there 

is no specific language in CAA section 111(d) or elsewhere in the Act that prohibits states from 

including measures other than performance standards and implementation and enforcement 

measures in state plans for existing sources, erroneously assumes that under the CAA any action 

that Congress did not explicitly prohibit is permitted. Both commenters stated that just the 

opposite is true. Commenters cited Ethyl Corp. v. EPA, 51 F.3d 1053, 1060 (D.C. Cir. 1995); see 

also Aid Ass'n for Lutherans v. U.S. Postal Serv., 321 F.3d 1166, 1174-75 (D.C. Cir. 2003). 

Commenters said Congress must "speak clearly if it wishes to assign to an agency decisions of 

vast 'economic and political significance.'" UARG v. EPA, 134 S. Ct. at 2444. Commenters said, 

a reading of the CAA that gives EPA and states the authority to potentially impose obligations on 

any entity that uses electricity would unquestionably bear vast economic and political 

significance. Commenters noted that EPA admits, "the terms of CAA section 111(d)(1) do not 

explicitly address whether, in addition to emission limits on affected EGUs, state plans may 

include other measures for achieving the emission performance level." Commenters indicated 

that without such explicit authorization, EPA may not seize regulatory authority beyond the 

affected sources on which section 111's narrow regulatory program is focused. 

Response 28: As discussed in sections V.B and VIII, after considering comments on the 

proposed portfolio approach, EPA is not finalizing that approach. Therefore, these comments are 

moot. Instead of the proposed portfolio approach, EPA is finalizing an option to submit a “state 

measures” plan type, under which a mass CO2 emission goal may be partially or entirely 

achieved through state measures that impose requirements on entities other than affected EGUs 

and that are not included in the federally enforceable 111(d) state plan, provided the state 

submits standards of performance for CO2 emissions from affected EGUs in the form of a 

federally enforceable “backstop” that would be triggered if the state measures fail to achieve the 

required CO2 emission performance level. See section VIII. 

Comment 29: Commenters said that EPA's suggestion that Chevron step two is implicated any 

time a statute does not expressly negate the existence of a claimed administrative power (i.e., 

when the statute is not written in "thou shalt not" terms), is both flatly unfaithful to the principles 
38 

 

of administrative law and refuted by precedent. Commenters stated that if courts were 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. The commenters provided the following citations to support their 

argument: Ry. Labor Exec. Ass'n v. Nat'l Mediation Bd., 29 F.3d 655, 671 (D.C. Cir. 1994) 

(emphasis added); see also Sea-Land Serv. Inc., 137 F.3d at 645; Michigan v. EPA, 268 F.3d 

1075, 1082 (D.C. Cir. 2001); Stephen Breyer, Judicial Review of Questions of Law and Policy, 

38 Admin. L. Rev. 363, 373 (1986) ("To read Chevron as laying down a blanket rule, applicable 

to all agency interpretations of law, such as "always defer to the agency when the statute is 

silent," would be seriously overbroad, counterproductive, and sometimes senseless."). 

Commenters indicated that nothing in section 111(d) can be read to authorize the shift in power 

that the proposed rule would cause towards infringement of state sovereignty, and courts would 

not defer to EPA's construction of section 111(d). Commenters said, to accord Chevron 

deference to EPA's interpretation would contravene structural principles of federalism by 

allowing EPA to intrude on a core state function. 

Commenters said EPA's interpretation is nonsensical and circular and fails Chevron step 2. 

Commenters indicated that the statute says that a "standard of performance" is determined 

through "the application of the [BSER]", and under EPA's proposal, the "system" that it would 

apply is "the electricity system" itself. Commenters said that EPA is using circular reasoning 

because the sources EPA would subject to this rule are already part of the electricity system, so 

EPA is applying the "system" to the "system." Commenters said that clearly the "system" that is 

to be applied to the source must be something other than the source itself or a system of which is 

already a part. Commenters said that EPA proposes to dictate how an existing system is 

operated. Commenters noted that is outside the scope of Section 111 and underscores the illegal 

nature of EPA's proposal. 

Response 29: We disagree 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 in light of legal precedent, the statutory text, statutory context, statutory purpose, and 

legislative history. 

Comment 30: State plans may include non-BSER measures, and need not be limited to the 

measures EPA determines are BSER 

Commenters stated that section 111(d) references section 110, and that EPA should create a 

similar procedure for section 111(d) compliance plans. Commenters said the extensive case law 

interpreting the federal-state relationship under sections 109 and 110 is instructive in 

understanding the breadth and limits on EPA and state authorities to propose and evaluate 

compliance plans. Commenters said that the courts have been clear that each state, not EPA, has 

discretion under section 110 to determine the best compliance mechanisms for its circumstances. 

Commenters said, so long as the state's selection of measures in its plan satisfies the EPAestablished goal, EPA may not "question the wisdom of a state's choices." ("The Agency is 
39 

 

plainly charged by the Act with the responsibility for setting the national ambient air standards. 

Just as plainly, however, it is relegated by the 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."). Commenters asked EPA to clarify 

that states have the discretion to include a range of measures (e.g., carbon capture and storage, 

biomass co-firing, others) and not just those measures that EPA proposes as BSER, in 

compliance plans as long as they are designed to achieve emission rate goals. 

Commenters said Section 110 provides guidance for section 111(d) plans; Section 111(d) plans 

may include other control measures, means, or techniques (including economic incentives, such 

as marketable permits or auctions of emissions allowances. 

Response 30: We agree with these comments, and discuss in sections III.A, V.A, V.B, and 

VIII.D of the final rule preamble of the CPP the types of other measures sources may implement 

and states may implement through the state measures approach. 

Comment 31: Commenters noted that section 111(d) was modeled on section 110, and 

referenced state implementation plan (SIP) submission, review, and disapproval provisions in 

section 110. Commenters noted that to attain the NAAQS, each state must submit a SIP that 

establishes "enforceable emission limitations and other control measures, means, or techniques 

(including economic incentives such as fees, marketable permits, and auctions of emissions 

rights)". Commenters stated, based on the structural similarity of 111(d) and 110, underlined by 

the specific reference in section 111(d) to section 110, it is reasonable for EPA to conclude that 

the state and federal plans provided for under section 111(d) may also include “enforceable 

emission limitations or other control measures, means, or techniques (including economic 

incentives, such as marketable permits or auctions of emissions allowances).” Accordingly, 

commenters concluded that it is a reasonable interpretation of the statute for EPA to set standards 

of performance for existing sources predicated on Building Block 1 and credits from activities 

described in Building Blocks 2–4. Commenters said the four building blocks represent a “system 

of emission reduction” that taps the emission reduction potential achievable at reasonable cost 

across the interconnected electricity system, using emission limitation methods, including 

crediting systems, authorized under section 110(a)(2). 

Response 31: We agree with this comment, although we not that we are not finalizing building 

block 4 as part of the BSER.

Comment 32: Section 110 provides guidance for section 111(d) plans; State plans may include 

"implementation" measures 

Commenters said that EPA is correct that states may include portfolio measures in their 111(d) 

plans as "implementation" measures. Commenters noted section 110 provides that SIPs may 

include a variety of measures that do not directly reduce emissions from affected sources, as well 

as measures that regulate entities other than pollution sources. Commenters indicated that section 
40 

 

111(d) provides that its state plans should be modeled on SIPs, and that it is reasonable for EPA 

to conclude that state section 111(d) plans "for the implementation [of] ... standards of 

performance" may include similar measures. 

Response 32: As discussed in sections V.B and VIII of the final rule preamble of the CPP, the 

EPA is not finalizing the portfolio approach. 

Comment 33: Commenters stated they are pleased to see EPA's acknowledgement that the state 

plans required under section 111(d) and the state implementation plans (SIPs) required under 

section 110 serve different purposes. Commenters pointed out that EPA states in the Existing 

Source proposal, "[i]t is a well-established principle that states have discretion regarding the 

measures adopted in their state implementation plans under CAA section 110 to attain the 

NAAQS." Commenters said further, the Agency claims "the same principle applies in the 

context of state plans under section 111(d) as well, such that each state has discretion to adopt 

emission reduction measures other than the measures found by the EPA to comprise the BSER, 

or to place greater or lesser emphasis than the EPA on certain measures, provided that the state's 

plan achieves the required level of emission performance for affected sources." Commenters said 

they believe that EPA's conclusion is in error, because the mechanics of the regulatory 

frameworks under sections 110 and 111(d) have little in common. Commenters said under the 

NAAQS program, EPA sets ambient air quality standards that must be met collectively by all 

sources within a region, and establishing implementation plans under those circumstances 

necessarily involves tradeoffs between controlling emissions from different sources and even 

different sectors in a region. Commenters said the fact that electricity generation must be 

evaluated comprehensively in order to meet health-based standards promulgated under section 

110 offers no support for looking beyond the fence line and requiring "entities other than 

affected EGUs" to contribute toward compliance with technology-based standards under section 

111(d). Commenters said section 111(d) is a source-category based rule and leaves little room 

for innovative approaches implemented outside of the specific category. Commenters said EPA 

reports several states already adopted RE and EE measures in their CAA section 110 SIPs for 

attaining and maintaining NAAQS. Commenters said they support state efforts to implement RE 

and EE policies in the context of the NAAQS, because section 110 was designed as an economywide regulatory approach, and they are not seeking to restrict the use of RE and EE to reduce 

CO2 emissions; however, their concern is that the section 110 and 111(d) regulatory frameworks 

are intended to achieve different aims and must necessarily regulate different types of entities 

using different approaches. Commenters said EPA cannot incorporate the approaches used in 

NAAQS SIPs into section 111(d) state plans because these approaches are not compatible with 

the design or intent of section 111. 

Response 33: We disagree with this comment. We explain in section V.B of the final rule 

preamble of the CPP our basis for including the building blocks as part of the BSER, and in 

section VIII our basis for allowing states flexibility. We are not finalizing the portfolio 

approach, and building blocks 2 and 3 may be included as part of the BSER without subjecting 

non-affected EGUs to section 111(d) regulatory requirements. 
41 

 

Comment 34: Commenters said that the proposal is unenforceable. 

Commenters stated in reference to building blocks 2, 3 and 4 that enforcement of a system-based 

limit becomes unenforceable as a practical matter in the real world of unit-specific sources. 

Commenters said that EPA's theory that they may apply a standard of performance over a 

collection of sources has not been tested in court, and the CAA does not support the EPA 

interpretation. Commenters said that standards of performance should be unit-specific. 

Commenters maintained that EPA does not have the authority to enforce the proposed rule 

because the CAA grants EPA the authority to regulate sources, but only the state has the 

authority to regulate generation‐related compliance options. 

Response 34: To the extent these comments address either building block 4 or the portfolio 

approach, they are moot, because the EPA is not finalizing those elements of the proposal. 

Furthermore, as explained in section V.B.6 of the final rule preamble of the CPP, EPA does have 

the statutory authority to promulgate this rule as finalized. In this rule, the EPA is following the 

same approach that it uses in any rulemaking under CAA section 111(d), which is designed to 

regulate the air pollutants from the source category at issue. In this rule, as with all CAA section 

111(d) rules, the EPA is not directly regulating any entities. Accordingly, the EPA is neither 

requiring nor authorizing the states to regulate entities other than affected EGUs in their CAA 

111(d) plans. 

The federal enforceability considerations raised in the comment arose primarily under the 

proposed portfolio approach for state plans. As mentioned above and explained in section VIII.C 

of the final rule 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 of the final rule 

preamble, 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. 

As proposed, we are requiring that state plans include a demonstration that plan measures are 

enforceable, which for state measures plans is provided for in § 60.5780 and discussed in section 

VIII.D.2.c.6 of the final rule preamble. 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 
42 

 

“Roadmap for Incorporating Energy Efficiency/Renewable Energy Policies and Programs into 

State and Tribal Implementation Plans, Appendix F.”

Comment 35: Commenters noted that the EPA says it is not "re-opening" these implementing 

regulations for section 111(d) in this current rulemaking. Commenters argued that it is uncertain 

whether the EPA, by this statement, means to assert that these regulations may not be challenged 

as a part of an appeal of EPA's Section 111(d) rules given the passage of time since they were 

adopted. Commenters argued that this is not a reasonable assertion given that no one could have 

anticipated, when these implementing regulations were adopted, that the EPA would use them to 

try to significantly reduce coal usage in the United States or that existing fossil fuel-fired EGUs 

would be regulated by EPA and the States pursuant to Section 111(d). Thus, commenters 

concluded that a challenge to these implementing regulations should not be foreclosed at this 

time. See Coalition for Responsible Regulation v. EPA, 684 F.3d 102, 131-32 (2012). 

Commenters stated that in subpart B, EPA has given itself the authority to conduct a BSER 

analysis and establish standards of performance that are legally binding on the states, thus 

abrogating the intent of Congress that states establish the standards of performance for existing 

sources. Commenters claimed that they have standing to challenge subpart B now, even thought 

it was adopted in 1975, because prior to this rulemaking the Associations that the commenter 

represents have had no basis for challenging EPA's regulations because their members were not 

regulated by EPA and the States pursuant to Section 111(d). Commenters said, here, for the first 

time, EPA has proposed to apply those regulations to the Associations' members' existing fossil 

fuel-fired EGUs in a manner that, if finalized, would cause their members harm. 

Response 35: In the proposal, our statement that we are not re-opening the implementing 

regulations meant that we are not taking comment on or revising those regulations. Commenters 

commented about authority to challenge the implementing regulations in Court may be relevant 

in any litigation raising “after-arising” issues over this rule, but are not relevant for this 

rulemaking. 

Comment 36: CPP's Federal-state collaboration similar to Section 110 

Commenters believed the federal-state collaboration is very similar to the process implemented 

under section 110. Commenters cited the section 110 plan development process and cases that 

describe EPA's role, and concluded that sections 110 and 111(d) have an appropriately parallel 

structure under EPA's interpretation of the statute - under both provisions, EPA uses its expertise 

to identify the emission reductions that must be achieved, states use their discretion to develop 

plans to achieve the emission reductions, and EPA reviews plans to ensure they are meeting the 

relevant statutory criteria. 

Commenters stated, the very language upon which opponents rely, requiring EPA to establish a 

"procedure similar to that provided by section 7410," undermines their argument. Commenters 
43 

 

said, EPA uses its scientific expertise to establish substantive standards under section 110 

(national ambient air quality standards or NAAQS), which the states then develop plans to 

implement. Commenters said, thus, like the section 110 state implementation plan (SIP) 

framework and procedure, section 111(d) directs EPA to work hand-in-hand with the states to 

ensure that each state - through its plan - achieves the reductions that EPA has determined are 

achievable through the application of the BSER that has been adequately demonstrated. 

Commenters said, this cooperative federalism allows EPA to establish the amount of reductions 

required, while giving the states flexibility to determine how to achieve those reductions (or 

more). 

Response 36: We agree with these comments. 

Comment 37: Commenters addressed the legal basis of the four individual plan approvability 

criteria the EPA proposed to use to determine whether a state’s plan is “satisfactory” under CAA 

section 111(d)(2)(A) and, thus, approvable. 79 FR 34909. 

(1) Enforceable Measures: Commenters argued that enforceability issues with the Proposed Rule 

present serious cooperative federalism concerns. 

Commenters noted that the CAA foundation rests on three straightforward themes: cooperative 

federalism, narrowly tailored emission control programs for enumerated purposes, and avoidance 

of duplicative regulation. Commenters noted that while EPA has a role in establishing minimum 

requirements for state programs, States assume the primary implementation role under the CAA, 

and the statute prohibits duplicative regulation between federal and state authorities. 

Commenters stated that Congress thus crafted a statute that would leave to States the task of 

enacting and administering programs to meet federal standards and noted that the process for 

setting, implementing, and enforcing the NAAQS typifies this approach. Commenters noted that 

under the NAAQS, the EPA may step in to take over the States' plan-preparation responsibility 

only if a State fails to make a required plan submission or submits a plan that has not satisfied 

the minimum criteria of the Act, and then does not timely correct the deficiency. Commenters 

noted that Congress explicitly carried this regime of cooperative federalism throughout CAA 

Section 111 and stated that EPA is relegated by the Act to a secondary role in the process of 

determining and enforcing standards. 

Commenters stated that one essential criterion for EPA approval of a state plan is for a state to 

ensure that its plan is enforceable. Commenters noted that the proposal requires that a state plan 

must include enforceable emission limits that apply to affected EGUs and can also include 

enforceable measures such as RE standards or demand-side EE measures under a portfolio 

approach. According to the commenters, EPA admits that requiring enforceable measures 

beyond the affected EGUs present a special challenge at 79 FR 34917. Commenters posited that 

it is not just challenging but impossible, and forcing a state to extend its authority in such a 

manner violates the basic precepts of federalism embedded in the CAA. 
44 

 

Response 37: As described in section V.B and VIII of the final rule preamble, we are not 

adopting the portfolio approach in the final rule. 

Comment 38: Commenters stated that based on historical experience, they believed that to 

implement the final rule, EPA will use its authority to constrain State preferences with respect to 

program design, potentially going so far as dictating policies that restrict when American 

families can do the laundry or run the air conditioning, and thus diminish the role of the States in 

our system of cooperative federalism. 

Response 38: We disagree with these comments. We discuss in sections V. and VIII of the final 

rule preamble of the CPP the flexibilities that sources and states have in meeting their obligations 

under section 111(d), and we explain in section V.B. of the final rule preamble that this rule is 

consistent with section 111(d) and does not represent over-reaching. 

Comment 39: (2) Emission Performance: Commenters expressed concern that the second 

approvability criterion for state plans (that the projected CO2 emission performance by affected 

EGUs must be equivalent to, or better than, the required CO2 emission performance level in the 

state plan) intrudes on state authority under section 111(d). Commenters argued that this leaves 

states none of the authority section 111(d) provides to establish different performance standards 

for individual sources based on their individual characteristics and needs. Moreover, commenters 

stated that EPA appears to be contemplating highly involved demonstration requirements that are 

not consistent with what the Agency may impose under section 111(d) and that cannot 

realistically be performed in the time that would be permitted under the proposed guidelines. 

(3) Quantifiable and Verifiable Emission Performance: Commenters stated that EPA must take 

comment on any requirement that state plans include, such as EM&V plans to address 

quantification, monitoring, and verification of EE and RE measures. Commenters stated that 

EPA should recognize that states have discretion over how to address these issues. 

(4) Reporting and Corrective Actions: Commenters questioned the EPA's proposal 

that approvable state plans must specify a process for annual reporting of overall plan 

performance and implementation (including compliance of affected entities with applicable 

emission standards) during the plan performance periods. Commenters argued that the EPA has 

no legal basis to impose a regulatory requirement for annual reporting of overall plan 

performance and implementation. Commenters stated that no such requirement exists under 

Section 110 for SIPs, and no other Section 111(d) emission guideline requires states to submit an 

annual report identifying compliance of affected entities with applicable emission standards. 

Commenters stated that even U.S. EPA's Emerging and Voluntary Measures guidance (at page 

21) contemplates an initial evaluation of the effectiveness of each measure within 18 months of 

the measures being in place and then provides for states to re-evaluate these measures every 3 

years. Commenters stated that reporting under Regional Haze only requires a performance check 

every 5 to 10 years. Commenters stated that Section 110 maintenance plans do not require any 

reporting back to U.S. EPA after initial submittal.
45 

 

Commenters disagreed with the proposed requirement that state plans include a process and 

schedule for implementing corrective measures if reporting shows that the plan is not achieving 

the projected level of emission performance. Commenters noted that EPA requested comment on 

whether the process should include the adoption of new plan measures and subsequent 

resubmission of the plan to EPA for review and approval, or whether the process should specify 

the implementation of corrective measures that are already included in the approved plan in case 

the projected performance level is not achieved, and on the point at which such a process and 

schedule would be triggered (e.g., at the end of a multi-year plan performance period or at 

specified interim stages within that period). As noted by the commenters, self-correcting 

mechanisms will not require corrective measures be included in the plan. 

Commenters argued that corrective, or contingency, measures are not appropriate or lawful for a 

section 111(d) plan. According to the commenters, any BSER developed by EPA that would 

necessitate contingency measures cannot be the type of BSER ever intended under the CAA. 

Commenters argued that states have discretion to determine the manner in which they will 

address any shortfalls in their plans and annual reporting on plan performance and corrective 

measures should not be criteria for approving a plan. 

Response 39: Regarding emission performance, we disagree. EPA’s authority to determine 

BSER is addressed in section V of the preamble and in the legal memorandum. EPA’s 

interpretation of the remaining useful life provision is discussed in section VIII.G.1 of the 

preamble and in the legal memorandum. 

Regarding quantification, verification, and monitoring of RE and EE, EPA has the authority to 

prescribe the minimum requirements for state plans to “provide for implementation” of the 

standards of performance. States do not have unfettered discretion with respect to quantification, 

verification, and monitoring. 

Regarding reporting of plan performance, we disagree. Although provisions in section 110 are 

not dispositive of the issue, section 110 specifically provides for “periodic reports on the nature 

and amounts of emissions and emissions-related data” from stationary sources. 42 USC 

7410(a)(2)(F); see also 40 CFR part 51 subpart A (requiring state reporting of air emissions to 

EPA).. Since section 110 requirements are related to maintenance and implementation of the 

NAAQS, section 110 also specifically requires states to provide an ambient air quality 

monitoring network and make data from it available to the Administrator. 42 USC 7410(B); see 

also 40 CFR part 58, which “contains requirements for measuring ambient air quality and 

reporting ambient air quality,” id. § 58.2(a). In the case of plans under these emission 

guidelines, plan performance is related to emissions and electrical generation, both of which 

have well-established monitoring methods. Thus, determining plan performance is more 

straightforward than the very complex requirements under part 58 for monitoring ambient air 

quality to ensure that the NAAQS are maintained. See generally part 58. Of particular note, part 

58 in fact requires states to submit an annual monitoring network plan to EPA to ensure that the 

network remains adequate. 40 CFR 58.10. In any case, as mentioned in the preamble the 
46 

 

statutory language “provide for implementation and enforcement” of the standards of 

performance is ambiguous and EPA may reasonably interpret it. It is of course reasonable, and 

in fact possibly compelled, for EPA to require reporting on plan performance to ensure that the 

plan “provides for implementation” of the standards of performance. 

With respect to the comment that corrective measures are not appropriate or lawful for a section 

111(d) state plan, we disagree. We note that a basic emission standards plan adopting the 

performance rates or setting mass limits that total the mass goal is mathematically assured 

(assuming full compliance) to achieve BSER. EPA is requiring corrective measures for plans 

that are not mathematically assured to achieve BSER; because those plans are flexibility 

alternatives provided to states, EPA may require additional mechanisms to assure BSER is 

achieved. See section VIII of the preamble for additional discussion. 

With respect to the comment that states have essentially unfettered discretion to address 

shortfalls in their plan, we disagree. See the Legal Memorandum for a discussion of EPA’s 

general authority. See section VIII of the preamble for discussion of EPA’s authority to require 

corrective measures and address shortfall. 

Comment 40: Commenters stated some commentators have suggested that EPA's proposal that 

multiple states may submit a joint compliance plan to implement the CO2 emissions targets for 

existing sources, may violate the Compact Clause of the U.S. Constitution, or at the very least 

would require Congressional approval. Commenters said the Compact Clause provides that "[n]o 

State shall, without the Consent of Congress - enter into any Agreement or Compact with another 

State, or with a foreign Power, or engage in War unless actually invaded, or in such imminent 

Danger as well not admit of delay." Commenters said critics argue that multi-state plans amount 

to interstate compacts and cannot be put into place without specific congressional authorization. 

Commenters said they do not agree. 

Commenters stated Congress has already sanctioned agreements of this nature under the Clean 

Air Act. Commenters said under the Compact Clause, Congress may give explicit or implicit 

authorization to compacts, and it may do so for all interstate agreements of a particular subject 

matter. Commenters exemplified that in Cuyler v. Adams, Congress authorized joint state action 

on criminal enforcement and allowed states to coordinate on policies and laws in the Crime 

Control Consent Act of 1934. Commenters said the language of the statute did not authorize a 

specific compact, but rather, approved future interstate agreements for the general purpose of 

"mutual assistance in the prevention of crime." Commenters said similarly, Congress foresaw 

interstate coordination on air pollution issues. Commenters said Clean Air Act section 102 

expressly instructs the Administrator to "encourage cooperative activities" and "encourage the 

making of agreements and compacts between States for the prevention and control of air 

pollution." Commenters said this provision cannot be interpreted in any way other than that 

Congress anticipated interstate compacts as a useful tool and pre-authorized them for efforts to 

improve air pollution control. Commenters said as in the Crime Control Consent Act, Congress 

has granted consent, in a capacious manner so that states would have the flexibility to 
47 

 

accomplish a general legislative goal. Commenters said multi-state plans comfortably qualify 

under the broad purpose of "prevention and control of air pollution." 

Commenters stated the Supreme Court has never interpreted the Compact Clause to require 

Congressional approval of every agreement between multiple states. Commenters said in one of 

its earliest cases concerning the Compact Clause, the Court remarked, "[t]here are many matters 

upon which different states may agree that can in no respect concern the United States." 

Commenters said the Court repeatedly recognized in subsequent cases that the Constitution "did 

not purport to exhaust imagination and resourcefulness in devising fruitful interstate 

relationships" and it was "not to be construed to limit the variety of arrangements which are 

possible through the voluntary actions of individual States with a view to increasing harmony 

within the federalism created by the Constitution." Commenters said having established in 

Virginia v. Tennessee, 148 U.S. 503, 518 (1983), that the Compact Clause did not apply to all 

interstate agreements, the Court affirmed that position in New Hampshire v. Maine, 426 U.S. 

363 (1976), another state boundary dispute case, and again declined to broaden its reading of the 

Compact Clause in United States Steel Corporation v. Multistate Tax Commission, 434 U.S. 452 

(1978). Commenters said in Multistate Tax, the Supreme Court explained in detail which 

interstate agreements require Congressional approval, and laid out the applicable test. 

Commenters said the case involved multi-state corporate taxpayers seeking to invalidate a 

compact between twenty-one states that created an administrative body to facilitate 

determination of liability for multi-state taxpayers and avoid duplicative taxation. Commenters 

said the Court stated that "[t]he relevant inquiry must be one of impact on our federal structure," 

as the Compact Clause only covered agreements "tending to the increase of political power in the 

States, which may encroach upon or interfere with the just supremacy of the United States." 

Commenters said this bar is extremely high, and in all of the interstate compacts that the Court 

has reviewed, it has never found an interstate compact to encroach on federal power. 

Commenters said for that reason alone, it is unlikely that multi-state plans at issue here would 

trigger the Court's disapproval. Commenters said the Court in Multistate Tax listed the following 

indicia to evaluate whether an interstate agreement encroaches on federal power: if a compact (1) 

authorizes member states to exercise any powers they could not in its absence, (2) delegates 

sovereign authority, or (3) encroaches on the power of the United States with respect to foreign 

relations. Commenters provided more discussion in a footnote. Commenters said multi-state 

plans under EPA's proposed rule do not exhibit these indicia. Commenters said multi-state plans 

serve the same function as single-state plans and may even be submitted as one plan. 

Commenters said they do not "create" more authority for the states involved any more than if 

each of the member states submitted individual plans. Commenters said it is true that the power 

sector is relatively unique because the sources operate in an interconnected grid system that is 

typically regional in scale. Commenters said a multi-state plan that comprises a subset of states 

in a regional grid system could potentially exert economic influences on non-member states, but 

such pressure alone is unlikely to constitute federal encroachment. Commenters referenced 

Multistate Tax, 434 U.S. at 473, noting that while "[g]roup action in itself may be more 

influential than independent actions by the States," it did not enhance state power at the expense 

of the national government. 
48 

 

Commenters stated a multi-state plan does not create any type of regulatory body with delegated 

authority that has greater powers than the sum of the member states acting individually or could 

bind member states in a way that would impact the federal structure. Commenters said even in 

Multistate Tax, the Court took no issue with member states empowering an administrative body 

to handle typically individualized tax legislative initiatives, noting that the individual states could 

have adopted the procedures on their own. Commenters said under the proposed rule, states may 

meet EPA's emissions goals under individual plans as well as multi-state ones, albeit that the 

latter may capitalize on efficiencies. Commenters said this is no different than what the Court 

permitted in Multistate Tax. 

Commenters stated while the federal government is undoubtedly interested in climate policy on 

an international scale, interstate compacts that merely speak to federal interests do not 

necessarily encroach on federal supremacy. Commenters said the Court emphasized that the 

regulatory organization in Multistate Tax did not interfere or foreclose federal action, and 

therefore did not encroach on federal supremacy. Commenters said even the fact that the member 

states were acting in concert to enhance their capacity to lobby for legislation did not constitute 

encroachment. Commenters said in comparison, multi-state plans are mere instruments for states 

to implement regulatory goals; they do not lend the member states any additional political power 

and certainly do not foreclose additional federal action, both from a domestic standpoint and if 

the United States were to enter into any international agreements on climate change. 

Commenters stated for the multi-state plans to violate the Compact Clause, they would have to 

increase state power at the expense of federal supremacy. Commenters said ultimately, the 

primary difference between multi-state plans and single state plans is one of form, rather than 

function. Commenters said the multistate plans do not enhance state power any more than single 

state plans do; therefore, it is unnecessary to receive congressional approval for these plans, 

which are merely one option that EPA has developed-an innovative and efficient method for 

additional emissions reduction that is well within the confines of the Agency's statutory 

authority. Commenters said it is the type of interstate cooperation that Congress envisioned and 

provided for when drafting the Clean Air Act. Commenters said it is not their view that the 

Compact Clause argument is valid, the argument would be annulled if EPA were to make clear 

through a model rule the approvable elements of a multistate plan, including such plans intended 

to adopt multi-state mass-based allowance trading systems. Commenters said in that case, 

multistate plans could not arguably be increasing political power in the States, or "encroach[ing] 

upon or interfere[ing] with the just supremacy of the United States," indeed they would be in 

furtherance of the Clean Air Act's directives, and the federal government's policy on pollution 

control. 

Response 40: We agree with these comments. 

Comment 41: Commenters said earlier this year, the Missouri General Assembly and the 

Governor enacted House Bill 1631 authorizes the state to develop such regulations. Commenters 

said this bill, which was passed in the last legislative session and signed by Governor Nixon on 
49 

 

July 7, 2014, requires the Missouri Air Conservation Commission (MACC) of the Department of 

Natural Resources (DNR) to set Missouri's carbon standard. Commenters said to assure that the 

resulting emission standards make sense for Missouri and best balances their needs, the 

legislation instructed MACC to set standards based on an inside-the-fence analysis of what is 

feasible at each EGU, and allow for a more lenient standard on a case-by-case basis after 

considering factors such as cost and impacts on ratepayers and the economy. 

Commenters said that, MACC has the legal authority to "develop emission standards under 

[Section 111(d)] through a unit-by-unit analysis of each existing affected source of carbon 

dioxide within the state." Commenters said, MACC "shall consider," among other factors, the 

remaining useful life of the existing affected source, and the overall economic impact from any 

and all emission standards and compliance schedules developed and implemented under Section 

111(d). Commenters said, MACC has the explicit authority in HB 1631 to develop less stringent 

emission standards and longer compliance schedules than those required by federal regulations 

based on these key factors: (1) Unreasonable cost due to plant age, location, or basic process 

design; (2) Physical impossibility of installing necessary control equipment; or (3) Factors 

specific to the existing affected source or class of such sources that make a less stringent 

standard or compliance schedule more reasonable, including: (a) absolute cost of the emission 

standard or compliance schedule; (b) economic impact of closing the affected source, including 

job losses if the source is unable to comply with the performance standard; and (c) customer 

impacts of the emission standard and compliance schedule, including disproportionate rate 

impacts on low income populations. 

Response 41: See section V.A and V.B of the final rule preamble of the CPP for explanation of 

the EPA’s authority to develop standards of performance. 

The general thrust of the comment is that existing state law should dictate what EPA determines 

to be BSER and how these emission guidelines should ensure that state plans establish standards 

of performance and provide for their implementation and enforcement. This misunderstands the 

cooperative federalism structure of the Clean Air Act in general and section 111(d)(1) in 

particular. Under the Act, EPA establishes standards based on health, welfare, and/or technology 

considerations. States may then choose to implement those standards, but if a state does so the 

state must have adequate legal authority. If not, then EPA must implement the standards. In the 

case of these emission guidelines, if a state lacks authority to submit a satisfactory plan, then 

EPA must impose a federal plan. 

With respect to the three factors quoted by the commenter, those factors are derived from the 

framework regulation in 40 CFR 60.24(f) that permits States, subject to EPA review and 

approval, to relax an emission standard in certain circumstances. In these guidelines, EPA is 

making the provisions in 60.24(f) inapplicable. With respect to remaining useful life, EPA is 

permitting states to consider remaining useful life through a number of reasonable mechanisms 

other than the provisions in 60.24(f). For details please see section VIII.G.1 of the preamble and 

the Legal Memorandum. 
50 

 

Comment 42: Comments stating that the EPA has not answered essential implementation 

questions, and that the guidelines are far removed from section 111’s narrow source-focused 

regulatory program. 

Commenters said that EPA has not answered essential implementation questions, nor can the 

CAA or EPA's past rulemakings under section 111 provide answers to any of these questions. 

Commenters said that the types of aggregate emission reduction measures and the broad universe 

of affected entities that EPA asserts authority over in the Proposed Guidelines are so far removed 

from section 111's narrow source-focused regulatory program as to be completely 

unrecognizable as a program under section 111(d) of the CAA. Commenters said, the CAA 

"do[es] not explicitly address" any of these issues, 79 Fed. Reg. at 34,902, for the same reason 

that section 111 does not explicitly address mobile source regulation or endangered species 

protection: because such language would be nonsensical in a statutory provision that has nothing 

to say about those issues. Commenters said, section 111, on its face, is singularly concerned with 

design or process changes that individual new and existing stationary sources within specific 

categories can implement to reduce their own emissions. Commenters said, that EPA is now 

grappling with the complex question of how to impose enforceable obligations on other affected 

entities in order to reduce aggregate emissions by reducing utilization of affected sources simply 

demonstrates that EPA has strayed far off the CAA's regulatory path. 

Response 42: We disagree with these comments. We explain in section V.B of the final rule 

preamble of the CPP our basis for including building blocks 2 and 3 as part of the BSER and we 

explain in section VIII of the final rule preamble that we are not finalizing the portfolio 

approach. 

Comment 43: Commenters said that, EPA maintains that it may specify in proposing an 

emission guideline that less stringent standards or a delayed compliance schedule would not be 

appropriate". Commenters said, in several of the past Section 111(d) guidelines, EPA expressly 

foreclosed the availability of any "variances" to be within state plans. Commenters said all of the 

regulations in which EPA foreclosed variances except one were regulations affecting solid waste 

incinerators under Section 129, and therefore it could be argued that these regulations were 

responsive to the particular language of Section 129(b)(2) provides that state plans "shall be at 

least as protective as the guidelines promulgated by the Administrator." Commenters said that 

language is not in Section 111(d). Commenters said EPA has prescribed the same by regulation 

in the implementing regulations. Commenters said that, EPA has acknowledged that there is a 

difference between the discretion afforded states under Section 111 compared to Section 129 

guidelines. 

Response 43: We disagree with the thrust of this comment, which is that EPA should allow for 

variances in these emission guidelines due to differences between section 129(b) and section 

111(d). Section 129(b) does provide, as commenter states, that state plans “shall be at least as 

protective as the guidelines promulgated by the Administrator.” This does not create a necessary 

inference that section 111(d)(1) requires EPA to allow state plans to be less stringent than section 

111(d)(1) emission guidelines (i.e. to provide for variances), for several reasons. 
51 

 

First, section 129(b) requires guidelines to reflect the maximum achievable control technology 

(MACT) standard in section 129(a)(2) for existing solid waste incineration units The MACT 

standard for existing units must at a minimum meet the “MACT floor,” the “average emissions 

limitation achieved by the best performing 12 percent of units in the category.” 42 USC 

7429(a)(2). Thus, to a certain extent the requirement in 129(b)(2) that state plans must be as 

protective as the guidelines reflects the nature of the MACT standard itself. 

That this is the case does not create a necessary inference that the remaining useful life provision 

in section 111(d)(1) must be interpreted to allow for less stringent plans (i.e. variances). Indeed, 

had Congress intended section 111(d)(1) to operate in that way, Congress could have clarified 

this in the 1990 Amendments at the same time that Congress added section 129 and made clear 

that section 129 did not allow for less stringent state plans. Instead, section 111(d)(1) is silent as 

to whether the state plan must be as stringent as the guidelines. Thus, Congress intended to 

delegate to EPA to reasonably decide the issue. 

Finally, the remaining useful life provision was added in the 1977 Amendments. (See the 

detailed legislative history in section IX of the Legal Memorandum.) As noted in the legislative 

history discussion in the Legal Memorandum, Congress appears to have been aware of and 

informed by EPA’s 1975 framework regulations, yet Congress did not explicitly state in the 

remaining useful life provision that EPA must allow for variances or less stringent state plans in 

the way contemplated by the framework regulations. Compare 42 USC 7411(d)(1) 

(“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.”) with 40 Fed. Reg. 53,340, 53,347/3 (Nov. 17, 1975) (“States may 

provide for the application of less stringent emission standards ...”). Thus, the legislative 

history confirms that Congress intended to delegate to EPA to reasonably decide. The document 

quoted by commenter, “Section 129 Rules for Solid Waste Combustion,” is a one-page 

descriptive document on EPA’s website that lacks legal relevance.2

 However, even if EPA had 

officially taken the interpretation stated in the document, that “Section 129 requires that Section 

111(d)/129 State plans be ‘at least as protective as’ the Guidelines, whereas Section 111(d) 

allows States flexibility to consider other factors,” and that meant that 111(d) plans necessarily 

had to allow variances, EPA would be entitled to change that interpretation through notice and 

comment, so long as EPA is reasonably interpreting the statute and explains the reasons for the 

change. See Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 981-82 

(2005). Here, we have explained that section 111(d) does not preclude other approaches than the 

variance approach in 40 CFR 60.24(f). For details see section VIII.G.1 of the preamble and 

section IX of the Legal Memorandum. 

 

2

 Available at http://www.epa.gov/ttnatw01/129/gil2.pdf. 
52 

 

1.11.2 Federal enforceability of renewable energy and demand-side energy efficiency 

measures 

Comment 1: Emission reductions from EE and RE projects are difficult to project and do not 

always achieve the levels predicted; the threat of possible federal enforcement and citizen suits 

could limit the number and type of RE and EE projects undertaken. 

Commenters stated the EPA is not proposing to provide any additional funding to states to 

manage their plans as a part of this highly complex proposal. Commenters said and as a legal 

matter, EE and RE projects, even with the best available data, do not always achieve the levels 

predicted. Commenters stated with the added pressure that sources or third parties could be 

liable, not only to the EPA but also citizens, if reductions are not achieved as expected, is a risk 

many entities may not want to take and could greatly limit the amount and type of projects 

undertaken. 

Response 1: We disagree with these comments. For the reasons described in the preamble, RE is 

adequately demonstrated and its emission reductions can be projected with confidence. The 

federal enforceability considerations raised in the comments arose primarily under the proposed 

portfolio approach for state plans. As explained in section VIII.C of the final rule preamble of the 

CPP, 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 of the final rule preamble, 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. And states that submit emission standard type plans would include in the state plans 

only standards of performance on their affected EGUs, and would not independently require any 

RE projects. In addition, building block 4 is not part of the BSER. 

Comment 2: EE and RE measures should not be made federally enforceable; other EPA 

regulations have not made EE and RE measures federally enforceable. 

Commenters stated that mandating an EE/RE program that must meet the requirements proposed 

under this rule or face the ramifications is completely inappropriate under Section 111(d). 

Commenters noted that EE/RE measures under Section 110 are not mandated and the EPA does 

not require a percentage of SIP measures incorporate EE/RE. Commenters said under Section 

110 this option is at the states discretion when they see it as viable. Commenters stated the EPA 

has gone beyond what could ever be contemplated as BSER given the significant road blocks 

states would have to overcome in order to incorporate EE/RE into a state plan. Commenters said 

under this proposed Section 111(d) program, states are being set up to fail. 
53 

 

Response 2: We disagree with these comments. As described in section V of the final rule 

preamble of the CPP, states are not required to implement RE measures; rather, they may submit 

an emissions standards state plan that imposes standards of performance on their sources. 

Comment 3: EPA should not make EE and RE measures federally enforceable; EPA should use 

an approach similar to the SIP calls under NAAQS and require states to revise their state plans if 

EPA finds a state plan is deficient. 

Commenters stated instead [of making EE and RE federally enforceable], the EPA should rely 

on a generic equivalent of the SIP calls under the NAAQS, under which the EPA - and only the 

EPA - may find a state plan deficient in terms of its effectiveness in reducing emissions, as laid 

out in the plan, and call for a revised plan to better achieve the specified levels of emission 

reductions. 

Commenters said instead, the EPA envisioned requiring contingency measures or a SIP call to 

make up any shortfall. Commenters requested that the EPA clarify if and how this guidance is 

applicable in the context of a rate-based plan. Commenters said or if, under the mass-based 

alternative, the EPA intends to allow states to present EE/RE measures as a binding commitment 

to capture such reductions as a part of the baseline emissions projections. 

Commenters provided an EE analogy to transportation emissions controls in SIPs and 

transportation conformity. Commenters stated that the EPA should recognize that smaller, 

dispersed EE measures are analogous to transportation emission reduction measures (many of 

which are, indeed, transportation EE). Commenters stated that the EPA should consider viewing 

them in a manner similar to how transportation measures are treated in NAAQS SIPs and for 

transportation conformity. Commenters stated that the EPA allows and provides guidance for the 

use of various transportation-related emissions control and prevention approaches and these 

measures are not subject to strict interpretations of enforceability. Nonetheless, commenters

stated that the impacts of these types of measures can be credibly modeled and do deliver 

significant emissions reductions and air quality benefits. Commenters stated that modeling 

results can be compared with selective sampling and monitoring to verify progress. Commenters 

noted that States are afforded the opportunity to make up for shortfalls that occur despite good 

faith efforts and can modify their plans, models, programs and measures accordingly. 

Response 3: These comments generally focus on the concern that making RE and EE measures 

federally enforceable as EPA has interpreted that concept would not be appropriate. Instead they 

argue for a more planning based approach, were the effect of RE and EE measures are accounted 

for in a state’s plan, and EPA works with states to ensure that the overall effect of the plan meets 

the requirements of this guideline. 

In the final rule, EPA has adopted an approach to the structure of state plans which is broadly 

responsive to these commenters’ concerns, depending on the choices each state makes in its plan 

design. EPA is not finalizing its proposal for the “portfolio” approach to state plans. Therefore, 

to the extent the comment relates to the portfolio approach, the comment is moot. EPA has 
54 

 

instead provided for states to have the reductions anticipated under a state’s plan enforceable 

either entirely on the affected sources subject to the plan or through a combination of limits on 

EGU’s and state measures. In either case, the EPA would not exert enforcement authority over 

any entity other than affected EGUs and thus this rule does not require that states make their EE 

or RE programs federally enforceable.. It is possible that such entities would be subject to state 

law requirements or incentives to perform measures that reduce carbon emissions, which is 

currently the case for many of these RE and EE programs. 

As discussed extensively in section V and VIII of the final rule preamble of the CPP describing 

the state measures plan approach EPA is promulgating, EPA has essentially embraced the idea 

that states should have the flexibility to rely on innovative RE and EE programs to accomplish 

reductions under these plans, while giving the state the flexibility to avoid incorporating those 

programs into the plan as a federally enforceable measure. If the state’s assumptions about the 

efficacy of the programs on which the state’s plan relies do not prove accurate over time, the 

final guideline allows the state to use a combination of backstop emission standards on EGUs 

and a planning response, rather than subjecting other entities undertaking RE or EE measures to 

be subject to direct federal enforcement. The state must implement backstop measures or submit 

a new plan design to address any emissions reduction shortfall. 

Comment 4: Making section 111(d) plans federally enforceable undermines state authority 

Commenters said making Section 111(d) plans federally enforceable would undermine 

California's authority under Section 111(d). Commenters stated instead, the EPA should 

encourage California to continue to use its broad discretion under California state law to choose 

emission reduction programs best suited to its needs over time, and, consistent with the terms of 

Section 111(d), provide California with the fullest ability to recalibrate and redirect California's 

programs over time to comply with federal emission GHG reduction targets. 

Commenters stated in light of the EPA's proposal to go "beyond the fence" of power plants for 

its BSER and thus the implication of activities and regulation beyond the scope of the Clean Air 

Act, it is particularly important for the EPA to avoid requiring states to cede jurisdiction over 

aspects of their plans that involve state or other non-EPA authorities and jurisdictions. 

Commenters said such excessive federal enforceability could give the EPA and third parties the 

ability to seek to change activities over which they have no current jurisdiction (or expertise) 

through litigation. Commenters stated this outcome should be avoided. Commenters said the 

EPA should leave all state jurisdictional and non-Clean Air Act jurisdictional policy and 

regulatory determinations fully under state or other authority and not attempt to make them 

federally enforceable through its 111(d) rulemaking process. 

Commenters stated the states must be able to use state-run programs, such as those for energy 

efficiency and renewable energy, for compliance with the rule without the risk of the EPA 

assuming any authority or control over state programs if they fail to deliver the anticipated 

emissions reductions. Commenters said instead, if these programs fall short of their goals, the 
55 

 

state should be responsible for attaining those emissions reductions in another manner. 

Commenters stated such an approach is currently used by states that include contingent reduction 

plans in criteria pollutant SIPs to be used in the event a shortfall in reductions occurs within the 

core approach. Commenters said this approach allows states to retain authority of all state 

programs used for compliance with the Clean Power Plan while assuring the program objectives 

will be met even if the planned approach falls short. 

Response 4: We appreciate this comment and agree with many aspects of it. The state measures 

approach accommodates the commenters’ concerns. 

Comment 5: State EE programs should not be federally enforceable for states that adopted 

mass-based limits. 

Commenters stated that to the extent a state intends to comply by establishing a mass based 

target, the state's EE program, including its EM&V protocols should not be subject to approval in 

a state plan or federally enforceable. 

Response 5: We agree with this comment. 

Comment 6: Federal enforceability of RE and EE on third parties. 

Commenters expressed concern about direct federal enforcement on third parties if a portfolio or 

mass-based approach is taken. Commenters explained that part of either of these approaches 

should require a CO2 limit on the regulated EGUs, and the regulation of the EGUs would be 

presumed to also be federally enforceable. Commenters expressed concern if some of the other 

obligations of the state plan, RE and EE, were viewed as federally enforceable against third 

parties. Commenters argued that the state plan should be acceptable if the state has enforcement 

authority over the in-state third party entities. Commenters noted that in a case where the 

state, and not the EPA, has enforcement authority, it would be the state that would be held 

accountable for meeting goals that rely on the non-EGU entities. 

Commenters noted that the EPA proposes to approve state plans based on four general criteria, 

the first of which is "enforceable measures that reduce EGU CO2 emissions." Commenters stated 

that a plan that includes re-dispatch using Building Block 2 from a state where the grid is run by 

an RTO would not be enforceable. Commenters noted that generation dispatch in Michigan is 

managed by MISO or PJM (not the state) based on security-constrained economic dispatch (i.e., 

Michigan does not decide which units are dispatched and does not have the authority to enforce 

re-dispatch to reduce CO2 emissions). Commenters stated that by proposing as the BSER a 

building block that many states (including Michigan) cannot enforce, the EPA is proposing a 

method for reducing CO2 emissions that the EPA itself will not approve. Commenters asserted 

that approach is irrational, and the proposed rule is therefore arbitrary and capricious. 

Commenters noted that where the state plan includes emission limits for the affected EGUs, and 
56 

 

when the sole responsibility for meeting the state goals are established with requirements for 

individual affected EGUs, it leaves little doubt that the state plan would be enforceable and the 

affected EGUs could be held responsible for meeting the goals in the state plan. 

Commenters stated CPP is unclear about the regulatory approach that would hold them 

accountable for the actions and inactions of third parties outside of the control of the 

commenter's city. Commenters understands that there are ways to incentivize demand side 

management, but there are no enforcement mechanisms or ways to guarantee this compliance. 

Commenters stated past Clean Air Act actions impacting electric generating units (EGUs) - as 

with other New Source Performance Standards (NSPS) regulated industries have been imposed 

at the affected unit. Commenters stated once the 111(d) plans propose to manage third parties, 

the regulatory landscape moves beyond state air or utility agency traditional authorities. 

Response 6: We appreciate these comments. The EPA is not finalizing the portfolio approach, so 

that states may either submit state plans for EPA approval that include only standards of 

performance on affected EGUs, and not requirements on any other entities, or adopt the state 

measures approach. 

Comment 7: Commenters recommended that all complementary measures implemented by 

entities other than affected EGUs should not be federally enforceable. 

Commenters opposed the EPA's proposal "that all measures relied on to achieve the emission 

performance level be included in the state plan renders those measures federally enforceable” 

Commenters recommended that the EPA finalize guidelines for state plans to explicitly exclude 

all complementary measures implemented by entities other than affected EGUs that support 

reductions in generation by affected EGUs. Commenters stated emissions reductions achieved 

through DSM programs should not be federally enforceable measures included in a state plan. 

Commenters said the discretion 111(d) provides the EPA in establishing the guidelines for the 

development of state plans does not give the Agency carte blanche to overextend its reach and 

subject non-EGU parties to enforceable requirements under this regulation. Commenters urged 

the EPA to reevaluate the scope of options and approaches available to states and ensure that any 

guidelines finalized by the Agency ensure the treatment of energy efficiency and DSM programs 

as complementary measures. Commenters said while state performance goals were established 

by the EPA through an application of the BSER, the proposal as drafted does not prescribe the 

states' use of any BSER component measures in designing their state plans. Commenters added 

the EPA is proposing guidelines for states that provide multiple pathways for developing a state 

plan that influence the scope of program measures covered as well as who the responsible 

entities will be. Commenters said a more limited scope of plan approaches that treat DSM 

programs as complementary measures should help ensure that ultimate legal responsibility for 

the achievement of required emissions reductions remains with affected EGUs or the state. 

Response 7: See section IV.A of the final rule preamble of the CPP for the EPA’s response to 

this comment.
57 

 

Comment 8: EPA does not have authority to enforce EE and RE programs. 

Commenters stated the inclusion of DSM programs in the state plan will make these programs 

federally enforceable as well as mandatory. Commenters said thus, if a state fails to enforce the 

requirements of the state plan, the EPA would have authority to initiate enforcement actions 

against non-EGU parties. Commenters said given that the EPA has no authority over DSM 

programs it would be unlawful for the EPA to seek implementation or enforcement of these 

programs. Commenters stated the obligation for ensuring emission reductions at affected EGUs 

must rest with the affected utilities or the state and must not extend out to the participants in such

programs. Commenters stated otherwise, the specter of federal enforcement will limit 

participation in DSM programs, especially given that 304 of the Clean Air Act allows citizens to 

bring civil suits to compel federal enforcement. Commenters stated to create such a disincentive 

for participation will undermine the success of existing programs and run counter to the Clean 

Power Plan's goal of achieving emission reductions though end use energy efficiency programs. 

Commenters said as proposed, the rule would not impose any such limitation on responsible 

entities. Commenters stated indeed, the EPA acknowledges that "a portfolio approach may result 

in enforceable state plan obligations accruing to a diverse range of affected entities beyond 

affected EGUs." 

Commenters stated at a recent Senate hearing on the proposal, EPA Administrator McCarthy 

failed to answer questions pertaining to the EPA's intentions to enforce provisions in State Plans 

that currently fall outside the EPA's authority. Commenters said for example, while the 

Administrator acknowledged that the EPA lacks the authority to require a state to adopt a 

renewable portfolio standard (RPS), she repeatedly dodged the question of whether the EPA 

believes it has the authority to enforce an RPS once a state submits it as part of a State Plan. 

Commenters stated without clarification, we are left to assume that the EPA is entertaining the 

possibility of overreaching its authority in this area. 

Commenters asked under your proposal, if a state adopts a renewable portfolio standard (RPS) 

and/or an Energy Efficiency Resource Standard (EERS) as part of its compliance strategy and 

later softens or repeals the RPS and/or EERS, does the EPA claim to have the authority to 

enforce the original RPS and/or EERS irrespective of subsequent legislation? If so, commenters 

questioned what is the source of the EPA's legal authority to take such action? 

Commenters stated EPA cannot hold affected EGUs solely responsible for meeting the entirety 

of a state's emission reduction goal. Commenters said 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 cannot be met solely through emission reduction measures achievable at affected 

EGUs, short of wholesale retirement of existing fossil fuel-fired generation, given that several 
58 

 

state goals are well below the CO2 emission rate achievable by fossil fuel-fired generation, even 

for new NGCCs. Commenters said EPA does not have 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 said 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, 

and commenter opposed this approach. Commenters said according to the proposal, 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. Commenters 

said this definition 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. Commenters agreed that states should be able to rely on emission 

reductions achieved by affected entities to achieve compliance with their state goals, EPA does 

not have the authority to make these emission reduction commitments federally enforceable. 

Commenters stated the EPA explains in the Proposed Rule that if a state wants to avoid imposing 

legal responsibility on affected EGUs for the entirety of the state's emissions reduction goal, the 

state may elect to pursue a "portfolio approach" to compliance plan development, which would 

allow enforcement of requirements against entities other than affected EGUs. 

Commenters did not agree with the EPA's interpretation. Commenters said, first, including any 

requirements related to RE and EE programs would put the EPA in the position of regulating 

retail electricity sales, over which the states (or in the case of the commenter, the commenter's 

Board) have exclusive jurisdiction. Commenters said the EPA cannot enforce where it does not 

have jurisdiction. Commenters stated, second, contrary to the EPA's assertion that the portfolio 

approach "accommodate[s] a diverse range of state approaches," implementation of the portfolio 

approach requires a state to have either (i) a legally binding RPS or EERS or (ii) a vertically 

integrated electricity sector that engages in integrated resource planning. Commenters said both 

these options would be reliant on participation of the electric utility sector for emissions 

reductions - states do not have an alternative to regulation of the utility sector. Commenters saw 

no path in which the states can compel non-EGUs to participate in an emissions reduction 

program applicable to EGUs. Commenters said this suggests the portfolio approach is 

unworkable and the states could not rely on this approach in developing state compliance plans. 

Commenters stated, the new "interpretation" of CAA section 111(d) set forth in the Proposed 

Rule encourages Wyoming to submit a plan that contains what EPA calls "portfolio" measures. 

Commenters said, these measures would be used, for instance, to dramatically increase the use 

and deployment of renewable energy and EE throughout the state, targeting Wyoming citizens 

and businesses as necessary agents in the reduction of electric consumption. Commenters said, 

however, upon EPA approval of a Wyoming CAA section 111(d) Plan, these measures would 

become "federally-enforceable" against those agents (citizens and businesses) required to 

implement them. Commenters said, yet, 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. Commenters said, rather, CAA section 111 authorizes standards to 
59 

 

be set for facilities within EPA-listed source categories. Commenters said, 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. 

Commenters stated EPA has no legal authority to regulate activities or sources that are not 

existing fossil fuel-fired EGUs, and its reliance on the "integrated nature" of the power sector 

cannot create such authority where none exists. Commenters said EPA cannot enforce where it 

does not have jurisdiction, see 42 U.S.C. section 7413(a)(3), and, consequently, cannot take 

enforcement action against entities other than affected EGUs. Commenters said holding affected 

EGUs legally responsible for obtaining all of the emission reductions required by the state goals 

would be unreasonable and illegal as proposed, and EPA would need to revise its BSER analysis 

to consider only the costs and other factors involved in applying the emission rate goals solely to 

affected EGUs. Commenters said EPA cannot develop and analyze a BSER that relies on 

reductions throughout the electric sector and then require affected EGUs to be wholly 

responsible for meeting the emissions reductions required by such an expansive BSER 

determination. Commenters said such a result would clearly circumvent Section 111's 

requirement that standards of performance be "achievable." 42 U.S.C. section 7411(a)(1). 

Commenters said this would be the epitome of arbitrary and capricious rulemaking. Commenters 

said EPA itself recognizes that state goals cannot be met solely through emission-reducing 

measures that may be taken by affected EGUs. Commenters said that, even with affected coalfired EGUs reducing emissions by 6 percent and additional reductions from sources other than 

affected EGUs, 65 gigawatts of affected sources will retire as a result of this proposal. 

Commenters said affected EGUs have no authority to ensure that other affected entities attain the 

projected emissions reductions required for the state to achieve its goal. Commenters said, for 

example, an affected EGU cannot mandate redispatch or force consumers to participate in EE 

programs, and enforcement against affected EGUs in each state, in the event that the state does 

not meet its goal, would be irrational and would render the rulemaking arbitrary and capricious. 

Commenters stated that EPA does not have the authority to regulate activity outside the sources 

subject to the CAA's performance standards. Commenters said renewable energy projects and 

energy efficiency measures have no CO2 emissions and cannot be regulated under these building 

blocks by the EPA. Commenters said the state agencies do not believe that the distinction 

between "inside the fence" and "outside the fence" is artificial. Commenters stated renewable 

energy projects and the measures to reduce end-user demand are not emissions reductions inside 

the fence, but rather, alternatives to fossil fuel generation outside the fence. Commenters said 

yet, the Clean Power Plan expands the EPA enforcement authority by requiring states to include 

renewable portfolio standards and energy efficiency measures within their state plans if the states 

intend on using these Building Blocks, which would then make them federally enforceable. 

Commenters stated concern that the state goal set forth in the Clean Power Plan cannot be met 

without utilizing each Building Block. Commenters expressed concern over BB2, BB3, and BB4 

that would be incorporated in state plans that expand the EPA's jurisdiction. Commenters said 

the EPA may initiate an enforcement action against any person that has violated a state plan; 

therefore making the state plan federally enforceable. Commenters said the state public utilities 
60 

 

commission would be included in the state plan, and would subject the public utilities 

commission to the EPA's oversight and enforcement and to citizen suits of litigation against the 

state's public utilities commission. 

Response 8: These commenters focus on the scope of EPA’s authority to regulate sources other 

than affected EGUs. The federal enforceability considerations raised in the comment arose 

primarily under the proposed portfolio approach for state plans. As explained in the preamble to 

the final rule and in response to comment B2, above, EPA has not finalized the portfolio 

approach for state plan design. Therefore, EPA would not exert enforcement authority over any 

entity other than affected EGUs. Furthermore, this rule does not require that states make their 

EE or RE programs federally enforceable.. The final guideline leaves the states with a choice 

whether to rely on emissions limits placed entirely on the EGU’s that are affected sources under 

the guideline, or a combination of limits on those EGU’s and state measures. In either case, EPA 

is not requiring a broad range of entities to be subject to the state plan and federal enforcement. 

EPA is requiring, however, that the state plan result in emissions reductions that meet the state’s 

emission goal under this guideline. And EPA is setting those emission goals based on an 

assessment of what the best system of emission reduction is achievable in each state. EPA sees 

nothing arbitrary about limiting EGU’s to emission levels that reflect the goals for emissions 

from affected sources based on that best system. If the state anticipates a certain level of 

emissions reduction might come from adjusting how EGU’s are dispatched, thereby reducing the 

utilization of a high-emitting EGU, the state can put that emission limit on the EGU. That 

emission limit simply becomes one of the several factors that limit how an EGU gets dispatched. 

It would be no different than an EGU that is subject to a temperature limit in its NPDES permit 

under the Clean Water Act. If that limit constrains the generating capacity of the EGU on a hot 

day, it will not be able to dispatch as much electricity to the grid as it might unconstrained by 

environmental limits. If the state anticipates a certain level of emissions reduction might come 

from RE development, and imposes emission limits on its EGU’s in anticipation of those 

alternative energy supplies, those limits simply become another factor in how the EGU’s get 

dispatched. There is nothing beyond the affected sources’ control or “outside the fence line” that 

inhibits a source from complying with environmental limits on its operations. EPA’s analysis 

makes it clear that states have ample options available to adjust for these BSER-based limits on 

EGU’s. 

Comment 9: EE and RE measures may not be enforceable as a practical matter. 

Commenters stated that challenges persist as to whether or not all DSM measures can meet the 

EPA's own general principle regarding enforceability that "a requirement that is enforceable as a 

practical matter is one that is quantifiable, verifiable, straightforward, and calculated over as 

short a term as reasonable." Commenters stated the EPA notes that "a plan that assigns 

responsibility to affected entities other than affected EGUs may be more challenging to 
61 

 

implement and enforce" before further acknowledging that "it may be more challenging for a 

state to demonstrate that it has sufficient legal authority to subject such affected entities other 

than affected EGUs to the federally enforceable requirements specified in its state plan." 

Commenters said implementing the increased regulatory requirements of the Clean Power Plan, 

as proposed, will likely result in commenters’ organization's members incurring unnecessary 

costs and liabilities as this uncertainty is resolved over time. Commenters suggested that 

treatment of DSM programs as complementary measures would help avoid this result, while 

preserving the value these programs currently hold.

Response 9: 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 final 

rule preamble of the CPP, 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 of the final rule 

preamble, 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. 

As proposed, we are requiring that state plans include a demonstration that plan measures are 

enforceable, which for state measures plans is provided for in § 60.5780 and discussed in section 

VIII.D.2.c.6 of the final rule preamble. 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.”

It should be possible for the state to track the success of these state measures with sufficient 

accuracy to anticipate whether the design assumptions behind its plan remain valid. In any case, 

the ultimate measure of the success of these complementary measures will be the emissions 

measured from the affected EGU’s, which should reduce consistent with the state’s design 

assumptions. It is relatively easy for EGU’s and the state to track carbon emissions, and they 

have been under the greenhouse gas reporting rule for years now. 

Comment 10: It is unclear what constitutes compliance or non-compliance with RE and EE 

programs; a clearer definition is required. 
62 

 

Commenters stated, in some cases it is unclear what would constitute a "violation" warranting an 

enforcement action or how a court would enjoin that violation. Commenters said, for example, a 

state might assign responsibility for implementing Building Block 3 (increased renewable energy 

generation) to a third party, such as an electric distribution utility, and require that utility to 

invest a certain amount of money each year into new renewable energy development. 

Commenters expressed concern whether there any guarantee that those investments will result in 

the required reduction in EGU CO2 emissions to render the state plan approvable. Commenters 

asked whether the utility demonstrate compliance with that obligation by simply making the 

required investments, or must it also show that the contemplated amount of renewable energy 

was produced as a result. Commenters questioned whether the utility would "violate" its 

obligation if new renewable energy capacity failed to materialize, or if that renewable capacity 

was not utilized enough (e.g., due to variations in weather) to generate the contemplated amount 

of renewable energy. Commenters requested clarification on whether a court would enjoin that 

violation by requiring greater investments, or by requiring increased renewable generation. 

Commenters questioned whether that the owners of renewable energy projects receiving 

investments under the state plan would also be "affected entities" subject to enforceable 

obligations requiring a minimum amount of generation each year. Commenters also asked if it 

they were affected entities, would it be a violation of that requirement if a solar or wind-powered 

energy source did not meet its generation target because of insufficient sun or wind. 

Response 10: As explained in section VIII.D of the final rule preamble of the CPP, 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. How the state structures its plan will determine what 

constitutes a violation of the plan. 

As proposed, we are requiring that state plans include a demonstration that plan measures are 

enforceable, which for state measures plans is provided for in § 60.5780 and discussed in section 

VIII.D.2.c.6 of the final rule preamble. 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.”

Comment 11: There are enforceability limitations associated with the RE and EE measures 

under the "portfolio" approach. 

Commenters stated whether a state has deregulated its electricity sector or has a binding RPS or 

EERS further limits state options under the portfolio approach. Commenters said the 21 states 

that currently do not have enforceable RPS and the 27 states that do not have mandatory EERS 
63 

 

would be forced to implement RE and EE measures through integrated resource planning 

because the measures are not enforceable through a binding RPS or EERS; conversely, a state 

with a deregulated energy sector and binding RPS and EERS, like Arizona, would have to rely 

on its RPS and EERS to incorporate EE and RE measures into its state plan. Commenters said a 

state that has a deregulated energy sector and no mandatory RPS or EERS, like Virginia, may not 

be able incorporate EE and RE measures into its state plan at all unless it enacts mandatory RPS 

and EERS or partially regulates its energy sector. Commenters said despite EPA's assertion that 

the CPP accommodates a range of state energy regulatory structures through the portfolio 

approach, the portfolio approach offers states no flexibility in whether to regulate the energy 

sector and little flexibility in the means of regulating the energy sector. Commenters said EPA 

has not fully explained how EE, RE and redispatch measures included in state plans could be 

enforced against entities that are not affected units under "portfolio approach." Commenters said 

however, it is not clear that EPA or citizens can enforce state plan RE and EE measures against 

such entities. Commenters questioned if a RE company proposes to build a new wind system but 

chooses not to do so because of economic reasons, how EPA or an environmental organization 

would purport to bring an enforcement action. Commenters requested clarification on if a third 

party service company (perhaps even a non-governmental organization) contracts to provide EE 

services but achieves less conservation than expected, how would EPA really expect that it can 

bring an enforcement actions against the company and how EPA would enforce against the plan. 

Commenters stated that EPA cannot bring an enforcement action against EGUs simply because 

they have relied on a state plan that proposes to achieve specific levels of RE and EE that were 

subsequently not achieved. Commenters added that regulating the RE and EE requirements of 

electric distribution utilities and EE providers would put EPA in the position of regulating retail 

electricity sales, over which the states have exclusive jurisdiction. EPA cannot enforce where it 

does not have jurisdiction. 

Response 11: First, as noted, EPA is not finalizing the portfolio approach, and the final guideline 

provides for state plan structures that ultimately rely on emission standards on affected EGUs, 

while giving states the flexibility to pursue state measures to reduce those emissions. It is not 

necessary for states to adopt RPS or EERS programs in order for RE to become available to 

affected EGUs. Rather, the fact that RE will allow affected EGUs to achieve their emission 

standards, coupled with the expected continued decline in prices of RE, will assure the 

availability of RE. Many commenters raised concerns about the ability of various states to adopt 

RPS or EERS programs, and therefore about the ability of the sources in those states, and those 

states, to comply with their section 111(d) obligations. However, as just noted, those RPS and 

EERS programs are not necessary for compliance with this rule, and if a state does choose to 

develop an RPS or EERS program, it is not necessary for the state to submit the program as an 

enforceable element of its state plan. The state can choose to implement an emission standard 

type plan. As further described in section VIII of the preamble, the final rule provides 

considerable discretion to the states in setting emission standards and related plan requirements.

Comment 12: Demand-side energy programs should be enforceable through citizen’s suit under 

CAA section 304. 
64 

 

Commenters stated one of the two options the EPA has proposed for implementing the program 

is called a "portfolio" approach, whereby the state itself is held responsible for measures such as 

demand-side energy efficiency programs and renewable portfolio standards. Commenters thinks 

that to the extent a commitment to implement such programs is included in a State 

Implementation Plan for criteria pollutants, it could be enforced via a citizen's suit under CAA 

Section 304, as an "emission standard or limitation." 42 U.S.C. Section 7604(a)(1) as recognized 

in cases such as CBE v. Deukmejian, 731 F. Supp. 1448; 1454 (N.D.Cal. 1990) reconsideration 

granted in part, 746 F. Supp. 976 (N.D. Cal. 1990}; Friends of the Earth v. Carey, 535 F. 2d. 

165; 170 (2d. Cir. 1976); Am. Lung Ass'n. of N.J. V. Kean, 670 F. Supp. 1285, 1289 (D. N.J. 

1987); Bayview Hunter's Point Comty. Advocates v. Metro. Transp. Comm'n., 366 F. 3d 692, 

670 (9th Cir. 2004). 

Response 12: The EPA is not finalizing the portfolio approach or the state commitment 

approach. 

Comment 13: EPA should provide additional guidance regarding what would be an acceptable 

federally enforceable plan for RE and EE. 

Commenters asked what is a federally enforceable plan for RE or EE measures? Commenters 

said for example, is an RPS "federally enforceable", or will EPA require that it be named as a 

third party beneficiary under power purchase agreements in order to enforce them? Commenters 

asked what if a state RPS allows for EE to satisfy part of the standard? 

Commenters asked what mechanisms EPA envisioned would be acceptable for states to propose 

in their plans to make energy efficiency projections and measures federally enforceable in states 

where deregulation has decoupled generation from distribution and delivery and the state has no 

existing statutory authority to enforce energy efficiency programs. 

Commenters stated that EPA must address enforceability issues (e.g., for EE and RE programs) 

rather than leaving these issues for states to resolve. 

Commenters stated that the Proposed Rule acknowledges that the plans EPA envisions would 

differ significantly from other types of Clean Air Act implementation plans and plans submitted 

under Section 111(d). Commenters stated that the Proposal, however, glosses over the 

unprecedented and arguably unlawful elements of each plan type, including measures that would 

be enforceable against entities other than affected EGUs and treating demand-side energy 

efficiency (EE) and renewable energy (RE) requirements as "standards of performance" for the 

affected EGUs. Commenters asserted that EPA must provide a more thorough analysis of these 

issues rather than simply leaving states to grapple with them. 

Similarly, commenters noted that EPA acknowledges "there may be challenges to practically 

enforcing against some entities in the event of noncompliance" resulting from the untested nature 
65 

 

of its Proposed Guidelines. 79 FR 34909. Commenters stated that there are serious legal 

problems with the enforceability of EPA's Proposed Guidelines. Commenters stated that indeed, 

the Plan TSD also acknowledges the enforceability challenges presented by the Proposed 

Guidelines, and according to the commenter, improperly suggests that it falls to states to resolve 

these questions. Plan TSD at 13-19. Commenters argued that EPA cannot make enforceability a 

prerequisite to plan approval without first resolving these issues. 

Response 13: EPA is not finalizing the portfolio approach and, therefore, comments on the 

federal enforceability of RE or EE measures are moot. States may choose to develop state 

measures to promote RE or EE, but those programs would not be an approved part of the state 

plan or directly enforceable under it. 

As discussed in section VIII of the preamble, after considering comments on the proposed 

portfolio approach, EPA is not finalizing that approach. Therefore, these comments to the extent 

they relate to the portfolio approach are moot. Instead of the proposed portfolio approach, EPA is 

finalizing an option to submit a “state measures” plan type, under which a mass CO2 emission 

goal may be partially or entirely achieved through state measures, that may include RE and EE, 

and impose requirements on entities other than affected EGUs and that are not included in the 

federally enforceable 111(d) state plan, provided the state submits standards of performance for 

CO2 emissions from affected EGUs in the form of a federally enforceable “backstop” that would 

be triggered if the state measures fail to achieve the required CO2 emission performance level. 

See section VIII. 

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 an affected EGU does not meet one of its requirements, regardless of whether 

or not its state has met its state requirements, the EPA will address the affected EGU’s violation 

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. 

As proposed, we are requiring that state plans include a demonstration that plan measures are 

enforceable, which for state measures plans is provided for in § 60.5780 and discussed in section 

VIII.D.2.c.6 of the final rule preamble of the CPP. 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.” 
66 

 

Comment 14: EPA should implement enforceable emissions targets, but should also allow 

programmatic flexibility, including enforcement at the state or municipal level. 

Commenters stated the EPA should implement enforceable emissions targets but allow 

programmatic flexibility. Commenters said EPA is proposing that all measures relied on to 

achieve the emission performance level be included in the state plan, and that inclusion in the 

state plan renders those measures federally enforceable. Commenters said in light of current state 

programs, and of stakeholder expressions of concerns, including legal enforcement 

considerations, with respect to those programs, the EPA is proposing to authorize states either to 

submit plans that hold the affected EGUs fully and solely responsible for achieving the emission 

performance level, or to submit plans that rely in part on measures imposed on entities other than 

affected EGUs to achieve at least part of that level, as well as on measures imposed on affected 

EGUs to achieve the balance of that level. Commenters said they do not take a position on any of 

the approaches put forth by EPA regarding the structure of state plans, but what is important is 

that the EPA require states to commit to binding and verifiable emission reductions, while 

allowing states significant programmatic flexibility in achieving those reductions. Commenters 

said EPA and states have much flexibility in the state plans, and commenters urged the EPA to 

take advantage of this flexibility and allow states to maintain autonomy over their emission 

reduction programs to the extent possible. Commenters said states have shown that they can 

achieve significant reductions through a combination of programs and measures developed and 

managed at the state level. Commenters said they are concerned that taking an overly 

prescriptive approach to enforcing state programs will render the programs less effective by 

exposing states to litigation risk and disrupting the administration of the programs by state 

agencies; therefore, commenters suggested the EPA require states to commit to binding emission 

reductions, but allow states significant programmatic flexibility in achieving their reduction 

goals. 

Commenters stated similarly, a federal enforcement scheme is not appropriate for Building 

Blocks 3 and 4. Commenters said for many years, the commenters’ organization have had RE 

and EE requirements in place for electric utilities. Commenters stated the commenter's 

organizations’ rules require the utilities to obtain commenters’ organizations’ approval for many 

aspects of these programs on at least a yearly basis. Commenters said the evolving nature of both 

programs, including approval of various EE measures and RE projects, makes inclusion of these 

programs under a federal enforcement scheme highly problematic. Commenters stated if state 

plans are forced to contain specific requirements on renewables and energy efficiency, 

the commenters’ organizations’ ability to make appropriate changes to these programs and 

properly discharge its constitutional authority would be adversely impacted. 

Commenters stated agreement with the EPA that renewable energy and energy efficiency 

programs should be enforceable as a practical matter to be used for compliance. Commenters 

said the question is which entity should be responsible for enforcement. Commenters stated in 

the proposed CPP, the EPA asserts that elements in state plans must be enforceable by the state 

and the federal government. 79 Fed. Reg. at 34,953-54 (proposed section 60.5780(f)(5)). 

Commenters stated this can raise serious issues for municipal regulators. Commenters said for 
67 

 

example, the city council is the entity responsible for managing the provision of power to its 

ratepayers, rather than the state public service commission. Commenters said the city council is 

the entity that implements municipal programs in the energy efficiency and renewable energy 

fields, and the state public service commission has no authority to enforce such programs in the 

city. 

Commenters stated this means that it is the city council, and not the state or the state public 

service commission, which implements, oversees and "enforces" municipal regulations relating 

to electricity (to the extent they are enforceable and not voluntary programs or aspirational 

goals). Commenters stated while the city council fully supports inclusion of a broad range of 

municipal programs in the CPP, it does not support having those programs implemented and 

enforced at the state or federal level. Commenters said such higher-level oversight and 

enforcement is hardly appropriate for what are inherently local programs based on local factors, 

needs and expertise. 

Commenters stated rather than make such programs enforceable by the state or federal 

government (except to the extent they are state-led programs), the proper implementation could 

be ensured by appropriate reporting and auditing requirements that could be written into the 

programs and implemented locally. Commenters said moreover, a state which adopts in its plans 

such municipal programs need not "enforce" those programs in the traditional sense of policing 

compliance. Commenters stated rather, the state could be held accountable by the EPA for 

reductions estimated to occur from those programs that are elements of state plans, and would be 

required to find reductions from elsewhere to cover any shortfalls in reductions ascribed to these 

municipal programs. Commenters said this is similar to the way the EPA authorizes states to 

adopt voluntary programs for mobile source emission reductions and stationary source emission 

reductions as measures in state implementation plans ("SIPs") under Clean Air Act section 110. 

Commenters stated, ultimately, the EPA should minimize the conditions and requirements it 

imposes on state programs, especially those based on local implementation, as red tape and 

prolonged bureaucratic review can be a powerful disincentive to these programs. Commenters 

said the EPA should give states and municipalities flexibility to determine appropriate 

mechanisms as long as a program can be effectively evaluated, monitored and verified. 

Commenters stated the EPA can certainly provide guidance to the states on how best to achieve 

these goals, but it should not take over enforcement. 

Response 14: See section IV.A of the final rule preamble of the CPP for the EPA’s response to 

this comment. 

Comment 15: EPA should carefully consider which elements of an allowance system must be 

federally enforceable in order to satisfy it regulations, while maintaining operating space for state 

regulators.

Commenters stated that EPA should carefully consider which elements of an allowance system 

must be federally enforceable in order to satisfy its regulations, while maintaining operating 
68 

 

space for state regulators to flexibly address more granular market function issues. Commenters 

stated that designing allowance systems is a complex task, requiring a significant state regulatory 

effort to define how the allowance market will function. Commenters stated that in California's 

experience, these market rules have required careful elaboration and ongoing market monitoring, 

along with several sets of regulatory amendments over the past few years. Commenters did not 

believe that the full suite of regulatory efforts supporting state allowance systems necessarily 

need be subject to federal enforcement if the systems are used as all or a portion of 111(d) 

compliance plan- i.e., not every market rule need be subject to federal approval, or open entities 

to the possibility of federal citizen suit. Commenters stated that such rigidity would make it 

difficult to adjust these rules as needed, and could impose undue compliance liabilities for 

market participants. Commenters stated that it is very important to the commenter to ensure that 

111(d) requirements do not cause disruptions to the existing economy-wide carbon market, or to 

continued regulatory efforts to improve it, so U.S. EPA's confirmation that not all market 

structures need be federally enforceable is especially important. 

Instead, commenters stated that EPA should confirm that it will evaluate state plans with 

allowance system designs in accordance with the broad plan design and enforcement latitude that 

section 111 indicates is appropriate. Although they expect to continue to explore options with 

EPA and stakeholders, the commenter initially suggested that appropriately bounded 

enforceability designs might include a commitment to continue operating the system itself and 

(an obligation for covered EGUs to participate in the system as a federally enforceable obligation 

- but not federal enforcement of more detailed state-level allowance system rules. Commenters 

expected that EPA would carefully scrutinize any submitted allowance plan to ensure that it 

would produce the required reductions (in combination with other programs or on its own). 

Commenters stated that allowance program designs need to be carefully reviewed to ensure, for 

instance, that they are not over-allocated and that they will function effectively as markets and 

pollution reduction tools. Commenters stated that such an approach could be appropriate if a 

state demonstrated to a reasonable certainty that market competition between entities and market 

design generally, in concert with complimentary measures reducing EGU emissions, demonstrate 

that covered EGUs would not acquire sufficient allowances as to collectively exceed the 111(d) 

levels under a wide range of plausible market conditions. Commenters stated that upon such a 

demonstration, the underlying market rules would not be included in the plan, but a requirement 

that entities participate in the plan would be, along with a requirement that the state continue to 

operate the system as a whole.

As a result, commenters stated that EPA and citizens would have the authority to enforce the 

obligation to operate the market as against state agency officials (including via imposing a 

federal plan, if necessary), see 42 U.S.C. section 7411(d)(2)(A), and the requirement to 

participate in allowance programs against covered entities, see 42 U.S.C. sections 

7411(d)(2)(B) and 7413 (EPA may enforce state plan requirements against covered entities). 

Commenters stated, however, EPA would not enforce compliance with particular program rules; 

these rules would also not require direct EPA approval before amendment (unless rule changes 

significantly changed the compliance demonstration). 
69 

 

Commenters stated that other designs may also be appropriate. Commenters stated, for instance, 

EPA may determine that additional EGU-specific market design features are necessary in 

economy-wide carbon markets. If so, commenters recommended that EPA work very closely 

with state officials to ensure that any such features do not disrupt the market as a whole, nor 

unwittingly cause reliability issues within the electrical grid. Commenters stated that the large 

emission reductions which efficient economy-wide carbon markets provide should not 

inadvertently be compromised by sector-specific section 111 programs. Commenters stated that 

the goal, in considering the interactions between state allowance systems and the federal rules, 

should be to ensure that plans are "satisfactory" for federal compliance purposes without 

potentially significantly disrupting the continuing management and operation of state allowance 

systems. Commenters stated that in a sense, higher level federal enforceability of allowance 

systems is a variant of the "enforceable commitment" approach discussed below. Commenters 

stated that states would be making a federally enforceable commitment to run an allowance 

system, with a particular emissions cap, but underlying program details would not themselves be 

federally enforceable (though a more general requirement for EGUs to participate in the system 

might be). 

 Response 15: EPA agrees with some of the broad principles in this comment but does not 

necessarily agree with every recommendation. First, we agree that EPA has the authority to 

reasonably determine what requirements must be made federally enforceable in order for state 

plans to “provide for implementation and enforcement” of the standards of performance. For 

details please see the Legal Memorandum discussion of the state measures approach. 

We have designed certain features of these guidelines, such as various state plan approaches 

available under the state measures plan type and emission standards plan type, with the aim of 

accommodating existing state programs, such as allowance-based trading programs that cover a 

broader range of sources to meet the requirements of section 111(d)(1) with minimal disruption 

to those programs. See section VIII.J.2.d. However, we are not approving any state’s specific 

program in this action; we will act on a state submittal of its program through notice-andcomment rulemaking. 

For all state plan types, we are requiring a demonstration that the state plan will achieve the CO2 

emission performance rates or the CO2 emission goals. In the case of a state measures plan type, 

the plan must include a description of the state measures along with a demonstration that the 

state measures and any federally enforceable emission standards for affected EGUs will achieve 

the mass goals. 

We are not finalizing a state commitment approach. Instead, we are finalizing the state measures 

approach, which includes a federally enforceable trigger and backstop. 

Comment 16: Federal enforcement is critical for fair and consistent rule implementation and for 

rapidly reducing emissions. 
70 

 

Commenters said the history of air pollution control shows that it is only effective under the 

potential for federal enforcement; therefore, given the urgency of addressing climate change, the 

commenters believed that federal enforcement is critical both for fair and consistent rule 

implementation and for rapidly reducing emissions that will impact our state. 

Response 16: EPA agrees it is important that requirements in a state plan must be federally 

enforceable. EPA has not finalized the portfolio approach to state plan design. As the comments 

above indicate, it raised many questions about legal authority. 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 an 

affected EGU does not meet one of its requirements, regardless of whether or not its state has 

met its state requirements, the EPA will address the affected EGU’s violation 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. 

Comment 17: If EPA makes RE and EE projects federally enforceable, then states would not 

have the flexibility they need; provisions such as force majeure and cost caps would not be 

available in cases where they are needed. 

Commenters stated that provisions such as force majeure and cost cap have not been accounted 

for in U.S. EPA's rule, and federally enforceable RE would not allow states the flexibility to 

apply such measures in cases when it is needed. Commenters said states would be locked into 

goals that do not account for real world changes and do not allow state agencies to fully utilize 

their knowledge regarding these measures and what is the most beneficial for the state. 

Commenters said this further strengthens Ohio EPA's desire to keep measures like RE and EE as 

state-only programs. Commenters said states should have control over what programs are used to 

achieve state RE and EE goals and if a program becomes no longer economically beneficial or 

technically feasible, the state can freely chose to take appropriate action without a lengthy SIP 

revision or enforcement by U.S. EPA or a citizen's suit. 

Commenters stated in regards to implementing EE programs in the state, Ohio has the following 

language in ORC 4928.66 (2)(b): "The commission may amend the benchmarks set forth in 

division (A)(1)(a) or (b) of this section if, after application by the electric distribution utility, the 

commission determines that the amendment is necessary because the utility cannot reasonably 

achieve the benchmarks due to regulatory, economic, or technological reasons beyond its 

reasonable control." Commenters stated the U.S. EPA has afforded no similar opportunity for 

states to make adjustments that are warranted, yet used these very state programs to develop the 

goals. Commenters said the U.S. EPA must re-evaluate the RE and EE goals, base them on all 

provisions provided in the individual state RPS programs and provide needed flexibility for goals 

and state plans to be adjusted when warranted, without the need for anti-backsliding provisions. 

Response 17: EPA is not finalizing the portfolio approach. 
71 

 

Comment 18: Commenters stated that under section 111(d)(2)(A), as with other SIP-based 

obligations, Congress obligated EPA to act if a state does not: "The Administrator shall have the 

same authority ... to prescribe a plan for a State in cases where the State fails to submit a 

satisfactory plan as he would have under section [110(C)] in the case of failure to submit an 

implementation plan .... " Commenters said that whatever EPA requires must be something that 

it can lawfully do if the state does not. Commenters said that while EPA certainly could adopt 

and impose emission limitations on "existing sources," it has no authority to prescribe state-wide 

energy policy, as the proposal would direct the states to do for themselves. Commenters said that 

EPEC is not aware of any CAA provision that authorizes EPA to establish and enforce 

renewable portfolio standards, to direct dispatch decisions, to provide rebates for programmable 

thermostats, or to undertake any of the other notions that it has for Blocks 2-4 of its BSER. 

Commenters said that those blocks are outside of the options delegated to EPA by Congress 

under section 111. 

Response 18: See section IV.A of the final rule preamble of the CPP for the EPA’s response to 

this comment.

Comment 19: Accountability and enforceability of demand-side EE is problematic and 

unsupported by the CAA. 

Commenters stated, at the accountability stage, the inclusion of demand-side energy efficiency 

programs becomes even more problematic and unsupported by the Clean Air Act. Commenters 

said, what if the retail customers and homeowners integral to these programs do not act the way 

they are assumed or expected to? Commenters said, 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? Commenters said, 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 stated, the Proposed Regulation's proposal for the States to resolve this dilemma 

and to assume accountability for enforcing activity beyond the bounds of the Clean Air Act is 

unlawful. Commenters said, far from cooperative federalism, the Proposed Regulation 

unlawfully expands coverage of the Clean Air Act and commandeers significant state resources. 

Commenters said, shortly after the Proposed Regulation was issued, the Supreme Court of the 

United States overturned an aspect of the EPA's Tailoring Rule for reasons that apply no less to 

the Proposed Regulation. Commenters said, in Utility Air Regulatory Group, the Court stated, 

among other things, that: 

• The fact that EPA's greenhouse-gas-inclusive interpretation of the PSD and Title V 

triggers would place plainly excessive demands on limited governmental resources is 

alone a good reason for rejecting it; but that is not the only reason. EPA's interpretation is 
72 

 

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," 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 19: See section IV.A of the final rule preamble of the CPP for the EPA’s response to 

this comment.

1.11.3 Plans with state commitments 

Comment 1: The proposed state commitment approach conflicts with Congress’s intent that 

state plans be federally enforceable; EPA should require enforceability and accountability in 

state plans. 

Commenters opposed the state commitment approach. Commenters believed that state plans that 

count non-federally enforceable measures to reach the BSER would be illegal and contrary to the 

Clean Air Act and argued that the EPA should reject them. Commenters argued the state 

commitment approach would conflict with Congress's intent that state plans must be federally 

enforceable by the EPA and citizens. Commenters stated that enforceability and accountability 

must remain strong to ensure that states do not falter implementing their plans in the face of 

political or economic pressure. Commenters urged the EPA to not allow states to use the state 

commitment approach because it would make states unaccountable. Commenters believed the 

state commitment approach would be unenforceable and would exclude the specific standards of 

performance from the federally enforceable state plan. 

Commenters stated that section 111(d)(1) specifically requires state plans to establish standards 

of performance and provide for their implementation and enforcement. Commenters argued 

Congress has not given the EPA authority to allow states to exclude standards of performance 

and the EPA does not have plenary authority subject only to congressional restriction. Railway 

Labor Executives’ Association v. National Mediation Board, 29 F.3d 655, 670 (D.C. Cir. 1994) 

(en banc) ("agencies owe their capacity to act to the delegation of authority" from Congress). 

"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 the Constitution as well." Id. at 671. Commenters stated that EPA's rationale that 

it has authority to allow the state commitment approach because Congress has not prohibited the 

state commitment approach has no legitimate basis. 

Commenters stated that citizen enforcement under section 304 and 307 must be available, as it is 

for NAAQS. Citizen suits are an essential element of Clean Air Act enforcement and citizens are 

specifically authorized to sue to enforce "any requirement under [section 111] (without regard to 
73 

 

whether such requirement is expressed as an emission standard or otherwise)". Commenters said 

the EPA cannot issue any regulations in violation of this specific statutory requirement, and 

should expressly provide for citizen suit enforcement. 

Commenters argued the EPA must establish clear requirements for the contents of state plans to 

ensure that states commit not only to overall targets and standards, but also spell out precise and 

enforceable emissions reduction obligations, methods and timelines, and identify by name the 

sources responsible for obtaining those reductions. Commenters stated in addition, state plans 

must contain monitoring, reporting and verification procedures. Commenters said this level of 

detail in state plans is necessary to guarantee their enforceability. 

Commenters stated the Clean Air Act contains all the procedures necessary for the federal 

enforcement of state plans under section 111(d). Sections 111(d)(1) and 111(d)(2)(B) specifically 

refer to section 110 state implementation plans, or SIPs for national ambient air quality 

standards, and to section 113, which describes section 110 SIP enforcement procedures. 

Commenters said these statutory references give the EPA clear authority to enforce section 

111(d) state plans in the same manner as SIP violations under sections 108 to 110. Commenters 

stated that section 110 provides that state plans must include enforceable emission limitations 

and other control measures, means, or techniques (including economic incentives such as fees, 

marketable permits, and auctions of emissions rights), as well as schedules and timetables for 

compliance, as may be necessary or appropriate to meet the applicable requirements of this Act. 

42 U.S.C. 7410(a)(2)(A). Commenters said the EPA reached these conclusions when it first 

considered section 111(d) plans in 1975. 

If states opt to rely on actions by third parties to reduce emissions at power plants, commenters 

argued that these obligations should become part of the approved state plans and therefore 

federally enforceable. Commenters stated that state plans must name the responsible parties, set 

specific reduction targets, and be sufficiently detailed so that effective enforcement can take 

place. If a state implements a state plan that exceed federal requirements, commenters argued 

that the state would still have to identify the specific measures designed to meet the guidelines to 

ensure those measures are federally enforceable. 

Commenters thought the EPA included the state commitment approach in the proposal “to 

appease states, who desire to avoid accountability and want flexibility.” 

Response 1: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing the proposed portfolio approach or state commitment approach, and any comments on 

these proposed approaches to 111(d) state plan design are therefore moot. Instead, the EPA is 

finalizing an option to submit a “state measures” plan type, under which a mass CO2 emission 

goal may be partially or entirely achieved through state measures that impose requirements on 

entities other than affected EGUs and that are not included in the federally enforceable 111(d) 

state plan, provided the state submits standards of performance for CO2 emissions from affected 

EGUs in the form of a federally enforceable “backstop” that would be triggered if the state 

measures fail to achieve the required CO2 emission performance level. Under a state measures
74 

 

plan, the backstop emission standards constitute the standards of performance required by 

section 111(d), and the state plan provides for the implementation and enforcement of such 

standards of performance by specifying the trigger mechanism and conditions under which the 

backstop emission standards apply to affected EGUs. Upon EPA approval of a state measures 

plan under section 111(d), the backstop emission standards become federally enforceable 

requirements, which EPA and citizens may enforce against affected EGUs under section 113 and 

section 304 of the Act, respectively, once triggered and implemented to address a shortfall in 

necessary emission reductions. See section VIII. 

The final emission guidelines require that all 111(d) state plans, including state measures plans, 

specify CO2 emission monitoring, reporting and recordkeeping requirements for affected EGUs, 

demonstrate that plan measures are enforceable, and contain the process, content and schedule 

for state reporting to the EPA on plan implementation and progress toward meeting the required 

CO2 emission performance level. For state measures plans in particular, the final emission 

guidelines also require states to submit annual reports to the EPA that address periodic 

programmatic milestones to show progress in program implementation. See section VIII. The 

EPA intends to review each submitted state plan on a case-by-case basis to determine whether it 

satisfactorily addresses the Act’s enforceability requirements. Final EPA action on any 

submitted 111(d) state plan, including a state measures plan, is subject to judicial review under 

section 307(b) of the Act. 

Comment 2: Commenters opposed the state commitment approach due to concerns the proposed 

approach would make enforcement impractical. 

Commenters opposed the state commitment approach because they felt it raises practical 

enforceability issues. Commenters noted that if the standards of performance are not part of the 

state plan, then citizens and the EPA would have difficulty determining compliance with the 

state commitment because citizens and the EPA would need to evaluate many different state 

programs and measures and independently challenge a state's claim that it has met the 

performance level. Commenters argued that enforcement is more practical when citizens and the 

EPA can enforce specific, verifiable, and enforceable standards of performance identified in state 

plans. 

Response 2: The EPA is not finalizing the proposed state commitment approach and comments 

on this approach to 111(d) state plan design are therefore moot. Instead, as explained in section 

VIII of the preamble and above, the EPA is finalizing an option to submit a “state measures” 

plan type, under which a mass CO2 emission goal may be partially or entirely achieved through 

state measures that impose requirements on entities other than affected EGUs and that are not 

included in the federally enforceable 111(d) state plan, provided the state submits standards of 

performance for CO2 emissions from affected EGUs in the form of a federally enforceable 

“backstop” that would be triggered if the state measures fail to achieve the required CO2

emission performance level. The state measures approach ensures that, if the state measures fail 

to achieve necessary emission reductions, the EPA and citizens can enforce backstop emission 
75 

 

standards against affected EGUs, once these backstop requirements are triggered and 

implemented. 

Comment 3: Commenters expressed support for the state commitment approach and asserted 

that state plans with state commitments would maintain appropriate level of federal 

enforceability while providing states with greater flexibility to implement state programs. 

Commenters supported the state commitment approach because it would provide greater 

flexibility to states, while maintaining an appropriate level of federal enforceability. Commenters 

believed the state commitment approach would enable states to continue to develop and 

implement effective and innovative energy policies that will support compliance with federal 

emissions targets. Commenters argued the state commitment approach ensures continuous 

progress towards achieving the federal goals is legally binding, while still providing states with 

the flexibility to innovate and improve programs if necessary. Commenters also said the state 

commitment approach would avoid any undue federal enforceability of the fine details of state 

allowance systems, by rendering the emissions reductions achieved by those systems federally 

enforceable, but not the system of measures used to meet the emission reductions. Commenters 

stated that the state commitment approach would avoid any integration challenges between 

EPA's and the state's emissions enforcement responsibilities under the Clean Air Act, and the 

enforcement of state energy programs. Commenters supported the state commitment approach 

because it would focus federal enforcement on ensuring the state's compliance with its plan and 

would avoid transforming state policies and processes into federal programs. 

Commenters argued that states that select the state commitment approach would be subject to 

federal and citizen law suits if they fail to meet their commitments. Commenters also noted that 

section 111(d) preserves EPA enforcement authority under 42 U.S.C. sections 7413 & 7414 

where a state fails to "enforce the provisions" of its section 111(d) plan. In support of their 

arguments, commenters also cited two court cases: (1) e.g., Citizens for a Better Environment v. 

Deukmejian, 731 F. Supp. 1448, 1457 (N.D. CCll. 1990) (explaining that citizen suits under 42 

U.S.C. section 7604 are available to secure injunctive relief against state agency officials that fail

to uphold enforceable commitments in a section 110 plan; and (2) BCCA Appeal Group v. U.S. 

EPA, 355 F.3d 817, 837, n.25 (5th Cir.2003) (collecting cases on state commitment 

enforcement). 

Commenters thought the state commitment approach would allow states to retain flexibility to 

administer their own programs in the most efficient and cost-effective manner, without the 

complexities of unnecessary federal mandates, and avoid subjecting non-EGU entities to 

multiple levels of regulation and enforcement authority. Commenters noted under existing 

programs, California's EGUs and other affected entities already provide reports to state agencies 

and submit detailed information regarding their compliance with state mandates to reduced 

emissions reductions. Commenters argued the imposition of additional and duplicative reporting 

requirements on the EGUs and affected entities would add no value to the EPA's proposal, but 
76 

 

rather would only result in additional compliance costs, and should be avoided. Commenters said 

the reporting and verification obligations already required in California support a robust and 

comprehensive means by which the state would be able ensure its emission reduction 

commitment under the Clean Power Plan, without further burdening compliance entities. 

Commenters said the state commitment approach avoids potentially duplicative federal and 

enforcement processes for particular energy program designs and fine plan details which 

might otherwise make it difficult to continue to adjust State energy and climate programs as 

circumstances shift over the coming years. Commenters thought the state commitment approach 

was important for maintaining state control over the energy programs and would allow the states 

to adapt programs to respond to new challenges. Commenters thought the state commitment 

approach would allow states to expand a wide range of energy efficiency and renewable energy 

programs without freezing a particular suite of programs in place and rendering them federally 

enforceable. 

Commenters argued that states understand the EPA will enforce commitments made under 

111(d) should they fail to meet their commitments in a timely manner. 

Commenters said this alternative approach would avoid the legal issue associated with placing 

partial or full responsibility on entities other than EGUs 

Commenters thought the state commitment approach was consistent with cooperative federalism 

upon which the Clean Air Act is founded and urged the EPA to preserve the states' role as 

primary implementers of the 111(d) performance standards, as envisioned by the Act. 

Response 3: The EPA is not finalizing the proposed state commitment approach and comments 

on this approach to 111(d) state plan design are therefore moot. Instead, as explained in section 

VIII of the preamble and above, the EPA is finalizing an option to submit a “state measures” 

plan type, under which a mass CO2 emission goal may be partially or entirely achieved through 

state measures that impose requirements on entities other than affected EGUs and that are not 

included in the federally enforceable 111(d) state plan, provided the state submits standards of 

performance for CO2 emissions from affected EGUs in the form of a federally enforceable 

“backstop” that would be triggered if the state measures fail to achieve the required CO2

emission performance level. The state measures approach allows states to rely on 

implementation of a wide variety of state-administered programs in their 111(d) state plans 

without subjecting these programs to federal enforcement under the CAA. At the same time, the 

state measures approach ensures that if the state measures fail to achieve necessary emission 

reductions, the EPA and citizens can enforce backstop emission standards against affected 

EGUs, once these backstop requirements are triggered and implemented. 

Comment 4: Commenters supported the proposed state commitment approach because it would 

reduce enforcement risks for EGUs and allow states to encourage, implement, and account for a 

number of programs and policies that could not otherwise be counted towards state goals. 
77 

 

Commenters supported the proposed state commitment approach because it would reduce 

enforcement risks for EGUs and allow states to encourage, implement, and account for a number 

of programs and policies that could not otherwise be counted towards state goals. 

Commenters noted that if a state incorporates an RPS in its entirety into its section 111(d) plan, 

then all aspects of the RPS would become federally enforceable and open to citizen suits. 

Commenters stated that federal enforcement of programs that are outside the EPA's jurisdiction 

is not authorized by the CAA and creates greater enforcement risk for EGUs and other entities. 

Commenters further observed that litigation by environmental groups has increased in the last 

few years, with groups seeking energy policy objectives rather than righting a permitting or 

statutory infraction. Commenters said this is evidenced by the multi-million dollar efforts behind 

Sierra Club's "Beyond Coal" campaign, which the commenter believed was designed to "replace 

[dirty] coal with clean energy by mobilizing grassroots activists in local communities to advocate 

for the retirement of old and outdated coal plants and to prevent new coal plants from being 

built." To illustrate their concerns, commenters referenced several examples, including: 

• December 2013 Sierra Club suit filed in U.S. District Court in Springfield that argued the 

court should force more controls on the carbon sequestration FutureGen project. 

• Sierra Club suit against Mississippi Power's Kemper County Energy Facility where 

Kemper will use a technology known as "transport integrated gasification" ("TRIG") to 

convert lignite coal into natural gas and will use clean coal technologies to capture 

carbon. Commenters stated during the four years of legal challenges Sierra Club sought 

$15 million in energy efficiency and clean energy investments to the state. 

• Sierra Club "Beyond Gas" campaign which opposes fracking and the use of natural gas in 

the United States. 

Commenters stated that EGUs affected by the proposed rule can anticipate continued litigation 

over the use of fossil fuels in the U.S. and noted the CPP will become a new tool for 

environmental groups. Commenters said incorporating state policies such as an RPS into a state 

plan would lead to a vast expansion of litigation and would lead to potential federal enforcement 

of every state approval process under every energy regulation. Commenters thought federal 

enforcement of an RPS would allow environmental groups to challenge business decisions that 

these groups would otherwise have no standing to pursue. For this reason, commenters thought 

the state commitment approach may be appropriate for states that wish to rely on state RE and 

demand-side EE programs but that do not want to include those programs in their state plans. 

Commenters said the state commitment approach may also encourage participation since third 

parties would no longer be concerned with subjecting themselves to federal enforcement. 

Commenters stated the EPA also proposed a modified variation of the state commitment 

approach, under which the state would credit the EGUs with the amount of emission reductions 

expected to be achieved from RE or demand-side EE measures. Commenters said the state would 

then assume responsibility for the credited amount of emission reductions. Commenters stated 
78 

 

while he agrees with this modified variation, the full state commitment approach provides greater 

flexibility. 

Response 4: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing the proposed portfolio approach, state commitment approach, or crediting approach, 

and any comments on these proposed approaches to 111(d) state plan design are therefore moot. 

Instead, as explained in section VIII of the final rule preamble and above, the EPA is finalizing 

an option to submit a “state measures” plan type, under which a mass CO2 emission goal may be 

partially or entirely achieved through state measures that impose requirements on entities other 

than affected EGUs and that are not included in the federally enforceable 111(d) state plan, 

provided the state submits standards of performance for CO2 emissions from affected EGUs in 

the form of a federally enforceable “backstop” that would be triggered if the state measures fail 

to achieve the required CO2 emission performance level. The state measures approach allows 

states to rely on implementation of a wide variety of state-administered programs, including state 

renewable portfolio standards, in their 111(d) state plans without subjecting these programs to 

federal enforcement under the CAA. At the same time, the state measures approach ensures that 

if the state measures fail to achieve necessary emission reductions, the EPA and citizens can 

enforce backstop emission standards against affected EGUs, once these backstop requirements 

are triggered and implemented. 

Comment 5: State commitment approaches are well established and have been used for criteria 

pollutant regulations in section 110 (attainment area plans) and section 172 (non-attainment area 

plans). 

Commenters supported the state commitment approach and argued that this approach is well 

established. Commenters noted that the Clean Air Act explicitly recognizes the use of state 

commitments in contingency planning for areas with extreme local criteria pollutant pollution 

problems and suggests this type of plan is appropriate for section 111(d) plans that address 

public health challenges across a broader geographic scope. Commenters noted that both section 

110 (for attainment plans) and section 172 (for nonattainment plans) endorse the use of a wide 

array of enforceable measures that clearly can include such commitments. Commenters said that 

the U.S. EPA and the states have long used such commitments for other criteria pollutant plans. 

See, e.g., 79 Fed. Reg. 52,526, 52,534 (Sept. 3, 2014) (endorsing enforceable commitments for 

nonattainment planning generally, per 42 U.S.C. section 7502(c)(6), as part of South Coast air 

district plan); 77 Fed. Reg. 12,562, 12,653-655 (Mar. 1, 2012) (enforceable commitment 

approval for San Joaquin air district); 76 Fed. Reg. 69,928, 69,941-45 (Nov. 9, 2011) (same for 

South Coast air district). 

Response 5: The EPA is not finalizing the proposed state commitment approach and comments 

on this approach to 111(d) state plan design are therefore moot. Instead, as explained in section 

VIII of the final rule preamble of the CPP and above, the EPA is finalizing an option to submit a 

“state measures” plan type, under which a mass CO2 emission goal may be partially or entirely 
79 

 

achieved through state measures that impose requirements on entities other than affected EGUs 

and that are not included in the federally enforceable 111(d) state plan, provided the state 

submits standards of performance for CO2 emissions from affected EGUs in the form of a 

federally enforceable “backstop” that would be triggered if the state measures fail to achieve the 

required CO2 emission performance level. The state measures approach allows states to rely on 

implementation of a wide variety of state-administered programs in their 111(d) state plans 

without subjecting these programs to federal enforcement under the CAA. At the same time, the 

state measures approach ensures that if the state measures fail to achieve necessary emission 

reductions, the EPA and citizens can enforce backstop emission standards against affected 

EGUs, once these backstop requirements are triggered and implemented. 

Comment 6: Courts have upheld plans with enforceable commitments. 

Commenters supported the state commitment approach and noted that the federal courts have 

previously upheld plans with enforceable commitments. Commenters specifically mentioned the 

following court decisions: 

• Environmental Defense v. U.S. U.S. EPA, 369 F.3d 193, 208-10 (2nd Cir. 2004) 

(approving New York plan and holding that "[g]iven the breadth of the statutory 

language, U.S. EPA's decision to treat an enforceable commitment as a means or 

technique [of ensuring compliance] is reasonable and therefore should be upheld"); 

• BCCA Appeal Group v. U.S. U.S. EPA, 355 F.3d 817, 841 (5th Cir.2003) (approving 

Texas plan, holding that "U.S. EPA reasonably concluded that an enforceable 

commitment to adopt additional control measures on a fixed schedule was an 

'appropriate' means, technique, or schedule or timetable for compliance under the statute" 

and noting that U.S. EPA had maintained this interpretation "[f]or over 20 years"); 

• Bayview Hunters Point Community Advocates v. Metro. Transp. Comm'n, 366 F.3d 692, 

701-03 (9th Cir. 2004) (discussing whether a plan element was an enforceable 

commitment); 

• Coalition Against Columbus Center v. City of New York, 967 F.2d 764 (2nd Cir. 1992) 

(considering implementation of such a commitment); and 

• Citizens for a Better Environment v. Deukmejian, 731 F. Supp. at 1457 (analyzing 

enforceable commitments and holding that "the basic commitment to adopt and 

implement additional measures, should the identified conditions occur, constitutes a 

specific strategy, fully enforceable in a citizens action, although the exact contours of 

those measures are not spelled out."). 

Commenters stated that courts and the EPA have found commitments appropriate for situations 

where the state demonstrates it is capable of fulfilling the commitment, the commitment covers a 

reasonable period of time, and the commitment "addresses a limited portion" of the plan, at least 

in the case where the state is committing to enact new programs. Commenters noted that the state 
80 

 

must submits a "comprehensive and detailed plan" for its commitments, allowing U.S. EPA to 

"deem the proposals sufficient to make the necessary emission reductions." Commenters 

believed that the state commitment approach is appropriate for section 111(d) plans and noted 

that these plans are significantly less constrained in some regards than the criteria pollutant plans 

that U.S. EPA has previously considered. Commenters believed that Congress expected a high 

degree of state flexibility and that a broad approach to state commitments, including allowing 

commitments to cover a potentially larger portion of state plans, would be appropriate. 

Response 6: The EPA is not finalizing the proposed state commitment approach and comments 

on this approach to 111(d) state plan design are therefore moot. Instead, as explained in section 

VIII of the preamble and above, the EPA is finalizing an option to submit a “state measures” 

plan type, under which a mass CO2 emission goal may be partially or entirely achieved through 

state measures that impose requirements on entities other than affected EGUs and that are not 

included in the federally enforceable 111(d) state plan, provided the state submits standards of 

performance for CO2 emissions from affected EGUs in the form of a federally enforceable 

“backstop” that would be triggered if the state measures fail to achieve the required CO2

emission performance level. The state measures approach allows states to rely on 

implementation of a wide variety of state-administered programs in their 111(d) state plans 

without subjecting these programs to federal enforcement under the CAA. At the same time, the 

state measures approach ensures that if the state measures fail to achieve necessary emission 

reductions, the EPA and citizens can enforce backstop emission standards against affected 

EGUs, once these backstop requirements are triggered and implemented. 

Comment 7: State commitment approach would address legal issues related to extending federal 

enforcement to RE and demand-side EE programs that are currently controlled by state utility 

commissions. 

Commenters supported the state commitment approach because it would allow state 

requirements for renewable energy and energy efficiency programs to be excluded federal 

oversight and enforcement. Commenters said, instead, the state plan would include an 

enforceable commitment by the state itself to implement state-enforceable measures that would 

achieve a specified portion of the required emission performance level on behalf of affected 

EGUs. Commenters thought the state commitment approach would addresses the legal issues 

that could arise with extending federal enforcement renewable energy and demand-side energy 

efficiency requirements that to date have been within the exclusive purview of state utility 

regulatory commissions. 

Response 7: The EPA is not finalizing the proposed state commitment approach and comments 

on this approach to 111(d) state plan design are therefore moot. Instead, as explained in section 

VIII of the preamble and above, the EPA is finalizing an option to submit a “state measures” 

plan type, under which a mass CO2 emission goal may be partially or entirely achieved through 
81 

 

state measures that impose requirements on entities other than affected EGUs and that are not 

included in the federally enforceable 111(d) state plan, provided the state submits standards of 

performance for CO2 emissions from affected EGUs in the form of a federally enforceable 

“backstop” that would be triggered if the state measures fail to achieve the required CO2

emission performance level. The state measures approach allows states to rely on 

implementation of a wide variety of state-administered programs in their 111(d) state plans 

without subjecting these programs to federal enforcement under the CAA. At the same time, the 

state measures approach ensures that if the state measures fail to achieve necessary emission 

reductions, the EPA and citizens can enforce backstop emission standards against affected 

EGUs, once these backstop requirements are triggered and implemented. 

Comment 8: Commenters expressed concern that the state commitment approach may subject 

state utility regulatory commissions to federal enforcement and challenges brought by citizen 

groups for violations CAA violations. 

Commenters were concerned the sate commitment approach would subject state utility 

regulatory commission to federal enforcement and citizen lawsuits. Commenters acknowledged 

that the EPA has been willing to work with state regulators to address compliance concerns and 

reduce the risk of citizen lawsuits and noted that their state considered retaining state oversight 

of renewable energy and energy efficiency decisions to be important and to greatly outweigh the 

risk of potential citizen lawsuits. Commenters also noted that their state had a lot of experience 

implementing energy efficiency and renewable energy programs and was implementing a 

technical reference manual to better assure the integrity of demand-side energy efficiency 

investments and results. Commenters believed these efforts greatly limit the potential risk of 

enforcement claims. 

Response 8: The EPA is not finalizing the proposed state commitment approach and comments 

on this approach to 111(d) state plan design are therefore moot. Instead, as explained in section 

VIII of the preamble and above, the EPA is finalizing an option to submit a “state measures” 

plan type, under which a mass CO2 emission goal may be partially or entirely achieved through 

state measures that impose requirements on entities other than affected EGUs and that are not 

included in the federally enforceable 111(d) state plan, provided the state submits standards of 

performance for CO2 emissions from affected EGUs in the form of a federally enforceable 

“backstop” that would be triggered if the state measures fail to achieve the required CO2

emission performance level. The state measures approach allows states to rely on 

implementation of a wide variety of state-administered programs in their 111(d) state plans 

without subjecting these programs to federal enforcement under the CAA. At the same time, the 

state measures approach ensures that if the state measures fail to achieve necessary emission 

reductions, the EPA and citizens can enforce backstop emission standards against affected 

EGUs, once these backstop requirements are triggered and implemented. 

Comment 9: Commenters supported the state commitment approach but expressed concern 

about EPA imposing penalties on states that fail to meet goals. 
82 

 

Commenters supported the state commitment approach, but recommended the EPA not impose 

penalties on states that fail to meet milestones, interim goals, or final goals. Commenters stated 

the state's Environment Department does not have and does not intend to seek authority for 

enforcement of items such as renewable portfolio standards and energy efficiency resource 

standards (EERS). However, commenters stated that they will continue to work closely with 

those state agencies that have authority in these areas. Commenters stated that it is not 

appropriate for the EPA to have federal authority over the actions of other agencies within the 

state such as the Public Regulation Commission. Instead, commenters stated that it is appropriate 

for the EPA to enforce upon the State and for the State to work with those agencies in 

determining how to correct any deficiencies in meeting State goals. Rather than imposing 

penalties on states, commenters recommended the EPA follow a process similar to a "SIP Call" 

wherein, if a state fails to meet a milestone or goal as outlined in its state plan and corrective 

measures are not included in the plan, the EPA will notify the state that it must revise the plan to 

make up for the deficiency and to meet the milestone or goal. If the state fails to do so, 

commenters noted the EPA could then issue a federal implementation plan. Commenters argued 

that the “SIP Call” approach would be beneficial since it would ensure corrective actions are 

taken. 

Response 9: The EPA is not finalizing the proposed state commitment approach and comments 

on this approach to 111(d) state plan design are therefore moot. Instead, as explained in section 

VIII of the preamble and above, the EPA is finalizing an option to submit a “state measures” 

plan type, under which a mass CO2 emission goal may be partially or entirely achieved through 

state measures that impose requirements on entities other than affected EGUs and that are not 

included in the federally enforceable 111(d) state plan, provided the state submits standards of 

performance for CO2 emissions from affected EGUs in the form of a federally enforceable 

“backstop” that would be triggered if the state measures fail to achieve the required CO2

emission performance level. The state measures approach allows states to rely on 

implementation of a wide variety of state-administered programs in their 111(d) state plans 

without subjecting these programs to federal enforcement under the CAA. At the same time, the 

state measures approach ensures that if the state measures fail to achieve necessary emission 

reductions, the EPA and citizens can enforce backstop emission standards against affected 

EGUs, once these backstop requirements are triggered and implemented. 

Comment 10: EPA should include provisions clarifying the extent of federal jurisdiction to 

ensure enforcement is limited and other measures not included in state plans are not subject to 

federal enforcement. 

Commenters expressed concern about the federal jurisdiction for requirements that are not 

included in state commitment plans. Commenters noted that measures that achieve the state 

goals, and measures applicable to non-EGUs should be enforceable solely by the state, and not 

the EPA, even to the extent that they impact "affected entities." Commenters recommended the 

EPA include provisions in the final rule that clarify in the final rule the extent of the federal 

jurisdiction, and ensure that federal enforcement is limited and only invoked in instances where 
83 

 

the state has violated its own plan or refuses to enforce state plan provisions. Commenters were 

concerned that state-level RPS and EE requirements (such as California's RPS) would become 

federally enforceable against municipalities and public power entities if the state decided to use 

the state commitment approach. Commenters believed that a major advantage of the state 

commitment approach is that it could avoid imposing federal energy regulatory obligations on 

municipalities and public power entities. 

Although commenters were generally supportive of the state commitment approach, they 

suggested the EPA provide additional details on how this approach would work, confirm that the 

state commitment approach would be approvable, and clarify what aspects of the state 

commitment, if any, would be federally enforceable and on which entity. Commenters also 

recommended the EPA clarify that any state that commits to meet its goal through a combination 

of measures to be implemented by municipalities and public power entities would not be 

required to make any aspect of those state measures subject to federal enforcement, even if those 

measures are referred to in state plans as evidence that the state will meet its state emission goal. 

Commenters emphasized that the EPA and citizens should be limited to bringing enforcement 

actions against the state itself in cases where the state fails to meet the RE target prescribed by 

the state plan and that RPS, EE, and other state programs should be enforceable only under state 

law. 

Commenters noted that Oregon may choose to develop a state plan using the "portfolio 

approach" identified by EPA, and use the planned Boardman retirement, the state RPS program, 

and state efficiency efforts to meet its Clean Power Plan goals. Commenters stated that the EPA 

should clarify that such a construct would make Oregon's commitment to achieve the emissions 

goals subject to federal law, but would not make the underlying RPS and energy efficiency 

programs themselves subject to federal law. 

Response 10: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing the proposed portfolio approach or state commitment approach, and any comments on 

these proposed approaches to 111(d) state plan design are therefore moot. Instead, the EPA is 

finalizing an option to submit a “state measures” plan type, under which a mass CO2 emission 

goal may be partially or entirely achieved through state measures that impose requirements on 

entities other than affected EGUs and that are not included in the federally enforceable 111(d) 

state plan, provided the state submits standards of performance for CO2 emissions from affected 

EGUs in the form of a federally enforceable “backstop” that would be triggered if the state 

measures fail to achieve the required CO2 emission performance level. The state measures 

approach allows states to rely on implementation of a wide variety of state-administered 

programs in their 111(d) state plans without subjecting these programs to federal enforcement 

under the CAA. At the same time, the state measures approach ensures that if the state measures 

fail to achieve necessary emission reductions, the EPA and citizens can enforce backstop 

emission standards against affected EGUs, once these backstop requirements are triggered and 

implemented. Under the final emission guidelines, only affected EGUs have federally 

enforceable obligations under a 111(d) state plan. See section VIII. 
84 

 

Comment 11: State commitments approach would not prevent improper interference in areas 

that are traditionally regulated by states. EPA seeks to avoid the appearance of such federal 

interference through the state commitment approach, but does not address how programs 

designed to meet the state goals can be left out of state plans. 

Commenters were concerned about federal interference in areas of state jurisdiction and argued 

that the state commitment approach does not allay their concerns. Commenters stated that the 

EPA had not addressed how elements necessary to ensure that state plans are implemented could 

be left out of state plans. Commenters stated that the state commitment approach would not 

avoid EPA interference in areas that are traditionally regulated only by states argued that EPA 

was trying “to avoid the appearance of such interference.” 

Response 11: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing the proposed state commitment approach, so any comments on this approach to 111(d) 

state plan design are moot. Instead, the EPA is finalizing an option to submit a “state measures” 

plan type, under which a mass CO2 emission goal may be partially or entirely achieved through 

state measures that impose requirements on entities other than affected EGUs and that are not 

included in the federally enforceable 111(d) state plan, provided the state submits standards of 

performance for CO2 emissions from affected EGUs in the form of a federally enforceable 

“backstop” that would be triggered if the state measures fail to achieve the required CO2

emission performance level. 

The state measures approach allows states to rely on implementation of a wide variety of stateadministered programs in their 111(d) state plans without subjecting these programs to federal 

enforcement under the CAA. Under the state measures approach, the backstop emission 

standards constitute the standards of performance required by section 111(d), and the state plan 

provides for the implementation and enforcement of such standards of performance by 

specifying the trigger mechanism and conditions under which the backstop emission standards 

apply to affected EGUs. Upon EPA approval of a state measures plan under section 111(d), the 

backstop emission standards become federally enforceable components of the state plan. See 

section VIII. 

Comment 12: What enforcement measures would EPA be able to take against states that fail to 

meet their state commitments? 

Commenters questioned what would happen if a state fails to meet its commitment. Specifically, 

commenters asked what remedies the EPA would have to help the state get back on track. 

Commenters also asked what types of contingencies and backstops state planners should 

consider for state plans using the state commitment approach. 
85 

 

Response 12: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing the proposed state commitment approach, so any comments on this approach to 111(d) 

state plan design are moot. 

Comment 13: EGUs should not be held responsible if states choose the "state commitment 

approach" for control measures that are beyond their control, such as RE and demand-side EE 

programs. 

Commenters thought the EPA should ensure that only those entities who have full control over 

the reduction measure(s) be held responsible for meeting those requirements for entities in states 

with state commitment plans. Specifically, commenters noted that if a state chooses to require a 

specific level of RE generation in its compliance plan, then owners/operators of an affected fossil 

fuel-fired EGU with no control over the RE resources should not be responsible for meeting the 

RE generation goal. Commenters recommended that affected EGUs should not be held 

responsible if states choose the "portfolio approach" or the "state commitment approach" for 

control measures that are beyond their control, including RE and demand-side EE programs. 

Response 13: As explained in section V.B and VIII of the final rule preamble of the CPP, the 

EPA is not finalizing the proposed portfolio approach or state commitment approach, and any 

comments on these proposed approaches to 111(d) state plan design are therefore moot. Instead, 

the EPA is finalizing an option to submit a “state measures” plan type, under which a mass CO2

emission goal may be partially or entirely achieved through state measures that impose 

requirements on entities other than affected EGUs and that are not included in the federally 

enforceable 111(d) state plan, provided the state submits standards of performance for CO2

emissions from affected EGUs in the form of a federally enforceable “backstop” that would be 

triggered if the state measures fail to achieve the required CO2 emission performance level. The 

backstop provision would impose enforceable obligations on the affected EGUs only if triggered 

by a state plan’s failure to achieve necessary CO2 emission reductions. 

The state measures approach allows states to meet the statutory requirements of section 111(d) 

while accommodating the wide range of regulatory requirements and other programs that states 

have deployed or will deploy in the electricity sector that reduce CO2 emissions from affected 

EGUs, such as RE and demand-side EE programs. 

Comment 14: Commenters expressed concern that the state commitment approach would lead to 

attempts by citizen groups to dictate state actions through enforcement actions. 

Commenters were concerned that the proposed state commitment approach would result in EPA 

or citizens potentially bringing suit against the state for violating the CAA if RE and demandside EE measures were not implemented. Commenters were concerned that citizen groups would 

attempt to dictate state actions either through enforcement actions or the threat of such actions. 

Response 14: The EPA is not finalizing the proposed state commitment approach and 

comments on this approach to 111(d) state plan design are therefore moot. 
86 

 

Comment 15: Commenters questioned how the EPA would take federal enforcement action 

against a state that takes obligations upon itself and expressed concern that EPA may be 

abdicating enforcement to third parties, thereby creating less flexibility and greater uncertainty 

for the power sector. 

Commenters questioned how the EPA would prosecute a federal enforcement action against a 

state that took obligations upon itself in a state-based portfolio approach. Commenters were 

concerned the proposed rule would rely on citizen suits for enforcement and felt that the EPA 

was abdicating enforcement to third parties, which they believed would result in a loss of 

flexibility and increased regulatory certainty for long-term power planning. 

Response 15: As explained in section V.B and VIII of the final rule preamble of the CPP, the 

EPA is not finalizing the proposed portfolio approach or state commitment approach, and any 

comments on these proposed approaches to 111(d) state plan design are therefore moot. Instead, 

the EPA is finalizing an option to submit a “state measures” plan type, under which a mass CO2

emission goal may be partially or entirely achieved through state measures that impose 

requirements on entities other than affected EGUs and that are not included in the federally 

enforceable 111(d) state plan, provided the state submits standards of performance for CO2

emissions from affected EGUs in the form of a federally enforceable “backstop” that would be 

triggered if the state measures fail to achieve the required CO2 emission performance level. The 

state measures approach allows states to rely on implementation of a wide variety of stateadministered programs in their 111(d) state plans without subjecting these programs to federal 

enforcement under the CAA. At the same time, the state measures approach ensures that if the 

state measures fail to achieve necessary emission reductions, the EPA and citizens can enforce 

backstop emission standards against affected EGUs, once these backstop requirements are 

triggered and implemented. See section VIII. 

Comment 16: EPA should provide guidance to regional offices for the review and approval of 

state plans that use the state commitment approach; guidance is essential for ensuring 

consistency. 

Commenters supported the state commitment approach but recommended the EPA provide 

guidance to regional offices for the review of these plans to ensure consistency across the 

regions. 

Response 16: The EPA is not finalizing the proposed state commitment approach, so comments 

on this approach to 111(d) state plan design are moot. The EPA is prepared to work with states to 

assist them in developing state plans that satisfy the requirements of section 111(d) through the 

emission standards approach and/or state measures approach. 

Comment 17: EPA must ensure the state commitments are federally enforceable. 

Commenters cautioned that state plans that contain state commitments should be crafted in a way 

that ensures enforceability against the states. Commenters said for example, a state commitment 
87 

 

that is dependent on passage of state legislation or administrative rules would be unacceptable 

given the inability of the implementing agency to ensure passage of such laws. 

Response 17: The EPA is not finalizing the proposed state commitment approach, so comments 

on this approach to 111(d) state plan design are moot. 

Comment 18: Commenters said that, EPA suggests that States subject themselves to EPA 

enforcement authority. Commenters said, this course of action would raise non-entrenchment 

issues. Commenters said, it is not clear that the necessary political support exists for such 

prospective waivers of the Eleventh Amendment. 

Response 18: The EPA is not finalizing the proposed state commitment approach, so comments 

on this approach to 111(d) state plan design are moot. 

Comment 19: EE and RE measures should be federally enforceable. EPA's proposal to 

substantially undermine, or eliminate completely, federal enforceability violates the Clean Air 

Act. 

Commenters stated the EPA proposes to allow states to exclude measures from state plans under 

the portfolio approach and make a commitment to achieve a specified portion of the required 

emission performance level on behalf of EGUs. Commenters said as described below, states may 

not exclude any measures by which states will achieve the state performance goal. Commenters 

stated nor may states simply commit to achieving the performance goal. Commenters said the 

EPA acknowledges that its proposals stem from states' desire to avoid federal enforceability. 

Commenters stated the EPA's proposals miss the point here. Commenter said Congress requires 

that the plans and standards of performance be federally enforceable. Commenters stated 

moreover, Congress wants citizens to be able to enforce the standards of performance and any 

requirement under section 111. Commenters stated just because states want a section 111(d) rule 

that excludes some or all of the strategies designed to achieve the performance goals, that desire 

does not justify eviscerating enforceability. Commenters said for the reasons described below, 

the EPA's proposal to substantially undermine, or eliminate completely, federal enforceability 

violates the Clean Air Act. 

Commenters stated under section 111(d)(1), the EPA "shall establish a procedure similar to that 

provided by section 110." 42 U.S.C. section 7411(d). Commenters said plans submitted under 

section 110 must include enforceable emission limitations and other control measures, means, or 

techniques (including economic incentives such as fees, marketable permits, and auctions of 

emissions rights), as well as schedules and timetables for compliance, as may be necessary or 

appropriate to meet the applicable requirements of this Act." Commenters stated Congress 

specifically authorized citizens to enforce EPA-approved plans required by section 110. 

Commenters said Congress also authorized citizens to enforce "any requirement under section 

111 or 112 (without regard to whether such requirement is expressed as an emission standard or 
88 

 

otherwise)." Commenters stated the EPA correctly states that "that all measures relied on to 

achieve the emission performance level be included in the state plan, and that inclusion in the 

state plan renders those measures federally enforceable." Commenters said this statement is 

consistent with section 110(a)(2)(A), Bayview, and El Comit, para el Bienestar de Earlimart v. 

Warmerdam, 539 F.3d 1062 (9th Cir. 2008). Commenters stated the EPA then illegally proposes 

to evade federal enforceability. 

Commenters stated under the "portfolio approach," the EPA proposes to allow states to utilize 

renewable energy ("RE") and demand-side energy efficiency ("EE") measures from the state 

plans. Commenters said such measures must be federally enforceable, including verifiable by 

citizens and enforceable as a practical matter. Commenters said the EPA discusses, and appears 

to propose, that states may exclude these portfolio approach measures from the state plans and 

thus federal enforceability. Commenters stated Section 111(d)(1) does not authorize the EPA to 

permit states to exclude measures from state plans. Commenters stated Section 111(d)(1) 

specifically requires states to submit plans that establish "standards of performance for any 

existing source" and "provides for the implementation and enforcement of such standards of 

performance." Commenters said Sections 111 and 302 define "standard of performance." 

Commenters stated Congress required 111(d) state plans to include these emissions standards 

and spoke directly to the issue. Commenters said Section 111(d)(2)(B) also specifically mandates 

that the EPA have the same authority to enforce such plans under sections 113 and 114 with 

respect to State Implementation Plans required by section 110. Commenters said the EPA 

concedes that allowing states to exclude standards of performance from the plans would render 

them unenforceable. 79 Fed. Reg. at 34902. Commenters stated adopting the portfolio approach 

and allowing states to exclude any standards, including RE and EE measures, violates section 

111(d)(1) and 111(d)(2)(B). 

Commenters stated for these reasons and because the EPA must adopt a procedure similar to that 

required under section 10, 42 U.S.C. section 7411(d)(1), the EPA has no authority to allow states 

to exclude measures from their state plans. Commenters said to ensure enforceability, states must 

submit measures to the EPA and demonstrate that the measures produce quantifiable, verifiable, 

non-duplicative, permanent, and enforceable reductions. 

Response 19: As explained in section V.B and VIII of the final rule preamble of the CPP, the 

EPA is not finalizing the proposed portfolio approach and any comments on that proposed 

approach to 111(d) state plan design are therefore moot. Instead, the EPA is finalizing an option 

to submit a “state measures” plan type, under which a mass CO2 emission goal may be partially 

or entirely achieved through state measures that impose requirements on entities other than 

affected EGUs and that are not included in the federally enforceable 111(d) state plan, provided 

the state submits standards of performance for CO2 emissions from affected EGUs in the form of 

a federally enforceable “backstop” that would be triggered if the state measures fail to achieve 

the required CO2 emission performance level. Under a state measures plan, the backstop 

emission standards constitute the standards of performance required by section 111(d), and the 

state plan provides for the implementation and enforcement of such standards of performance by 

specifying the trigger mechanism and conditions under which the backstop emission standards 
89 

 

apply to affected EGUs. Upon EPA approval of a state measures plan under section 111(d), the 

backstop emission standards become federally enforceable requirements, which EPA and 

citizens may enforce against affected EGUs under section 113 and section 304 of the Act, 

respectively, once triggered and implemented to address a shortfall in necessary emission 

reductions. See section VIII. 

The final emission guidelines require that all 111(d) state plans, including state measures plans, 

specify CO2 emission monitoring, reporting and recordkeeping requirements for affected EGUs, 

demonstrate that plan measures are enforceable, and contain the process, content and schedule 

for state reporting to the EPA on plan implementation and progress toward meeting the required 

CO2 emission performance level. For state measures plans in particular, the final emission 

guidelines also require states to submit annual reports to the EPA that address periodic 

programmatic milestones to show progress in program implementation. See section VIII. The 

EPA intends to review each submitted state plan on a case-by-case basis to determine whether it 

satisfactorily addresses the Act’s enforceability requirements. Final EPA action on any 

submitted 111(d) state plan, including a state measures plan, is subject to judicial review under 

section 307(b) of the Act. 

Commenters argue that the language of section 304 of the Act necessarily requires that every 

collateral measure a state takes in order to reduce CO2 emissions from affected EGUs must be 

made federally enforceable through section 304. We disagree. In relevant part, section 304(a) 

provides that “any person may commence a civil action on [their] own behalf against any person 

... who is alleged to have violated (if there is evidence that the alleged violation has been 

repeated) or to be in violation of an emission standard or limitation under this chapter.” 

“Emission standard or limitation under this chapter” is defined in relevant part in section 304(f) 

as “any requirement under section [111] ... (without regard to whether such requirement is 

expressed as an emission standard or otherwise) ... which is in effect under this chapter.” In 

turn, the relevant “requirement[s] under section 111 ... which are in effect under this chapter” 

are those in a state plan that are necessary to satisfactorily “provide for ... enforcement” of the 

standards of performance. 

Because the phrase “provide for ... enforcement” is ambiguous, EPA has been delegated 

authority to interpret what elements in a state plan are necessary to satisfactorily provide for 

enforcement of the standards of performance. Under the emission standards plan type, those 

requirements are the emission standards on affected EGUs along with the associated monitoring, 

recordkeeping, and reporting requirements that ensure enforceability. Under the state measures 

plan type, those requirements are the trigger and the backstop. The backstop must satisfy the 

same enforceability criteria as the emission standards in an emission standards plan type. The 

trigger must be capable of being activated by EPA and citizens. Details of the interpretation of 

section 111(d)(1) with respect to the state measures approach are provided in the Legal 

Memorandum. 

 Finally with respect to section 304, we note that a requirement in a state plan is not federally 

enforceable until EPA has approved it as part of the federally enforceable plan. In other words, 

measures in a state plan are not “in effect under this chapter” for the purposes of section 304 
90 

 

until EPA has made them part of the federally enforceable plan. As a result, under the emission 

standards plan type, the emission standards and associated monitoring, recordkeeping, and 

reporting that EPA has approved into the federally enforceable plan are “requirements under 

section 111 which are in effect under this chapter,” and are thus enforceable under section 304. 

Under the state measures plan type, the trigger and backstop are approved into the federally 

enforceable and are therefore “requirements under section 111 which are in effect under this 

chapter” and are thus enforceable under section 304. 

With respect to section 110(a)(2)(A) , as explained in section VIII of the preamble section 

110(a)(2)(A) explicitly requires that SIPs “include enforceable emission limitations.” Thus, 

section 110(a)(2)(A) is inapposite. While section 111(d)(1) does require “similar” procedures to 

section 110, it does not require the “same” procedures, again as explained in section VIII of the 

preamble. As also explained in the preamble, substantive requirements in section 110, such as 

that in section 110(a)(2)(A), do not directly apply; however EPA may adopt analogous 

substantive requirements if doing so would be reasonable in light of the purposes of section 

111(d)(1). In this case, EPA is reasonably interpreting the language “provide for implementation 

and enforcement” as allowing the state measures approach and not requiring every collateral 

measure aimed at reducing CO2 emissions from affected EGUs to be made federally enforceable 

under section 304. If anything, the cases cited by the commenter, Bayview Hunters Point 

Community Advocates v. Metropolitan Transp.Comm’n, 366 F.3d 692, 695 (9th Cir. 2004) and 

El Comité para el Bienestar de Earlimart v. Warmerdam, 539 F.3d 1062 (9th Cir. 2008), support 

the state measures approach, as they support the enforceability of the trigger through section 304. 

Comment 20: EPA should limit federal enforceability to a state's commitment to form (i.e., rate 

or mass), timeframe, and a narrower categorization of affected entities. 

Commenters opposed requiring specific state plan provisions, such as targeted performance 

under individual building blocks or specific state programs, to be federally enforceable. 

Commenters stated unless otherwise requested by a state, the EPA should consider to be 

federally enforceable only a state's commitment to achieve progress in the form (e.g., rate, mass) 

and over the timeframe the state submits and the EPA approves. Commenters stated such a 

requirement could expose specific programs or projects, such as gas dispatch, energy efficiency 

or renewable energy projects, to the threat of federal enforcement or citizen suit. Commenters 

stated such an enforcement risk would be wholly inappropriate for state energy planning and 

states should be permitted to avoid this risk for projects implemented to achieve CPP-mandated 

reductions. Commenters said a commitment approach is particularly important where states 

cannot guarantee specific dispatch outcomes nor ensure the success of specific renewable energy 

or demand-side efficiency strategies. Commenters stated the EPA acknowledged similar 

concerns and has asked for comment on a "state commitment approach" to including energy 

efficiency and renewable energy in state plans. Commenters said the EPA and the states have 

considerable experience with such an approach, and under CAA section 110, the EPA has 

allowed states to include limited commitments in SIPs in certain circumstances instead of 
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specific adopted measures. Commenters stated that courts have upheld the EPA's authority under 

the CAA and the EPA's regulations to approve a SIP containing an enforceable commitment to 

adopt unspecified control measures.

Response 20: As explained in section V.B and VIII of the final rule preamble of the CPP, the 

EPA is not finalizing the proposed portfolio approach or state commitment approach, and any 

comments on these proposed approaches to 111(d) state plan design are therefore moot. Instead, 

the EPA is finalizing an option to submit a “state measures” plan type, under which a mass CO2

emission goal may be partially or entirely achieved through state measures that impose 

requirements on entities other than affected EGUs and that are not included in the federally 

enforceable 111(d) state plan, provided the state submits standards of performance for CO2

emissions from affected EGUs in the form of a federally enforceable “backstop” that would be 

triggered if the state measures fail to achieve the required CO2 emission performance level. The 

state measures approach allows states to rely on implementation of a wide variety of stateadministered programs in their 111(d) state plans without subjecting these programs to federal 

enforcement under the CAA, while ensuring that the EPA and citizens can enforce backstop 

emission standards against affected EGUs once these are triggered and implemented to address a 

shortfall in necessary emission reductions.

1.11.4 Ongoing applicability of CAA Section 111(d) state plan 

Comment 1: Commenters argued that under the CAA a source is either “existing” or “new” and 

that Section 111(d) cannot apply to sources subject to section 111(b) and to apply both section 

111(d) and 111(b) to a source is inconsistent with the CAA. Section 111(b) and 111(d) should be 

mutually exclusive. 

Commenters stated the critical fact then is that once an existing source is modified or 

reconstructed, it ceases to be an existing source subject to section 111(d) and becomes a new 

source subject to 111(b). Commenters said, under the CAA, a source is either "existing" or it is 

"new"; it cannot be both at the same time. Commenters stated, moreover, under its explicit terms, 

section 111(d) may not apply to sources subject to section 111(b). Commenters said, because the 

EPA's proposal ignores this clear statutory language, the Proposed Rule must be withdrawn and 

re-proposed to conform to the clear statutory language of CAA section 111. 

Commenters stated that it is inconsistent with the CAA to subject units that are modified or 

reconstructed after the effective date of a state or federal section 111(d) plan to both programs, 

and noted that a unit is either new or existing, but cannot be both simultaneously. Commenters 

noted, if a unit is modified or reconstructed after state plan approval, the unit would no longer be 

subject to existing source requirements. 

Commenters stated EPA's proposal would unlawfully subject modified and reconstructed sources 

to standards of performance under both Sections 111(b) and 111(d). Commenters said under the 
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plain meaning of Section 111, these standards of performance are mutually exclusive and cannot 

both be applied to the same source: A source cannot simultaneously be "new" and "existing." 

Commenters said EPA's proposed justifications for continuing to regulate modified and 

reconstructed sources under Section 111(d) are unreasonable, and even if EPA's underlying 

factual assumptions are correct, this merely underscores the legal and practical defects in the 

proposed rule. Commenters said to the extent that EPA's proposed regulations are incompatible 

with the plain meaning of the Clean Air Act, it is EPA's proposal that must yield. 

Commenters stated that EPA proposes that units that become "modified" and therefore "new" 

sources after a state plan is adopted and goes into effect will remain subject to the requirements 

of the state plan, and at the same time be required to comply with the recently proposed 

standards under section 111(b). Commenters said this result is precluded by the plain language of 

the statute, which contains definitions for "new" and "existing" sources that are mutually 

exclusive. 

Commenters stated Congress' intent here is further underscored by the language of Section 

111(d), which authorizes States to impose standards of performance only on 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) (emphasis added). Commenters said the contingent nature of this provision 

makes clear that States cannot impose standards of performance under Section 111(d) on new 

sources which are in fact subject to standards of performance under Section 111(b). Commenters 

said the fact that Section 111(d) does not expressly state that standards of performance no longer 

apply after modification or reconstruction, 79 Fed. Reg. at 34,904, is of no moment: "A statutory 

'provision that may seem ambiguous in isolation is often clarified by the remainder of the 

statutory scheme.'" UARG, 134 S. Ct. at 2442 (quoting United Sav. Ass'n of Tex., 484 U.S. at 

374). Commenters said here the definitions themselves make clear that regulation under Sections 

111(b) and 111(d) must be mutually exclusive. Commenters noted that the regulatory structure of 

Section 111 further underscores the mutually exclusive nature of Sections 111(b) and (d). 

Commenters said Section 111(b) authorizes EPA to regulate new sources while Section 111(d) 

directs States to establish standards of performance for existing sources. Commenters said there 

is no basis to suggest that Congress would have intended a source to be subject to two different 

standards of performance adopted by two different regulators. 

Commenters said EPA cannot lawfully require modified sources to be subject to both 111(d) and 

111(b) requirements. Commenters said, despite EPA's assertion that 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" the plain language of the 

CAA disallows EPA's interpretation. Commenters said the CAA 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." Commenters said, alternatively, the CAA 

defines an existing source as "any stationary source other than a new source." Commenters said 

these definitions contain no ambiguities- an existing source is not a new source, and a new 
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source includes modified sources; therefore, EPA may not subject modified sources to both 

existing source and new source standards, and the Agency's stated rationale for attempting to do 

so evidences the flaw in EPA's BSER determination. 

Commenters stated the standards of performance established by EPA under Section 111(b) 

extend beyond newly constructed sources and also include "modified" sources. 42 U.S.C. 

Section 7411(a)(2). Commenters said EPA expanded the definition of new sources to include 

reconstructed sources as well. See 40 C.F.R. Section 60.15. Commenters said existing sources 

are then defined in Section 111 as "any stationary source other than a new source." 42 U.S.C. 

Section 7411(a)(6). Commenters concluded existing sources are defined as the residual sources 

that are not considered "new" under Section 111, and the two categories are mutually exclusive. 

Commenters continued by explicitly defining new and existing sources in mutually exclusive 

terms, the plain language of Section 111 dictates that a source cannot simultaneously be both a 

new source and an existing source. Commenters said this follows logically then that the 

applicability of standards of performance under Section 111(b) for new sources and Section 

111(d) for existing sources must also be mutually exclusive. Commenters concluded a single 

source cannot be simultaneously subject to standards of performance under both Sections 111(b) 

and (d). 

Commenters said under the EPA's proposed reinterpretation, existing sources subject to 111(d) 

plan that later modify or reconstruct would remain subject to the 111(d) plan, and would also 

become subject to separate 111 (b) requirements for modified or reconstructed sources. 

Commenters stated the EPA's rationale is that Section 111(d) does not explicitly exclude existing 

sources that modify or reconstruct from inclusion under 111(d). Commenters stated the EPA 

expresses that uncertainty about whether affected power plants would remain subject to a 111(d) 

plan would be detrimental to the plan's long-term stability and integrity, and that it must avoid 

creating an incentive for sources to undertake modifications simply to avoid obligations under a 

111(d) plan. Commenters stated the EPA's reinterpretation of Section 111(d) is at odds with prior 

Clean Air Act language, rulemakings, and interpretations, which clearly delineate the application 

of Section 111 (b) and (d) between new and existing sources. 

Commenters stated we are also concerned that this aspect of the EPA's proposal exceeds the 

agency's authority under the Act. Under section 111, a "new source" is "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 .... " 

Commenters said an "existing source," meanwhile, is defined as "any stationary source other 

than a new source." Commenters stated it appears that under the statute, the definitions of "new 

source" and "existing source" are mutually exclusive: under section 111(a)(2), an existing source 

that commences modification after the publication of an applicable NSPS becomes a "new 

source." Commenters said meanwhile, under section 111(a)(6), this "new source" cannot also be 

an existing source to which section 111(d) would apply, because that section defines an existing 

source as any source "other than a new source." 
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Commenters noted that EPA has not proposed that either new sources or modified and 

reconstructed sources that commence construction prior to becoming subject to a section 111(d) 

plan would later become subject to such plans, even though the statute and EPA regulations treat 

all new, modified, and reconstructed sources as "new sources." Commenters noted that EPA has 

not explained why it has chosen to include only a subset of modified/reconstructed sources in 

state section 111(d) plans while excluding all new sources, as well as modified and reconstructed 

sources that commence construction before becoming subject to a state section 111(d) plan. 

Commenters asserted that this dubious legal interpretation raises further substantial risk that this 

aspect of the Proposed Rule will be overturned on judicial review. 

Commenters stated, the agency's justification for reinterpreting the Clean Air Act to fit the policy 

goals of the section 111(d) proposal is to avoid disruption "to the operation of the program" 

caused by "uncertainty about whether units would remain in the program" and to avoid creating 

"incentives for sources to seek to avoid their obligations under a CAA section 111(d) plan by 

undertaking modifications." Commenters said, EPA has no statutory authority to do this, 

particularly in light of the plain language of the text. Commenters said, in its UARG decision, 

the Supreme Court is again instructive, where it declared that "An agency has no power to 'tailor' 

legislation to bureaucratic policy goals by rewriting unambiguous statutory terms." Commenters 

said, consequently, the EPA must also withdraw its proposed rule for modified and reconstructed 

units. 

Response 1: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

The EPA encourages commenters to raise these issues during the public comment period on the 

EPA’s proposed federal plan, which has a separate rulemaking docket. 

Comment 2: EPA’s proposal that existing units should continue to be subject to Section 111(d) 

after they are modified or reconstructed would result in duplicative and overly burdensome 

regulation that would be confusing to the sources and state permitting authorities. 

Commenters said EPA's proposal would result in duplicative and overly burdensome regulation 

for the sources and confusion regarding the obligations of state permitting authorities. 

Commenters said this purported "ambiguity" arises solely as a result of EPA's decision to invert 

the nature of the proposed standards, seeking far more aggressive emission reductions from 

existing sources than those that would apply if a source became "new" as a result of a 

modification. Commenters said there is no basis for EPA's duplicative regulatory proposal, and it 

conflicts with the clear language of the statue and is invalid. 
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Response 2: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

The EPA encourages commenters to raise these issues during the public comment period on the 

EPA’s proposed federal plan, which has a separate rulemaking docket. 

Comment 3: EPA’s justifications for continuing to regulate modified and reconstructed sources 

under section 111(d) are unpersuasive, questionable from a public policy standpoint, and not 

necessary to ensure effective implementation of the CPP. 

Commenters stated EPA's purported justifications for continuing to regulate modified and 

reconstructed sources under Section 111(d) are unpersuasive and simply underscore the 

unlawful, arbitrary, and capricious nature of the proposed rule. Commenters said EPA asserts 

that its approach is necessary "to assure the integrity of the CAA section 111(d) plan" because 

"[u]ncertainty about whether units would remain in the program could be very disruptive to the 

operation of the [Section 111(d)] program." 79 Fed. Reg. 34,904. Commenters continued even if 

EPA is correct that the potential for modified and reconstructed sources to be removed from 

Section 111(d) implementation plans may create uncertainty and pose challenges to 

implementing the proposed rule, that does not give EPA authority to override the statutory text 

and regulate modified and reconstructed sources under Section 111(d). Commenters said as the 

Supreme Court recently held, "[a]n agency has no power to 'tailor' legislation to bureaucratic 

policy goals by rewriting unambiguous statutory terms." UARG, 134 S. Ct. at 2445. 

Commenters stated in sum, the EPA's proposal that modified sources would remain subject to 

section 111(d) even after modification is questionable from a public policy standpoint, is not 

necessary to ensure effective implementation of the Proposed Rule, and appears to be 

contradicted by the plain language of section 111. Commenters said for these reasons, they 

encourage the EPA to abandon this novel and unnecessary interpretation when it issues a final 

rule. 

Commenters stated the EPA's 111(b) proposal has major implications for its section 111(d) 

proposal. Commenters said primarily, an EGU that was initially governed by section 111(d), 

which later becomes subject to section 111(b) criteria, would be governed by both standards 

instead of just section 111(b). Commenters did not support EPA's contention that a 

"reconstructed facility" is still an existing facility. Commenters said a "new source" is 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 
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performance under this section which will be applicable to such source." Commenters said an 

"existing source" is "any stationary source other than a new source." 

Response 3: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

The EPA encourages commenters to raise these issues during the public comment period on the 

EPA’s proposed federal plan, which has a separate rulemaking docket. 

Comment 4: Commenters disagreed with EPA’s concern that existing units would avoid section 

111(d) by undertaking modifications and reconstructions because performance standards for 

modified and reconstructed sources should be more stringent than section 111(d) standards. 

Commenters stated EPA expresses "concern[] that owners or operators of units might have 

incentives to modify purely because of discrepancies in the stringency of the two programs." 79 

Fed. Reg. at 34,904. Commenters said again, the fact that EPA concedes that the standards of 

performance for existing sources will be more stringent than those for modified and 

reconstructed sources simply underscores the unlawful nature of the proposed rule. Commenters 

said the inclusion of modified and reconstructed sources under Section 111(b) reflects the intent 

of Congress and EPA that such sources may be subject to more stringent standards of 

performance than existing sources. See, e.g., 40 Fed. Reg. at 58,416, 58,417 ("The reconstruction 

provision is intended to apply where an existing facility's components are replaced to such a 

degree that it is technologically and economically feasible for the reconstructed facility to 

comply with the applicable standards of performance [under Section 111(b)]."); see also 40 Fed. 

Reg. at 53,540, 53,340 ("[T]he degree of control reflected in EPA's emission guidelines will take 

into account the costs of retrofitting existing facilities and thus will probably be less stringent 

than corresponding standards of performance for new sources."). Commenters said this approach 

is inherently sensible, as facilities undergoing modification or reconstruction may have 

opportunities to incorporate emission control technology not available to other existing sources. 

Commenters said here, EPA turns that logic on its head and suggests that existing fossil fuelfired EGUs may be subject to standards of performance so stringent that they go beyond the 

"best system of emission reduction" that has been "adequately demonstrated" for a modified or 

reconstructed source in the same source category. Commenters said the fact that a source could 

gain relief by undergoing a modification or reconstruction is clear evidence that the proposed 

regulations for existing sources are unlawfully stringent. 

Commenters stated EPA's stated reasons for proposing to merge the separate "new" and 

"existing" provisions of Section 111 is a "concern[] that . . . units might have incentives to 
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modify purely because of discrepancies in the stringency of the two programs . . . ." Commenters 

said in order to maintain an interpretation of Section 111 which allows for Section 111(d) to be 

more stringent than Section 111(b), EPA has to strain to prevent existing units from "escaping" 

Section 111(d) and becoming "new units" by undertaking a modification (of course, when 

Section 111(b) is more stringent, as it should be, this is not a concern-new sources have no 

mechanism for becoming "not new."). 

Response 4: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

The EPA disagrees with commenters’ assertion that the requirements for existing sources are 

more stringent than those for modified and reconstructed sources. As explained in the preamble, 

comparison of the control requirements in the section 111(d) emission guidelines to those in the 

section 111(b) standards of performance is an “apples-to-oranges” comparison, in particular 

because the two sets of rules become applicable at different points in time and have significantly 

different compliance periods. Additionally, the flexibility that this rule offers the states has 

important implications for its stringency and for any comparison to the section 111(b) rule. 

Comment 5: EPA cannot simultaneously treat modified and reconstructed units as existing 

sources under CAA 111(d) and as new sources under CAA 111(b) because the source categories 

the EPA is regulating under its proposed modified/reconstructed source rule and its proposed 

existing source rule are different. 

Commenters stated the EPA cites no precedent for separating its "new" source standards into two 

separate rulemakings--one for new sources and another for modified/reconstructed source-with 

either one of them sufficient for supporting existing source standards. Commenters said, 

regardless, EPA's approach does not work. Commenters said the EPA's proposal to set 

performance standards for modified and reconstructed coal units states that modified and 

reconstructed sources will be treated as existing sources that remain subject to any CAA 111(d) 

standard that is then in effect. Commenters stated the EPA cannot simultaneously treat modified 

and reconstructed units as existing sources under CAA 111(d) and as new sources under CAA 

111(b). Commenters said the source categories the EPA is regulating under its proposed 

modified/reconstructed source rule and its proposed existing source rule are different. 

Commenters stated under the proposed modified/reconstructed source rule, the EPA is regulating 

coal-fueled EGU's. Commenters said under the proposed existing source rule, the EPA is 

nominally regulating a combined coal/natural gas category but in reality is setting standards 

applicable to entire state electric utility systems. Commenters stated as explained in the 

Department's prior written comments, CAA 111(b) and CAA 111(d) regulations must apply to 

the same source category, the EPA therefore cannot rely on its modified/reconstructed source 

regulations to regulate existing coal-fueled EGU's. 
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Response 5: With respect to commenters’ concern about treating modified and reconstructed 

units both as existing sources under section 111(d) and as new sources under section 111(b), as 

noted above, the EPA is not finalizing its proposal concerning ongoing applicability of section 

111(d) state plan requirements after an existing source modifies or reconstructs. Instead, the EPA 

is seeking public comment on this issue through the proposed federal plan issued concurrently 

with these final emission guidelines. Therefore, any comments on the effect of modification or 

reconstruction on preexisting section 111(d) state plan requirements are moot as to this 

rulemaking. 

Comment 6: EPA should not make modified and reconstructed sources subject to both section 

111(b) and section 111(d) because both rules have very different emission limits and compliance 

requirements. 

Commenters were very concerned that the EPA is proposing that modified and reconstructed 

electric generating units be subject to both CAA section 111(b) and section 111(d), which have 

widely disparate proposed compliance requirements. Commenters said under the proposed 

section 111(b) language, new, modified or reconstructed fossil-fuel fired EGUs must emit no 

more than 1,100 lb CO2/MWh. However, under this section 111(d) proposal, over half of the 

States have proposed final CO2 emission performance goals below 1,100 lbs CO2/MWh. These 

disparate CO2 emission rates could result in some States requiring modified and reconstructed 

EGUs to emit less than 1,100 lb CO2/MWh as per section 111(d), even though the EGU would 

be regulated by and compliant with section 111(b). 

Response 6: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

Comment 7: Sources that elect to modify or reconstruct an EGU should be able to benefit by 

being allowed to decide whether they comply with section 111(d) or section 111(b). 

Commenters stated ultimately, there should be an election made between the New Source 

Performance Standards and Existing Source Performance Standards. Commenters said if a 

facility owner elects to incur the expense of modifying or reconstructing an EGU, then it should 

be entitled to the benefit of such an election. 

Response 7: Under these final emission guidelines, state plans must address any affected steam 

generating unit, IGCC, or stationary combustion turbine that commences construction on or 

before January 8, 2014 and that meets the relevant applicability conditions specified in section 

60.5840 of the final rule. 
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As explained in section VIII of the final rule preamble of the CPP, the EPA is not finalizing its 

proposal concerning ongoing applicability of section 111(d) state plan requirements after an 

existing source modifies or reconstructs. Instead, the EPA is seeking public comment on this 

issue through the proposed federal plan issued concurrently with these final emission guidelines. 

Therefore, any comments on the effect of modification or reconstruction on preexisting section 

111(d) state plan requirements are moot as to this rulemaking. 

Comment 8: Forcing EGUs to comply with both sections 111(b) and 111(d) will result in higher 

costs for ratepayers. 

Commenters said in section 111(b), the EPA has proposed a limit that is more stringent than 

BSER by forcing an EGU to comply with both sections 111(b) and 111(d). Commenters stated 

with no relief provided on 111(d) for the modification/reconstruction of an existing source, the 

economics of doing so become even more difficult. Commenters stated ultimately, such a 

standard will only cause the ratepayers to incur even higher costs. 

Response 8: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

Comment 9: EPA has failed to provide guidance for situations where conflicts arise between 

sections 111(b) and 111(d); the EPA has provided no indication of which standard would take 

precedence. 

Commenters stated further, should conflicts arise between sections 111(b) and 111(d), the EPA 

has provided no indication of which standard would take precedence, just as the EPA has 

provided no support for applying both standards. 

Response 9: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

Comment 10: Commenters agreed that EPA has the authority to require modified and 

reconstructed units to remain subject to section 111(d) and agreed that sources may have 

incentives to modify units due to discrepancies in the rules. 

Commenters stated, section 111(d) continues to apply even after a modification or reconstruction 

of a source. Commenters said, because Section 111(d) does not address whether an existing 
100 

 

source that is subject to a Section 111(d) program remains subject to that program even after it 

modifies or reconstructs, EPA has authority to provide a reasonable interpretation, under the 

Supreme Court's decision in Chevron U.S.A. Inc. v NRDC. Commenters agreed with EPA's 

proposal that an existing source subject to requirements under Section 111(d) will continue to be 

subject to those requirements even after it undertakes a modification or reconstruction. 

Commenters said, under this interpretation, a modified or reconstructed source would be subject 

to both: (1) the section 111(d) requirements that it had previously been subject to; and (2) the 

modified source or reconstructed source standard being promulgated under Section 111(b) 

simultaneously with this rulemaking. Commenters said, this interpretation, which is supported by 

the statutory text, is a sensible policy and will further the goals of the statute. 

Commenters agreed with EPA that owners and 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 Section 111(d). Commenters said, and, the 

uncertainty about whether units would remain in the program could be very disruptive to the 

operation of the program. Commenters said, EPA's interpretation of Section 111(d) will avoid 

creating incentives for sources to seek to avoid their obligations thereunder by undertaking 

modifications and, therefore, will assure the integrity of the Section 111(d) program. 

Commenters stated Section 111 is ambiguous as to whether existing sources continue to be 

subject to 111(d) requirements after modification or reconstruction makes that source subject to 

section 111(b) standards. Commenters said EPA has reasonably resolved this ambiguity by 

concluding that state plans must continue to apply section 111(d) carbon pollution standards to 

those sources regardless of a later modification or reconstruction. Commenters said this 

interpretation is consistent with the statutory text, EPA's past practice, and judicial 

interpretations of the framework of section 111, and is necessary to avoid perverse incentives 

that could undermine the regulatory scheme and weaken limits on carbon pollution. 

EPA's Duty to Establish Emission Guidelines for Existing Sources is Not Altered By the 

Continuing Applicability of 111(d) Requirements to Sources that Subsequently Elect to Modify 

or Reconstruct 

Commenters stated, EPA has properly recognized that its duty to issue emission guidelines for 

existing sources now that the Agency has proposed standards of performance for reconstructed 

or modified sources is not affected by the clarification that 111(d) requirements continue to apply 

to sources that modify or reconstruct after becoming subject to 111(d) state plan requirements. 

Commenters said, contrary to industry arguments, the modified and reconstructed standard of 

performance is a sufficient predicate for the regulation of existing sources under 111(d) 

regardless of the continued applicability of 111(d) plan requirements to sources that modify or 

reconstruct because the statutory definitions of "new' and "existing' sources are relevant only to 

the initial applicability of the respective standards. Commenters said, consequently, a source can 

be subject to ongoing 111(d) requirements because it was formerly an existing source, even 
101 

 

though the source has also become subject to a 111(b) standard by meeting the section 111(a)(2) 

definition of a "new" source. 

Commenters stated, industry comments rely on the flawed assumption that the ongoing 

applicability of 111(d) requirements to modified or reconstructed sources rests on the modified 

or reconstructed sources continuing to be "existing" sources as defined in section 111(a)(6). 

Commenters said that "[i]f EPA intends to continue to subject sources that modify or reconstruct 

to the CAA section 111(d) plan, it must be because EPA considers modified and reconstructed 

sources to be existing sources for some reason." Commenters, based on this conclusion, asserted 

that if the modified and reconstructed sources are actually existing sources, the proposed rule 

cannot be a predicate for regulation under the command of section 111(d)(1)(A). Commenters 

said section 111 is ambiguous as to whether 111(d) requirements continue to apply to a source 

that modifies or reconstructs. Commenters said, a reasonable interpretation of this ambiguity is 

that the definitions of "new" and "existing" source are relevant to the question of what type of 

standard of performance initially applies to a source, but do not constrain whether that standard 

continues to apply once the same source meets the requirements for applicability of another 

standard under section 111. Commenters said, consequently, the question of whether a source 

continues to be subject to a standard is separate from whether that source initially meets the 

statutory definition of "new source" or "existing source." 

Commenters stated, under EPA's interpretation of the statutory ambiguity, sources that modify or 

reconstruct continue to be subject to the 111(d) standard not because they are still "existing" 

sources, but rather because the statute does not relieve sources of requirements that were 

imposed on them at an earlier time, when they were "existing" sources. Commenters said, 

indeed, in the specific context of the Clean Power Plan, excluding modified or reconstructed 

sources from a section 111(d) state plan would not ensure that the standards for such sources 

reflect the "best system of emission reduction," as section 111(a)(1) requires. Commenters said – 

the BSER for modified and reconstructed EGUs necessarily encompasses not just systems such 

as heat rate improvements, considered in the proposed standards here, but also the potential to 

reduce carbon pollution through shifts in utilization towards lower- or zero-emitting generation 

and demand-side energy efficiency. Commenters said, this is the system that EPA has identified 

as the "best system of emission reduction" in the proposed emission guidelines for all existing 

plants because it achieves the greatest pollution reductions considering cost, energy 

requirements, and other health and environmental outcomes. Commenters said, the modification 

or reconstruction of an existing fossil fuel-fired EGU does not alter the fact that the flexible, 

cost-effective system of emission reduction identified by EPA remains the best system for that 

plant, achieving the greatest emission reductions considering cost and the other statutory factors. 

Commenters said, rather, the modification or reconstruction means that there is an additional 

component of the best system for that source to ensure that the section 111(b) standard serves its 

technology-forcing, emission-reducing role when significant investments are being made in these 

plants. 
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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 requiring, in the finalization of these standards, that state plans apply to all 

sources that were "existing" as of the date the emission guidelines were proposed is also 

consistent with the statutory text. Commenters said section 111(d) vests EPA with broad 

authority to establish procedures governing the submission and content of state plans that 

"establish" performance standards for "any existing source." Commenters said the statute does 

not clearly delineate the point in time at which a source should be considered to be "existing" and 

therefore within the scope of a state plan; however, EPA's proposed emission guidelines set 

state-wide goals that are based on the BSER for all EGUs that were under construction or in 

operation as of January 8, 2014. Commenters said it is reasonable and consistent with the statute 

for EPA - acting under its authority to establish minimum requirements for state plans, including 

determining the scope of those plans to require that state plans establish performance standards 

for the same set of existing sources addressed in the emission guidelines. 

Response 10: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

The EPA encourages commenters to raise these issues during the public comment period on the 

EPA’s proposed federal plan, which has a separate rulemaking docket. 

Comment 11: Commenters supported EPA’s proposal that section 111(d) remain applicable to 

modified and reconstructed sources, but recommend the EPA undertake frequent review of the 

NSPS to ensure the emissions guidelines for existing EGUs are effectively coordinated with the 

NSPS standards. 

Commenters stated they support EPA's proposal that Section 111(d) standards remain applicable 

to sources that modify or reconstruct, and they suggested EPA take on more frequent review of 

the NSPS to ensure that the proposed emission guidelines for existing EGUs are coordinated 

effectively with the proposed standards for modified and reconstructed sources. Commenters 

said although section 111(b) of the Clean Air Act clearly requires that carbon pollution standards 

for new sources be reviewed at least once every eight years, EPA could establish a more frequent 

schedule for revision (such as once every five years) in recognition of the rapid evolution of 

methods to reduce carbon pollution from the power sector. Commenters said this would ensure 

that sources that modify or reconstruct quickly come into compliance with section 111(d), 

consistent with EPA's past practice of subjecting modified and reconstructed sources to state 

plans upon revision of an applicable NSPS, and in so doing, EPA would also reduce potential 
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incentives for EGUs to modify or reconstruct for the purpose of avoiding state plan requirements 

under section 111(d). 

Response 11: As explained in section VIII of the final rule preamble of the CPP, the EPA is not 

finalizing its proposal concerning ongoing applicability of section 111(d) state plan requirements 

after an existing source modifies or reconstructs. Instead, the EPA is seeking public comment on 

this issue through the proposed federal plan issued concurrently with these final emission 

guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

The EPA agrees, however, with commenters’ statement that EPA may review carbon pollution 

standards for new sources more frequently than once every eight years under CAA section 

111(b). 

Comment 12: If EPA decides modified and reconstructed EGUs are not required to continue to 

comply with section 111(d), then the EPA should require the emissions from modified and 

reconstructed units to continue to be counted when determining state compliance with section 

111(d). 

Commenters stated that if modified or reconstructed EGUs are excluded from state plans under 

section 111(d), EPA could require that emissions from modified and reconstructed units "count" 

when determining state compliance with Section 111(d). Commenters said EPA could require 

that emissions from those units continue to be "counted" when determining whether states have 

complied with the goals promulgated in the emission guidelines. Commenters said this 

requirement would not impose any section 111(d) obligations on the modified or reconstructed 

EGUs, but would ensure that limits on carbon pollution under section 111(d) are not undermined 

by "leakage" resulting from increased emissions at those modified or reconstructed EGUs. 

Commenters said in practice, state regulators would have a strong incentive to ensure that 

modified and reconstructed units are subject to either state plans or to additional emission 

limitations in order to ensure compliance with the section 111(d) goals. 

Commenters said this approach is not precluded by the broad language of section 111(d), which 

affords EPA significant discretion to determine how states demonstrate compliance with an 

emission guideline, and EPA could justify this approach as necessary to ensure an accurate 

accounting of emissions from affected EGUs. Commenters said this is because generation from 

any EGU that modifies or reconstructs would effectively be substituting for generation from the 

same EGU prior to its modification or reconstruction. Commenters said if generation and 

emissions from modified and reconstructed EGUs were not counted in the state's emission rate 

under section 111(d), emissions from existing EGUs could appear to decrease solely because 

some of those units had become modified or reconstructed sources subject to section 111(b). 

Commenters said EPA could reasonably conclude that to protect against such "over-crediting," 

emissions from modified and reconstructed EGUs must be included in a state's average emission 

rate. Commenters said this approach would also have the effect of treating modified or 
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reconstructed EGUs in a way that is comparable to incremental nuclear, renewable energy and 

energy efficiency-all of which are considered as resources that displace affected EGUs and 

therefore enter into the compliance determination for each state as zero-emitting resources. 

Commenters said the emissions from the units in question were taken into account when EPA 

established the state goals, and it would be appropriate to find that those emissions must continue 

to count in determining compliance with that target. Commenters said because the proposed state 

goals reflect the emissions from those units, the state's compliance demonstration must also 

include the emissions from those units. 

Response 12: With respect to commenters’ concern about treating modified and reconstructed 

units both as existing sources under section 111(d) and as new sources under section 111(b), as 

noted above, the EPA is not finalizing its proposal concerning ongoing applicability of section 

111(d) state plan requirements after an existing source modifies or reconstructs. Instead, the EPA 

is seeking public comment on this issue through the proposed federal plan issued concurrently 

with these final emission guidelines. Therefore, any comments on the effect of modification or 

reconstruction on preexisting section 111(d) state plan requirements are moot as to this 

rulemaking. 

However, to address emission leakage under mass based state plans, Section VIII.J. of the 

preamble also discusses how states, as an option and under their own discretion, 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 13: States should be given the discretion to address section 111(b) and 111(d) 

requirements for modified and reconstructed sources on a case-by-case basis. 

Commenters stated the EPA noted in the Proposed Rule that regulations proposed under 111(b) 

for modified and reconstructed sources affect the implementation of state plans under 111(d) and 

requested comment on the interdependency of 111(b) and 111(d). See 79 Fed. Reg. 34,852 (June 

18, 2014). Commenters said accounting for any 111(b) actions only adds to the complexity of a 

state plan and increases the administrative burden. Commenters stated the States must be given 

the discretion to address 111(b) interdependencies on a case-by-case basis if the EPA requires an 

analysis of 111(b) as part of the approval process for 111(d) state plans. 

Response 13: 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, as an option and under 

their own discretion, 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.

If commenters’ are concerned about treating modified and reconstructed units both as existing 

sources under section 111(d) and as new sources under section 111(b), as noted above, the EPA 
105 

 

is not finalizing its proposal concerning ongoing applicability of section 111(d) state plan 

requirements after an existing source modifies or reconstructs. Instead, the EPA is seeking public 

comment on this issue through the proposed federal plan issued concurrently with these final 

emission guidelines. Therefore, any comments on the effect of modification or reconstruction on 

preexisting section 111(d) state plan requirements are moot as to this rulemaking. 

1.11.5 Obligations on affected EGUs 

Comment 1: The compliance obligation should be kept to only covered source units. 

Commenters stated, as a legal matter, the final obligation to comply with standards of 

performance lies with each such plant. To minimize legal uncertainty, the compliance obligation 

should be kept to only covered source units, with the assumption that system-wide compliance 

tools, such as renewable energy generation, would reduce overall electricity generation at 

covered sources, thereby reducing overall emissions. 

Response 1 All affected EGUs that are subject to an emission standards state plan will be subject 

to standards of performance, as described in section VIII.C of the final rule preamble of the CPP, 

that will be enforceable by their terms. 

Comment 2: Commenters stated that the electric utility industry is made up of dozens of entities 

operating across state lines and bounded by dispatch regions; commenters asserted that setting 

state goals that require entities separate from those responsible for carbon-emitting EGUs to take 

certain actions is inequitable. Commenters argued that a state's ratepayers would be penalized for 

living in the same state as affected EGUs where their actions are not connected with, and thus 

have no effect on, affected EGU emissions in the state. 

Response 2: We disagree with these comments. As we discuss in the preamble, the affected 

EGUs are able to implement the building blocks. 

Comment 3: State plans should place the burden of compliance on EGUs. 

Commenters stated that state plans must ensure that affected EGU’s are responsible for meeting 

emission reductions required by federally enforceable emission limits in the rule. Commenters 

stated that the Act explicitly provides for state plans requiring affected sources to be the entities 

legally responsible for achieving the required emission standards. Commenters said emission 

limits that are federally enforceable against affected EGUs clearly fall within the definition of a 

"standard of performance." Commenters added that the federally enforceable limits would 
106 

 

require affected EGUs to demonstrate compliance in the event that the portfolio measures fail to 

deliver the required emissions reductions. Commenters noted that section 111(d) does not 

prevent states from imposing obligations on non-affected entities so long as it ensures that 

affected EGUs are ultimately responsible for all emission reductions; what a state may not do, 

however, is shift responsibility away from affected EGUs and onto other entities. Commenters 

said states must craft their plans to ensure that affected entities can claim proper credit for 

emission reductions that are not automatically reflected in their source-specific emission rates. 

Commenters noted that a state plan that includes portfolio measures can only be approved if the 

plan also "provides for the ... enforcement of [the] standards of performance" established for the 

affected sources. Commenters added that EPA could add provisions that could take the form of a 

requirement that regulated EGUs make sufficient reductions or secure sufficient credits from redispatch, renewable energy generation, and energy efficiency activities to make up the shortfall 

within the same compliance year. Commenters suggested that the obligation to make up the 

shortfall could be allocated among sources in any manner acceptable to the state. Commenters 

said the backstop would be included in the operating permits of the regulated entities, and would 

be federally enforceable by EPA under section 113 of the Clean Air Act, and by citizens under 

section 304 of the Act. 

Commenters stated under a portfolio approach, the EGU would be responsible for implementing 

Building Blocks 2, 3 and 4 in addition to "inside the fence" improvements in Building Block 1. 

Commenters said EGUs are fully capable of developing and implementing demand side and 

energy efficiency programs, and many do so in Indiana voluntarily. Commenters stated in 

addition, EGUs are capable of developing renewable energy sources and refueling to natural gas 

or developing new natural gas plants. Commenters stated EGUs can do all of the above more 

quickly and efficiently than the state or other smaller, lower capitalized entities, and they can 

enter contracts with other entities to meet their goals. Commenters stated with the EPA’s 

alternative to having third party entities partially responsible under the state plan for Building 

Blocks 2, 3 and 4, the state would assume the responsibility of ensuring reductions to be credited 

toward the state goals by third parties other than EGUs. Commenters said this alternative may 

avoid the legal issue associated with placing partial or full responsibility on entities other than 

EGUs. Commenters stated a further variation is to place full responsibility on EGUs for meeting 

the state goals, but would allow the states to credit EGUs with progress towards those goals for 

emissions reductions expected from renewable energy, demand side management or energy 

efficiency measures. Commenters stated of the two alternatives, a state plan that places the 

responsibility to meet the state goals on the EGUs, but allows the state to credit the EGUs with 

reductions resulting from Building Blocks 2, 3 or 4, would be preferable, because responsibility 

would be clear at the outset, and EGUs would be motivated to bring their considerable planning 

and technical expertise to the task of working with the state and other entities to develop 

programs and projects to reduce electricity demand and emissions. 

Response 3: EPA agrees that section 111(d) specifically requires a state to submit standards of 

performance. The final rule satisfies this requirement by making two types of state plans 

available: the emission standards type, which applies all requirements for meeting the emission 
107 

 

guidelines to affected EGUs, and the state measures type, under which a mass CO2 emission 

goal may be partially or entirely achieved through state measures imposing requirements on 

entities other than affected EGUs and that are not included in the federally enforceable 111(d) 

state plan. To ensure that the state measures plan type is consistent with section 111(d), as part of 

a state measures plan a state must submit standards of performance for CO2 emissions from 

affected EGUs in the form of a federally enforceable “backstop” that would be triggered if the 

state measures fail to achieve the required CO2 emission performance level. Thus, under either 

possible plan type, the state must submit federally enforceable standards of performance that 

affected EGUs are responsible for meeting. See 40 CFR § 60.5775. 

To the extent the comments concern the proposed portfolio approach, the comments are moot. 

As explained in sections V.B and VIII.C of the final rule preamble of the CPP, the EPA is not 

finalizing that proposed approach, and is instead finalizing the option to submit the state 

measures plan type, including a requirement for a federally enforceable emission standards 

backstop. Under a state measures plan, the backstop emission standards constitute the standards 

of performance required by section 111(d), and the state plan provides for the implementation 

and enforcement of such standards of performance by specifying the trigger mechanism and 

conditions under which the backstop emission standards apply to affected EGUs. The state 

measures approach will give states the flexibility to take advantage of efficiencies such as those 

described by some of the commenters, without raising the legal issues that some commenters 

raised in connection with the portfolio approach.

Comment 4: State plans should not place the entire burden of compliance on EGUs. 

Commenters stated that the entire burden of compliance should not be placed on EGU’s. 

Commenters stated that federal and state enforcement must take into account that other parties, 

such as renewable and energy efficiency providers, likely will have a role in meeting the 

emission reduction requirements through the approach of the EPA Plan's building blocks; 

otherwise, the entire burden of compliance is placed inappropriately on the regulated EGUs that 

only have direct control over emissions from their affected units. Commenters added that state 

plans should be able to include measures and policies (e.g., renewable portfolio standards) for 

which the state itself is responsible. Commenters supported allowing states to submit plans that 

rely in part on measures imposed on entities other than affected EGUs to achieve at least part of 

that level, as well as on measures imposed on affected EGUs to achieve the balance of that level. 

Commenters added that state plans should include measures enforceable against other entities 

that support reduced generation by, and therefore carbon emission reductions from, the affected 

EGUs. 

Commenters stated that plans with rate-based emission limits could incorporate enforceable 

renewable energy measures by adjusting an EGU's carbon emission rate when demonstrating 

compliance through either an administrative adjustment by the state or use of a tradable credit 

approach. Commenters emphasized states should be able to rely on certain renewable energy 

programs as complementary measures to reduce costs for, and otherwise facilitate, EGU 

emission limits without including those measures in the Section 111(d) state plan. Commenters 
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said the EGU emission limits would be federally enforceable, but certain renewable energy 

measures could serve as complementary measures and would not be enforceable under federal 

law; instead, they would remain enforceable under state law. Commenters said this approach 

would work for certain types of state programs, such as RPSs, particularly because they are wellestablished and can be expected to achieve their intended results. Commenters said the state plan 

would include an enforceable commitment (state commitment approach) by the state itself to 

implement state-enforceable (but not federally enforceable) measures that would achieve a 

specified portion of the required emission performance level on behalf of the affected EGUs. 

Commenters added that a state plan that imposes a mass limit on affected EGUs that is 

sufficiently stringent to achieve the emission performance level should not need to include 

renewable energy measures as an enforceable component of the plan to assure the achievement 

of that performance level. Commenters added that the mass limit itself would suffice; however, 

the state may wish to implement renewable energy measures as a complement to the plan to 

support forward-looking achievement of the mass limit at lesser cost. 

Commenters expressed concern that there are no current mechanisms for imposing legal 

responsibility on the state for providing for the funding and regulatory rulemaking required to 

implement the energy efficiency programs and renewable energy projects that will be required 

for EGU's to comply with the proposed standard and adequately maintain reliability. 

Commenters added that RGGI is an existing source performance standard compliance approach 

that can be used for meeting the 2030 emission goal but only if appropriate funding is authorized 

and effectively applied to energy efficiency and renewable generation development. Commenters 

continued that presuming the RGGI overall emission cap will decrease over time, it is absolutely 

essential that the State take responsibility for meeting its portion of the emission reduction 

paradigm. Commenters stated that even in situations where a utility or non-state entity 

implements energy efficiency or renewable energy development programs, the state ultimately 

holds the obligation for authorizing funding and enabling regulation for these programs. 

Commenters rejected the concept that "... state plans must impose all of the legal responsibility 

for achieving the required emission performance level on the affected EGUs" and encourages the 

EPA to ensure that no RGGI-based state plan reliant on outside-the-fence measures leaves the 

affected EGUs exposed as the only compliance entity. Commenters explained that this level of 

legal responsibility may not be captured in statute in some states, and legislative changes, where 

necessary, should be part of a state plan filed with the EPA and the EPA should not approve that 

state plan unless the legislation requiring this increased level of legal responsibility has been 

enacted. 

Response 4: Because section 111(d) specifically requires a state to submit standards of 

performance for existing sources, state plans must include federally enforceable standards 

applicable to EGUs. As noted above, however, the state measures plan type allows states to 

design plans that include state-enforceable measures applicable to EGUs and to other entities as 

well. These measures could include mechanisms advocated by the commenters, such as such as 

renewable portfolio standards and energy efficiency measures. This plan type gives states the 

flexibility that the commenters requested, while ensuring through the backstop mechanism that 

the requirements of section 111(d) are satisfied. 
109 

 

Commenter 5: EGUs or group of EGUs cannot enforce RE and EE programs. 

Commenters stated, there is sufficient evidence that these building blocks can be legally 

enforceable emissions performance standard at affected EGUs, no matter who the responsible 

party is. However, commenters said, an affected EGU or group of EGUs cannot enforce RE and 

EE programs, especially in non-vertically integrated states. 

Response 5: See section IV.A of the final rule preamble of the CPP for the EPA’s response to 

this comment. 

Comment 6: States and the EPA has limited resources and enforcing against multiple entities 

will be difficult and complicate enforcement. 

Commenters stated the States and the EPA have limited resources to devote to enforcement. 

Commenters stated allowing plans that apply to multiple entities will complicate enforcement. 

Commenters stated instead, requiring EGUs to meet the emission limitations will simplify 

enforcement and ensure greater success toward meeting the carbon emission goals. Commenters 

said as stated in the Draft Rule, demonstrating compliance would be achieved by quantifying 

reduced generation at the EGUs resulting from building Blocks 2, 3 and 4, rather than requiring 

costly compliance and enforcement strategies aimed at multiple entities. 

Response 6: As discussed in section V of the final rule preamble of the CPP explaining how 

EPA designed the BSER, the EPA designed the emissions reduction goals so that they should be 

readily achievable using proven methods for efficient and clean energy production. EPA is not 

finalizing the portfolio approach. It is therefore, the EPA’s expectation that state law will not 

have to be radically restructured. The guideline does not require a state to change its law in a 

way that subjects entities other than affected EGU’s to federally enforceable requirements under 

the state plan. Compliance determinations under the federally approved state plan will focus on 

measuring the effect of whatever measures the state decides to pursue on the emissions from 

affected EGU’s, which should be readily verifiable and enforceable. 

Comment 7: States will need to take an active role in crafting state plans that apportion emission 

reductions across affected units. 

Commenters stated that states will need to take an active role in crafting state plans that 

apportion emission reduction obligations across their fleets of affected units and in administering 

such programs, a particularly important for states that choose to adopt a rate-based protocol, 

since emission reductions achieved through measures other than on-site heat rate improvements - 

EE, RE, and other techniques that allow for reduced dispatch of affected fossil units - will not be 

reflected in the emission rates of the affected EGUs. Commenters said rate-based states will need 

to include a mechanism in their implementation plans that adjusts the emission rate at affected 

units to account for non-HRI emission reductions. 
110 

 

Response 7: As we explain in section VIII.D of the final rule preamble of the CPP and the Legal 

Memorandum, a state may fulfill its requirements under section 111(d) by adopting a state plan 

with the emission standards approach, and that imposes rate-based emission standards at the 

level of the source subcategory-specific performance rates or that imposes the equivalent massbased emission standards. The affected EGUs would be able to take actions to implement the 

building blocks or other emission reduction methods, and thereby achieve their emission 

standards. As a result, it is not necessary for state utility or environmental agencies to order the 

affected EGUs to implement the building blocks and, therefore, it is not necessary for the state 

agencies to have the authority to do so or for the states to make the other types of changes to 

state law that the commenters describe.

Comment 8: EGUs that are subject to System Support Resource Agreements (SSRs) should not 

be assigned sole responsibility for compliance because they may be required to operate by 

FERC, and should be excluded from the rule 

Commenters stated the EPA requested comment on whether the responsibility to achieve the 

emission performance level should be assigned solely to EGUs. Commenters said while this may 

be possible, it does lead to some questionable scenarios. Commenters indicated that one such 

scenario is when a regulated unit is subject to a System Support Resource Agreement (SSR) that 

requires a unit to operate to maintain system reliability. Commenters said Michigan currently has 

three power plants in the Upper Peninsula that are subject to an SSR Agreement: the Presque Isle 

Power Plant, the City of Escanaba Plant, and White Pine No. 1. Commenters questioned if a unit 

cannot run because of a CO2 limit, how this would interact with a SSR ordered by FERC. 

Commenters stated power plants with System Support Resource agreements in place with an 

electric system operator that prohibit plants from retiring and require them to remain in service 

due to reliability issues should be excluded from this rule since these plants will be retired once 

the system reliability issue is resolved. Commenters listed the Presque Isle Power Plant in 

Michigan's Upper Peninsula as an example. Commenters stated it appears reasonable to exclude 

these units since, once the system reliability issues are resolved, these units will not be a source 

of future GHG emissions. Commenters said the need for this type of flexibility could be 

demonstrated by unit SSR status, or through some other similar type of electric system operator 

procedure. Commenters stated alternatively, a mechanism is needed to provide state flexibility 

for treatment of units that are designated for retirement but are required to run due electric 

system reliability constraints. Commenters said if the units are not excluded from rule 

applicability overall, states should be able to exclude emissions from these units for purposes of 

preparing state compliance plans. 

Response 8: We recognize the commenters’ concerns regarding SSR agreements and reliability 

issues. The EPA has fully considered reliability issues in developing this final rule. Specifically, 

we note that affected EGUs that are required to run for reliability reasons have means to do so, 
111 

 

including trading for ERCs or allowances. For a more comprehensive discussion of reliability 

issues and final rule, please see preamble section VIII.G.2. 

Comment 9: EPA should clarify the legal obligations placed on EGUs subject to section 111(d) 

plans.

Commenters requested clarification on appropriate enforcement mechanisms for affected EGUs 

not regulated by the state public utility commission, especially merchant power plants. 

Commenters stated, the final emission guidelines should offer greater clarity regarding how 

obligations placed on EGU owners, electric utilities and others contained in state plans will be 

enforced. 

Response 9: All affected EGUs that are subject to an emission standards state plan will be 

subject to standards of performance, as described in section VIII.C of the final rule preamble of 

the CPP, that will be enforceable by their terms. 

Comment 10: Commenters stated if this format for state goals is adopted in the Final Rule, the 

EPA should provide additional clarity that state goals are for, and a state plan must address, 

affected EGUs within its borders. 

Response 10: We discuss state goals in section VII of the final rule preamble of the CPP. Their 

purpose is to assure that the state’s standards of performance on its sources result in an emission 

performance level from those sources that is equivalent to the source subcategory-specific 

emission performance rates. 

Comment 11: Commenters supported the option of enforcing emissions limits for EGUs but 

allowing states with existing re-dispatch, RE, and EE programs to adjust EGU limits, provided 

the other programs are enforceable and reductions verified. 

Commenters stated as for states that already have aspects of Building Blocks 2,3 and 4 in place 

and are under the control of the state or other entities, those states be allowed to include these 

projects and the reductions they will achieve in 2020-2029 in their plans so long as an 

enforceable mechanism exists to maintain the programs. Commenters stated the goals for those 

states could be adjusted down to include reasonable projections of the reductions expected from 

those programs, so long as the programs themselves are enforceable and the projected reductions 

are verified in the state plans. Commenters stated there is a rational basis to treat states that have

made progress reducing carbon emissions differently from states that have not and therefore have 

a limited time period to meet their goals. 
112 

 

Response 11: We appreciate these comments. The state measures approach is designed to 

achieve the policy objectives that the commenters support.

Comment 12: Some commenters disagreed with both approaches arguing that placing the entire 

responsibility of compliance on EGUs would be arbitrary and capricious and that EPA does not 

have authority to enforce regulations for other non-EGU entities. 

Commenters stated the EPA's proposed BSER presents challenges with the enforcement of the 

standards. Commenters said under the Act, the EPA is authorized to issue an order, 

administrative penalty or bring a civil action if a person has violated or is in violation of any 

requirement or prohibition of a state implementation plan. Commenters said the EPA proposes 

two different options to address the federal enforcement statute, both of which are unlawful. 

Commenters stated the first option would be arbitrary and capricious, as it places the entire 

responsibility of achieving a state's emissions performance level fully and solely on the affected 

EGUs. Commenters said the second option would make affected EGUs responsible for achieving 

their balance of the emission reduction level with the remaining responsibility falling on the 

remaining measures. Commenters said the EPA is without the authority to propose, let alone 

enforce, outside the fence measures, such as renewable portfolio standards and energy efficiency 

because those measures bring into the scope of section 111 sources that Congress did not intend 

to be regulated. 

Response 12: EPA disagrees that a rule that allows a state to place the responsibility for 

compliance on EGUs is either arbitrary or capricious, because as explained above Section 111(d) 

specifically requires a state to submit standards of performance for existing sources. The final 

rule satisfies this requirement while adding flexibility for states by making two types of state 

plans available: the emission standards type, which applies all requirements for meeting the 

emission guidelines to affected EGUs, and the state measures type, under which a mass CO2 

emission goal may be partially or entirely achieved through state measures imposing 

requirements on entities other than affected EGUs and that are not included in the federally 

enforceable 111(d) state plan. To ensure that the state measures plan type is consistent with 

section 111(d), as part of a state measures plan a state must submit standards of performance for 

CO2 emissions from affected EGUs in the form of a federally enforceable “backstop” that would 

be triggered if the state measures fail to achieve the required CO2 emission performance level. 

Thus, under either possible plan type, the state must submit federally enforceable standards of 

performance that affected EGUs are responsible for meeting. See 40 CFR § 60.5775. (To the 

extent the comments concerned the proposed portfolio approach, the comments are moot. As 

explained in section V.B and VIII.C of the final rule preamble of the CPP, the EPA is not 

finalizing that proposed approach.) 

In response to this comment’s concerns regarding enforcement, the final rule gives considerable 

discretion to the states in setting emission standards and related plan requirements for affected 

EGUs. Under the final rule, the states may choose whether to rely on emissions limits placed 

entirely on the EGUs that are affected sources under the guideline, or a combination of limits on 
113 

 

those EGUs and state measures. And, consistent with longstanding CAA practice, 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. But EPA would only enforce the standards 

that apply to affected EGUs, not state-enforceable measures that apply to entities other than 

affected EGUs included in a state measures plan. States need not face the issue of making 

entities “outside the fence” subject to direct federal enforcement. 

Comment 13: EGUs should not be subject to enforcement if they are complying with any unitspecific emission limits; EGUs should not be subject to enforcement if the state fails to 

demonstrate emission reductions are occurring consistent with the trajectory or that the state fails 

to procure sufficient RE and EE. 

Commenters stated, the failure of a state to meet its projected emission rate may occur for many 

reasons that are beyond the control or responsibility of individual EGUs and utilities. 

Commenters said the approach to enforcement under section 111(d) plans should follow two 

principles: first, that affected EGUs will not be subject to enforcement if they are complying with 

any unit-specific emission limits that are imposed as part of the state compliance plan; and 

second, that states (and EGUs in such states) will not be subject to enforcement if annual reports 

demonstrate that emission reductions are occurring consistent with the trajectory included in the 

approved compliance plan, even if specific elements of the plan are not performing as expected. 

Commenters stated that an affected EGU should have no enforcement exposure so long as it is 

complying with its obligations written into an EPA-approved state plan. Commenters said EPA 

should make clear that the legal obligation on individual EGU owners, utilities, or other affected 

entities is to comply with the applicable requirements contained in the relevant state plan where 

that entity is located. Commenters said, so long as an affected entity complies with the specific 

obligations required of that entity under the state plan---for example, to hold emission 

allowances in a cap-and-trade program, submit RECs under an RES, or invest a set amount of 

funds in energy efficiency programs---that entity will be considered in compliance and so cannot 

be subject to any enforcement actions by EPA or under the Clean Air Act citizen suit provisions. 

See CAA section 304. Commenters stated EPA should make clear that an affected entity is not at 

risk of enforcement action merely because a state's emission rate in a given year deviates from 

the trajectory it established in its state plan submission or, after 2030, from its goal. Commenters 

said, the fact that the state is off of its compliance pathway may be a basis for triggering 

corrective measures or otherwise modifying a state plan, but it is not a basis for pursuing 

enforcement action against an individual entity in an attempt to achieve additional emission 

reductions or other actions beyond those required by the EPA-approved state compliance plan. 

Commenters in cases where states place obligation on non-EGU, non-utility entities, the state 

necessarily will have placed direct obligations on individual EGUs and/or utilities that, when 

added together, only will result in achievement of a portion of the state goal, consistent with the 

state's trajectory or 2030 goals. Commenters stated that if a state may require affected EGUs (or 

a group of EGUs, such as all EGUs operated by an integrated utility) to meet emission standards 
114 

 

less stringent than the state goal, an affected EGU or utility that complies with the state-set 

emission standard should be considered to have fulfilled all of its obligations under the state plan 

and so there would be no enforcement, even if other affected entities in a state (including the 

state itself), did not meet their obligations or if, for whatever reason, the state's overall emission

rate performance was not consistent with the level required by trajectory established in the 

approved compliance plan. Commenters stated, alternatively, if a state makes a commitment to 

administratively adjust the EGU or utility's emission rate, EPA should make clear that the failure 

to procure sufficient alternative generation or energy savings should not expose the EGU or 

utility to enforcement action. 

Commenters stated there are circumstances where an affected entity's obligations under the state 

plan will change from those originally set out by the state plan submitted and approved by EPA. 

Commenters said, for example, if a state plan results in emission reductions that are not 

sufficient for the state to be within 10 percent of its approved emission reduction trajectory, that 

state will be required to impose corrective measures. Commenters added that if a state's 

corrective measures are still not enough for the state's emission rate to be consistent with the 

state's trajectory, or if the state has a change in circumstances, the state may have to modify its 

plan. Commenters said, in such cases, principles of fairness and due process require that no new 

enforceable obligations for EGUs or utilities be created under the modified state plan without 

procedural protections including notice, and the opportunity to provide public comment on those 

modifications. 

Commenters stated the appropriate remedy for a state whose plan is not resulting in expected 

emission rate reductions notwithstanding faithful execution is modification of the state plan, not 

an enforcement action against regulated entities. Commenters said, under such circumstances, 

neither EPA nor private litigants may bring an enforcement action against EGUs or utilities for 

underperformance of the state plan. Commenters added neither EPA nor private parties may use 

an enforcement action to impose obligations on EGUs or utilities that were not already included 

in a properly approved plan. Commenters said that there are significant concerns that EPA or 

private parties may attempt enforcement actions even if an EGU or utility is fully implementing 

the required measures included in a state plan, merely because RE, EE or other state or thirdparty actions do not result in the emission reductions built into the state's plan projections or 

because of unexpected circumstances such as increased electricity demand due to economic 

recovery. Commenters said that EPA should more clearly establish that an EGU or utility that is 

complying with its obligations under an EPA-approved state compliance plan is legally meeting 

all federally enforceable obligations and therefore cannot be subject to an EPA enforcement 

action or citizen suit. 

Response 13: Once the plan is implemented, if the CO2 emission performance rates or 

applicable state rate-based CO2 goal are not achieved, for emission standard type plans corrective 

measures would need to be implemented, as described in section VIII.F.3 of the final rule 

preamble of the CPP, or for state measures type plans the federally enforceable backstop would 

be triggered, as described in section VIII.C.3 of the final rule preamble. In response to this 
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comment’s concerns regarding enforcement, the final rule provides considerable discretion to the 

states in setting emission standards and related plan requirements for its affected EGUs. And, 

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. 

The comment also is expressing concern that affected EGUs should have clear compliance 

obligations under their control and a chance to comment on the structure of a state plan. The 

guideline as finalized meets both those goals. As a matter of direct federal enforcement, a state 

plan will include emission standards on affected EGUs. Those standards may be designed to 

accomplish the entirety of the emission reductions needed under the plan, or a portion, with the 

state relying on state measures to achieve the balance. In either case, the affected EGU can limit 

its emissions to meet the requirements of the state plan. In addition, the EGUs will have an 

opportunity as the state develops its plan to comment on how those limits are structured, and, if a 

state uses a state measures plan design with backstop EGU emission standards, the EGUs can 

comment on the conditions under which those backstop standards become effective. 

Comment 14: EPA is not permitted to enforce a state plan if a state fails to meet its state goals. 

Commenters stated that a state's failure to meet its state goal does not permit EPA to enforce the 

state's plan. Commenters said EPA can take over administration of a state plan when "violations 

of an applicable implementation plan or an approved permit program . . . are so widespread that 

such violations appear to result from a failure of the State in which the plan or permit program 

applies to enforce the plan or permit program effectively." 41 U.S.C. section 7413(a)(2). 

Commenters said if a state has implemented the measures in its state plan then there would be no 

widespread violations meriting EPA enforcement. Commenters said if EPA cannot enforce 

against a state for failing to meet a state goal, then EPA must explain whether and how it will 

address a state that is not on track to meet its interim state goal (per the progress checks every 

two years). Commenters said EPA needs to clarify whether the Agency would issue a federal 

plan or whether it would require the state to amend its plan. Commenters said based on EPA's 

regulations, it appears EPA would issue a revision to the state plan, see 40 C.F.R. section 60.29. 

Response 14: Once the plan is implemented, if the CO2 emission performance rates or 

applicable state rate-based CO2 goal are not achieved, for emission standard type plans corrective 

measures would need to be implemented, as described in section VIII.F.3 of the final rule 

preamble of the CPP, or for state measures type plans the federally enforceable backstop would 

be triggered, as described in section VIII.C.3 of the final rule preamble. In response to this 

comment’s concerns regarding enforcement, the final rule provides considerable discretion to the 

states in setting emission standards and related plan requirements for its affected EGUs. And, 

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. 
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Comment 15: If an affected unit or program fails to meet expectations, then the utility should 

not be considered out of compliance if the utility as a whole is meeting the requirements imposed 

upon it by the state. 

Commenters stated as states develop their compliance strategy to meet the respective emission 

reduction requirements for the CPP in their state, they will necessarily make certain assumptions, 

including but not limited to, the following items: (1) Affected fossil unit(s) generation; (ii) 

Affected fossil unit(s) CO2 emission rate; (iii.) Installed capacity and generation from in-state 

qualified renewable resources; (iv.) Renewable energy credits transferred into or out of state; (v.) 

Existing and incremental capacity and generation from in-state nuclear resources; (vi.) 

Incremental capacity and generation from hydroelectric resources; and (vii.) Energy efficiency 

and demand-side management energy savings. Commenters said most vertically integrated 

utilities will be able to draw on some or all of the aforementioned resources in states in which 

they operate, and as such, it will be most efficient if the compliance requirement for such utility 

was placed upon the company as a whole and not on the individual resources and programs 

which it controls. Commenters said this is important to avoid a potential unintended consequence 

where the utility is in compliance overall, but certain individual components may have not met 

the original expectations and as such could receive a Notice of Violation for being out of 

compliance with the state expectation for such unit. Commenters gave as an example, in a hotterthan-normal year, a certain state may lean more heavily on its fossil-fueled resources than 

originally expected, but this may have been offset by higher than expected generation from its 

renewable resources and/or larger energy efficiency savings from its retail load. Commenters 

said if an affected unit or program has a specific requirement as part of a state plan, that unit or 

program should not be deemed to be out of compliance if the utility as a whole is meeting the 

requirement imposed upon it by the state for a given year. 

Response 15: 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 16: States should have the ability to enforce state plans. 

Commenters urged EPA to ensure that affected EGUs are not necessarily the only entities 

responsible for achieving the final emission performance levels. Commenters said it is important 

for EPA to urge states to consider which entities would be responsible for the measures states 

include in compliance plans as some entities may be responsible for implementing energy 

efficiency measures but also dependent on decisions beyond their control to achieve the 

projected reductions. Commenters provided examples in their comment. 

Commenters recommended that the requirements to meet renewable or energy efficiency 

obligations should be enforced consistent with current practice. Commenters said states should 

have the authority to determine whether they want to design a plan consistent with EPA'sdescribed "portfolio approach" or the "state commitment approach". Commenters said provided 
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states are ensuring implementation and enforcement of the appropriate emission reductions, state 

plans can be designed consistent with the requirements of 111(d). Commenters said the choice of 

the federally enforceable entity should be a state's decision. Commenters said if a state chooses 

to include a measure as an express component of its 111(d) compliance plan, that program can 

become federally enforceable; however, as an alternative, a state can commit to achieve a portion 

of the required emission performance level on behalf of affected EGU, and the state can be 

responsible for demonstrating those reductions without the associated state programs becoming 

federally enforceable. Commenters said this alternative is consistent with the procedures under 

section 110 to which section 111 references. 

Response 16: We appreciate these comments. The final rule requires that states adopt either an 

emissions standards approach or a state measures approach and approaches offer the states the 

types of opportunities the commenters recommend. 

Comment 17: Commenters referred to specific comments made for each building block, and 

stated that a number of issues have been identified regarding the underlying assumptions used by 

EPA. Commenters stated that these issues create significant uncertainties that greatly diminish 

the potential for states to translate those assumptions into feasible requirements that can be 

implemented and enforced. Commenters also summarized issues of uncertainties and 

implementation concerns, including: Building blocks 3 and 4 are not enforceable against 

designated facilities 

Response 17: We are not finalizing the portfolio approach. Accordingly, states must either (i) 

submit state plans that adopt the emission standards approach and that therefore include 

standards of performance for the affected EGUs, but that do not impose requirements on nonaffected EGUs, which standards of performance are federally enforceable; or (ii) adopt the state 

measures approach that may include some or no federally enforceable emission standards for 

affected EGUS and state-law requirements on non-affected EGUs and other non-EGU entities, 

which are not federally enforceable. 

1.11.6 Parties regulated by the state other than affected EGUs 

Comment 1: Concern regarding the liability of the power sector if Building Block 4 reductions 

are not met. 

Commenters indicated that problems with Block 4 including the lack of uniform technical 

standards for measuring EE gains may result in an unfair shift of liability to EGU owners in 

states that rely upon significant EE achievements if EE components are unmet. Commenters 

said, it is unclear within the current rule how one industry sector within a state compliance plan 

would be affected by the failings of others. Commenters suggested a clear chain of liability in the 

event that any entity or single EGU misses goals. Commenters said, states should keep the 

mechanism for enforcement internal, and bear costs, rather than shifting costs/risk to other 

entities in the portfolio. 
118 

 

Response 1: We disagree with the commenters, although as discussed in section V.B. of the final 

rule preamble of the CPP, we are not including building block 4 as part of the BSER. 

Comment 2: Comments that EPA should ensure that provisions of state plans are verifiable and 

enforceable. 

Commenters said that state plans with requirements that apply to entities beyond the affected 

EGUs must make those requirements federally enforceable by both EPA and citizens, and 

incorporate a backstop mechanism that will ensure that any shortfall is remedied. Commenters 

said the backstop mechanism must be designed by the state and incorporated in its plan, must be 

triggered automatically by any shortfall, and must ensure that ultimate responsibility for 

remedying any shortfall in emission reductions rests with the regulated EGUs. Commenters said 

that the state plans must clearly present how liability and enforcement would work when entities 

other than power plants have responsibility for emission reduction measures as part of a state's 

implementation plan. Commenters stated that the rule should be enforceable only against 

affected EGUs and no other entities. Commenters from electric utilities stated that they should 

not be held accountable for measures that are not under their direct control. 

Response 2: The preamble addresses these concerns by explaining that the final rule authorizes 

either the emission standards approach or the state measures approach, which requires the state 

submit standards of performance for CO2 emissions from affected EGUs in the form of a 

federally enforceable “backstop” that would be triggered if the state measures fail to achieve the 

required CO2 emission performance level. See section VIII of the final rule preamble of the 

CPP. The final rule does not authorize the portfolio approach, as explained in section VIII.C of 

the final rule preamble, and affected EGUs are able themselves to take actions that implement 

the building blocks and achieve their emission standards at the levels of the source subcategory 

specific emission performance rates. The federal enforceability considerations raised in the 

comment arose primarily under the proposed portfolio approach for state plans., 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 of the final rule preamble, 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 caseby-case basis, to determine the appropriate response and resolution. 
119 

 

Comment 3: Comments that section 111(d) does not authorize EPA to make the control 

measures in building blocks 2-4 federally enforceable against any entities other than the EGUs 

that are “designated facilities.” 

Commenters said, CAA section 111(d) does not provide EPA the authority to create federally 

enforceable obligations on entities that are not within the regulated source category. 

Commenters said first, the entity must be a "stationary source," meaning a "building, structure, 

facility, or installation which emits, or may emit any air pollutant.' Section 111(a)(3). Second, 

commenters said that stationary source must be an existing source that falls within the "category 

of sources" that EPA has listed as eligible for regulation because that category "causes, or 

contributes significantly to, air pollution which may reasonably be anticipated to endanger public 

health or welfare." Section 111(b)(1)(A). Third, commenters said that EPA must have 

promulgated a standard of performance for new sources in the source category. Commenters said 

finally that EPA's regulations define "designated facility" as "any existing facility that emits a 

designated pollutant and that would be subject to a standard of performance for that facility if the 

existing facility were an affected facility." Commenters stated, thus, a "designated facility" for 

which state plans must establish existing-source performance standards is the same as an 

"affected facility" for which EPA establishes new source performance standards, except that a 

"designated facility" is an existing facility. Commenters concluded, therefore, that neither EPA 

nor the states have no authority under section 111(d) to enforce emissions reductions beyond the 

physical boundary of a “designated facility.” Commenters said that if an entity is not a stationary 

source of pollutants in a category for which the Agency has promulgated an endangerment 

finding and an applicable NSPS, then neither EPA nor the states have authority to impose any 

obligation on that entity under section 111(d). But instead, commenters said that the Agency 

proposed to take another wrong turn away from the regulatory program established in section 

111 and to direct states to impose legal obligations on "affected entities" other than EGUs to 

obtain the aggregate emission reductions that cannot be achieved by adopting proper standards of 

performance for existing EGUs. 79 Fed. Reg. at 34,901-03. Commenters also pointed out that 

"affected entity" is not a term that EPA has previously used in its Section 111(d) regulations to 

define the regulated sources and is not defined in the Agency's section 111(d) implementing 

regulation 40 CFR 60, subpart B. 

Response 3: The EPA is not adopting the portfolio approach in the final rule; accordingly, any 

requirements that the state adopts for entities other than affected EGUs must be limited to the 

state measures approach and those measures that apply to entities other than affected EGUs will 

not be federally enforceable.

Comment 4: Comments that the enforcement authority of the CAA does not allow enforcement 

against any entity other than a regulated source. 

Commenters stated in some states, public utility commissions are the only entities with authority 

to effectively implement the re-dispatch of generation from existing coal-fired units to NGCC 

units, or to coordinate investments in renewable energy generation or demand-side energy 

efficiency campaigns. Commenters stated these state agencies are shielded from suit under the 
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CAA's citizen suit provision. Commenters stated therefore, it would not be possible to enforce 

emission-reducing measures on these state agencies. Commenters stated in that case, under the 

state plan requirements of the EPA's proposal, the state plan submission would not be approvable 

unless the state adopts legislation expressly opening its agencies to citizen suits seeking to 

enforce these obligations, which would plainly exceed the scope of measures the EPA may 

require in a state plan. Commenters concluded accordingly, it may well prove impossible for 

states to submit plans that are "approvable" under the EPA's criteria. 

Commenters stated, EPA acknowledges that placing enforceable goals on non-EGUs (i.e., the 

portfolio approach) may be "challenging" and tasks states with working out these problems. 79 

Fed. Reg. at 34,915. Commenters said, EPA cannot impose goals if it does not know if they are 

lawful, and it cannot circumvent that by asking the states to figure it out. 

Response 4: The EPA is not adopting the portfolio approach; accordingly, any requirements that 

the state adopts for entities other than affected EGUs must be limited to the state measures 

approach and those measures that apply to entities other than affected EGUs will not be federally 

enforceable. 

Comment 5: Comments suggesting that EPA should define enforcement and compliance 

measures for the rule and clarify utilities responsibilities. 

Response 5: 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 an affected EGU does not meet one of its requirements, 

regardless of whether or not its state has met its state requirements, the EPA will address the 

affected EGU’s violation 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. 

EPA is finalizing an option to submit either an emission standards plan type or a state measures 

plan type. If a state fails to achieve the required CO2 emission performance level, then under an 

emission standards plan a corrective measure would apply and under a state measure plan a 

federally enforceable backstop would be triggered. Under the state measures plan a mass CO2 

emission goal may be partially or entirely achieved through state measures that impose 

requirements on entities other than affected EGUs and that are not included in the federally 

enforceable 111(d) state plan. See section VIII of the final rule preamble of the CPP. 

As proposed, we are requiring that state plans include a demonstration that plan measures are 

enforceable, which for state measures plans is provided for in § 60.5780 and discussed in section 

VIII.D.2.c.6 of the final rule preamble. 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 
121 

 

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.”

Commenters requested that EPA define enforcement and compliance measures in the rule for EE 

projects undertaken to help reach the CPP's goals. The commenters argued that the proposed 

language is ambiguous and compliance and enforcement measures should be on the state or 

entity managing the overall EE program and not the individual sites implementing EE/RE. The 

commenters wanted EPA to clarify that water and wastewater utilities are only responsible for 

submitting proper monitoring and verification materials to the sponsoring state or electric utility 

and are not considered regulated entities in this rule or subject to CAA enforcement under this 

rule. 

Comment 6: Commenters stated that holding affected EGUs legally responsible for obtaining all 

of the emission reductions required by the state goals would be unreasonable and illegal as 

proposed. EPA would need to revise its BSER analysis to consider only the costs and other 

factors involved in applying the emission rate goals solely to affected EGUs. Commenters stated 

EPA cannot develop and analyze a BSER that relies on reductions throughout the electric sector 

and then require affected EGUs to be wholly responsible for meeting the emissions reductions 

required by such an expansive BSER determination; such a result would circumvent Section 

111's requirement that standards of performance be "achievable." 42 U.S.C. section 7411(a)(1); 

and this would be arbitrary and capricious rulemaking. Commenters continued, stating that EPA 

recognizes that state goals cannot be met solely through emission-reducing measures that may be 

undertaken by affected EGUs. See 79 Fed. Reg. at 34,838. According to EPA, affected coal-fired 

EGUs could reduce their emissions by only six percent through the adoption of best practices to 

reduce heat rate variability and implementation of equipment upgrades. Id. at 34,861, and even 

with the assistance of CO2 emission reductions from sources other than affected EGUs, EPA still 

predicts that 50 GW of affected fossil-fuel fired generation will retire as a result of the 

Proposal.(77 See American Legislative Exchange, Clean Power Plan Fact -- Expected Plant 

Retirements, at http://www.alec.org/cpp-facts/expected-plant-retirements.) Additionally, 

Commenters remarked, affected EGUs have no authority to ensure that other affected entities 

attain the projected emissions reductions required for the state to achieve its goal. For example, 

an affected EGU cannot mandate re-dispatch or force consumers to participate in EE programs. 

Commenters concluded, stating that enforcement against affected EGUs in each state, in the 

event that the state does not meet its goal, would be irrational and would render the rulemaking 

arbitrary and capricious. 

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, 
122 

 

states will be able to choose from a wide range of emission reduction measures, including 

measures that are not part of the BSER. 

To the extent this comment objects to the portfolio approach, which the EPA is not finalizing, the 

comment is moot. Nevertheless, as explained in the preamble, the EPA 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. 

1.11.6a Electric distribution utility with obligations to meet an EERS or RPS 

pursuant to state regulations 

Comment 1: Commenters disagreed that distribution utilities should have enforceable 

requirements for EE and RE measures. Commenters said if the state plans provide that an 

electric distribution utility will be fined if it transmits electricity that does not satisfy proclaimed 

EERS or RPS, then it is difficult to see how this comports with due process; or if EPA is 

suggesting that a distribution utility not transmit electricity from sources not in compliance, then 

the rule will have electricity reliability impacts. Commenters said that if alternative compliance 

payment (ACP) provisions are not be permitted for an RPS, or not fully permitted, then EPA's 

determination of demonstrated BSER for RE is not valid because current state plans allow ACPs. 

Response 1: The final rule provides considerable discretion to the states in setting emission 

standards and related plan requirements for its affected EGUs. EPA is finalizing an option to 

submit a “state measures” plan type, under which a mass CO2 emission goal may be partially or 

entirely achieved through state measures that impose requirements on entities other than affected 

EGUs and that are not included in the federally enforceable 111(d) state plan. See section VIII. 

As proposed, we are requiring that state plans include a demonstration that plan measures are 

enforceable, which for state measures plans is provided for in § 60.5780 and discussed in section 

VIII.D.2.c.6 of the preamble. 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.” 

1.11.6b Vertically integrated electric utility with obligations under a state-approved 

integrated resource plan 

Comment 1: The proposed rule is unenforceable against traditional utilities, perhaps even more 

so against Cooperatives and other Public Power Systems. Commenters stated that the states have 
123 

 

jurisdiction over electric utility planning for traditional utilities and EPA has no authority to 

intervene. Municipal utilities and co-operatives are not subject to the jurisdiction of the state and 

therefore the state has even less authority to mandate action by these utilities. 

Response 1: The final rule does not adopt the portfolio approach; accordingly, any requirements 

that the state adopts on entities other than affected EGUs must be limited to the state measures 

approach and requirements that apply to entities other than affected EGUs will not be federally 

enforceable. 

Comment 2: Commenters disagreed that states could reduce or deny rate recovery to vertically 

integrated, state-regulated utilities for failure to meet emissions obligations or to empower 

agencies to issue direct compliance orders. Commenters said because a public utility is entitled 

to a constitutionally guaranteed rate of return on capital it is not clear that rate recovery can be 

reduced or denied solely to influence CO2 emissions, particularly for building blocks, such as 

energy efficiency, over which the utility lacks direct control. 

Response 2: As we explain in the section VIII.D of the final rule preamble of the CPP and the 

Legal Memorandum, a state may fulfill its requirements under section 111(d) by adopting a state 

plan with the emission standards approach, and that imposes rate-based emission standards at the 

level of the source subcategory-specific performance rates or that imposes the equivalent massbased emission standards. The affected EGUs would be able to take actions to implement the 

building blocks or other emission reduction methods, and thereby achieve their emission 

standards. In regulated states, we note that a vertically integrated utility operating under cost-ofservice would obtain cost recovery through state Public Utility Commissions (PUCs) or other 

authorities with jurisdiction over their rates. We note that “In states where electric utilities own 

affected power plants, such costs will tend to be passed along to those utility’s consumers 

through regulated rates as a pass-through of a variable expense, or as recovery of and a return on 

compliance capital investments.”3

 “Typically, state regulators in states that own power plants 

determine whether large capital investments at those plants are prudent, used and useful, and 

appropriate to be included in `just and reasonable’ rates charged to customers.”4In some 

instances, utilities obtain preapproval of expenditures for costs of environmental compliance. For 

example, “under Ohio law, under an automatic rider, utilities are able to recover costs of 

environmental compliance, including `the cost of emission allowances; and the cost of federally 

mandated carbon or energy taxes...’ and a `reasonable allowance for construction work in 

progress ... for an environmental expenditure for any electric generating facility of the electric 

 

3

 Analysis Group, EPA’s Clean Power Plan: State Plans and Consumer Impacts, at 11 (July 

2014), available at

http://www.analysisgroup.com/uploadedfiles/content/insights/publishing/analysis_group_epa_cle

an_power_plan_report.pdf. 

4

Id. at 5 n.4. 
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distribution utility....’”5 Finally, we note that we are not including building block 4 as a 

component of BSER in the final rule. 

1.11.7 Private or public third-party entity not regulated by the state 

Comment 1: Commenters said that, making State 111(d) Plans "enforceable" could require 

major changes in Indiana law, given Building Blocks 2, 3, and 4, because Indiana has not 

authorized the Indiana Utility Regulatory Commission (IURC) to mandate specific dispatch 

decisions, implement renewable portfolio standards, or require end-use energy efficiency 

measures and lacks the authority to directly regulate some electricity markets in 

Indiana. Commenters said, Indiana explicitly gives municipalities and rural electrical 

membership cooperatives or corporations the option to opt out of IURC oversight, and these 

entities and their generating assets are covered by the proposed rule. 

Commenters said that, Local Boards of Trustees and City Councils are educated in the operation 

of their respective municipal electric utilities and are in the best position to make decisions 

regarding municipal utilities generating resources, and they are in the best position to understand 

the impact those decisions will have on the ratepayer-citizens in the communities in which they 

serve. 

Commenters said that, EPA suggests that States might use public funds to induce voluntary 

submission to state control for private or public third-party entities not now regulated by a State. 

Commenters said that "Alternatively, a municipal utility or utility cooperative might voluntarily 

submit to state authority as a condition of the state agreeing to let the entity implement a 

portfolio approach, in lieu of the application of certain direct CO2 emission limits for affected 

EGUs owned and operated by such entities through a state regulation." Commenters said that, it 

is not clear that these tactics could be employed everywhere because in some States such locally 

controlled entities enjoy constitutional protection. Commenters said that it is not clear that the 

funding could be secured much less dedicated funding or that conditioning environmental 

concessions on surrender of control of the governance of an entity is lawful regulation. 

Response 1: As explained in the section V.B and VIII.C of the preamble of the CPP, the final 

rule does not adopt the portfolio approach; accordingly, any requirements that the state adopts on 

non-affected EGUs must be limited to the state measures approach and requirements that apply 

to non-affected EGUs will not be federally enforceable. A state may adopt the emission 

standards approach, under which regulatory requirements are limited to the affected EGUs and, 

as described in the preamble, those entities are able to take actions, including implementing the 

 

5

 Regulatory Assistance Project, Incorporating Environmental Costs in Electric Rates Working 

to Ensure Affordable Compliance with Public Health and Environmental Regulations, at 17 

(2011) (citing Ohio Revised Code, Section 4928.143(B)(2)(a)and (b)), available at raponlin.org. 
125 

 

building blocks, that will allow them to achieve emission standards at the level of the source 

subcategory-specific emission performance rates. The state may also adopt the state measures 

approach although, of course, if that approach proves challenging in a particular state for any 

reason, the state may use the emission standards approach. 

Comment 2: Comments that proposed rule is unenforceable against traditional utilities (larger, 

vertically integrated) and perhaps even more so against cooperatives and other public power 

systems, and that local boards and City Councils are in a better position to make resource 

decisions related to their respective municipal utilities. 

Commenters said that, the Proposed Rule is unenforceable against traditional utilities, perhaps 

even more so against cooperatives and other public power systems. 

Commenters said that, the differences between smaller, public utilities (like cooperatives and 

municipals) and larger, more traditional and vertically integrated utilities are even more 

pronounced in the laws of some states, which tend to exert greater control over traditional 

investor-owned utilities. Commenters said, states possess exclusive authority over investorowned utilities (IOUs), including decisions regarding the need for additional generating capacity; 

the type, location, and construction of generating facilities to be licensed; and the retirement of 

existing generators. Commenters said, for such systems, states maintain jurisdiction over the 

integrated resource plan (IRP), which represents the utility's plan for meeting its anticipated 

energy demand through a combination of supply and demand-side resources. Commenters said, 

most states, including Georgia, require such utilities to file their IRP with the public utility 

commission. Commenters said, some states may use the information in IRPs to develop 

renewable portfolio standards (RPS) that require the affected utilities to serve retail load with 

certain levels of renewable generation. 

Commenters said that, some state laws may treat smaller systems, like electric cooperatives or 

municipals differently from traditional utilities. Commenters said, this is the case in Georgia. 

Under Georgia law, an electric membership corporation (EMC) is not subject to the jurisdiction 

of the Georgia PSC: 

Except as otherwise provided in Part 1 of Article I of this chapter, the "Georgia 

Territorial Electric Service Act," electric membership corporations shall not be subject to 

the jurisdiction of the commission. 

O.C.G.A. section 46-3-177 (2004 & 2014 Supp.). Commenters stated consequently, unlike 

traditional IOUs, a wholesale service EMC like Oglethorpe Power is not subject to regulation by 

the Georgia Public Service Commission (PSC). Commenters said Georgia electric membership 

corporations (EMCs) are not required to produce and seek approval of IRPs, and the State - 

through the jurisdiction of the Georgia Environmental Protection Division (EPD), the PSC or any 

other Georgia regulatory agency - cannot impose renewable energy production or demand-side 

management requirements on Georgia EMCs, including Oglethorpe Power. Commenters stated 
126 

 

instead, Georgia law grants its EMCs the power to generate, manufacture, purchase, acquire, and 

accumulate electricity, and to transmit, distribute, sell, furnish and dispose of such electricity. 

Commenters said that, based on the way Georgia regulates traditional utilities and cooperatives, 

EPA's proposed rule is unenforceable against both types of entities. Commenters said that for 

traditional utilities, the State of Georgia PSC has been given exclusive authority over issues like 

generation, IRPs and electric retail sales and not the EPD or EPA. Commenters said, this 

structure has been upheld through federal law and judicial precedent. Commenters said not only 

does the Federal Power Act (FPA) prohibit Federal Energy Regulatory Commission (FERC) 

from regulating generation either directly or indirectly, but also a recent D.C. Circuit decision 

rejected FERC's attempt to intrude on state authority to regulate its own retail electricity market. 

Commenters said, if FERC lacks such authority, common sense dictates that EPA would not 

possess it either. Commenters said EPA cannot point to any statute enacted by Congress that 

would extend it such authority. Commenters said, EPA's proposed rule is invalid to the extent 

that it infringes on a state's traditional rights to regulate those portions of its electric market 

addressed by the Proposed Rule. 

Commenters stated that furthermore, given that the EPA cannot, through its proposed rule, 

require Georgia to implement certain steps in regard to traditional utilities, then it similarly 

cannot require Georgia to implement measures in regard to cooperatives. Commenters said as 

discussed above, subject to a limited exception for retail EMCs (Oglethorpe Power is not a retail 

EMC and thus is not subject to that limited exception), Georgia cooperatives are not subject to 

the jurisdiction of the PSC like IOUs, lessening the State's ability to exert control over them, 

especially in the areas contemplated by the Proposal. Commenters stated thus, even assuming the 

EPA could require Georgia to implement the proposed rule in regard to its vertically-integrated 

IOUs, which it cannot, the State would still lack the necessary jurisdiction to implement the 

Proposal in regard to Georgia EMCs - especially ones like Oglethorpe Power over whom the 

PSC has no regulatory authority. 

Response 2: 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 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). Additionally, we are not requiring any state or affected EGU to construct electric 

generation. Further, we note that we are not including building block 4, demand-side energy 
127 

 

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 3: Commenters said that, electric cooperatives face an entirely different and unique 

regulatory framework from investor-owned utilities and municipal utilities operating in the state, 

as well as from generation and transmission cooperatives. Commenters said, Texas legislatures 

have largely chosen to leave it up to the electric cooperatives' members (through voting for their 

boards of directors) to regulate themselves. Commenters said, in order for a Texas State 

Implementation Plan (relative to this EPA proposed rule) to be enforceable, the Texas legislature 

would need to first alter state policy and pass a new law regulating Texas electric 

cooperatives. Commenters questioned whether the federal government can legally dictate a 

change in state policy and mandate that Texas regulate electric cooperatives. Commenters said 

that the EPA's attempt to coerce the state legislature to change the way it regulates electric 

cooperatives who do business entirely in the State of Texas is highly questionable from a legal 

perspective. 

Commenters said that, from state's rights perspective, FERC Commissioner Tony Clark has 

pointed out that every state will be forced to move from a cooperating relationship with the 

federal government to a "mother-may-I'' relationship with EPA, as to how a state may regulate 

how it generates, transmits and consumes energy. Commenters said that the Proposed Rule will 

comprehensively reorder, perhaps forever, the way that states interact with the Federal 

government in regard to electric energy. Commenters said that federalism and state-sovereignty 

issues are not being adequately considered by EPA in this rulemaking. 

Response 3: 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 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. We recognize 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). 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. 
128 

 

Comment 4: Commenters said that, Rural Cooperatives and Municipal facilities should be 

subject to the same requirements as electric generating units under this rule, especially in 

deregulated markets where they would operate at a competitive advantage, as compared to units 

subject to the proposed rule. Commenters said, any longer-term capacity planning strategies 

advantage could be misconstrued as market distortion. 

Response 4: We appreciate this comment and note that to the extent that electric cooperatives 

and municipalities own affected EGUs as defined in the final rule, they will be subject to the 

final rule requirements. Please see section V.A of the final rule preamble of the CPP for EPA’s 

response to this comment.

Comment 5: Comments that the proposed regulation lends no insight into which body should 

take the lead, Colorado Department of Public Health and Environment or Public Utilities 

Commission, and that the legislature would have to decide by passing an enabling statute. 

Commenters said that, historically, the Colorado Department of Public Health and Environment 

(CDPHE) has administered the federal Clean Air Act in Colorado. Commenters said, however, 

currently, environmental regulators at the CDPHE and the Air Quality Control Commission 

(AQCC) are not authorized to regulate "beyond the fence" of an individual pollution source, so 

they would not possess the authority to implement much of the Clean Power Plan. Commenters 

said that if the legislature were to grant this authority to environmental regulators, such a 

delegation no doubt would conflict with the Public Utilities Commission's (PUC's) century-old 

jurisdiction over the electric industry. 

Commenters said that, EPA's Clean Power Plan (CPP) would thrust into regulatory limbo the 

Colorado's 22 electric cooperatives and 29 publicly-owned utilities, which provide 

approximately 24 percent and 17 percent respectively of Colorado's power. Commenters said, 

these "coops" and "munis" would have to be part of any Colorado strategy to achieve the Clean 

Power Plan, but they are exempt from rate regulation by the State, and are otherwise subject to 

far less onerous oversight from the Public Utilities Commission (PUC). 

Commenters said that, the lack of PUC resource planning over coops and munis is particularly 

problematic in the context of the CPP. Commenters said, unlike investor-owned utilities, 

generation and transmission providers are only required to file its resource plan with the PUC as 

a report rather than filing it for approval through a litigated proceeding. Commenters said that 

member-systems and the other coops in the state have voted to exempt themselves from PUC 

regulation as allowed for under state law. Commenters said that these coops are therefore not 

subject to the resource planning jurisdiction of the PUC and do not need to file resource plans for 

approval. Commenters said, the PUC does not have resource planning or any other regulatory 

authority over munis. Commenters said, the PUC lacks approval authority over the resource 

planning activities of all utilities except the two investor-owned utilities in Colorado. 

Commenters said that the resource planning is the only regulatory process where all "building 

blocks," as a general matter, are holistically evaluated and considered in conjunction with each 
129 

 

other. Commenters said the proposed CPP does not include how Colorado should incorporate its 

"coops" and "munis" into a compliance plan. Commenters said that, any attempt to further 

regulate these entities will result in political and legal battles. 

Response 5: 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 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 6: Broad definition of system raises enforcement and Home Rule issues for municipal 

electric systems. 

Commenters noted that the concept of an "outside- the-fence" regulatory approach would hold 

individual generating units accountable for the actions and inactions of third parties outside their 

control. Commenters questioned how states might incorporate outside-the-fence strategies into a 

section 111(d) plan, including whether such measures are legally permissible/defensible, and 

whether they are necessarily central to a compliance strategy. Commenters argued that past CAA 

actions impacting EGUs -- as with other NSPS regulated industries -- have been imposed "inside 

the fence line" at the affected unit and these compliance strategies and tools are familiar to states 

and regulated entities. Commenters said once the 111(d) plans step outside that fence line, the 

regulatory landscape becomes more difficult, particularly when moving beyond state air or utility 

agency traditional authorities. Commenters argued that the proposal would require a reworking 

of state enforcement authorities to account for municipal electric systems and rural electric 

cooperatives that in most states do not fall under state renewable and energy efficiency standards 

because of local governance. Commenters argued that Home Rule authorities are extremely 

important to municipal electric systems and must be maintained. Commenters argued that EPA's 

proposed rule should not be used to impose state utility commission oversight of public power 

utilities for purposes of compliance in contravention of longstanding state laws and policies. 

Response 6: 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 
130 

 

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 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 7: State environmental agencies lack the authority to require private companies to 

invest in new infrastructure needed to comply with the rule. 

Commenters said that, the state environmental agencies lack the authority to require individual 

companies to invest in natural gas generating assets or infrastructure to comply with a rule 

setting the BSER using parameters outside the existing units. 

Response 7: We disagree with commenters that the final rule requires state environmental 

agencies to require private companies to invest in new infrastructure. There are many ways in 

which affected EGUs can comply with the final rule. 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 individual companies, 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 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). 

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 8: Commenters said, EPA delegates the development of performance standards to the 

States through a requirement that each state develop a State Implementation Plan ("SIP") that 

details the actions that will be required to meet the emission rate targets set by the rule. 

Commenters said to achieve compliance with the Proposed Rule, the State(s) in which the Co-
131 

 

ops operate would be required to develop enforceable requirements on a Federal agency which 

raises significant questions about federalism and a State's authority to issue such requirements. 

Response 8: 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 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 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 9: Clarification needed on how programs funded or implemented by federal entities 

such as the Bonneville Power Administration may be incorporated in state compliance plans as 

enforceable measures. 

Commenters noted that in the Northwest, many of the energy efficiency programs relied upon by 

the consumer-owned electric utilities (e.g., public utility districts) are funded by Bonneville 

Power Administration (BPA), a federal agency. Commenters stated that the energy efficiency 

programs implemented by BPA are invaluable to the region and to customers of these utilities, 

and are also programs which EPA has implicitly included in setting its energy efficiency target 

since over half of the state's population is served by these utilities. Commenters stated that tying 

enforceable measures (such as accomplishing energy efficiency improvements) to budget 

decisions made by a federal agency is a scenario which EPA did not address in its proposal. For 

example, commenters stated that it is unclear how a state could set obligations and enforce 

adherence to a SIP for federally financed energy efficiency programs. According to the 

commenters, the alternative approach of transferring the financing of these projects to consumerowned utilities is not efficient or politically feasible. Commenters stated that incorporating 

BPA's energy efficiency programs is essential to meeting the state's compliance goal, but without 

a protocol for doing so (e.g., an agreement between EPA and BPA) this vital contribution may, 

by necessity, have to be excluded. 

Response 9: By not finalizing the portfolio approach and instead finalizing the option to submit 

a state measures plan type or an emission standard plan type, EPA has provided states the 

flexibility to consider the kind of programs the commenter describes without making such 

programs subject to federal enforcement. Under the emission standard plan type, if a state wants 
132 

 

to consider an EE program, it can factor the results of that plan into its assumption of how much 

emissions reduction it anticipates from such measures and use them in developing a emission 

standard type plan. Under a state measures plan type, a mass CO2 emission goal may be partially 

or entirely achieved through state measures that impose requirements on entities other than 

affected EGUs and that are not included in the federally enforceable 111(d) state plan, provided 

the state submits standards of performance for CO2 emissions from affected EGUs in the form of 

a federally enforceable “backstop” that would be triggered if the state measures fail to achieve 

the required CO2 emission performance level. See section VIII. We are requiring that state plans 

include a demonstration that plan measures are enforceable, which for state measures plans is 

provided for in § 60.5780 and discussed in section VIII.D.2.c.6 of the preamble. 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.” 

1.11.8 State agency, authority, or entity 

Comment 1: Some states will be unable to achieve the EPA's reductions under Building Block 2 

without adopting laws and regulations that impermissibly intrude upon the exclusive jurisdiction 

of FERC 

Commenters stated, while states retain some authority to adopt laws and regulations that promote 

utilization of certain types of generation facilities over others (e.g., renewable portfolio 

standards), federal courts have consistently found the FPA preempted state laws that directly or 

indirectly impact the rates charged in wholesale markets administered by System Operators, 

including direct rate subsidies. Commenters said, as a result, states like Pennsylvania 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. 

Response 1: We disagree with commenters. See section VIII.E of the final rule preamble of the 

CPP for EPA’s response to this comment. 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. 
133 

 

Comment 2: Utility Commissions and state environmental agencies cannot be sued under the 

CAA's citizen suit provision, therefore provisions cannot be enforced. 

Commenters stated, EPA suggests that in order to implement Building Blocks 2, 3, and 4, 

"affected entities" may include "a state agency, authority or entity," such as a state environmental 

management agency or public utilities commission. 79 Fed. Reg. at 34,917. Commenters said, in 

some states, these may be the only entities with authority to implement the redispatch of 

generation from existing coal-fired units to NGCC units or to coordinate investments in 

renewable energy generation or demand-side energy efficiency campaigns. Commenters said, 

these state agencies, however, are immune from suit under the CAA's citizen suit provision. 

Sierra Club v. Korleski, 681 F.3d 342, 351 (6th Cir. 2012) ("The text and structure of the CAA 

make plain that [section 304(a)(1)] does not permit citizen suits against state regulators qua 

regulators."). Commenters said, thus, it would not be possible to enforce emission-reducing 

measures that are the responsibility of state agencies. Commenters said, in such a case, under the 

plain terms of EPA's proposal, the state's plan submission would not be approvable unless the 

state adopts legislation expressly opening its agencies to citizen suits seeking to enforce these 

obligations, which would plainly exceed the scope of measures EPA may require in a state plan. 

Response 2: The EPA is not finalizing the portfolio approach (see section VIII.D of the final 

rule preamble of the CPP); accordingly, entities other than affected EGUs will not be subject to 

federal enforcement or citizen suits under sections 111(d) or 304 of the CAA, respectively. 

Comment 3: Comments that state environmental and energy agencies do not have the legislative 

authority to impose the control measures specified as the building blocks in the emission 

guidelines. 

Commenters stated that the EPA has specified BSER in terms of measures that neither the state 

environmental agencies nor energy agencies have the legislative authority to implement. 

Commenters contend that states can limit the emissions from EGUs but do not have the authority 

to adopt the building block measures specified in the guidelines. Commenters said that EPA 

cannot set standards based on illegal actions by the states. Commenters gave several examples of 

states that lack the necessary authority for implementing the building blocks. 

Building block #1. Commenters states that Alabama, Florida, Georgia, or Mississippi do not 

have the authority to impose heat rate improvement standards. Commenters said that although 

each state has the authority to adopt a standard of performance for a designated facility, none of 

these states has the authority to require regulated utilities to construct specific capital projects, 

even those that improve the efficiency of generating units. Commenter said as a result, EPA 

cannot reasonably identify Building Block 1 as an element of any "best system of emission 

reduction." 
134 

 

Building block #2. Commenters stated that neither state environmental agencies nor state utility 

commissions have the authority to force the increased dispatch of natural gas units and the forced 

idling of coal units, as required by Building Block 2. Commenters stated that environmental 

agencies cannot regulate electricity generation because state legislatures often have granted 

explicit, exclusive authority over certain aspects of electric utilities' generation to public utility

commissions. Commenters said, even so, many states still cannot inclement building block #2 

because the authority of utility commissions is limited to regulation and not management. 

Commenters said the commissions have the authority to ensure that utilities comply with 

environmental regulations in an economical manner but cannot direct the utilities how to comply. 

Commenters said, for example, in Alabama, “...the Commission should not be allowed to 

interfere with the proper operation of the utility as a business concern by usurping managerial 

prerogatives." Commenters said, similarly, the Georgia Supreme Court has confirmed that the 

Georgia Public Service Commission's ("GPSC") rate and service territory authority does not 

extend to operational or managerial authority over public utilities (enjoining the GPSC from 

requiring two utilities to merge or one to sell power to the other). Commenters pointed out that 

neither Alabama, Florida, Indiana, Mississippi, Tennessee, nor West Virginia utility 

commissions have the authority to order utilities to run their NGCC units to the exclusion of their 

coal units or to purchase power from other companies' NGCC units. Commenters also stated that 

states cannot mandate a specific capacity factor for generating units operated by independent 

power producers because these units not subject to regulation by a public utility commission. 

Commenters stated that states generally do not have the authority to override economic dispatch 

of generating units by the RTOs or the RTO decisions to operate certain plants for reliability 

purposes or voltage support. Commenters pointed out that the regulation of dispatching has been 

brought into question due to a recent court decision [http://www.ferc.gov/legal/courtcases/opinions/2014/13-4330.pdf, New Jersey Court Case] in which the state of New Jersey 

approved contracts for new generation that paid the difference between what the generator would 

make in the wholesale market through PJM and the bid price, thereby providing a predictable 

and adequate stream of revenues to ensure generation is built in the state in order to address 

reliability and other concerns. Commenters said the Third District Court of Appeals concluded: 

"We affirm the District Court's judgment. Long-term Capacity Pilot Project (LCAPP) compels 

participants in a federally-regulated marketplace to transact capacity at prices other than the price 

fixed by the marketplace. By legislating capacity prices, New Jersey has intruded into an area 

reserved exclusively for the federal government. Accordingly, federal statutory and regulatory 

law preempts and, thereby, invalidates LCAPP and the Standard Offer Capacity Agreements." 

Building block #3. Commenters stated that none of the states in which they operate have the 

authority to mandate construction of non-emitting generation (renewable or nuclear). 

Commenters stated that the utility commissions could find that a utility had failed to demonstrate 

that a proposal for a new resource was in the best public interest, but it may not substitute its 

judgment for utility management's and dictate a different resource course. Commenters stated 

that in Florida, no state agency has the authority to establish a renewable portfolio standard. 
135 

 

Building block #4. Commenters stated that none of the four states in which they operate are 

authorized to enforce the massive reduction in state-wide electricity demand that constitutes 

building block 4. For example, commenters stated that Alabama and Georgia have the authority 

to approve demand-side management ("DSM") programs only if the program is cost effective for 

utility customers, but in most states DSM goals apply only to investor-owned utilities, and not to 

municipal utilities or electric cooperatives. 

Commenters stated that to implement and enforce the CPP, state legislatures would need to 

fundamentally reorder the governance of public power utilities in ways that undermine bedrock 

principles under which energy has been managed for over a century. Commenters said new 

legislation would be needed among other things to realign responsibilities for electricity 

generation oversight, provide state environmental agencies enforcement power against other 

state agencies; require mandatory integrated resource plans with specific GHG provisions; 

provide the utility commissions with siting authority; and authorize new energy efficiency and 

demand side energy efficiency standards. Commenters said that energy production and dispatch 

is determined through a host of regulatory agencies and legislative requirements, and to develop 

this section 111(d) state plan would require unprecedented interactions among agencies that 

cannot occur without numerous legislative changes. Commenters said that in some states a 

change to the state constitution would be needed, and this could take more time than is allowed 

for submitting the section 111(d) state plans. Commenters said, moreover, the rule poses the 

potential to reorder the current jurisdictional relationships and authority between the federal 

government (e.g., FERC) and the states regarding electricity policy. 

Commenters stated that the EPA assumes that states have the authority to re-dispatch large 

amounts of capacity and generation from existing coal-fired EGUs to existing NGCC EGUs. 

Commenters said that simplifying assumption is not based on a review of states' actual authority 

or capability to do so. Commenters said in Nevada, for example, it is questionable whether either 

the NDEP or the PUCN has the authority to require such re-dispatch. Commenters said the 

PUCN must provide for the safe, economic, efficient, prudent and reliable operation and service 

of public utilities. Commenters said that at most, the NDEP has the authority to create a system 

of emission reduction credits which could be issued should coal-fired EGUs choose to redispatch to NGCC facilities. Commenters said in order to create an incentive for the coal-fired 

EGUs to do so, however, the NDEP would have to permit those facilities with such low emission 

limits that it would effectively force them to retire. Commenters said that may subject the NDEP 

to other legal risks. 

Commenters said that states cannot mandate the interstate purchase and sale of electricity. 

Commenters said Building Block 2 of the BSER assumes that states can "substitute" the 

electricity produced by coal-fired steam and oil/gas-fired steam units with electricity produced 

by NGCC units through, essentially, preferential dispatch of NGCC units. Commenters said 

Building Block 2 fails to consider what percent of electricity produced by NGCC facilities is 

currently committed through long-term sales contracts and, therefore, not available for dispatch. 

Commenters said that insofar as the capacity of a NGCC facility is already committed through a 
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long-term contract, states lack the authority to mandate that those facilities break existing 

contracts in order to dispatch and sell into the wholesale markets. 

Response 3: As we explain in the preamble (section VIII.D) and the Legal Memorandum, a state 

may fulfill its requirements under section 111(d) by adopting a state plan with the emission 

standards approach, and that imposes rate-based emission standards at the level of the source 

subcategory-specific performance rates or that imposes the equivalent mass-based emission 

standards. The affected EGUs would be able to take actions to implement the building blocks or 

other emission reduction methods, and thereby achieve their emission standards. As a result, it is 

not necessary for state utility or environmental agencies to order the affected EGUs to implement 

the building blocks and, therefore, it is not necessary for the state agencies to have the authority 

to do so or for the states to make the other types of changes to state law that the commenters 

describe. Finally, we note that we are note including building block 4 as a component of BSER 

in the final rule. 

Comment 4: The proposed guidelines conflict with state laws 

Commenters stated the Proposed Guidelines conflicts with state laws and state constitutions. 

Commenter said, to override these laws, the CAA would have to provide clear authority, 

grounded in the Commerce Clause, for EPA to take such action. Commenters said the Act 

provides no such authority. 

Commenters stated that Kansas, Kentucky, Louisiana, Missouri, and West Virginia have laws 

that prohibit those states from regulating power plant emissions by shifting pollution-control 

costs to other parts of the economy. Commenters referenced a Wyoming law that provides that 

EPA's emission guidelines must recognize state primacy in establishing carbon regulations, and a 

Kentucky law precludes BSER at coal-fired electric generating unit from including fuelswitching, co-firing with other fuels, or limiting utilization. Commenters also referenced an 

Arizona statute that prohibits any state agency from adopting or enforcing a state or regional 

program to regulate GHG emissions to affect atmospheric temperature without express 

legislative authorization. Commenters provided references tallying well over a dozen other 

instance of conflicting state legislation. 

Commenters stated that EPA has no authority to override these state laws due to the Supremacy 

Clause of the U.S. Constitution. U.S. CONST. art. VI, cl. 2. Commenters said that wherever 

possible courts avoid determining that federal preemption of state law has occurred, and cited 

N.Y. State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 

654-55 (1995); Maryland v. Louisiana, 451 U.S. 725, 746 (1981); Napier v. Atl. Coast Line R. 

Co., 272 U.S. 605, 611 (1926), and courts typically presume that "the historic police powers of 

the States were not to be superseded by [federal law] unless that was the clear and manifest 

purpose of Congress." Rice, 331 U.S. at 230; see also Wisconsin Public Intervenor v. Mortier, 

501 U.S. 597, 605 (1991). . Commenters said that when a court examines whether preemption 

occurs, it looks first to the intent of Congress in passing the statute. Commenters indicated that 
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the purpose of the CA is to regulate air emissions and not the amount and source of energy 

generation from utilities. 

Commenters stated that to meet the proposed rule would require legislative changes to Florida 

law to provide the requisite powers to state agencies. If the state does to act or act in time to meet

the rule compliance deadlines, commenters believed the EPA does not have the authority to 

change Florida law. 

Response 4: The Clean Air Act is founded on the principle of cooperative federalism. In 1970, 

Congress undertook to create federal mandates to regulate air pollution, for the first time entering 

a realm of regulatory police power that had long been the exclusive province of the states. 

Congress did not oust the states from regulating air pollution within their boundaries. Indeed, 

Congress specifically preserved the states’ authority to regulate air pollution in section 116 of the 

Act. Notably, however, Congress specifically provided that a state “may not adopt or enforce 

any emission standard or limitation which is less stringent than the standard or limitation under 

[any applicable implementation plan, or sections 111 or 112 of the Act].” It is clear that 

Congress was assigning EPA the job of developing standards under section 111 that would set a 

national floor for air pollution control requirements. 

Therefore, EPA disagrees with commenters who suggest EPA has no role in setting national 

standards that apply, and must be complied with, in all the states. Any suggestion that such 

legislation is beyond the bounds of Congress’s authority under the Constitution’s commerce 

clause has long since been disposed of. Indeed, air pollution is the quintessential interstate 

problem that does not respect state boundaries and is at the core of Congress’s authority and 

responsibility under the commerce clause. See EPA V. EME Homer City Generation, 572 U.S. 

__ (2014)(slip op. at 4-5). 

With that said, the comments raise an important question about how such national standards get 

implemented and enforced in the Act’s cooperative federalism regime. Several of these 

comments raise the scenario where a state has adopted state law that effectively disables the state 

from implementing or enforcing a state plan consistent with the requirements of this guideline. 

The comments suggest that the Act gives EPA no authority to override such state legal 

requirements. 

EPA agrees with the commenter that promulgating this guideline under the Act will not 

somehow void or eliminate any state law that limits a state’s ability to develop a state plan, as a 

matter of state law. The structure of the Act is that it gives states a choice. If a state choses to 

cooperate in implementing air pollution control requirements consistent with the federal floor 

under the Act, the state can do so. Once EPA approves the state plan, it assumes the status of 

federal law as well as state law and becomes enforceable under the federal Clean Air Act. 
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A state can, however, chose not to implement a requirement under the Act, such as this 

guideline. In that case, the Act provides for EPA to administer a federal program that implements 

the national floor requirements EPA has set. 42 U.S.C. 7411(d)(2)(A). Nothing about EPA’s 

implementation of a federal plan under this guideline overrides the sort of state legal 

requirements the commenters are highlighting. To the extent a state has disabled itself under 

state law from administering a state program, the state would remain disabled, consistent with 

state law. But under the structure of the Act, it would fall to EPA to undertake implementation of 

the guideline’s requirements in that state. 

In so doing, EPA would not be purporting to change state law. It is true that the federal 

requirements embodied in the federal plan EPA would implement would become the controlling 

legal requirements with respect to any source’s compliance obligations under the federal Clean 

Air Act. State law might become irrelevant to the question of controlling greenhouse gas 

emissions, but it would remain unchanged. This arrangement is clearly consistent with wellestablished principles of cooperative federalism that courts routinely uphold. See, e.g., Hodel v. 

Va. Surface Mining & Reclamation Ass’n, Inc., 452 U.S. 264, 283–93 (1981); Texas v. EPA, 

726 F.3d 180, 196–97 (D.C. Cir. 2013) (noting that “Supreme Court precedent repeatedly 

affirm[s] the constitutionality of federal statutes that allow States to administer federal programs 

but provide for direct federal administration if a State chooses not to administer it”). 

1.11.9 Multi-state approaches 

Comment 1: Commenters requested additional guidance on the enforceability of multi-state 

agreements. In general, commenters requested guidance on who will enforce multi-state 

agreements, the mechanism for enforcement, and how enforcement will be applied if there are 

certain underperforming states within the agreement. 

Commenters noted that the State Plans Consideration TSD states that multi-state enforceability 

"would be contingent, in part, on states having comparable enforcement mechanisms." 

Commenters asked for guidance on what "comparable enforcement mechanisms" are. 

Commenters asked if the enactment of legislation implementing a Model Rule is sufficient in the 

context of RGGI. Commenters further asked if there are other examples of "comparable 

enforcement mechanisms" that are not legislative. 

Commenters also asked if the Agency thinks an approvable multi-state arrangement needs to 

include an interstate enforcement mechanism. If not, commenters asked how states could deal 

with “free riders” in a potential noncompliance scenario. Commenters asked if EPA or all the 

states in the plan hold the underperforming state liable. Further, commenters asked if EPA brings 
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a federal enforcement action, would it be brought against all the participating states in the multistate plan, or only those states in the plan found not to be contributing to compliance. 

Commenters asked if EPA could explain when a voluntary plan (e.g., RGGI) becomes federally 

enforceable, how the liability of the group is applied. Commenters said, for example, if one state 

in the group doesn't achieve its reductions, do the other states face an enforceable action? How 

does a group plan, adopted by individual legislatures then transform to a group? Commenters 

questioned if the group entity takes over the decision-making currently left for individual states. 

Commenters stated EPA's current proposal is vague on a number of issues surrounding 

implementation of market-based approaches, including how compliance and enforcement would 

work for multi-state emission trading programs. Commenters recommended that EPA clarify 

these issues in order for states to more clearly evaluate multi-state, market-based implementation 

approaches. Commenters further said several states have indicated interest in more limited 

cooperation to address interstate electricity flows in accounting for avoided generation from 

renewable energy or demand-side energy efficiency. Commenters said EPA should provide 

guidance on how compliance will be assessed and enforced and should also clearly establish a 

default rule for interstate accounting for renewable energy and energy efficiency. 

Commenters stated for states in the same inter- connection that pursue a multi-state emissiontrading program, aggregation of state targets may be the most straightforward means of assessing 

performance, but EPA should also explore different enforcement models that would ensure that 

only the state that caused non-compliance would be impacted, rather than all states involved in 

the multi-state plan. 

Commenters said more problematically, a requirement for states that pursue multi-state programs 

to aggregate their state targets could be a barrier to cooperation; merging of targets would 

essentially mean that that multi-state group would succeed or fail as a whole: if the aggregated 

target is met, all states are in compliance; if the aggregated target is exceeded, all states are out of 

compliance. Commenters said an individual state within a multistate plan could thus be subject 

to EPA enforcement due to another state's actions or inaction, and the perceived encroachment of 

state sovereignty would be a non-starter for many states. 

Commenters asked who is responsible for enforcement of the regional/multi-state goal and 

suggested an alliance of each region's state agencies would be best equipped to enforce 

compliance with regional/multi-state goals. 

Commenters said fourth, the Proposed Rule does not address how a multi-state integrated electric 

system, such as TVA's, would allocate or assign variables of compliance among States 

participating in a joint SIP. Commenters said it is unclear how the seven states served by TVA 

could, either individually or jointly, develop SIPs that could simultaneously address the 

requirements of the Proposed Rule on the TVA power system and the other electric utilities that 

operate in each the seven states. 
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Response 1: See section VIII.E of the final rule preamble for EPA’s response to this comment.

Comment 2: Commenters supported allowing multi-state plans, but recommend that 

enforcement activities should be limited solely to the specific underperforming states in these 

partnerships. Otherwise, commenters noted that there could be undue burden placed on states 

that are complying with their goals to be liable to make up for the emission reductions another 

state partner did not achieve. Commenters said, in essence, the multi-state plan could create 

winners and losers if enforcement is not limited to the non-complying state. Commenters 

suggested that EPA should work with states to address any issues that may arise in the event that 

one state in a multistate effort fails to implement its approved plan. 

Response 2: See section VIII.E of the final rule preamble of the CPP for EPA’s response to this 

comment.

Comment 3: Commenters expressed concerns on how the goal setting described in the proposal 

accounts for electricity system operations and allows the option of multi-state cooperation in 

meeting goals. Specifically, commenters objected to situations where, due to the interconnected 

nature of the electric grid, a state can force this cooperation upon an unwilling neighbor. 

Commenters noted that there were no specific details provided on how EPA will address 

calculating a multi-state goal. As a result, commenters claimed that states do not know whether 

collaborating with other states will pose advantages and the scope of those advantages. 

Commenters stated that the EPA goal-setting formula does not adequately account for the 

interstate nature of electricity system operations, or for the closely related disparity in 

compliance burdens that affects small states that export a significant share of power generated 

within the State. Commenters stated that wholesale transactions within this federally-regulated 

marketplace are outside of state jurisdiction. Commenters provided an example for Arkansas. 

 

Response 3: See section VIII.E of the final rule preamble of the CPP for EPA’s response to this 

comment.

Comment 4: Commenters suggested alternative methods other than multi-state plans of 

aggregate compliance, including averaging across utilities or units and developing sub-state 

regional groups that can be merged to achieve a state goal. 

Commenters stated that the final rule should clarify that averaging across utility fleets is allowed. 

Commenters said EPA should clarify in the final rule that, to the extent permitted by state 
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affiliated interest rules, such multi-unit/multi-utility compliance aggregation is permissible in 

addition to individual compliance requirements on a unit specific basis. 

Commenters stated that EPA should permit states to segment their state into separate groups, 

either geographic or economic, and create multiple compliance plans for each segment so long as 

the aggregated set of compliance plans meets the state carbon emission rate reduction goals, or 

equivalent mass emission reductions. Commenters provided an example for 

Montana. Commenters stated that such flexibility could potentially be useful for states and 

electricity generators to generate cost-effective carbon emission rate reductions and that such 

partial state compliance plans should be approvable by EPA so long as states can demonstrate 

that each partial state plan contributes appropriately to the states overarching compliance with 

EPA's goals. Commenters stated further that EPA should permit states to participate in regional 

compliance plans that are specific to particular types of resources or building blocks. 

Response 4: See section VIII.E of the final rule preamble of the CPP for EPA’s response to this 

comment.

Comment 5: Commenters urged EPA to allow additional time for development and legislative 

approval for multi-state approaches. Commenters noted the additional legislative authorization 

and planning needed to develop multi-state approaches are not feasible with EPA’s intended 

schedule for meeting the goals, noting that an existing program, RGGI, took 6 years to develop 

and implement. Commenters suggested re-proposing new plan submittal and compliance dates. 

Commenters stated that EPA must understand that some state agencies may need additional 

legislative authorization to collaborate with other states and that such legislation takes time to 

draft and enact before any multi-state approach can be formalized. Commenters stated that by 

failing to consider all of the barriers, EPA does not provide a realistic framework for developing 

regional plans. 

Commenters expressed concern about the enforcement of performance goals for multi-state 

plans, especially given the short time frame available to develop and obtain legislative approval 

for multi-state approaches. Commenters stated that the multi-state approach, as a compliance 

option identified in the EPA's preamble, would certainly require state legislative 

approval. Commenters pointed to EPA's description of the multi-state approach as a measurable 

tool for two or more states meeting performance goals and indicated that they have limited 

experience with the type of planning that would be necessary to develop a multi-state approach 

to CO2 emission reductions. Commenters noted that this type of state planning would infer a 

singular plan covering the participating states, who would be reliant upon one another to enforce 

a previously agreed upon model rule, enacted through each state's regulatory process. According 

to the commenters, enforcement of a multi-state plan would be extremely challenging, if not 

impossible, to achieve. 
142 

 

Commenters pointed to EPA's discussion of the Regional Greenhouse Gas Initiative (RGGI) as 

an example of a multi-state CO2 emissions reduction approach in its preamble and noted that 

their staff has read information about RGGI and understand this concept was first discussed 

among several Northeastern states in 2003. Commenters noted that a Memorandum of 

Understanding (MOU) was the initial action step taken by seven states in 2005, with a couple of 

more states signing the MOU in 2007. Commenters further noted that a model rule was then 

established for each state to develop for their respective states statutes. According to the 

commenters, by January 1, 2009, 6 years after this concept was discussed, the first compliance 

period for this trading program began. Commenters argued that the EPA's overall timeframe 

would severely handicap this approach for states to even consider as a potential path forward due 

to the planning and administrative procedures required to be followed for legislative approval. 

Commenters stated that EPA must fundamentally revise its proposal and put any new proposal 

out for public comment and provides several suggestions for a revised rule that address critical 

implementation issues, including 1) additional time to develop a SIP and multi-state SIP, 2) 

allow the States to adopt compliance deadlines that are based on the remaining useful lives of 

each of the designated existing facilities, and 3) give the States until 2035 to achieve compliance 

with any emission reduction targets without any intermediate enforceable targets. 

Commenters stated EPA's proposed rule provides an additional two years for submission of state 

plans from states that wish to pursue multi-state plans, for a total of three however, states must 

indicate their intention to consider multi-state plans within one year of finalization of the rule. 

Commenters said even in states where pursuit of multi-state programs is politically achievable, 

the need for coordination across multiple regulatory bodies, such as air agencies, public utility 

commissions, electric grid operators, and potentially state legislatures, will be complicated. 

Commenters said when you add to this the challenge of coordinating with multiple entities in 

other states, it is clear that EPA will need to provide significant clarification and provide 

enhanced support to ensure that this can be accomplished within the established deadlines. 

Response 5: Commenters stated that the multi-state approach would require state legislative 

approval and suggested that this type of state planning would infer a singular plan covering the 

participating states, who would be reliant upon one another to enforce a previously agreed upon 

model rule, enacted through each state’s regulatory process. According to the commenters, 

enforcement of a multi-state plan would be extremely challenging, if not impossible, to achieve. 

The EPA is finalizing that states can choose to provide to the EPA one multi-state plan submittal, 

on behalf of all participating states, or one single submittal for each participating state. If one 

multi-state submittal is the option selected, it must be signed by authorized officials for each 

state participating, and it would have the same legal effect as a single-state submittal for each 

state. 

The commenters provided the example of the Regional Greenhouse Gas Initiative and stated that 

it took 6 years after the concept was discussed for the first compliance period for this trading 
143 

 

program to begin. The commenters argued that the EPA’s overall timeframe would severely 

handicap this approach for states to even consider as a potential path forward due to the planning 

and administrative procedures required to be followed for legislative approval. The EPA is 

finalizing that state plan submittals are due on August 31, 2016, which is 13 months after 

finalization of the emission guidelines. In order to address the concern that 13 months is not 

sufficient time for states to prepare and submit a complete plan submittal and to allow consistent 

timelines for both a single state and multi-state approach to state plan submittals, the EPA is also 

finalizing a plan submittal process which provides additional time to submit a complete plan 

submittal after August 31, 2016. This approach involves the option that we refer to as an initial 

submittal, followed by submittal of a complete state plan submittal no later than August 31, 

2018, for both single state and multi-state plan submittals. 

Comment 6: Commenters stated EPA has not provided a rational basis for its legal authority to 

approve multistate plans under FCAA section 111(d) given the requirement for Congressional 

approval of interstate compacts under FCAA section 102(c). 

Commenters said while FCAA section 102 allows for interstate compacts, section 102(c) states 

that: "No such agreement or compact shall be binding or obligatory upon any state a party 

thereto unless and until it has been approved by Congress." Commenters said EPA asserts that its 

approval of all state plans will result in federal enforceability of those state plans. Commenters 

continued that as the proposed rule specifies in 40 CFR section 60.5785, once the EPA has 

approved a state plan then that plan can only be revised with approval by the EPA. Commenters 

said once a multistate plan is federally enforceable by the EPA, states that are parties to that 

multistate plan cannot revise or withdraw from that multistate agreement without approval from 

the EPA. Commenters said an EPA-approved multistate plan would be binding on all the states 

participating in that multistate plan. Commenters said the EPA has not provided any rational 

basis for how the multistate plans contemplated under the proposed rule are not subject to the 

Congressional approval requirements of FCAA section 102(c) or for the EPA's legal authority to 

approve a multistate plan in lieu of Congressional approval. 

Response 6: For the reasons stated in the Legal Memorandum, the EPA disagrees that section 

102(c) prohibits the types of state plans envisioned under this rule. 

Comment 7: Commenters noted several complicating factors and potential reasons that would 

prevent states from entering into multi-state plans, including lack of detailed guidance, tools, or 

incentives, along with competing self-interests of the individual states. 

Commenters stated that the Proposed Rule explicitly allows states to create multi-state plans 

using a single multi-state performance goal. Commenters said the Proposed Rule does not 

explain how this should be accomplished, and does not provide states with tools or incentives for 

doing so. Commenters said there may be numerous obstacles to creating such a plan. 
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Commenters said that, first, given the complexity of the electric generation market, the varying 

interests of the different electricity producers within a given state, and the multitude of options 

available to states under the Proposed Rule, it will be a significant challenge for states to create 

single state plans within the tight time frame that EPA has proposed. Commenters said in light of 

this, it seems unlikely that most states would be willing to even consider taking on the added 

complexity and challenge associated with negotiating a multi-state plan. Commenters said that, 

second, even in instances where a group of states might be willing to consider working with their 

neighbors to create a multi-state plan, these states may be operating under significantly different 

circumstances, making it difficult to come up with a coherent plan. Commenters said that, third, 

states will inevitably, and appropriately, be looking out for their own state interests by seeking to 

negotiate the most favorable plan they can for themselves. Commenters said even where states 

are willing to take on the added complexity of negotiating a multi-state plan and are situated such 

that a workable multi-state plan could be created and implemented, self-interest may preclude 

states from reaching an agreement. Commenters said that, fourth, putting aside the logistical and 

technical complexities associated with negotiating a multi-state plan, different political 

viewpoints and preferences will make final agreement on such a plan difficult to achieve. 

Commenters said that, fifth, even if two or more states could agree to a common plan, there 

might be one or more states that are essential to create such a plan who are unwilling to agree. 

Commenters said that, finally, entering into an agreement with another state or states will in all 

cases create the risk that the other state or states will not meet their obligations under the plan. 

Commenters said in light of this risk, states may rationally conclude that staying with an 

individual state plan is the more prudent course of action. 

Response 7: See section VIII.E of the final rule preamble of the CPP for EPA’s response to this 

comment.

1.11.9a Multi-state emission budget or rate-based emission trading programs 

Comment 1: Commenters argued that EPA does not have the authority to implement beyondthe-fence measures, such as a cap and trade program, as BSER. Commenters said affected 

sources should have the implementation option to comply with a lawfully set BSER by looking 

beyond-the-fence line to identify the most cost-effective method for reducing emissions, as this 

flexibility can provide significant benefits. Commenters said a source may have an opportunity 

to obtain cost-effective reductions by looking beyond-the-fence; however, that fact does not 

grant authority for state regulators to impose more stringent limits on regulated entities. 

Commenters said EPA must not conflate a source's ability or opportunity to "trade" with the 

Agency's underlying legal authority for setting a "cap." Commenters said 111(d) was not 

designed or intended to set an emissions cap for a trading company, and this conclusion would 

not change even if the states can successfully pass the needed legislation or if states adopt a cap 

and trade system based on the emission reductions needed to achieve EPA's binding state goals. 

Commenters said BSER must be based on a system of emission reductions achievable at existing 
145 

 

sources (i.e., within-the-fence), and implementing a cap and trade system as BSER remains 

unsupported and illegal because the required level of emission reductions would be based on (i.e. 

the "cap" would have been derived from) beyond-the-fence mechanisms which rely on the 

actions of third parties that are outside the scope of state regulatory agencies' authority. 

Response 1: We disagree with this comment. In the preamble (section IV.A and V.B) we explain 

why section 111(d)(1) and (a)(1) authorize inclusion of building blocks 2 and 3 in the BSER, and 

we explain why a state plan that adopts the emission standards approach may include a cap-andtrade program.

Comment 2: Commenters suggested that EPA should encourage and allow multi-state emission 

budget trading programs such as RGGI and RGGI-like multistate efforts for compliance with 

federal emission reduction requirements under CAA Section 111(d). Commenters suggested that 

the emission budget trading program should stand on its own as a state regulatory matter, but 

allows for trading with other similar state programs, both currently or in the future. 

Further, commenters stated that the RGGI program applies to all units with a nameplate capacity 

of 25 MW or greater, existing and new. Commenters said in order to avoid market distortions 

and level the playing field between RGGI states and other states, EPA should allow states to 

include new units in 111(d) compliance plans provided the inclusion does not result in greater 

overall emissions. 

Commenters stated it is likely that lower-cost emissions reductions could be acquired through 

exchange agreements between or among states, or within a utility serving more than one state. 

Commenters said such multi-state reduction strategies may also have a more predictable and 

less-disruptive effect on power system planning and operations. Commenters urged EPA to 

enlarge the window for such multi-state efforts beyond the RGGI design, and to authorize states 

at any time following adoption of the federal rule to devise and enter into multi-state transactions 

of alternative design (such as single bilateral transactions; complementary resource choices 

within a utility serving more than one state; an open regional trading "floor", etc.) so long as the 

outcome, for the states involved, results in emissions reductions equal to or greater than the sum 

of those required by EPA of each state acting independently within its boundaries. 

Response 2: See section V.A and V.B of the final rule preamble of the CPP for EPA’s response 

to this comment.

Comment 3: Commenters stated that with regard to state plans assigning legal responsibility for 

compliance to affected sources and other entities, Connecticut noted that some states adopted 

such an approach for Municipal Solid Waste Combustors. Commenters stated that EPA has 

acknowledged that RGGI would be an acceptable compliance mechanism to meet the best 

system of emissions reductions and that under RGGI, participating states each promulgated state 

rules that apply directly to affected sources, requiring them to satisfy individual requirements 
146 

 

that in aggregate ensure compliance with state and regional mass based targets. Commenters 

stated that Connecticut believes it would be appropriate to assign legal responsibility for meeting 

state plan commitments to the owners and operators of affected sources. 

Response 3: We agree with this comment.

Comment 4: Commenters stated for purposes of judging compliance with a state goal, EPA 

should recognize that multistate efforts like RGGI-whether implemented through a shared budget 

or separate budgets- may result in emissions in one state exceeding the emissions budgets in that 

state because of the trading of emissions allowances into that state from other states. 

Commenters said EPA's enforcement focus should be on whether all states in a multistate or joint 

coordinated effort have issued allowances in accordance with an EPA-approved state plan, and 

are enforcing the requirement that all covered units surrender sufficient allowances to cover their 

emissions. Commenters said as long as no state issues allowances that exceed its state budget and 

every state enforces its program requirements, the multistate or joint coordinated effort will 

succeed-in the aggregate-to stay below the combined emissions budget of all the states 

participating in the multistate program. 

Response 4: 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 5: Commenters stated EPA should facilitate multi-state compliance by enabling 

credits and allowances from approved programs to be used for compliance in multiple states, and 

should provide a tracking system for these credits to prevent double-counting. 

Commenters said in the emission guidelines, EPA should provide that states designing such 

state-based plans with credits or allowances can specify that they will accept for compliance 

credits or allowances originating in their state or originating in another state taking the same type 

of target (mass or rate-based) with an approved plan. Commenters said EPA should also provide 

a centralized tracking system for credits and allowances that cross state borders in order to 

facilitate multi-state compliance and to ensure that these credits and allowances are not double 

counted. 

Commenters stated multistate emissions budget trading programs like RGGI depend on a 

common emissions allowance "currency" that is fungible and tradable across state lines. 

Commenters also stated that EPA should not erect any barriers to the fungibility and tradability 

of emissions allowances. Commenters stated EPA should provide states with a tracking system 

based on or compatible with RGGI CO2 Allowance Tracking System (COATS) or EPA's 

Emissions and Allowance Tracking System (EATS) system that states can choose to use to 
147 

 

facilitate interstate trading. Commenters said, as an alternative, states could choose to develop 

their own tracking system using EPA guidance. 

Commenters said EPA should explore ways that it could assist states in implementing multistate, market-based approaches. Commenters said such support could include development of an 

optional model rule for emission trading, provision of an EPA tracking system, or direct EPA 

technical assistance to states in implementing market-based approaches. Commenters said EPA's 

interactions with states may identify other areas where EPA assistance would be helpful. 

 

Response 5: See section V.B and VIII.C of the final rule preamble of the CPP for EPA’s 

response to this comment.

Comment 6: Commenters suggested that EPA should provide guidance on some key issues 

surrounding implementation of multi-state market based approaches, but also allow for lessstructured forms of multi-state compliance as well. Commenters said these issues include 

conversions from mass-based to rate-based targets; use of carbon pricing to project emissions 

performance and enforcement; and allowing multi-sector emissions trading. Commenters 

suggested that EPA provide states with a pre-approved conversion table (updated as needed) for 

recording reductions consistent with each state's commitment metric. Commenters suggested 

providing a model rule. 

Commenters stated EPA should clarify whether conversion to a mass-based target is required in 

order for a state to implement a mass-based trading program. Commenters stated they believe 

there is no inherent conflict between a state retaining a rate-based emission target against which 

it will be evaluated under EPA's proposed rule, while simultaneously establishing a mass-based 

target to implement a mass-based trading program. 

Commenters said EPA has proposed that states could jointly submit plans providing for multistate compliance with state targets. Commenters said they strongly support facilitating multistate compliance, as states working together can secure reductions in carbon pollution more costeffectively and with greater flexibility; however, they urge EPA to enable a less structured form 

of multi-state compliance as well. Commenters said states may comply with their emission 

targets by putting in place source-based trading programs, under which a regulated unit is 

required under its permit to hold enough allowances to match its emissions (under a mass-based 

approach) or enough credits to meet a specified emission rate (under a rate-based approach). 

Commenters stated they believe that EPA can approve state implementation plans that regulate 

emissions across multiple sectors and recommend that EPA explicitly state in its final rule that 

multi-sector emissions trading would be a valid state compliance option, provided that the state 

can demonstrate that it will achieve the necessary emission reductions in the electricity sector to 

meet its target. 
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Commenters stated they suggest that the expected carbon price under the program could be used 

to model the emission impact on EGUs; specifically, a state could model the expected impact of 

carbon prices under its program on electricity system dispatch which can then be used to project 

emissions from affected EGUs and demonstrate the state's compliance pathway over the 2020-

2030 period. Commenters said measurement of the state's performance ex-post would be based 

on actual emissions of affected EGUs during the 2020 to 2030 period. 

Commenters said the ISO and RTO Council has proposed a model whereby a regional 

transmission organization would impose a carbon price in economic dispatch. Commenters said 

EPA should develop guidance on how responsibility for emissions performance would be 

assigned, assessed and enforced under such an approach. 

Commenters stated that the EPA should facilitate implementation of multi-state, market-based 

approaches. Commenters said the complexity of EPA's rule will make design and 

implementation of multi-state, market-based programs challenging, and EPA should help states 

overcome this barrier by providing more support to states for design and of implementation of 

multi-state, market-based approaches. 

Commenters said EPA should expand and enhance the materials on market-based approaches 

available under the State Tools section of its website, and EPA should also provide links to 

relevant analyses and information by other organizations. 

Response 6: See section V.B and VIII.C of the final rule preamble of the CPP for EPA’s 

response to this comment. 

Comment 7: Commenters said EPA should articulate what a federal implementation plan would 

entail to allow states to fully assess their options; in particular, EPA should clarify whether a 

federal implementation plan would be developed for individual states, or whether a federal 

implementation plan could require a multi-state approach. 

Response 7: Concurrent with the signing of this final rule the EPA proposed a federal plan and 

model rule. 

1.11.9b Multi-state portfolio approaches 

Comment 1: EPA's proposed "portfolio approach" would bolster the enforceability of state EE 

and RE policies by making them federally enforceable. Commenters also stated, to the extent 

possible, EPA's rule should encourage full compliance with any current state energy efficiency 

and renewable energy standards. To that end, commenters supported EPA's "portfolio approach" 

to compliance, which would bolster the enforceability of these state policies. 
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Commenters stated, in its proposal, EPA provides two primary compliance options for states: an 

electric generating unit ("EGU") approach and a portfolio approach. Commenters said, under the 

first approach, states submit compliances plan that holds affected EGUs responsible for 

achieving compliance with accompanying measurement and verification processes. Commenters 

said, under this approach, the state plan would not directly include the "outside the fence" 

emission reduction measures such as renewable energy and demand-side energy efficiency 

programs. Commenters said, instead, these activities would be coordinated at the state level to 

provide credits for affected sources. Commenters said, because this approach does not include 

auxiliary state energy programs, only affected EGUs would be subject to federally enforceable 

requirements. 

Commenters stated, in contrast, the portfolio approach allows for participation of secondary 

entities in addition to affected EGUs. Commenter said, under this approach, such entities, which 

may include state agencies or electric distribution utilities, take on a portion of the responsibility

for reducing carbon emissions in the state. Commenters said, under this approach, all emission 

limits and "outside the fence" measures become federally enforceable, but instead of the affected 

sources bearing the full burden of compliance, these secondary entities would be subject to 

mandatory measures that would ultimately reduce emissions at the affected sources. Commenters 

said, such measures may include state energy efficiency and renewable energy policies, which 

would subsequently become federally enforceable. 

Commenters stated, the primary drivers behind state EE and RE investments are some form of 

EERS and RPS policies respectfully. Commenters said, due to the importance of these state 

policies, commenters believed EPA should prioritize the portfolio approach, which would greatly 

strengthen these efforts by rendering them federally enforceable. 

Response 1: We appreciate this comment but as discussed in the preamble (section VIII.E), we 

are not adopting the portfolio approach. 

1.11.10 Other 

Comment 1: Comment stating that if a state is on its EPA-approved trajectory, the affected 

entities within the state should be deemed to be in compliance with the plan. 

Commenters stated, no enforcement exposure exists for a state or EGU within the state if the 

state is on its emission rate compliance path established in its approved state plan. Commenters 

said, if a state is on its EPA-approved trajectory, the affected entities within the state should be 

deemed to be in compliance with the plan. Commenters said, this principle is important in cases 

where a state, for instance, is meeting its projected trajectory and is on track to meet the state 

goal, but makes a sovereign decision to modify its laws. Commenters said, before the state has 

made corresponding modifications to its plan, affected EGUs or utilities may be put in a difficult 

position of choosing between complying with currently-effective state law and complying with 
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the plan as originally submitted to and approved by EPA. Commenters said, alternatively, 

affected EGUs might find themselves unable to meet obligations in the originally approved plan 

as the result of later state law or policy changes. Commenters said, for example, a state's 

originally submitted plan might have contemplated that affected EGUs or utilities meet their 

obligations by obtaining RECs, yet the state might later change its RES requirements, rendering 

the affected EGU's or utility's compliance impossible. Commenters said, under such a scenario, 

the affected EGUs or utilities should not be subject to an enforcement action from EPA or 

citizens, particularly in cases where the state's emission rate is consistent with the trajectory 

included in the approved state plan. 

Commenters stated, enforcement actions against a particular affected entity should only be 

available if: 1) the affected entity is failing to meet its legal obligations established under an 

approved state plan; 2) those legal obligations are in force as a matter of state law; and 3) the 

state is not currently meeting its emission rate or mass obligations established in its state plan. 

Commenters said, these principles can establish an enforcement system that simultaneously 

ensures states are on track to meet their 2030 goals and provides the necessary legal certainty for 

EGUs and utilities to invest the significant resources that will be required. 

Response 1: 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 2: Commenters asked if EPA can explain how enforceability might be addressed in 

the context of entities like cooperatives or municipal utilities that are not currently subject to 

state jurisdiction. Commenters asked if EPA does not approve the portion of a state plan 

addressing cooperatives and municipal utilities due to a lack of authority, would EPA consider 

legally enforceable emission standards and compliance schedules beyond building block 1? 

Response 2: The final rule provides considerable discretion to the states in setting emission 

standards and related plan requirements for its affected EGUs and entities other than affected 

EGUs, including cooperatives or municipal utilities, to meet the applicable state-level rate-based 

and mass-based CO2 goals. In its submittal, a state must adequately demonstrate that it has the 

legal authority to implement and enforce each component of the state plan, including federal 

enforceable emissions standards for affected EGUs and state measures. This requirement is 

further explained in section VIII.D of the preamble. 

Comment 3: Commenters stated any program used to demonstrate a state's compliance with a 

standard of performance must be included in the state implementation plan. Commenters said 

once a state receives the EPA's approval for its plan, the provisions in the plan become federally 

enforceable against the entity responsible for compliance, in the same manner as the provisions 

of an approved SIP under Section 110. Commenters stated accordingly, if the existing state 

statute and implementing regulations are incorporated as part of the State's compliance plan, 
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under the CPP, such statute and regulation become federally enforceable by the EPA and citizen 

groups and could form the basis of litigation under the Clean Air Act. Commenters said such 

claims could be directed at EGUs, the State of Missouri, the State of Illinois, or a third party 

responsible for implementing the compliance measure. Commenters stated by "federalizing" 

compliance plans, the EPA created a statutory mechanism for dissatisfied stakeholders to 

challenge compliance with the goals against a whole host of entities and seek enforceability of 

state programs like renewable energy and energy efficiency in federal court. Commenters said 

such an enforcement "free-for-all" is not constructive nor is it necessary to achieve the reduction 

goals of the CPP. 

Commenters stated to illustrate the difficulty of this approach, the Missouri legislature has placed 

limits on energy efficiency programs so as to mitigate the economic impact of energy efficiency 

programs. Commenter said RSMo Section 392.245. Commenters stated the EPA's certain 

disapproval, as part of its plan approval process, functions as an administrative veto of that 

legislative decision. RSMo Section 392.245. Commenters said in such a circumstance, Missouri 

may need to provide a compliance demonstration based on other components. Commenters 

stated under the CAA, should a state submit a plan that is unacceptable to the EPA, the EPA can 

begin its disapproval process and proceed to promulgate a federal plan, known as a federal 

implementation plan ("FIP"). 

Response 3: We disagree with these comments. As discussed in section VIII.C of the final rule 

preamble of the CPP, the EPA is not finalizing the proposed portfolio approach, and any 

comments on this proposed approach to 111(d) state plan design are therefore moot. Instead, 

the EPA is finalizing an option to submit either an emission standards plan type or a state 

measures plan type. Under a “state measures” plan type a mass CO2 emission goal may be 

partially or entirely achieved through state measures that impose requirements on entities other 

than affected EGUs and that are not included in the federally enforceable 111(d) state plan, 

provided the state submits standards of performance for CO2 emissions from affected EGUs in 

the form of a federally enforceable “backstop” that would be triggered if the state measures fail 

to achieve the required CO2 emission performance level. Under a state measures plan, the 

backstop emission standards constitute the standards of performance required by section 111(d), 

and the state plan provides for the implementation and enforcement of such standards of 

performance by specifying the trigger mechanism and conditions under which the backstop 

emission standards apply to affected EGUs. Upon EPA approval of a state measures plan under 

section 111(d), the backstop emission standards become federally enforceable requirements, 

which EPA and citizens may enforce against affected EGUs under section 113 and section 304 

of the Act, respectively, once triggered and implemented to address a shortfall in necessary 

emission reductions. See section VIII.

Comment 4: The Proposed Rule's Allocation of Renewable Energy Credits Potentially Raises 

Constitutional Concerns Under the Article 1 Contracts Clause. 
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Commenters stated, the Contract Clause in Article 1, Section 10, clause 1 of the Constitution 

states: "No State shall ... pass any ... Law impairing the Obligation of Contracts[.]" Commenter 

said, by authorizing state plans that enable states to take the renewable energy and/or RECs of 

utilities and others, the Proposed Rule also potentially violates the Contracts Clause. 

Commenters said, APPA member MRES has several contracts with a number of individual 

entities for the output of wind projects and their associated RECs, totaling 85 MW. Commenters 

said, a state-driven portfolio approach that adopts EPA's suggestion to use the renewable energy 

and RECs located in the7 state to satisfy a state goal will take that RE and RECs out of the hands 

of the purchaser, such as MRES, and into the hands of the state to meet its objectives. 

Commenters said, the Proposed Rule authorizes state plans that would have this very result. 

Commenters stated, the Proposal authorizes states to take RE and RECs from their owners by 

disregarding the contractual rights of both the seller and the purchaser. Commenters said, it 

vitiates the obligation of the seller to deliver the RE and RECs to the purchaser, and substitutes 

the state as the beneficiary of the renewable contract (again, without compensation). 

Commenters said, this constitutes an undeniable "substantial impairment of a contractual 

relationship." Commenters said, the construct of the state-driven portfolio approach, including its 

provisions allowing states to interfere with existing contracts for RE and RECs - both in-state 

and out-of-state - appears to violate the Contracts Clause. 

Commenters stated, specifically, EPA, in the Proposed Rule, essentially invites states to create a 

substantial impairment in the renewable energy contracts of utilities. Commenters said, first, it is 

undeniable that many utilities have such contractual relationships with renewable power 

producers, and that a regulation that allows the state to step in and use that RE to meet its CO2 

reduction obligation would constitute a change in law that impairs that contractual relationship. 

Commenters said, that action satisfies the first of the two elements in the test of a Contract 

Clause violation. Commenters said, the second element, whether the impairment is substantial, 

while typically the subject of controversy, is also undeniable. Commenters said, where the 

regulation establishes the mechanism for the state to unilaterally use a utility's resources for its 

own benefit, there can be little doubt that there is a virtual "destruction of contractual 

expectations" and thus, a substantial impairment. 

Response 4: For the reasons stated in the Legal Memorandum accompanying the final rule, the 

EPA disagrees that this rule is likely to raise Contract Clause concerns. Furthermore, insofar as 

this comment concerns the portfolio approach, which EPA is not adopting, the comment is moot.

Comment 5: Commenters said the Co-ops find it unlikely that EPA possesses the authority to 

require a State(s) (through a SIP) to compel TVA to undertake activities that are "outside the 

fence" of the power plant, and therefore creates the significant risk that Tennessee's compliance 

with the Proposed Rule could only be achieved through heat rate improvements to existing 

generation units (building block one). Commenters said second, the Co-ops find it unlikely that 

under existing law EPA possesses the authority to require a State(s) (through a SIP) to compel 

TVA to mandate activities among its regulated entities which such a scenario would create of 

situation for The Co-ops of concurrent Federal jurisdiction, and the Co-ops believe that the 
153 

 

prevailing authority is that of the TVA. Commenters said third, if as a part of its SIP the State(s) 

were to consider requirements to be imposed directly upon the Co-ops (primarily envisioned as 

building block four, i.e. energy efficiency requirements, but others are conceivable), such a 

requirement would not be feasible as the States are pre-empted from and lack the regulatory 

authority to issue such requirements. 

Response 5: In section V.A and V.B of the final rule preamble of the CPP and in the Legal 

Memorandum, we explain our basis for including building blocks 2 and 3 in the BSER, and how 

the affected EGUs can implement those building blocks to achieve the subcategory-specific 

emission performance rates without the need for states to attempt to mandate implementation of 

the building blocks. 

Comment 6: Commenters stated they support the inclusion of formulaic crediting for any 

measures or programs EPA believes have straightforward results, similar to how formulaic 

crediting is used in the context of a Section 110 SIP. 

Response 6: Our discussion of crediting measures that reduce CO2 emissions are discussed in 

section VIII.C and K of the final rule preamble of the CPP. 

Comment 7: Commenters stated, EPA must address the penalty structure for non-compliance as 

it relates to the withholding of funding for EE programs. Commenters said utilities and other 

third parties should not be penalized for non-compliance if the cause was inadequate funding 

from the state. 

Response 7: EPA is not including proposed building block 4, involving demand-side energy 

efficiency, in the BSER. To the extent that this comment is related to building block 4 it is moot. 

However, EE measures would still be available for compliance purposes to the extent permitted 

under state plans. As further explained in section VIII.D of the final rule preamble of the CPP, if 

the state is adopting the state measures plan type, then 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.
154 

 

Comment 8: Commenters 18238-43 stated that since commenter lives in Tennessee, that means 

that our energy generation comes from Tennessee Valley Authority, TVA. Commenters said that 

is a quasi-federal agency with 9 million customers in parts of seven states. Commenters said that 

means they don't really have to answer to any state determinations. Commenters asked what is 

the relationship is required for interaction between TVA and the State of Tennessee when it 

comes to developing a plan to address climate resiliency? 

Response 8: Under the CAA TVA is required to comply with state plan requirements. 

Comment 9: Commenters stated that they were particularly concerned about Building Blocks 3 

and 4, and potentially Building Block 2 that it could leave Colorado with a higher reduction 

mandate than would otherwise be supported by the law. Commenters said the State of Colorado 

would need to have commensurate authority created, and commenter was worried that the 

authority that needs to be created would not also be supported by the Clean Air Act. 

Commenters stated that there are real political and institutional realities that have to be taken into

account here. Commenters said state law needs to change, potentially the state constitution itself. 

Commenters said the EPA simply cannot wave its hand at the states and hope that the rule will 

be successful as they've done so. 

Commenters stated that systems must be designed and resources allocated at the Federal and 

State levels so that compliance is verifiable and enforceable. 

Commenters asked, do states face potential monetary penalties for not complying with the 

proposed rule? Commenters asked, if so, do ratepayers within the state pay the fine? 

Commenters asked, could an EPA enforcement action require a state legislature to modify a 

renewable portfolio standard? 

Response 9: As discussed in the sections explaining how EPA designed the BSER, the EPA 

designed the emissions reduction goals so that they should be readily achievable using proven 

methods for efficient and clean energy production. EPA has not finalized either Building Block 4 

as part of the design of the BSER, nor is EPA finalizing the portfolio approach. It is therefore, 

the EPA’s expectation that state law will not have to be radically restructured. The guideline 

does not require a state to change its law in a way that subjects entities other than affected EGU’s 

to federally enforceable requirements under the state plan. Compliance determinations under the 

federally approved state plan will focus on measuring the effect of whatever measures the state 

decides to pursue on the emissions from affected EGU’s, which should be readily verifiable and 

enforceable. Enforcement of Clean Air Act requirements such as an approved state plan can lead 

to the assessment of penalties authorized under the Act. Whether the ratepayers or shareholders 

of an affected EGU subject to such penalties bear the financial burden will likely depend on how 

state law handles the question. Since EPA is not finalizing the portfolio approach, there is no 

chance that the direct result of a federal enforcement action would be a mandate to modify a 

renewable portfolio standard. It is possible that, to provide for the emissions reductions required 
155 

 

under the state plan from the affected EGU’s, a state may choose to modify its renewable 

portfolio standard. 

Comment 10: Commenters stated that EPA has asked if there could be components of the state 

plan that are not federally enforceable. Commenters said this should only be allowed for 

components that have no way to achieve enforcement in federal court, such as a state carbon tax. 

Commenters said it is not clear that a federal court could order a state to increase a tax that is 

underperforming. Commenters said in that case, continuing the example, the state plan should 

have federally-enforceable guarantor measures that would kick in if the non-enforceable element 

fails to produce the promised savings. 

Response 10: We discuss these issues in the context of the discussion of the state measures 

approach in section VIII.C of the final rule preamble of the CPP. 

Comment 11: Commenters stated that EPA should not make the eligibility of emission rate 

reductions - whether they occur before or during the compliance period - contingent on state 

requirements. Commenters said companies should not be penalized for showing leadership in 

developing renewable resources, especially since they cannot control their state governments. 

Response 11: We discuss the opportunities for early reduction credits in section VIII of the final 

rule preamble of the CPP.

Comment 12: Commenters asserted that EPA cannot impose sanctions on states for failure to 

comply.

Commenters noted that EPA cannot force states to implement Section 111(d) through sanctions 

or the threat of sanctions. First, commenters stated that EPA's authority to issue sanctions under 

Section 179 applies only to nonattainment areas. See 42 U.S.C. section 7509. Because there is 

not a NAAQS for CO2, commenters stated that no attainment or nonattainment areas have been 

designated for CO2. Second, commenters stated that EPA's authority to issue sanctions under 

Section 110(m) is similarly tied to NAAQS and cannot be applied to Section 111(d) 

implementation plans. See 42 U.S.C. section 7410(m). 

Commenters stated that EPA must in this rulemaking disclaim any authority to impose highway 

sanctions on states that do not submit an approved SIP. According to the commenters, if EPA 

leaves the specter of highway sanctions hanging over the states, EPA's proposed rule will subject 

itself to a challenge for unconstitutional coercion of the type successfully brought against the 

Affordable Care Act. 
156 

 

Response 12: EPA agrees that the CAA does not give the Agency the authority to impose 

sanctions under section 179 sanctions — neither “mandatory” sanctions under section 179(a), 

nor “discretionary” sanctions under section 110(m) — for a state’s failure to comply with the 

Clean Power Plan. EPA disagrees with any assertion that sanctions are available for section 

111(d) plan deficiencies. EPA also disagrees that states may be sanctioned under this rule for 

citizen failures to meet standards under a Federal Implementation Plan, whether under section 

110 or under this rule. Both mandatory and discretionary sanctions are only available in 

connection with SIPs under section 110 of the Act. A state plan under this rule and section 

111(d) of the Act is not a SIP and does not arise under section 110. Therefore, neither form of 

sanctions is available in connection with any state plan under this rule. 

Under section 179(a), mandatory sanctions only apply in connection with nonattainment area 

SIPs, or with SIPs submitted in response to an EPA finding that a SIP is substantially inadequate 

under CAA section 110(k)(5) (a “SIP call”). Neither of these events can occur with respect to a 

CPP plan. A state plan under this rule is not a nonattainment plan or any form of SIP under 

section 110, and is not the result of a SIP call, but instead arises under section 111(d). 

Accordingly, mandatory sanctions do not apply in connection with Clean Power Plan state plans. 

Section 110(m) discretionary sanctions are only potentially available if the Administrator makes 

a deficiency finding under section 179(a) in connection with “any plan or plan item” under the 

Act. 42 U.S.C. § 7410(m). The “plan or plan item” reference in section 110(m) refers to a section 

110 plan, not to a section 111(d) plan. The four section 179(a) deficiency findings that may 

potentially trigger the imposition of discretionary sanctions all appear in the context of the 

section’s introductory clause, which explicitly refers to implementation plans and plan revisions 

under part D, which covers nonattainment areas. Further, two of the four potential section 179(a) 

findings explicitly refer to nonattainment areas, while a third uses the term “plan” with clear 

reference to the introductory clause of section 179(a), which likewise limits its applicability to 

nonattainment areas. See §§ 7509(a)(1), (2), and (4). The remaining section 179(a) finding does 

use broader language referring to “submissions...under this Chapter,” but cites as a specific 

example only section 110 maintenance plans. Further, it indicates that the submissions involved 

are to be evaluated under section 110(k)(1)(A), which applies to section 110 SIPs. 

EPA’s historic interpretation of the provisions involved is consistent with the reading of the 

statute described above. In its rulemaking actions concerning sanctions, the Agency has never 

raised the possibility of imposing discretionary sanctions outside the section 110 framework. In 

fact, the Agency has specifically defined “plan” and “plan item” to mean section 110 

implementation plans. See 40 CFR § 52.30. Likewise, in its previous section 111(d) rulemakings, 

the EPA has not stated that sanctions are available for section 111(d) plan failures. “Unlike a 

Federal plan for sources regulated under sections 110 or 172 of the CAA, the section 111(d)/129 

Federal plan imposes no statutory or other sanctions because of deficient or unapproved state 

plans.” Approval and Promulgation of State Air Quality Plans for Designated Facilities and 

Pollutants; Pennsylvania; Control of Emissions From Existing Hospital/Medical/Infectious 

Waste Incinerators, 67 FR 22354, 22355 (May 3, 2002). 
157 

 

Therefore, as indicated by the plain text of the statute and supported by the Agency’s historic 

application of the relevant provisions, CAA sanctions are not available with respect to section 

111(d) plans. 

Comment 13: In addition, commenters stated that section 111 does not require "symmetry" 

between the method through which EPA determines state goals and the mechanisms that states 

can use to satisfy the goals. For example, commenters noted that states' authority to take into 

account the remaining useful life of existing sources and other factors when applying 

performance standards under section 111(d) indicates that existing sources must be allowed to 

comply by using methods and under timelines that may differ from EPA's formulation of BSER. 

Clearly, commenters stated that the EPA may not prohibit a state from relying on any system of 

emission reduction that EPA relies on to establish the guideline; however, both states and EGUs 

must be free to rely on methods other than those relied upon in setting the guideline for purposes 

of compliance. 

Response 13: We agree with this comment about “symmetry,” although we do not view the 

remaining useful life provision of section 111(d)(1) as necessary to provide the basis for this 

comment. 

Comment 14: EPA should clarify several questions regarding the authority of states to 

administer, execute, and enforce a final section 111(d) rule 

Commenters stated the question of state authority arises from other presumptions and provisions 

of EPA's proposed rule: 

- Commenters asked in a state that includes territory in two or more regional market 

organizations, what authority will the state agency responsible for developing and 

(presumably) administering the section 111(d) emissions plan have to compel a regional 

organization's compliance with the state plan, when that regional organization may 

encompass several states? 

- Commenters asked what authority will a state have to compel multi-state transmission 

organizations to alter their dispatch or operating procedures? 

- Commenter asked if section 111(d)-related operational directives from states within a 

regional market differ from one another, how will the states resolve conflict, and with what 

authority? 

- Commenters asked what authority will a state have to compel compliance with a 

section 111(d) rule by generating or transmission facilities that are financed and/or 

administered by the federal government? (Commenters said often, federally administered 

facilities consider themselves exempt from state energy policies.) 
158 

 

Response 14: The rule does not call for the state to compel those entities to comply with any 

requirements, nor does the rule call for the state to impose operational directives. In addition, as 

noted in section VIII.C of the final rule preamble of the CPP, the EPA is not finalizing the portfolio

approach. 

Comment 15: Commenters asked for a state in which electric generating units (EGUs) export 

electricity out-of-state, will the rule allow the state to assign the costs of Building Blocks 3 and 4

to be charged to those EGUs, even though their owners may not serve load in the state? 

Commenters asked if so, what kind of procurement and payment structure does EPA contemplate 

in this regard? 

Response 15: We are not finalizing building block 4 as part of the BSER. In section V.E of the 

final rule preamble of the CPP and in the Legal Memorandum we explain how affected EGUs 

can implement building block 3, which means that Pennsylvania need not change it renewable 

energy requirements. In addition, the Commonwealth has the state measures approach as an 

option, which could allow it to achieve its section 111(d) obligations based at least in part on the 

effects of its state law requirements for renewable energy. 

Comment 16: Commenters asked what provisions or contingency plans has the EPA made in 

developing its compliance timetables and deadlines in anticipation of litigation that is almost 

certain to arise from a final section 111(d) rule promulgated by EPA? 

Commenters stated the proposed rule is likely to face legal challenges delaying clarity on what is 

actually required in states' plans. Commenters said the proposed rule and the EPA rules 

governing adoption and submittal of state plans do not provide sufficient flexibility to account 

for litigation delays. Commenters requested clarification on how litigation delay will affect 

timing of state plan submittal. 

Response 16: As long as the 111(d) remains effective, states and affected EGUs are required to 

comply with it, regardless of whether the rule is in litigation. The same is true for all EPA rules.

Comment 17: EPA's RE and EE measures conflict with state RE and EE programs. 

Commenters stated Pennsylvania, like many other states, has implemented aggressive AEPS and 

EE programs for promoting renewable resources and energy efficiency measures. Commenter 

said the EPA's proposed CAA Section 111(d) emissions standards purport to regulate renewable 

energy and demand-side (RE/DS) resources under BB3 and energy efficiency (EE) programs 

under BB4 by setting presumptive standards for attainment of renewable resource penetration 

and EE achievement that would require changes to existing legislation. Commenters stated the 

EPA's proposed targets for both BB3 and BB4 are not credible and will be unattainable given 

current legislative constraints and structural and economic obstacles to further expansion of 

RE/DS and EE programs in Pennsylvania. Commenters said further, the CAA Section 111(d) 
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BB3 and BB4 requirements constitute an encroachment on and interference with state legislative 

authority. Commenters stated the EPA, in effect, establishes a federal mandate over PA 

renewable energy programs and presents a direct conflict with PA legislation governing RE. 

Commenters said the EPA should re-examine its approaches to the design of BB3 and BB4 to 

more sensibly accommodate existing Pennsylvania legislative and commenter's organization's 

regulatory mandates for expanding renewable resources and energy efficiency programs. 

Commenters stated Pennsylvania's alternative/renewable energy legislation, the Pennsylvania's 

Alternative Energy Portfolio Standard (AEPS), created by enactment of S.B. 1030 on November 

30, 2004, requires each electric distribution company (EDC) and electric generation supplier 

(EGS) to supply to 18% of its electricity using alternative-energy resources by 2021. 

Commenters said qualifying resources are divided between Tier I and Tier II. Commenters stated 

the percentage of Tier I (8% with 0.5% from solar), Tier II (10%) and solar alternative energy 

credits that must be included in sales to retail customers gradually increases over the compliance 

period. 

Commenters stated Pennsylvania energy efficiency standards are governed under Act 129 of 

2008 (Act 129). Commenters said the Act expands the commenter's organization's oversight 

responsibilities for energy efficiency standards and imposes new requirements on EDCs with the 

overall goal of reducing energy consumption and demand. Commenters stated under this 

legislation, commenter's organization has implemented an energy efficiency and conservation 

(EE&C) program. Commenters said subsequent phases of the Act 129 implementation process 

will address EDC and default service provider responsibilities; conservation service providers; 

smart meter technology; time-of-use rates; real-time pricing plans; default service procurement; 

market misconduct; alternative energy sources; and cost recovery. Commenters stated 

commenter's organization has aggressively implemented both the AEPS and Act 129 over the 

past several years and the achievements stemming from these programs are well documented. 

Commenters asserted that the CAA proposed BB3 and BB4 targets, as currently designed, 

establish potentially illegal and unenforceable federal mandates on those states that have actively 

implemented and promoted RE/EE programs. Commenters said at a minimum, the EPA proposal 

conflicts with existing state legislative requirements. Commenters stated in the case of PA, the 

EPA has proposed that PA attain a 2029 goal of 9% (interim) and 12% (final) of generation 

resources from RE from a baseline level of 2% (calculated as of 2012). Commenters said the 

EPA's alternative scenario establishes PA's 2029 goals of 5% (interim) and 7% (final). 

Commenters stated neither goal is attainable under current PAPUC projections as will be 

addressed later in these comments. 

Commenters stated in addition, it is unclear whether the EPA would have the authority to 

mandate a state to adopt RPS or EE standards absent a state including those components in a 

plan. Commenters said the EPA avoids this issue by using RE and EE as a means of calculating 

BSER without mandating specific reductions. Commenters stated however, because of the 
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aggressive targets used in the BSER calculation, it is unclear how PA would met its reduction 

targets, effectively turning the RE and EE BBs into mandates. 

Response 17: We disagree with this comment. We are not finalizing building block 4 as part of 

the BSER. In section V.E of the final rule preamble of the CPP and in the Legal Memorandum 

we explain how affected EGUs can implement building block 3, which means that Pennsylvania 

need not change it renewable energy requirements. In addition, the Commonwealth has the state 

measures approach as an option, which could allow it to achieve its section 111(d) obligations 

based at least in part on the effects of its state law requirements for renewable energy. 

Comment 18: Commenters argued that the final rule should provide guidance or principles on 

how compliance responsibilities should be allocated among load serving entities within a state. 

Commenters argued that all load serving entities should be subject to similar requirements. 

Commenters stated the proposed rule contains the potential to create issues related to the 

distribution of compliance responsibility within a state. Commenters added in Nevada, NV 

Energy is subject to the RPS while certain load serving entities such as municipals, electric 

cooperatives, select commercial or industrial sources, and merchant entities are not. Commenters 

stated for example, the natural gas-fueled Apex plant in Clark County, Nevada, is owned by the 

Los Angeles Department of Water and Power and sends its generation out of state. Commenters 

stated while this facility is an eligible emission source under the rule, and has a CO2 emission 

profile higher than either the Nevada interim target of 697 lbs/MWhr or final target of 647 

lbs/MWhr, the state does not currently have the authority to require this source to offset its 

emissions to the target through the use of Building Blocks 3 or 4 or other means. Commenters 

stated as well, disparity exists between entities such as those that own and operate affected EGUs 

versus other entities that serve load but purchase and deliver power by wire. 

Response 18: We are not finalizing the portfolio approach. Accordingly, only affected EGUs 

are subject to the requirements of this rule. 

Comment 19: Expanded renewable energy reliance conflicts with state policies and IRP 

processes 

Commenters stated the proposal for states to expand their reliance on renewable energy conflicts 

with: 1) the policies of dozens of states (e.g. West Virginia) that have adopted renewable energy 

standards based on a balancing local economic, resource, and environmental considerations; and 

2) the Integrated Resource Plan processes that state public utility commissions (e.g., West 

Virginia) utilize for the long-term planning of electric supply and demand resources. 

Commenters said states should retain their authority regarding the nature and extent of any 

renewable energy standards. 
161 

 

Commenters stated the proposal relies heavily on additional renewable generation as a means to 

achieve the state goals. Commenters said most States cannot simply mandate additional 

renewables though RPS. Commenters stated such authority must come from state legislative 

actions that can take several years to enact considering that many state legislatures meet only 

biannually. Commenters said moreover, the legislatures must agree to enact additional mandates, 

which they may or may not do. Commenters stated most States simply have no authority to adopt 

mandates that additional renewable generation be built. Commenters said moreover, the entities 

building renewable generation such as wind are not affected entities under this proposal, because 

they are not in the identified source category; thus they have no incentive to do so, particularly if 

the production tax credit is not renewed in the future. 

Response 19: The final rule takes a different approach towards building block 3 than at proposal. 

In addition, the rule does not require that states change their authority regarding the nature and 

extent of any renewable energy standards or mandate additional renewables through RPS. As we 

discuss in section V.E of the final rule preamble of the CPP and the Legal Memorandum, 

affected EGUs will be able to achieve the source subcategory specific emission performance 

rates by implementing the building blocks, including building block 3, without being dependent 

on state renewable energy standards. In addition, we are not adopting the portfolio approach, so 

that non-affected EGUs are not subject to the requirements of this rule. 

Comment 20: Commenters said that, the proposal places significant, unknown burdens on the 

yet to be identified on other entities, which would need to be addressed over the duration of the 

program Commenters said these include (1) identification of emission standards for affected 

entities (which would presumably be negotiated, in some fashion, between the state and the 

entities); Commenters said these include (2) the establishment of and progress reporting for 

performance milestones; the establishment and, if necessary, implementation of corrective 

measures should an affected entity fail to meet performance requirements; and Commenters said 

these include (3) the identification and performance of applicable monitoring, reporting and 

recordkeeping. Commenters said, as a result of these requirements, affected entities other than 

affected EGUs will incur substantial cost in the service of reducing CO2 emissions from the 

affected entities. 

Response 20: The final rule addresses, in section VIII of the final rule preamble of the CPP, 

many of the concerns raised by the commenter. In addition, we are not finalizing the portfolio 

approach, so that affected entities are not subject to requirements.

1.12 PROMULGATION OF RULES NOT PROPOSED 

Comment 1: Several commenters objected to the proposal as the promulgation of rules not 

proposed 
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Commenters stated, NSPS rulemakings are subject to section 307(d) of the CAA. CAA section 

307(d)(1)(C). Commenters said, among other requirements, the rulemaking proposal must "be 

accompanied by a statement of its basis and purpose," that includes: "(A) the factual data on 

which the proposed rule is based; (B) the methodology used in obtaining the data and in 

analyzing the data; and (C) the major legal interpretations and policy considerations underlying 

the proposed rule." Id. section 307(d)(3). Commenters said, further, all of those required "data, 

information, and documents" must be "included in the docket on the date of publication of the 

proposed rule." Id. Commenters said, Section 307(d) also establishes requirements for final rules. 

Commenters said, among other things, the promulgated rule must be accompanied by (1) a 

statement of basis and purpose like that required for the proposed rule, (2) an explanation of the 

reasons for any major changes in the promulgated rule, and (3) a response to each of the 

significant comments submitted during the comment period. Id. section 307(d)(6)(A), (B). 

Commenters said, these requirements are fundamental to both reasoned decision making and 

judicial review. Small Refiner, 705 F.2d at 519 (the fundamental purpose of section 307(d)(3) is 

to require that "EPA 'give a detailed explanation of its reasoning at the 'proposed rule' stage" of 

the rulemaking process); Home Box Office, Inc. v. FCC, 567 F.2d 9, 35 (D.C. Cir. 1977) (per 

curiam) (without a response to significant comment, the "opportunity to comment is 

meaningless"). 

Commenters stated, consistent with these key principles, commenters objects to promulgation of 

any final rule the content of which commenters could not reasonably have anticipated based on 

the proposed rule, and to any failure by the Agency to adequately respond to commenters’ 

comments. Commenters said, in particular, commenters notes the absence from this rulemaking 

docket of 21 of the 25 IPM modeling runs that EPA performed. Commenters said, EPA relied on 

these modeling runs in establishing the Proposed Guidelines, and their absence from the 

rulemaking docket has prevented meaningful comment on the Proposed Guidelines, in violation 

of section 307(d) of the CAA. 

Response 1: In the preamble to the final rule, as well as in this Response to Comment document, 

the Legal Memorandum, and other supporting documents, the EPA describes at length the 

statement and purpose of the regulation, provides explanations for the major changes in the rule, 

and responds to all significant comments submitted. This final rule is thus in compliance with the 

relevant requirements of section 307(d). For a response to comments regarding CAA section 

307(d)(3); the requirements associated with a rulemaking proposal, including the docketing of 

information; and the IPM modeling runs described above, see section 1.13 below. 

Comment 2: Commenters stated, the EPA's open-ended comment solicitation on numerous 

issues associated with the proposed rule makes it impossible for states to assess the feasibility 

and potential impacts of the rule because the states cannot reasonably predict the possible 

outcomes in the final rule. Commenters said, while the EPA has proposed specific state goals 

based on the four specific building blocks, the EPA has also requested comment on numerous 

issues on the proposed rule, such as alternate approaches to setting renewable energy targets not 

identified by the EPA and expanding BSER to include other strategies. 
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Response 2: The EPA respectfully disagrees with this comment. The proposed rule and Notice 

of Data Availability, along with numerous supporting documents including Technical Support 

Documents and a Legal Memorandum, laid out at length the EPA’s proposals and alternatives, as 

well as the detailed reasoning behind and goals of the proposal. The EPA has provided this 

extensive documentation to ensure that commenters have ample notice of the proposals and 

alternatives under consideration, and in response the EPA received more than two million public 

comments. This process accords with proper notice and comment procedure. Under 5 U.S.C. § 

553(b)(3), a notice of proposed rulemaking shall include “either the terms or substance of the 

proposed rule or a description of the subjects and issues involved.” The EPA provides adequate 

opportunity for public comment on a proposed rule where it “ensures a reasonable period for 

public participation of at least 30 days,” 42 U.S.C. § 7607(h), and “give[s] interested persons an 

opportunity to participate in the rule making through submission of written data, views, or 

arguments,” 5 U.S.C. § 553(c). The extensive description and documentation provided to support 

the EPA’s proposal, and the lengthy period for public comment addressed in chapter 1.14 of the 

Response to Comment document, comply with these requirements. A proposed rule need not 

reflect the precise components that will comprise the final rule anticipated or ultimately 

promulgated by the agency, provided the final rule is a “logical outgrowth” of the materials 

provided at proposal. See, e.g., NRDC v. Thomas, 838 F.2d 1224, 1242 (D.C. Cir. 1988); Select 

Specialty Hosp. - Akron, LLC v. Sebelius, 820 F. Supp. 2d 13, 23 (D.D.C. 2011) (there is “no 

requirement that an agency select a final rule from among the precise proposals”). Although the 

EPA’s own reasoned consideration and its assessment of public comment have resulted in some 

modifications from the proposed rule, the proposed rule ensured that interested parties were 

“fairly apprised” of the elements ultimately included in this final rulemaking. See, e.g., United 

Steelworkers of America v. Schuylkill Metals, 828 F.2d 314 (5th Cir. 1987). In addition, states

have ample time to consider how to employ the many flexibilities under the final rule when 

implementing the standards of performance. 

Comment 3: Commenters stated, EPA is attempting to use the NODA as a means to advance 

substantive changes to the rule proposal without providing sufficient opportunity for impacted 

stakeholders to comment. Commenters said, EPA's NODA is not a data-availability notice; in 

fact, there is little, if any, new "data." Commenters said, rather, EPA has simply listed some 

initial comments of stakeholders and is attempting to use that as a pretext to re-propose sections 

of the Rule Proposal without properly proceeding through a formal re-proposal process. 

Commenters said, EPA is also proceeding with these changes while failing to provide any 

substantive findings or concrete examples of revisions in the NODA. 

Commenters appreciated EPA recognizing the difficulty states face in complying with the Rule 

Proposal. Commenters said, however, substantive changes, including changes that could 

potentially increase the stringency of the Rule Proposal, cannot be done through a NODA. EPA 

should only proceed with the substantive changes discussed in the NODA through a formal reproposal of the underlying Rule Proposal. 
164 

 

Commenters stated, the rulemaking process is designed by statute and mandated by courts to 

provide affected entities a full and fair opportunity to receive notice, properly review the notice 

and proposed rule, and provide comment on substantive rulemaking. Commenters said, the 

NODA fundamentally undermines these statutory protections by functionally re-proposing 

aspects of the underlying Rule Proposal without either going through the correct legal 

proceeding (i.e. re-proposing the rule) or even providing sufficient detail to give potentially 

impacted entities fair notice of what EPA is contemplating. Commenters said, it is not clear 

whether EPA's contemplated revisions to the glide path, changes to the Building Block 

methodology, and/or changes to the goal setting equation will result in any relief to the entities 

regulated in the Rule Proposal, and in fact, may result in much more burdensome emissions 

requirements. 

Commenters stated, further, rather than providing concrete proposals in the NODA, EPA solicits 

comment on a wide range of issues identified thus far by stakeholders. Commenters said, for 

example, EPA solicits comment "on whether to establish some minimum value as a floor for the 

amount of generation shift for purposes of building block 2- [and] on what that value should be." 

Id. at 64,550. Commenters said, likewise, with respect to an alternative regional approach for 

renewable energy under Building Block 3, EPA solicits comment on "what the regional structure 

would be," on "the criteria that should be used to reapportion state RE targets within a given 

region," and on "what components of the state RE targets should be regionalized." Id. at 64,551. 

Commenters said, these requests for comment, among others in the NODA, are so broad that 

they would be more appropriate for an advanced notice of proposed rulemaking. Commenters 

said, to the extent that EPA decides to adopt any of the alternative options described in the 

NODA, EPA must engage in a supplemental rulemaking process that presents EPA's proposal in 

concrete terms and gives the public a full and fair opportunity to comment on that proposal. 

Commenters said, it is especially concerning that EPA would seek comment in the NODA on 

changing the goal without providing a new proposed rule. Commenters said, instead, EPA 

merely states "this adjustment to goal-setting formula would yield more stringent state goals." 

Commenters said the EPA's Notice of Data Availability (NODA) on the proposed rule, published 

in the October 30, 2014 Federal Register, further expands the possible outcomes of the rule. 

Commenters said, the scope of the rulemaking is effectively open-ended. Commenters said, the 

states cannot assess the feasibility of the rule and the potential impacts on electric reliability 

without a clear understanding of the proposed rule requirements and a reasonable expectation of 

how the final rule is likely to be adopted. Commenters said, if the EPA intends to deviate 

substantially from the state goals included in the proposed rule, then the EPA should withdraw 

and re-propose the rule to allow states and other affected parties adequate opportunity to provide 

meaningful comment on the substantive changes. 

Commenters stated, in the NODA, EPA identifies a number of potential problem areas in the 

proposed rule, and solicits comment on options for addressing those problems. Commenters said, 

many, if not all, of the challenges identified by EPA in the NODA can be attributed to the 

complexity associated with EPA's decision to look beyond the fence line in its BSER analysis. 
165 

 

Commenters said, yet, rather than using stakeholder feedback to simplify the proposal, EPA has 

identified alternative approaches that would further complicate an already complex regulation. 

Commenters said, for example, rather than eliminating the interim compliance period, EPA 

proposes alternative glide-paths that would be based on detailed State- and source-specific data 

and assumptions. 79 Fed. Reg. at 64,548-59. Commenters said, likewise, EPA's proposed 

solution to the current disparity in existing NGCC capacity is to adopt a complex regional 

structure for its BSER analysis. Id. at 64,550-51. Commenters said, EPA also proposes a 

complex regional structure for calculating and allocating renewable energy potential among the 

States in an effort to address concerns over interstate transmission and interstate sale of 

renewable electricity credits. Id. at 64,551-52. Commenters said, finally, EPA suggests that 

differences in the proposed treatment between renewable energy and energy efficiency and 

NGCC facilities can be resolved by increasing even further the displacement of coal-fired 

electricity generation. Commenters said, thus, if adopted, EPA's suggested alternatives would 

address the complexity and implementation challenges of the proposal by increasing, rather than 

decreasing, the complexity and stringency of the proposal. 

Commenters stated that the proposed alternate regional approaches discussed in the October 30 

NODA are unclear and too open-ended to allow states adequate opportunity to comment. 

Response 3: The EPA respectfully disagrees with these comments. The Notice of Data 

Availability concerned a select array of alternative methodologies proposed by commenters and 

under consideration by the EPA, in concert with its original proposal on June 18, 2014. This 

information was properly contained in a Notice of Data Availability because the notice made 

available certain data from the Emissions and Generation Resource Integrated Database (eGRID) 

pertaining to the EPA’s state goal-setting equation and associated proposals, and because the 

remaining proposals uniformly concerned technical, methodological, and computational 

questions related to the compliance trajectory for emissions through 2029 and the calculation of 

renewable energy resources under building block 3. More importantly, the Notice of Data 

Availability provided adequate public notice, as required by the CAA and Administrative 

Procedure Act, regarding alternative methodologies or approaches to aspects of the EPA’s 

proposed rule. Neither the CAA nor the Administrative Procedure Act require the EPA to 

include regulatory text in such a proposal, nor is the EPA barred from proposing alternatives that 

may increase the complexity or stringency of the proposal. As the Notice of Data Availability 

provided public notice and a full and fair opportunity for comment on the three enumerated 

topics – in response to which it received extensive comments – the EPA has satisfied its 

obligations under the CAA and Administrative Procedure Act and need not re-propose the rule. 

Comment 4: Commenters stated EPA must give the public an opportunity to review and 

comment on Federal rules for measuring and verifying energy efficiency and renewable energy 

credits before finalizing this rule. 
166 

 

Commenters stated, emission reductions related to energy efficiency and renewable energy are 

likely to play a significant role in compliance with the Section 111(d) standards of performance 

for fossil fuel-fired EGUs, regardless of whether EPA proceeds with the Building Block BSER 

analysis or gives affected EGUs flexibility to voluntarily incorporate such emission reductions 

for the purpose of complying with more narrow standards of performance for each source 

category based on an inside the fence line BSER analysis. Commenters said, in either case, it is 

critical that energy efficiency and renewable energy programs can be measured and verified. 

Commenters said, however, EPA has provided no guidance on how such measurements and 

verifications must be made. Commenters said, without additional information about how 

emission reductions associated with these sources will be measured and verified, commenters 

cannot comment on the technical bases for including these emission reduction opportunities, and 

States will ultimately be unable to develop implementation plans that incorporate them. 

Commenters said, this is a serious deficiency with respect to two significant aspects of EPA's 

proposed standards of performance. 

Commenters stated, to ensure that the measurement and verification of energy efficiency and 

renewable energy programs are incorporated into the final rule in an appropriate manner, it is 

imperative that EPA conduct a rulemaking to establish the necessary procedures. Commenters 

said, further, because of their importance to this rulemaking, EPA must issue a proposed rule 

addressing measurement and verification and solicit public comment on it before finalizing this 

rule. Commenters said, such an approach will, at a minimum, give States some initial guidance 

regarding the incorporation of energy efficiency and renewable energy into their implementation 

plans. Commenters said, given EPA's abbreviated schedule for the States to prepare such 

implementation plans, failure to provide some initial guidance to States at an early stage will 

pose significant challenges to the States' ability to develop satisfactory implementation plans that 

address these two subjects within the time allotted by EPA. 

Commenters stated, EPA's proposal cannot proceed until the public has an opportunity to review 

and comment on a federal rule(s) that establishes measurement and verification of energy 

efficiency and renewable energy credits. 

Response 4: The EPA is finalizing structural requirements for EE and RE crediting in the final 

rule, and is proposing as part of the federal plan this summer, a more detailed set of requirements 

for ensuring emission reductions from RE and EE are quantifiable, verifiable, enforceable, 

permanent, and non-duplicative. The public will have the opportunity to comment on these 

proposals. 

Comment 5: Commenters stated, the proposal is incomplete. Commenters said, for example, the 

proposal does not include a clear and workable compliance formula. Commenters said, the gaps 

in key aspects of the proposal do not allow for meaningful review and comment, and is an 

insufficient indicator of what in fact EPA might adopt. 

Commenter states that the EPA has not provided adequate information for the states to evaluate 

the possible changes to Block 3 and provide meaningful comment. 
167 

 

Response 5: The EPA’s final rule consistent with proper notice and comment procedure, as 

discussed above. In more than a thousand pages comprising the proposed rule and its supporting 

documents, the EPA provided detailed descriptions of its proposal as well as numerous 

suggestions, alternatives, and methodologies. The EPA also issued a Notice of Data Availability 

that requested further comment on a number of ideas and alternatives arising out of the original 

proposal. Both the proposed rule and the subsequent Notice of Data Availability informed the 

interested public of the proposals under consideration with respect to the application of the 

building blocks and the potential options for compliance with the resulting standards of 

performance. The EPA received more than two million comments in response, discussing all 

aspects of its proposals and providing significant depth of comment on the definition and 

application of the building blocks, and on industry and state compliance with the resulting 

standards of performance. The final rule adopted in this rulemaking is the logical outgrowth of 

the detailed information included in and accompanying the proposed rule and Notice of Data 

Availability. Although the EPA’s own reasoned consideration and its assessment of public 

comment have resulted in some modifications to the final rule, such changes are incremental and 

reflect the goals and alternatives in the EPA’s original proposal and Notice of Data Availability. 

The EPA has thus provided a full and fair opportunity to commenters to assess the various 

components that have come together in this final rulemaking.

Comment 6: Commenters stated that in response to stakeholder concerns regarding the Building 

Block 3 methodology, EPA in the NODA provided a conceptual discussion of a third 

methodology for setting RE targets based on a regional approach. Commenters said, this 

"conceptual discussion" represents an attempt to alter the original proposal, or at least, set the 

stage for EPA to adopt a final rule that departs significantly from the proposal without meeting 

proper notice and comment requirements. 

Response 6: The EPA respectfully disagrees with this comment. The October 30, 2014 Notice of 

Data Availability explained that the EPA was considering additional methodologies and 

proposals related to three discrete areas of the proposed rule, including alternative methodologies 

for applying building block 3 based on regionalization. These additional ideas and alternatives 

each built upon the proposals in the July 18, 2014 proposed rule and the comments the EPA had 

received on those proposals, and were appropriately published in the Federal Register by way of 

the Notice – a permissible means of seeking further public input on alternatives under 

consideration by the EPA. As the Notice of Data Availability provided public notice and a full 

and fair opportunity for comment on the three enumerated topics, in response to which it 

received extensive comments, the EPA has satisfied its obligations under the CAA and 

Administrative Procedure Act and may finalize proposals or concepts included in the Notice of 

Data Availability. 

Comment 7: Under The Proposal, States' Reliance on Building Blocks 3 and 4 is Effectively a 

Requirement, Not An Option and Raises APA Issues. 

Commenters stated that EPA claims the proposal allows states great latitude to craft a plan that 

will achieve each state's individual goal. Commenters said that EPA claims that "in developing 

its plan, each state will have the flexibility to select the measure or combination of measures it 
168 

 

prefers in order to achieve its CO2 emission reduction goal." Commenters said that the proposal 

sets state goals that are based on achievable emissions reductions by applying all four building 

blocks: 

Commenters stated that federal case law interpreting the APA (5 U.S.C. section 551 et seq.) 

demonstrates how courts determine whether policies contained in EPA documents such as policy 

memoranda are considered binding rules. Commenters said that in Appalachian Power, despite 

EPA's protestations that its "Periodic Monitoring Guidance" was neither final nor binding, the 

court held that "the entire Guidance, from beginning to end - except the last paragraph - reads 

like a ukase. It commands, it requires, it orders." Commenters said that the court did not rely 

solely on the Agency's characterization of the documents, but looked to the language of the 

document and how it was practically applied. 

Commenters stated that the CPP is analogous to the guidance document referred to in 

Appalachian Power. Commenters said the CPP contains a bare bones rule, accompanied by 

thousands of pages of "technical support documents." Commenters said nowhere in the rule does 

EPA mention "building blocks" or "heat rate improvement" or "redispatch." Commenters said 

that these concepts, intended to be incorporated by states into state plans, are not flexible 

guidance documents but integral to an understanding of what states, and the existing EGU source 

category, are expected to do. Commenters said relying solely on the proposed rule and without 

reviewing the TSDs, no one could possibly understand the CPP as EPA has defined it. 

Commenters said that clearly we haven't arrived at the enforcement stage since the proposed rule 

is still a rulemaking. Commenters said that nonetheless, the proposal and supporting technical 

support documents ("TSDs") state numerous times that the rule allows states flexibility to 

comply with the state goals by using a variety of means, yet the TSDs then set forth very specific 

equations for determining state goals. 

Commenters stated that under this practical effects test, relying on Building Blocks 3 and 4 is 

really an obligation for states, not a flexible option. Commenters said the proposal as written 

leads stakeholders to believe that state plans will not be approved unless they rely on emissions 

reductions achieved by relying on all four building blocks. Commenters cited National Mining 

Ass'n v. Jackson, 2012 U.S. Dist. LEXIS 106057 (D.D.C. July 31, 2012) (rejecting the agencies' 

stated position that guidance was not binding and imposed no obligations, the court found that 

the guidance had "caused EPA field offices and the state permitting authorities to believe that 

permits should and will be denied if its 'suggestions' and 'recommendations' are not satisfied."). 

Commenters said if states cannot meet their goals, legal consequences will flow. Commenters 

said if allowed to go final as written, application of the practical effects test proves that Building

Blocks 3 and 4 are, contrary to EPA's characterization, mandatory. Commenters said the use of 

Building Blocks 3 and 4 is a rule within the meaning of the APA, and reliance on those building 

blocks is improper. 

Response 7: The EPA disagrees and notes that the building blocks are neither guidance nor a 

mandate. They are part of a technical determination of what the BSER is. EPA is not establishing 

any requirement in the guidelines that affected EGUs use particular technology to meet emission 

standards set in a state plan or federal plan. Thus, the cases the commenter cites are inapposite. 
169 

 

1.13 CAA 307(D) 

Comment 1: Commenters stated, the EPA's proposal fails to provide the information required to 

justify any rule under section 111. Commenters said, the Clean Air Act requires that, in order to 

initiate a rulemaking subject to section 307(d) of that Act, the EPA must include in the docket for 

the rule at the time of proposal the "data, information, and documents ... on which the proposed 

rule relies." Commenters said, because of the EPA's failure to include these materials in the 

dockets, the Agency must withdraw the Section 111(b) Modification Proposal and the Section 

111(d) Proposal and complete the dockets for each rulemaking before re-proposing any such 

rules. 

I. The Requirements of Section 307(d) 

Commenters stated, the Clean Air Act provides that "[n]ot later than the date of proposal of any 

action to which this subsection applies, the Administrator shall establish a rulemaking docket for 

such action." Commenters said, for actions subject to section 307(d) like the Proposed Rules, 

section 307(d)(3) then addresses the legal requirements for the contents of those rulemaking 

dockets. Commenters said, specifically, it requires that: "All data, information, and documents 

referred to in this paragraph on which the proposed rule relies shall be included in the docket on 

the date of publication of the proposed rule." Commenters said, the "documents referred to in 

this paragraph" are: "(A) the factual data on which the proposed rule is based; (B) the 

methodology used in obtaining the data and in analyzing the data; and (C) the major legal 

interpretations and policy considerations underlying the proposed rule." 

Commenters stated, these provisions taken together define the statutory limitations on the EPA's 

authority to initiate Clean Air Act rulemaking subject to section 307(d). Commenters said, these 

statutory limitations reflect Congress's recognition that having the information on which a 

proposed rule is based available at the time of proposal is critical to meaningful comment and, 

ultimately, sound rulemaking. 

Commenters stated, in this case, the requirements of section 307 (d) mean that EPA was 

obligated to include in the docket at the time of proposal (i.e., on June 18, 2014) all of the 

modeling results on which it relies to justify the Section 111(d) Proposal, all of the net heat rate 

and carbon dioxide emissions data for existing power plants for which it has determined that 

certain heat rate improvements are achievable, and all of the technical data on which it relies for 

its proposed standards for modified Subpart Da units and for modified and reconstructed Subpart 

KKKK units. Commenters said, critical portions of this information, however, were not in the 

docket as of September 3, 2014, long after publication of the Proposed Rules. 

II. Why the Section 111(d) Proposal Violates Section 307(d) 
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Commenters stated, the EPA has omitted from the docket of the Section 111(d) Proposal 21 of 

25 key modeling runs on which it relied to justify the proposed rule. Commenters said, the EPA 

also omitted any net (as opposed to gross) heat rate and carbon dioxide emissions data on which 

it based the proposal. 

A. IPM Modeling Runs 

Commenters stated, the EPA used the Integrated Planning Model ("IPM") to model whether the 

Section 111(d) Proposal was achievable and how regulated entities would comply with it in 

different years. Commenters said, the EPA modeled 25 cases, looking at five different policy 

scenarios (Base, State Option 1, State Option 2, Regional Option 1, and Regional Option 2) in 

five different years (2016, 2018, 2020, 2025, and 2030). Commenters said, the model estimates 

whether particular units will have to shut down, curtail production, improve heat rates, or switch 

fuels in each of the 25 cases. 

Commenters stated, the five scenarios EPA modeled were: (1) the Base Case, looking at 

regulated entity compliance with existing rules like the Clean Air Interstate Rule, the Mercury 

and Air Toxics Standards, consent decrees and other existing federal and state programs; (2) 

State Option 1, looking at regulated entity compliance with EPA-established state CO2 emission 

goals through 2030; (3) State Option 2, looking at regulated entity compliance with EPA 

established state CO2 emission goals through 2025; (4) Regional Option 1, looking at regulated 

entity compliance with EPA-established regional CO2 emission goals through 2030; and (5) 

Regional Option 2, looking at regulated entity compliance with EPA-established regional CO2 

emission goals through 2025. 

Commenters stated, despite the EPA having modeled these five different scenarios in each of 

five years, for a total of 25 modeling runs evaluating the achievability and impacts of the 

proposal, the EPA provides the results of only four of the 25 modeling runs in the docket, and no 

results for 2030 (the year in which compliance must be achieved with the final state emission 

goals). Commenters said, the four files it provides address the 2025 Base Case, the 2025 State 

Option 1, the 2020 Regional Option 1, and the 2025 Regional Option 2. Commenters said, the 

other 21 files have not been provided. Commenters said, without these additional 21 files, 

commenters cannot evaluate the EPA's contention that compliance with the proposed rule is 

feasible. Commenters said, specifically, without this data, commenters cannot analyze how the 

EPA has determined that regulated entities are capable of complying with the remaining Base 

Case, State Option 1 and 2, and Regional Option 1 and 2 policy options in the years 2016, 2018, 

2020, 2025, and 2030. 

Commenters stated, indeed, the only real unit-by-unit comparison modeling the EPA provides 

are the 2025 Base Case and 2025 State Option 1, which look at compliance with the interim state 

goals rather than the final goals EPA proposes to prescribe for the year 2030. Commenters said, 

to properly evaluate how the EPA expects regulated entities to achieve their 2030 goals, and how 

this compliance is balanced within a state, commenters need to have access to the results of the 
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remaining IPM scenarios for 2016, 2018, 2020, 2025, and 2030 for all of the policy options. 

Commenters said, without these results, the EPA appears to lack any basis for determining that 

regulated entities can achieve the proposed 2030 goals in the first place. 

Commenters stated, on August 1, 2014, commenters issued a Freedom of Information Act 

("FOIA") request seeking the "results of the remaining 21 modeling runs" beyond the four IPM 

modeling runs the EPA placed in the docket. Commenters specifically requested the "parsed 

files" for the missing runs. Commenters said, on August 12, 2014, the EPA responded that it had 

"conducted and included only four parsed files in the docket for the proposed rule" and that 

"parsing is a post -processing step that EPA does not routinely perform." 

Commenters stated, they understand that the EPA "parses" modeling results to show unit-by-unit 

impacts of a rule. Commenters said, in the case of the Section 111(d) Proposal, it appears from 

the response to this FOIA request that the EPA did not analyze the ability of individual units to 

comply with the proposed rule's various implementation scenarios, even in the final compliance 

year of 2030. Commenters said, if this is in fact the case - i.e., if the EPA did not analyze the 

ability of individual units to comply with the proposed rule under various implementation 

scenarios - the rule would have no basis and as a result would be unlawful. Commenters said, 

based on other information and references in the docket, however, the EPA appears to have run 

the IPM model in these instances, but either did not include those runs in the docket or did not 

"parse" those runs for any scenarios beyond the four that the EPA posted in the docket. 

Commenters said, the EPA easily could have parsed all the modeling runs it conducted, but 

apparently chose not to for reasons that are unclear. Commenters said, the EPA may not have 

examined each scenario due to resource constraints, or it may have simply assumed, without 

completing the analysis, that compliance with each scenario was feasible for existing units. 

Commenters said, without these modeling results, the regulated community cannot fully assess 

EPA's claims that the goals and building blocks in the proposed rule are "achiev[able]," and the 

EPA would violate the clear statutory results for initiation of rulemaking. 

Commenters stated, finally, the EPA states in the preamble that its "assessments ... regarding the 

ability of the electricity and natural gas industries to achieve the levels of performance indicated 

for building block 2 in the state goal computations are supported by analysis that has been 

conducted using the Integrated Planning Model (IPM)." Commenters said, with only a very 

limited and incomplete portion of that analysis in the docket, it is impossible to analyze the basis 

for such assertions. Commenters said, it is highly unusual if not unprecedented for EPA to have 

omitted the necessary modeling from a rulemaking docket on which it relies in support of a rule. 

Commenters said, this again illustrates that the EPA has violated the requirements of section 

307(d) for initiation of rulemaking. 

B. Net Heat Rate and Emissions Data 

Commenters stated, the EPA also has omitted from the docket data to support one of the central 

elements of its proposed rule: that existing coal-fired electric generating units can achieve a 4-6 
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percent heat rate improvement. Commenters said, to support this proposal, the EPA examined its 

database of existing coal-fired units and identified 16 units that it says have achieved heat rate 

improvements of 3-8 percent "year-to-year." Commenters said, the EPA omits from the docket, 

however, any data that supports this assertion. 

Commenters stated, the Section 111(d) Proposal docket contains a database of heat rates and 

carbon dioxide emissions from existing units measured on a gross basis for the past decade. 

Commenters said, it also contains a single year-2012---of such data on a net basis. 

Commenters stated, because the EPA says that 16 units achieved 3-8 percent heat rate 

improvements on a "year-to year" basis-which would require more than one year of data - the 

EPA must be relying on its gross emissions data to support the assertion that a 4-6 percent heat 

rate improvement is achievable and legally supportable. Commenters said, but the EPA is 

proposing to require that units demonstrate compliance on a net basis, while omitting from the 

docket any "year-to-year" data demonstrating that units are capable of complying with a central 

element of its proposal: a 4- 6 percent heat rate improvement on a net basis. Commenters said, 

without the net data, the EPA "fail[ed] to provide an accurate picture of the reasoning that has 

led the agency to the proposed rule." 

Commenters stated, this is a particularly glaring omission given that if the EPA had measured 

heat rate improvements on a net basis, it would have been unable to show that a 4-6 percent heat 

rate improvement is in fact achievable. Commenters said, measuring compliance on a net basis 

subtracts from a unit's gross heat rate (and related emissions) any electricity output associated 

with auxiliary power consumed by the unit to enable it to run. Commenters said, significant 

power can be consumed by pollution control devices at the unit, for instance, and heat rates are 

compromised when greater auxiliary power is needed. Commenters said, with the 

implementation of the Mercury and Air Toxics Standards rule, more pollution controls are being 

installed on existing sources, increasing demand for auxiliary power and thus increasing heat 

rates. Commenters said, furthermore, units that operate at lower load as a result of these rules 

would experience a higher level of auxiliary power use relative to their generation. Commenters 

said, for these reasons, it is critical to have the EPA's data on net (as opposed to gross) heat rate.

Commenters stated, without a database of net heat rate and associated emissions, the EPA's 

assertion that compliance with its proposed heat rate reductions (and other parts of the rule) can 

be achieved on a net (rather than gross) basis cannot be validated. Commenters said, this would 

render the EPA's proposed rule unlawful. Commenters said, if the EPA has such data, the EPA 

cannot "play hunt the peanut with technical information, hiding or disguising the information 

that it employs," and in the process "treat what should be a genuine interchange as mere 

bureaucratic sport." 

Commenters stated, the missing heat rate data, if it exists, are the type of information that must 

be included in the docket on the date of proposal under section 307(d)(3). Commenters said, 
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without the net heat rate and emissions data, the EPA cannot satisfy the requirements of section 

307(d) for initiation of rulemaking. 

Response 1: We disagree with these commenters’ assertions that EPA has failed an obligation 

under CAA section 307(d)(3). That provision provides in relevant part that a notice of proposed 

rulemaking shall include a “statement of basis and purpose,” which itself includes, “a summary 

of (A) the factual data on which the proposed rule is based; (B) the methodology used in 

obtaining the data and in analyzing the data; and (C) the major legal interpretations and policy 

considerations underlying the proposed rule.” In addition, section 307(d)(3) provides that, “All 

data, information, and documents referred to in this paragraph on which the proposed rule relies 

shall be included in the docket on the date of publication of the proposed rule.” The D.C. Circuit 

has emphasized that section 307(d)(3) does not establish a “general requirement” to include all 

information of potential relevance to those reviewing the proposal, but rather only requires 

docketing of those materials “on which the proposed rule relies.” Am. Trucking Ass’ns v. EPA, 

283 F.3d 355, 372 (D.C. Cir. 2002) (quoting 42 U.S.C. § 7607(d)(3)) (emphasis by the court). 

Commenters allege that there are essentially three categories of information that the 

proposal relied on, but which EPA failed to include in the docket. In actuality, the information 

sought by these commenters was either available to commenters in the docket, was not relied 

upon by the proposal, or does not exist. Accordingly, we disagree with these commenters that 

EPA failed a docketing requirement under section 307(d)(3). 

First, commenters allege that the EPA failed to include in the docket the parsed data files 

relating to 21 Integrated Planning Model (IPM) runs or, alternatively, information regarding 

those modeling runs. As EPA explained in its Aug. 12, 2004 response to a FOIA request for the 

parsed files (EPA-HQ-2014-009111), all the parsed files created by EPA were already available 

to commenters, and the remaining “missing” files never existed in the first place. Parsing is a 

post-processing step that EPA does not routinely perform. The four parsed files that we executed 

for this rulemaking were included in the docket at EPA-HQ-OAR-2013-0602-0219 through -

0221. All other modeling runs that EPA relied upon, but did not parse the results of, were 

available in the docket at the time of proposal. Further extensive information on the IPM 

modeling conducted for the proposal was available in a URL cited numerous times in the 

preamble and throughout the Regulatory Impact Analysis accompanying the proposed rule. 

Second, commenters also request the net heat rate data that they presume EPA used to 

determine building block 1. As explained in the GHG Abatement Measures TSD accompanying 

the proposed rule, the EPA used gross data in proposed heat rate assessment, as we do now in 

our final heat rate assessment. The reasonableness of this decision is explained in section V.C of 

the final rule preamble of the CPP and Chapter 2 of the GHG Mitigation Measures TSD 

supporting the final CPP. Insofar as section 307(d)(3) is concerned, however, this concern is 

moot. 

Third, and finally, commenters requested information pertaining to 16 EGUs referenced 

in the GHG Abatement Measures TSD accompanying the proposed rule. The net heat rate data 

on which EPA purportedly relied never existed to begin with, for the reasons stated more 
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generally above. All of the gross data on which the proposal relied was included in the docket, 

and was used by many commenters to critique the EPA’s heat rate assessment, as discussed in 

section 3.1.1 through 3.1.5 of this document, in section V.C of the final rule preamble, and in 

Chapter 2 of the GHG Mitigation Measures TSD supporting the final CPP. Additionally, with 

respect to with respect to the 16 units referenced by commenters, the EPA decided not to include 

a separate identification of the average quantity of heat rate improvement achievable solely 

through equipment upgrades, for the reasons stated in section V.C of the final rule preamble of 

the CPP and Chapter 2 of the GHG Mitigation Measures TSD supporting the final CPP. 

Accordingly, it is unlikely that commenters could show a substantial likelihood that the rule 

would have been changed but for a hypothetical procedural error related to these 16 units. See 42 

U.S.C. § 7607(d)(8). 

EPA also disagrees that the NODA or November Supplemental Proposal deprived 

commenters of sufficient time to meaningfully comment on the proposal. As noted in section I.L 

of the preamble of the final rule, EPA initially made the proposal available to the public online 

on June 2, 2014, at http://www.epa.gov/cleanpowerplan/. Over two weeks later, the proposal was 

published in the Federal Register, and a 120-day comment period began. EPA subsequently 

extended the comment period by an additional 45 days, to December 1, 2014. Commenters thus 

had over 30 days to comment on the NODA. For the supplemental, EPA offered a separate 45-

day comment period that continued until December 19, 2014. The D.C. Circuit has previously 

rejected 307(d)(3)-based claims of inadequate time for comment, noting in one case that after 

publishing a supplemental proposal, “The EPA even extended the time to accept public input 

until 30 days after close of the public comment period to provide manufacturers like [plaintiff] 

with more opportunity to comment.” Husqvarna Ab v. EPA, 245 F.3d 195, 203 (D.C. Cir. 2001). 

Here too, the commenters had more than enough time to meaningfully comment on these 

documents, as many of them did. 

Moreover, setting aside all of the above, commenters fail to explain how this allegedly 

missing information—most of which never existed at all, or was not relied upon by the 

proposal—hindered their ability to meaningfully comment. To the contrary, the extensive 

comments provided by these same commenters and many others, including on the very same 

topics, belie their unsupported assertions of prejudice. See Union Oil Co. v. EPA, 821 F.2d 678, 

683–84 (D.C. Cir. 1987) (citing 42 U.S.C. § 7607(d)(8)) (holding that petitioners had failed that 

but for an alleged procedural error, there was a “substantial likelihood” that the final rule would 

have been significantly changed). 

Comment 2: Several commenters assert that the 111(d) proposal fails to meet 307(d) and should 

be withdrawn. 

Commenters expressed concerns about the failure of the EPA to include required and critical 

information in the regulatory dockets of two recent proposed rules: the Carbon Pollution 

Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (Existing 

Source Rule), and the Carbon Pollution Standards for Modified and Reconstructed Stationary 
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Sources: Electric Utility Generating Units (Modified Sources Rule) (together, Proposed Rules). 

Commenters said, by failing to include in the dockets key materials on which the Agency relies 

as support for the Proposed Rules, the EPA has violated Section 307(d) of the Clean Air Act 

(CAA) (codified at 42 U.S.C. Section 7607(d)). Commenters said, both the Existing Source Rule 

and the Modified Sources Rule must thus be withdrawn. 

Commenters stated, in the Existing Source Rule, the EPA omitted from the docket 84% of the 

modeling runs on which it relied in crafting the proposed Rule, without which the States and the 

public cannot comment meaningfully on the proposal. Commenters said, specifically, the docket 

does not include 21 out of 25 of the Integrated Planning Model modeling runs that the agency 

used to justify the standards imposed by the Rule. Commenters said, the missing modeling runs 

cover projections for 2016, 2018, 2020, 2025 and 2030. Commenters said, this information is 

critical to assessing the EPA's claims that States and industry will be able to comply with the 

four "building blocks" in the proposed Existing Source Rule. Commenters said, the States need 

the modeling run data for sufficient analysis of what that data shows on a unit by unit and state 

by state basis. 

Commenters stated, similarly, the EPA failed to include in the Existing Source Rule's docket 

vital net heat rate and emissions data, which are central to the EPA's assertion that existing 

power plants are able to achieve a four to six percent heat rate improvement under EPA's first 

"building block." Commenters said, without the "year-to-year" data showing that facilities can 

comply with the four to six percent heat rate improvement, the States and the public cannot 

meaningfully comment on the achievability of the EPA's heat rate projections. Some commenters 

added, in particular, EPA failed to include any supporting data regarding the 16 units that it 

identified in the preamble as having achieved gross heat rate improvements of 3% to 8% per 

year. Commenters said, failure to include the data is of particular interest because one of those 16 

units was Commenter's Brame Energy Center Unit 2. Commenters dispute EPA's conclusions 

regarding that unit. 

Commenters stated, all told, the missing information unquestionably constitutes "data, 

information and documents," and likely contains "policy considerations underlying the proposed 

rule" that should have been in the rulemaking dockets from the beginning, according to Section 

307(d). Commenters said, deprived of this missing information, the notices of proposed 

rulemaking published on June 18 "fail[ed] to provide an accurate picture of the reasoning that 

has led [EPA] to the proposed rule." Conn. Light. 673 F.2d at 530. Commenters said, this is 

particularly problematic where, as here, the proposals seek to overhaul the existing electric 

generating sector on an unprecedented scale. See Maryland v. E.P.A., 530 F.2d 215, 222 (4th 

Cir. 1975) (vacating rule due to EPA's failure to comply with notice and comment requirements, 

emphasizing the "drastic impact" that compliance with rule would have), vacated on other 

grounds, 431 U.S. 99 (1977). 

Commenters stated, in light of these clear violations of Section 307, the EPA should withdraw 

the Existing Source Rule and the Modified Sources Rule immediately. Commenters said, with 
176 

 

regard to the proposed Existing Source Rule, that Rule is wholly unlawful on other grounds and 

therefore may not be re-proposed at all, even if the EPA were to compile the data and documents 

required by Section 307. See Letter from Patrick Morrisey. Attorney General of West Virginia. 

to Gina McCarthy, Administrator. EPA (June 6, 2014); State of West Virginia, et al v. EPA, No. 

14-1146 (D.C. Cir.); In re Murray Energy corporation, No. 14-1112 (D.C. Cir.). 

Response 2: The EPA’s response to this comment is addressed in the response to Comment 1 in 

this section 1.13. 

Comment 3: Commenters stated, as an initial matter, Commenters must call attention to EPA's 

last-minute release of information and data concerning key aspects of the Existing Source 

Proposal. Commenters said, EPA's 60-page Notice of Data Availability ("NODA"), which 

addresses several controversial aspects of the proposal, including the proposed interim goals and 

the building block methodology, was not made available to the public until just over one month 

prior to the comment deadline. See 79 Fed. Reg. 64543 (October 30, 2014). Commenters said, 

worse yet, just days before the comment deadline, EPA released a 16-page technical support 

document concerning methodologies for converting a state's rate-based CO2 emission standards 

to mass-based standards. EPA, Technical Support Document: Translation of the Clean Power 

Plan Emission Rate-Based CO2 Goals to Mass-Based Equivalents (Nov. 2014), available at 

http:/ /www2.epa.gov/sites/productionlfiles/20 14-11/documents/20 1411 06tsd-rate-to-mass.pdf 

(last visited Nov. 13, 2014). Commenters said, EPA's late docketing virtually ensures that 

stakeholders will be unable to fully review, analyze, and comment on this information. 

Commenters stated, even if the Existing Source Proposal could withstand the substantive 

challenges discussed above, it must nevertheless be withdrawn on procedural grounds because 

EPA omitted from the rulemaking docket key materials upon which the agency relies as support 

for the proposal, in violation of Section 307(d) of the CAA. 

Commenters stated, section 307(d) of the CAA imposes certain mandatory requirements for all 

proposed rules, which reflect Congress's judgment that information on which a proposed rule is 

based must be made available to the public at the time of publication to ensure meaningful 

comment and sound rulemaking. Commenters said, more specifically, Section 307(d) states that 

"[a]ll data, information, and documents ... on which the proposed rule relies shall be included in 

the docket on the date of publication of the proposed rule." Commenters said, "all data, 

information, and documents" includes a "statement of basis and purpose ... [which] shall include 

a summary of ... the factual data on which the proposed rule is based[,] ... the methodology used 

in obtaining the data and in analyzing the data[,] and ... the major legal interpretations and policy 

considerations underlying the proposed rule." Commenters said, this docketing requirement is 

nondiscretionary. 

Commenters stated, EPA violated Section 307(d) by omitting from the docket 84 percent of the 

modeling runs on which it relied in crafting the Existing Source Proposal, without which the 
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public cannot comment meaningfully on the proposal. Commenters said, specifically, the docket 

does not include 21 out of 25 of the Integrated Planning Model modeling runs that the agency 

used to justify the standards imposed by the Existing Source Proposal. Commenters said, the 

missing modeling runs cover projections for 2016, 2018, 2020, 2025, and 2030. Commenters 

said, this information is critical to assessing EPA's claims that states and industry will be able to 

comply with the four "building blocks" in the Existing Source Proposal. Commenters said, the 

public needs the modeling run data for sufficient analysis of what that data show on a unit by 

unit and state by state basis. 

Commenters stated, in addition, EPA failed to include in the docket vital net heat rate and 

emissions data, which are central to EPA's assertion that existing power plants are able to 

achieve a 6 percent heat rate improvement under EPA's first "building block." Commenters said, 

for example, EPA claims in the Existing Source Proposal to have reviewed its database of 

existing coal-fired units and found 16 facilities that have achieved heat rate improvements of 3 to 

8 percent "year-to-year," but it does not include any supporting data. Commenters said, without 

the "year-to-year" data showing that facilities can comply with the requisite 6 percent heat rate 

improvement, the public cannot meaningfully comment on the achievability of EPA's heat rate 

projections. Commenters said, in other words, the public cannot meaningfully comment on the 

Existing Source Proposal because EPA has "fail[ed] to provide an accurate picture of the 

reasoning that has led the agency to the proposed rule." 

Commenters stated, issuing a rule without providing parties with the technical information 

necessary for meaningful comment renders the final rule unlawful. Commenters said, nor can the 

problem be cured by late docketing of the required data, as such late docketing does not permit 

the public with sufficient time for meaningful review and comment. Commenters said, given 

EPA's clear violation of Section 307(d), the agency must withdraw the Existing Source Proposal. 

Response 3: The EPA’s response to this comment is addressed in the response to Comment 1 in 

this section 1.13. 

Comment 4: Commenters stated that EPA has not followed proper rulemaking procedures. 

Commenters stated, EPA's rulemaking schedule is insufficient and contravenes the CAA's public 

comment requirements. Commenters said, therefore, EPA must withdraw its current proposal, 

and if it intends to proceed with this effort, issue a new and complete proposal. 

Commenters stated, first, EPA has failed to provide significant supporting materials in the public 

docket. Commenters said, CAA section 307(d)(3) requires EPA to include in its rulemaking 

docket on the date of publication of a proposed rule "[a]ll data, information, and documents . . . 

on which the proposed rule relies." Commenters said, EPA's docket as of the date of the 

publication of the proposed rule in the Federal Register on June 18, 2014, and to this day, fails to 

include significant documents EPA acknowledges it has relied upon. Commenters said, for 

example, EPA conducted 25 primary modeling runs using the IPM, yet only four of those 25 
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runs were placed in the docket for public review. Commenters said, in preparing its proposed 

rule, EPA evaluated numerous compliance options and compliance years; however, it only made 

available in the docket the parsed files from IPM runs that evaluate the 2025 base case, 2025 

State Option 1, 2025 Regional Option 2 and the 2020 Regional Option 1. Commenters said, EPA 

provided none of its modeling runs evaluating the states' ability to comply in 2030 and only one 

of five scenarios modeled for the initial 2020-compliance year. Commenters said, the one 

scenario provided for 2020 is a regional scenario, not a state-specific scenario. Commenters said, 

EPA's other building blocks were also developed based in part on IPM runs. Commenters said, 

the public thus needs EPA's additional parsed files to complete a meaningful analysis of EPA's 

proposal. 

Commenters stated, also missing from the docket are data EPA relied on to support the heat rate 

improvement assumptions underlying EPA's first building block. Commenters said, according to 

EPA, 16 facilities have achieved heat rate improvements of three to eight percent on a year-toyear basis, allegedly supporting its assertion that a four to six percent heat rate improvement is 

reasonable and achievable across all coal-fired units in every state. Commenters said, however, 

despite requests for this information from states and affected entities, EPA has not made that 

year-to-year heat rate improvement data available in the public docket. 

Commenters stated, in September 2014, EPA posted additional materials to its rulemaking 

docket, but did not include the information referenced above. Commenters said, regardless, EPA 

is still violating procedural requirements because these materials were not included in the 

rulemaking docket on the date of publication. Commenters said, despite notice of the 

deficiencies, the passage of significant time, and EPA's publication of other materials to the 

docket in the middle of the public comment period, EPA has not remedied the deficiencies in the 

docket. Commenters said, EPA must correct these deficiencies and allow additional time for 

public review and comment based on the complete record that it has relied upon in developing its 

proposal. 

Commenters said that many primary documents necessary for analysis of the costs and feasibility 

of the program in the various states were not placed in the docket, as required, by the date the 

proposed rule was published in the Federal Register. 

Response 4: The EPA’s response to this comment is addressed in the response to Comment 1 in 

this section 1.13. The agency has been committed to transparency and public engagement 

throughout the rulemaking process. The proposed rule and subsequent notices satisfy the 

procedural requirements of the CAA and/or the APA by providing meaningful notice and gave 

giving commenters an adequate basis on which to comment. In addition to providing notice and 

soliciting comment in the Federal Register, EPA conducted an extensive outreach effort 

including numerous meetings with stakeholder groups. Many of commenters’ suggestions have 

been reflected throughout the final rule. 
179 

 

Comment 5: Commenters stated, EPA solicits comment on a third "regionalized" approach to 

RE in Building Block 3. Commenters said, the Agency's new approach was not included in the 

June 14 Proposed Guidelines and is not actually proposed in the NODA. Commenters said, under 

a "regionalized" approach, EPA would "adjust[] each state's RE target based on the RE potential 

available across a multi-state region in which the state is located" rather than attempting to 

determine what level of renewable energy could be generated within the state itself. 79 Fed. Reg. 

at 64,551. Commenters said, this approach would "group states into regions; aggregate RE 

generation potential across states within each region; and then reapportion the aggregate 

identified RE generation to individual states according to criteria that assume regional RE 

development in which parties in multiple states participate, regardless of the specific state where 

the generation occurs." Id. Commenters said, EPA believes this approach would "better align RE 

targets with the proposal to allow the use of certain out-of-state renewables for compliance." Id. 

Commenters stated, similarly, EPA solicits comment on using a regional approach to redispatch 

under Building Block 2 that would include requiring redispatch across state lines. Commenters 

said, again, EPA does not actually propose this approach and merely seeks comment on an 

approach whereby "regional availability of NGCC generation would be considered rather than 

just in-state availability of NGCC generation in setting building block 2 targets." Id. at 64,550. 

Commenters said, under this approach, the levels of required generation shift under Building 

Block 2 could be determined in at least three different ways - using six regions whose borders 

are informed by NERC regions, RTOs, or some alternative regional structure. Id. at 64,551. 

Commenters said, the Agency explains that using regional approaches could "mitigate the 

concerns expressed" by certain unnamed stakeholders "that building block 2 has little or no 

effect on certain states with large amounts of coal-fired generation and limited excess NGCC 

capacity." Id. Commenters said, as noted, EPA has neither proposed any of the regional 

approaches on which it requests comment nor has it provided sufficient information such as 

technical analyses that commenters need to allow them to comment in a meaningful way. 

Commenters said, the Agency provides no direction on how states might be grouped into 

regions, instead listing four significantly different options and also soliciting comment on "some 

other approach." Id. 

Response 5: As noted by the commenter, the agency provided specific information in the NODA 

regarding how it was considering recalculating certain aspects of the building blocks, including 

the regionalization approach. EPA put the information out for comment and received numerous 

comments, including this one. The remainder of this comment is addressed by EPA’s response to 

comment 1 in Section 1.13.

Comment 6: Several commenters asserted that the docket is incomplete due to missing 

modeling results. 

Commenters stated, EPAs proposed rule relies heavily upon computer modeling, but many of the 

key assumptions used throughout the modeling process have not been made available for public 
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comment. Commenters said, EPA's refusal to disclose its modeling assumptions and the full suite 

of model outputs renders regulations based on those models arbitrary and capricious. 

Commenters said, EPA failed to include key assumptions it used when modeling the effects of 

111(d) in the record. Commenters said, the agency continues to refuse outside requests for the 

relevant information. Commenters said, without access to the assumptions used to formulate the 

rule and the full portfolio of model outputs, stakeholders cannot confirm or deny the veracity of 

the Agency's claims about the feasibility of compliance. 

Commenters stated, some, but not all, critical documents were added after the proposed rule was 

published in the Federal Register. Commenters said, for instance, EPA released two new years of 

data on electricity consumption on October 28th. Commenters said, this new data forced 

stakeholders to re-do their computations just one month before the end of the comment period. 

Commenters said, furthermore, EPA has done computer modeling to support its proposed rule 

but has not made the key details of these modeling runs available for public comment. 

Commenters said, critical modeling runs that bear upon the economic, consumer, and energy 

impacts on Indiana remain unavailable. 

Commenters stated, EPA failed to provide data on all IPM model runs. 

Commenters stated, EPA must provide the basis and purpose for the Proposed Guidelines under 

section 307(d)(3) of the CAA. Commenters said, the basis and purpose must include "a summary 

of . . . the factual data on which the proposed rule is based; . . . the methodology used in 

obtaining the data and in analyzing the data; and . . . the major legal interpretations and policy 

considerations underlying the proposed rule." CAA section 307(d)(3). Commenters said, EPA's 

failure to include the data for 21 of its modeling runs has affected Commenters’ ability to 

comment meaningfully on the Proposed Guidelines. Commenters said, in response to a request 

from Commenters under the Freedom of Information Act, EPA responded that it had not parsed 

the 21 modeling runs, which is why those data are not included in the docket. Letter from Karen 

Orehowsky, Deputy Dir., Clean Air Markets Div., EPA to Craig S. Harrison, Hunton & Williams 

LLP (Aug. 12, 2014) (included in UARG's separately filed Supplemental Materials for the 

Rulemaking Record). Commenters said, without such parsed data, however, EPA cannot have 

conducted a reasonable inquiry into the achievability of Building Block 3. Commenters said, this 

is an egregious failure to comply with section 307(d)(3), and will render any final rule unlawful. 

Commenters said, EPA is "play[ing] hunt the peanut with technical information, hiding or 

disguising the information that it employs," and is "treat[ing] what should be a genuine 

interchange as mere bureaucratic sport." Conn. Light & Power Co. v. Nuclear Regulatory 

Comm'n, 673 F.2d 525, 530 (D.C. Cir. 1982). 

Commenters stated, EPA cannot establish that increases of this magnitude are achievable - 

particularly because it has failed to provide any parsed analysis of its IPM runs for 2030 that 

would allow states to assess the impact of these required increases. Commenters said, indeed, 
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EPA has provided data for only four of the 25 IPM runs that it performed as support for the 

Proposed Rule. Commenters said, the Agency must provide the basis and purpose for the 

Proposed Rule under section 307(d)(3) of the CAA. Commenters said, the basis and purpose 

must include "a summary of . . . the factual data on which the proposed rule is based; the 

methodology used in obtaining the data and in analyzing the data; and the major legal 

interpretations and policy considerations underlying the proposed rule." Commenters said, EPA's 

failure to include the data for 21 of its modeling runs has affected Commenters’ ability to 

comment meaningfully on the Proposed Rule. 

Commenters stated, the Agency's own analysis demonstrates that it has failed to accurately 

consider factors such as cost and feasibility. Commenters said, the IPM results suggest that rapid 

growth in renewable energy generation is so costly that states are able to achieve only negligible 

incremental increases in renewable energy generation above the status quo (at best), and they 

must instead rely more heavily on other components of EPA's selected BSER in order to comply 

with the Proposed Rule. Commenters said, this, in turn, will increase the cost of those other 

building blocks in ways that EPA has failed to analyze in the Proposed Rule. Commenters said, 

therefore, EPA must recalculate its renewable energy generation targets to consider factors such 

as cost and feasibility for each state. Commenters said, a failure to do so would necessitate the 

Proposed Rule's withdrawal and re-proposal. 

Commenters stated, since the release of the proposal in June 2014, EPA has continuously added 

to the rulemaking docket, making it difficult for stakeholders adequately to evaluate the proposal 

during the comment period. Commenters said, at present, it contains more than 1,500 documents, 

with significant new information, concepts, and requests for comment added as recently as 

October 28, 2014 and November 6, 2014 (i.e., Notice of Data Availability ("NODA") and 

Notice). Commenters said, the docket still does not contain all of the parsed (unit-level) 

modeling files depicting critical unit level assumptions and impacts from EPA's analyses. 

Commenters said, the proposal, as it stands, violates basic statutory requirements for rulemaking 

set forth in section 307(d) of the Act. 

Commenters stated, EPA completed twenty-five IPM runs (or scenarios) to support its proposal. 

Commenters said, each of the 25 model runs produces results for seven model years - 2016, 

2018, 2020, 2025, 2030, 2040, and 2050 - for a total of 175 model years. Commenters said, EPA, 

however, has not provided all of the "parsed files" that depict critical unit-level assumptions and 

impacts. Commenters said, only four of the 175 "parsed files" have been uploaded to the docket: 

2025 Base Case, 2025 State Option 1, 2020 Regional Option 1, 2025 Regional Option 2. 

Commenters said, EPA's compliance modeling is therefore completely inadequate as 

Commenters cannot properly evaluate the Agency's justification for its BSER determination and 

the proposed guidelines' impacts without proper analysis of all "parsed files." 

Commenters stated, some critical documents were not released when the proposed rule was 

published in the Federal Register, nor have they been added to the docket. Commenters said, 

perhaps one of the most critical elements missing is the Agency's failure to make key details of 
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the computer modeling they performed to support its proposed rule available for public 

comment. Commenters said, critical modeling runs that bear upon the economic, consumer, and 

energy impacts on both Indiana and Ohio remain unavailable. Commenters said, as a result, 

commenters believe that preparing informed comments on this important issue is not possible. 

Commenters 24110 stated, EPA's analysis of the effects the proposed rule consists primarily of 

IPM model runs. Commenters said, these runs form the basis for EPA's RIA, and they are a key 

component of EPA's conclusion that EPA's "best system" and the standards it is imposing as a 

result of that system are achievable. Commenters said, yet despite the centrality of these model 

runs to EPA's analysis, and despite the fact that the Agency conducted 25 different model runs, 

EPA (a) failed to include the complete model run information for any years it modeled, (b) 

included in the record the parsed files for only 4 out of the 25 model runs, and (c) did not include 

any information for model runs simulating 2030, the key compliance date for the rule. 

Commenters said, EPA's failure to include this information in the docket for the Proposed Rule 

does not comply with CAA section 317 nor with EPA's obligation under CAA section 307(d)(5) 

to create an adequate record and provide the public with an opportunity for notice and comment. 

Response 6: The EPA’s response to this comment is addressed in the response to Comment 1 in 

this section 1.13. 

Comment 7: Commenters asserted that the NODA fails to satisfy obligations under section 

307(d). 

Commenters are discouraged that U.S. EPA has provided an additional proposal on such an 

important element of Clean Power Plan with less than 2-1/2 weeks left in the comment period to 

prepare additional comments. Commenters said, in combination with the June 18, 2014 proposal 

and the October 30, 2014 NODA, there is just not enough time to thoroughly explore all of the 

ramifications of these proposals and engage in discussions with U.S. EPA to obtain additional 

clarification regarding the mass-based approach in this NODA. Commenters said, regardless, 

they conducted as complete a review of this new information as possible in this narrow 

timeframe. 

Commenters, among other interested parties, requested clarification on the rate-to-mass 

conversion process in response to the vague and inadequately developed guidance provided by 

U.S. EPA in the "Projecting EGU CO2 Emission Performance in State Plans" TSD which was 

released with the June 18, 2014 proposal. Commenters said, the aforementioned TSD described a 

methodology in which states would develop various reference and future projection scenarios, 

accounting for load growth, transmission expansion, fuel supply and delivery, among other 

variables. Commenters said, many questions were left unanswered, such as how states could 

account for and credit pending unit retirements, what would be considered an adequate loadgrowth model, and what would the reporting requirements be under a mass-based goal. 

Commenters said, EPA, in the name of flexibility, unencumbered itself of the responsibility of 

providing firm guidance that would enable states to adequately assess the pros and cons of a 
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mass-based compliance path, and instead placed the burden of developing a mass-based 

conversion on the states. 

Commenters stated, EPA is now soliciting comment on two additional approaches for 

determining a mass-based equivalent metric. Commenters said, first, EPA is proposing an 

approach based on historical data that produces a mass-based equivalent that applies to existing 

affected EGUs only. Commenters said, this option simply assumes that the proposed rule will 

reduce generation demand via elements of the proposed best system of emission reduction 

(BSER), and that a mass-based goal can be obtained simply by the multiplication of the ratebased goal by this new, reduced generation value. Commenters said, second, U.S. EPA is 

proposing an approach based on a combination of historical data and a projection of future 

electric demand that produces a mass-based equivalent that is inclusive of new fossil fuel-fired 

sources. Commenters said, this second approach takes into consideration EPA's proposal of an 

option for state plans to include an approach where new fossil fuel-fired sources are incorporated 

as a component. Commenters said, however, even this method falls far short of the sophistication 

and level of detail put forth in the original proposal. 

Commenters stated, neither option presented in the recently released TSD sufficiently addressed 

stakeholder questions. Commenters said, indeed, the recent rate-to-mass TSD bears little 

resemblance to, nor sheds any new light on, the proposed scenario-based approach in the June 

18, 2014 TSD. Commenters said, there is no guidance on the development of the various 

projection and reference scenarios, a complete lack of accounting for pending shutdowns 

(including a fair methodology to credit them), and no recommendations as to the appropriate 

tools to develop long-term projections of generation. Commenters believe that, given the farreaching impacts of the proposed rule, the burden falls on EPA to fully develop a rate-to-mass 

conversion methodology along with supporting information that demonstrates the feasibility and 

legality of such an approach. Commenters said, further, EPA must demonstrate that grid 

reliability will be maintained whether a state chooses a rate-based or mass-based compliance 

plan, which EPA has failed to do. 

Commenters stated, the NODA provides very little additional "data" beyond U.S. EPAmanipulated eGRID data; this data could be compiled from existing EIA datasets and is of very 

little utility to entities as they prepare comments. Commenters said, rather, this proposal presents 

a series of concepts or alternatives based presumably on stakeholder feedback without any 

supporting data and analysis, without any new goal computations, and without analysis of costs 

and feasibility associated with these alternatives. Commenters said, U.S. EPA acknowledges 

these potential changes "could increase or decrease the stringency of the goals or shift stringency 

levels between and among states" yet U.S. EPA has provided no additional goal computation or 

data for states to use in providing meaningful comments. Commenters said, additionally, no 

additional IPM results were provided to assess, on a unit-by-unit basis, the implications of these 

alternatives and potential changes. 
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Commenters asserted that U.S. EPA released critical guidance far too late in the comment period 

and also omitted vital information from the docket that would allow stakeholders to fully 

understand the proposal at hand. Commenters provided a list of the major elements. One 

Commenter's Appendix EE included a formal request to U.S. EPA for additional necessary 

information. 

• IPM Parsed Files: Option 1 State, 2030 

• IPM Parsed Files: Option 1 Regional, 2025 

• IPM Parsed Files: Option 1 Regional, 2030 

• IPM Parsed Files: Option 2 State, 2025 

• U.S. EPA heat rate improvement analysis data 

• Sufficient detail on enforceability and EM&V approvability 

• NODA lacked data, reformulated state goals, cost analysis, technical analysis and other 

administrative elements 

Response 7: With respect to EM&V approvability, as further discussed in Section VIII of the 

preamble, the requirements for EM&V under state plans the EPA is finalizing were proposed for 

comment in its June 18, 2014 proposal. EPA discusses the importance of EM&V in Section VIII 

of the preamble and establishes a structural requirement in the guidelines. In the proposed federal 

plan, the agency provides a more robust discussion of particular EM&V requirements which will 

be available for public comment, in addition to further guidance the agency intends to issue on 

EM&V. With respect to the NODA, the EPA included in the NODA the information upon 

which it relied. The remainder of this comment, including commenters’ concern regarding the 

time available to comment on the NODA, is addressed in EPA’s response to Comment 1 in 

section 1.13. 

Comment 8: Several commenters stated that the NODA is an improper alteration of the original 

proposal, in violation of section 307 of the CAA. 

Commenters stated it appears that most of the new approaches represent an attempt to increase 

the stringency of the final rule without providing any basis to indicate that this increased 

stringency can be achieved, let alone achieved at a reasonable cost. Commenters said, to the 

extent that this is the case, they assert that EPA is precluded from including these approaches in 

the final rule. See 42 U.S.C. Sections 741 l(d), 7607(d); Essex Chemical Corporation v. 

Ruckelshaus, 486 F.2d 427, 433 (D.C. Cir. 1973). 

Commenters stated, in the NODA, EPA asserts that it intends to ensure that other stakeholders 

have the opportunity to consider these ideas as they formulate their comments on the proposal. 

Commenters said, this assertion is unpersuasive. Commenters said, the true purpose of the 

NODA appears to be an effort by EPA to circumvent proper notice and comment procedures by 

de facto alteration of the original proposal, in violation of section 307 of the CAA. 
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Commenters stated, the fact that EPA felt compelled to issue the NODA, requesting comment on 

issues that go beyond the more than 130 requests for comment it made in the June proposal, 

again underscores the fact that its proposal is not sufficiently expressed. Commenters said, this 

scoping exercise should have been an Advance Notice of Proposed Rulemaking, rather than a 

Notice of Proposed Rulemaking. Commenters said, even at the late date on which the NODA 

was issued, with just 31 days remaining in the comment period, EPA still failed to address the 

critical issue of the rate-to-mass conversion methodology. Commenters said, a well-defined and 

consistent methodology is crucial for states to formulate meaningful comments and evaluate 

compliance options. Commenters said, the poor trickle of critical information from EPA has left 

states, affected sources, and the public inadequate time for review and development of 

comments. 

Commenters stated, EPA has offered two approaches for revising the state goal-setting formula: 

(1) replace all historical fossil generation, or (2) prioritize replacement of historical fossil steam

generation. Commenters said, both of these approaches represent a fundamental departure from 

EPA's original proposal, which Commenters strongly oppose as a violation of section 307 of the 

CAA. Commenters said, EPA here finally drops its original pretense that coal generation is not 

targeted for replacement. Commenters said, the agency now expressly solicits comment on a 

method that effectively mandates the shutdown of an entire major coal-fired power plant in West 

Virginia by 2030. Commenters said, this is unacceptable and flies in the face of claimed 

flexibility. 

Commenters stated, the release of the Rate-to-Mass Conversion TSD as a technical support 

document, not as a formal part of the proposed rule, does not address EPA's failure to propose a 

transparent, replicable methodology to allow the translation of the proposed rate-based goals to 

mass-based goals, as discussed previously in these comments. 

Response 8: EPA disagrees with this comment. In the June 18 proposal, EPA took comment on 

a number of ways that States could convert rate based targets to mass based targets. Following 

the proposal, EPA received significant input from a wide variety of commenters that more detail 

on a methodology for calculating mass based equivalent targets based on historical data. Many 

stakeholders also developed methodologies. Based on this large response, EPA supplemented the 

record on this limited portion of the rule. In particular, EPA proposed a methodology (similar to 

methodologies a range of commenters had developed independently) to convert the rate based 

targets to mass based targets. EPA believes the amount of time that commenters had to provide 

additional comment on this limited comment was sufficient because: 1) the fact that a range of 

commenters independently developed similar approaches to the approach that EPA requested 

additional comment on demonstrates how much EPA's methodology built off of the original 

proposal and the fact that even absent the supplemental proposal, many stakeholders were 

already actively considering this issue as part of their comments. 2) the fact that the 

methodology that EPA was requesting comment on, was merely a calculation methodology and 

did not change any of the underlying control assumptions. Finally, insofar as commenters claim 

that the existence of the NODA means that EPA failed an obligation under CAA section 

370(d)(3), they are incorrect. As explained in response to Comment 1 in section 1.13, the EPA 
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included in the docket at the time of proposal all of the information upon which the proposal 

relied.

Comment 9: Commenters requested on behalf of the Commonwealth of Kentucky and in 

support of requests made by the key stakeholders and fellow state Attorneys General that 

the EPA make available all data, information, and documents upon which it relied when drafting 

the proposed rule "Carbon Pollution Emission Guidelines for Existing Stationary Sources: 

Electric Utility Generating Unites." 79 Fed. Reg. 34,830 (June 18, 2014) (hereinafter "111(d) 

Rule"). Commenters said, all data, information, and documents that the EPA analyzed and upon 

which the EPA relied when drafting the 111(d) Rule must be made publicly available in order to 

ensure opportunity for meaningful analysis and comprehensive public 

comment. Commenters requested that the EPA immediately promulgate and publish a Notice of 

Data Availability ("NODA") that contains the technical documents and data requested. 

Commenters said, further, along with the NODA, they request that the EPA extend the comment 

period regarding the 111(d) Rule to allow a reasonable period for potentially affected entities to 

analyze the data and to permit meaningful public comment. 

Comment 9: NO RESONSE HAS BEEN ADDED 

Comment 10: Commenters stated, first, EPA's timeline fails to comply with the rulemaking 

requirements of CAA section 307(d) concerning receipt and consideration of public comments. 

Commenters said, EPA has not provided significant supporting materials in the public docket. 

Commenters said, section 307(d)(3) requires EPA to include in its rulemaking docket on the date 

of publication of a proposed rule "[a]ll data, information, and documents . . . on which the 

proposed rule relies." Commenters said, EPA's docket on the date of the publication of the 

proposed rule in the Federal Register, June 18, 2014, failed to include significant documents the 

Agency acknowledges it relied upon. Commenters said, this deficiency persists to this day. 

Commenters said, for example, EPA conducted 25 primary modeling runs using the IPM, yet 

only four of those 25 runs were placed in the docket for public review. Commenters said, in 

preparing its proposed rule, EPA evaluated numerous compliance options and compliance years; 

however, the Agency only made available in the docket the parsed files from IPM runs that 

evaluate the 2025 base case, 2025 State Option 1, 2025 Regional Option 2 and the 2020 Regional 

Option 1. Commenters said, EPA provided none of its modeling runs evaluating the states' 

ability to comply in 2030 and only one of five scenarios modeled for the initial 2020 compliance 

year. Commenters said, moreover, the one scenario provided for 2020 is a regional scenario, not 

a state-specific scenario. Commenters said, also, according to EPA, its "assessments . . . 

regarding the ability of the electricity and natural gas industries to achieve the levels of 

performance indicated for [B]uilding [B]lock 2 in the state goal computations are supported by 

analysis that has been conducted using the Integrated Planning Model." Commenters said, other 

Building Blocks evaluated by EPA were also developed based in part on IPM runs. Commenters 

said, EPA's missing, additional parsed files from the IPM results are needed to complete a 
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meaningful analysis of, and to comment on, the guidelines, their underpinnings, and whether and 

how states and sources are projected to comply with the proposed guidelines. 

Commenters stated, also missing from the docket are data EPA relied on to support the heat rate 

improvement assumptions underlying EPA's first Building Block. Commenters said, according 

to EPA, 16 facilities have achieved heat rate improvements of three to eight percent on a year-toyear basis, allegedly supporting its assertion that a six percent heat rate improvement is 

reasonable and achievable across all coal-fired units in every state. Commenters said, however, 

despite requests for this information from the states and affected entities, EPA has not made that 

year-to-year heat rate improvement data available in the public docket. Commenters said, one of 

the 16 facilities is Plant Gorgas in Alabama, which is owned and operated by Alabama Power, a 

subsidiary of Southern Company. Commenters are obviously uniquely positioned to comment on 

the missing data from that plant, in particular, but EPA must make available the missing data 

from all 16 plants to ensure that EPA has properly interpreted it and understands any applicable 

limitations on it. Commenters said, without those data, commenters could not fully evaluate and 

comment on the basis for EPA's conclusions that a six percent improvement in heat rate is 

reasonable and achievable. 

Commenters stated, in September 2014, EPA posted additional materials to its rulemaking 

docket. Commenters said, these materials, however, do not include the missing parsed files, heat 

rate, and other data EPA relied on. Commenters said, even if it did, EPA would still be in error 

because these materials were not included in the rulemaking docket on the date of publication as 

required by the CAA. Commenters said, these missing materials may well demonstrate that this 

proposed rule would be fundamentally different if those materials were properly considered by 

EPA, based upon meaningful and informed public comment. Commenters said, despite notice of 

the deficiencies, the passage of significant time, and EPA's publication of other materials to the 

docket in the middle of the public comment period, EPA has not remedied the deficiencies in the 

docket. Commenters said, this legal mandate to provide its supporting material is not a mere 

ministerial duty but is intended to allow affected persons and ultimately a reviewing court to 

determine if any agency rule was technically supported, reasonable, and legally authorized. 

Commenters said, the absence of this information has prejudiced not only Commenters in their 

ability to participate in this rulemaking proceeding in a meaningful manner, but also any court 

that may subsequently review this rulemaking. Commenters said, EPA must correct the 

deficiencies in the record and allow additional time for public review and comment based on the 

complete record that it has relied upon in developing this proposed rule. 

Commenters stated, third, EPA's rulemaking schedule does not provide the Agency sufficient 

time to consider and respond adequately to public comments. Commenters said, section 

307(d)(6)(B) of the CAA requires that when promulgating a final rule, EPA is to provide "a 

response to each of the significant comments, criticisms, and new data submitted in written or 

oral presentations during the comment period." Commenters said, EPA has proposed that it will 

adopt a final rule in this proceeding by June 1, 2015. Commenters said, this self-imposed 

deadline is arbitrary and capricious in light of the tremendous volume of comments being 
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developed on this proposed rule. Commenters said, as of November 26, 2014, over 1.2 million 

comments had been submitted to EPA on the proposal; and additional significant comments will 

be submitted by the deadline of December 1, 2014. Commenters said, given the volume of 

comments and new data that EPA must consider, it seems impossible for the Agency to 

understand the comments, incorporate necessary rule revisions, and prepare a meaningful 

response to the significant comments it received on these proposed rules within the six months it 

has announced before final promulgation of these rules. Commenters said, accordingly, EPA 

should withdraw its June 18, 2014 proposal, re-propose it along with all supporting materials, 

and provide adequate time for the public to comment and for EPA to respond thereto. 

Response 10: This rule was signed on August 3, 2015, and thus commenters’ specific concern 

about a June 1 deadline is moot. The EPA’s response to the remainder of this comment is 

addressed in the response to Comment 1 in this section 1.13. The Plant Gorgas is one of the 16 

EGUs discussed in that response. 

Comment 11: Commenters argued that EPA has not adequately explained the criteria that will 

be used to evaluate State Plans or measure compliance. 

Commenters stated that the CPP is implemented through three key elements: State Goals, State 

Plans, and Compliance. State Goals are tabulated in the published documents. Commenters noted 

that the EPA has released supporting documents detailing the formula used to calculate State 

Goals, which employs a CAA concept called Best System of Emission Reduction (BSER). 

However, the commenters asserted that the released documents do not clearly lay out the criteria 

and procedure that will be used to evaluate the suitability of State Plans or measure compliance. 

The commenters asserted that this is a critical omission that makes it impossible to analyze most 

key items in CPP or scenarios for State Plan development and implementation with certainty. 

The commenters noted that State governments are quite certain to have severe practical concerns 

about the ambiguities in the pathway to State Plan approval and ultimate compliance 

determinations (in addition to the political objections already raised in August and September) 

Response 11: In the final rule, building off the proposal’s requirements, the EPA has issued 

clear criteria for approvability of state plans, addressing this commenter’s concern. After 

reviewing comments concerning the four proposed approvability criteria, the EPA has 

determined that listing approvability criteria separate from the 12 required plan components is 

potentially confusing and redundant. The EPA has concluded that a satisfactory state plan that 

includes the required components will meet the proposed approvability criteria and is not 

finalizing the criteria separate from the required plan components. See sections VII.D.1 and D.2 

of the preamble to the final rule. 

Comment 12: Commenters stated that EPA should have provided additional guidance on 

enforceability of state plans for non-affected entities and guidance for evaluation, measurement, 

and verification (EM&V) plans prior to proposal so these materials would have been available 

for public comment. 
189 

 

Commenters noted that EPA is seeking comment on the appropriateness of existing U.S. EPA 

guidance on enforceability in the context of state plans under section 111(d), considering the 

types of affected entities that might be included in a state plan. According to the commenters, 

EPA acknowledges this guidance serves as the foundation for the types of emission limits that 

they have found can be enforced as a practical matter and set forth the general principle that a 

requirement that is enforceable as a practical matter is one that is quantifiable, verifiable, 

straightforward, and calculated over as short a term as reasonable. The commenters cited the 

following guidance referenced by EPA: 

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. 

Commenters have serious concerns with the use of these existing guidance documents for nonEGU entities. The commenters believe U.S. EPA should provide guidance on enforceability 

considerations related to requirements in a state plan for entities other than affected EGUs and 

should have provided this guidance as part of the rulemaking docket available for comment. The 

commenters noted that, especially with RE and EE, it is difficult for states to analyze the ability 

to meet the goals proposed without the context of how EPA will define enforceability. The 

commenters argued that states should have had the opportunity to review this proposal within 

that context. 

Commenters noted that EPA identified a need for approvable plans to have quantification, 

monitoring and verification provisions for EE/RE. The commenters referred to EPA's 

statement that state plans must include "an evaluation, measurement, and verification (EM&V) 

plan that explains how the effect of these measures will be determined in the course of plan 

implementation." The commenters noted that these EM&V plans must specify analytical 

methods, assumptions, and data sources that the state will employ and will be subject to EPA 

approval. According to the commenters, EPA obviously intends to hold states to a high standard 

for EM&V, yet provides no indication of what those standards will be. While EPA stated they 

intend to develop guidance for EM&V, the commenters argued that this guidance should have 

been developed and made available for comment during the proposal. The commenters 

contended that this approach inhibits the states' ability to provide meaningful comments on 

feasibility of EPA's goals, and could ultimately jeopardize the ability of states to prepare plans 

that meet EPA's requirements. 

Response 12: Commenters stated that EPA should provide guidance on enforceability 

considerations related to requirements in a state plan for entities other than affected EGUs and 
190 

 

should have provided this guidance as part of the rulemaking docket available for comment. In 

this action, the EPA is finalizing a “state measures approach” which, unlike the proposed 

portfolio approach, does not require federally enforceable measures against entities other than 

affected EGUs. In this approach, state enforceable measures against entities other than affected 

EGUs should be included in the state plan supporting documentation. Since the EPA will leave 

requirements for entities other than affected EGUs for the state to determine, the agency is not 

providing additional guidance on this topic. 

Concurrent with this final rule, the EPA is issuing EM&V guidance that explains how states can 

craft regulatory provisions that meet the EPA’s minimum requirements in the emission 

guidelines for quantification and verification of EE/RE measures. 

Comment 13: Commenters stated that EPA must take comment on any requirement that state 

plans include EM&V plans, which are subject to state discretion. 

Commenters noted, with respect to state plan approvability criteria, that EPA mentions 

quantification, monitoring, and verification of EE and RE measures. The commenters noted that 

the Plan TSD in particular discusses a requirement that states include in their plans a separate 

"evaluation, measurement, and verification plan (EM&V plan)." Plan TSD at 36. To the extent 

EPA includes such a requirement in the final rule and to the extent it prepares guidance on 

EM&V plans, the commenters stated that EPA must first provide adequate notice and 

opportunity to comment on such issues. 

Response 13: As further discussed in Section VIII of the preamble, the requirements for EM&V 

under state plans the EPA is finalizing were proposed for comment in its June 18, 2014 proposal. 

EPA discusses the importance of EM&V in Section VIII of the preamble and establishes a 

structural requirement in the guidelines. In the proposed federal plan, the agency provides a more 

robust discussion of particular EM&V requirements which will be available for public comment, 

in addition to further guidance the agency intends to issue on EM&V. 

Comment 14: Commenters stated that in order to make an informed decision on whether to 

submit a state plan, the states must have a clear understanding of what a federal plan for this 

section 111(d) rule would require. The commenters stated that the EPA has not provided a 

rational justification for not including a draft federal plan with the proposed rule. The 

commenters asserted that the EPA should withdraw the proposed rule until they have established 

a draft federal plan and are able to explain the basis for their authority to implement that federal 

plan if necessary. 

Response 14: Comments regarding the Federal plan are beyond the scope of this rulemaking. 

We note that concurrent with signature of this final rule the Agency has signed a proposed 
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Federal Plan and model rule. The EPA disagrees that it is under any legal obligation to provide a 

proposed federal plan at the time it issues emission guidelines under section 111(d). However, 

the proposed federal plan addresses stakeholders’ requests for ideas on how to design an 

approvable plan, shows how the EPA would implement the guidelines were it necessary to 

promulgate a federal plan for particular states, and will be out for public comment. 

1.14 REQUEST FOR EXTENSION OF COMMENT PERIOD 

Comment 1: Commenters stated that the EPA only provided a 165-day period for the public to 

evaluate and submit comments and data on the proposed rules, which are the most complex and 

far-reaching environmental rules ever proposed by EPA. Commenters noted that these rules 

significantly affect almost every electric generating facility in all 50 states and contemplate 

significant changes to state regulatory structures for the electric utilities that operate those 

facilities. Commenters said that, given the breadth, complexity, and impact of these rules, 165 

days is insufficient to evaluate and understand the proposal, the regulatory and technical data, 

and the analyses that have been provided in support, much less to develop and submit 

meaningful comments and data in response. 

Commenters stated that EPA's proposal for existing sources covers over 130 pages in the Federal 

Register, with references to numerous Technical Support Documents, a Regulatory Impact 

Analysis, and complex modeling analyses. Commenters noted that the material posted in the 

online rulemaking docket for existing sources, EPA-HQ-OAR-2013-0602, comprises over 1,400 

voluminous documents that cover an untold number of pages. Commenters also said that the 

165-day period provided to review and comment on this sweeping rule and the voluminous 

supporting information is unreasonable and arbitrary. Commenters said that the agency should 

allow a longer public comment period to ensure meaningful public participation and a fullydeveloped record in support of the rule. 

Commenters stated that EPA's public comment process is inadequate. Commenters said, while 

EPA did ultimately grant a 60-day extension to the original public comment period, the agency 

has continued to release data and supplementary information throughout that extension, 

including as recently as mid-November. Commenters said that large companies will have 

difficulty properly analyzing the proposed rule and all of its attendant materials. Commenters 

stated that small businesses and average citizens do not have the resources necessary to conduct 

such analyses, likely resulting in failure to review the plan at all, or making uninformed 

decisions at best. Commenters also stated that such a precedent-setting regulatory scheme 

affecting the entire U.S. economy should not be finalized in this manner. 

Commenters stated that the 165-day comment period (including the 45-day extension) is not 

sufficient time to review this landmark rule and all of its supporting documents. Commenters 

said that there remain many gaps and details that must be filled in by the states making it 
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difficult, if not impossible, for affected entities such as the city to provide meaningful comments 

on the proposed rule. Commenters said, perhaps more importantly, the EPA has yet to complete 

referenced documents that will directly impact the feasibility of the proposal, such as the 

biomass framework to define carbon neutrality. 

Commenters said, U.S. EPA has released numerous new technical documents during the 

comment period, including the rate to mass guidance within 30 days of the end of the comment 

period, which normally would result in an extension of the comment deadline. Commenters said, 

with U.S. EPA not extending the deadline on this issue, they stand to lose important input from 

stakeholders. Commenters said, furthermore, due process dictates that stakeholders have all 

information at their disposal with sufficient time to review, evaluate, and prepare comments. 

Commenters said, for this reason, the comment deadline should have been extended. 

Commenters stated, despite the extension of the comment period, the complexity and preliminary 

nature of the proposed rule have made it extremely difficult to conduct thorough and 

comprehensive analyses. Commenters believe that it is critical that EPA offer additional 

opportunity to comment, preferably on a re-proposed rule that significantly narrows the range of 

issues under consideration. 

Commenters said, given the importance of these potential changes, EPA is penalizing key 

stakeholders in this rulemaking - especially generators - by failing to provide sufficient time to 

fully analyze and comment on the content of the NODA. Commenters said, stakeholders must be 

given additional time to comment on this NODA. 

Response 1: The EPA engaged in extensive outreach to stakeholders and the general public at 

every stage of development of this rule. Our outreach included direct engagement with energy 

and environmental officials in states, with tribes, and with a full range of stakeholders including 

leaders in the utility power sector, labor leaders, non-governmental organizations, other federal 

agencies, other experts, community groups and members of the public. The EPA participated in 

more than 300 meetings before the rule was proposed and more than 300 meetings after the rule 

was proposed. 

Throughout the rulemaking process, the agency has encouraged, organized, and participated in 

hundreds of meetings about CAA section 111(d) and reducing carbon pollution from existing 

power plants. The agency’s outreach prior to proposal, as well as during the public comment 

period, was designed to solicit policy ideas, concerns, and technical information. 

The EPA signed and announced the proposed rule on June 2, 2014, and the full text of the 

proposal was available for public review that same day on the EPA website 

(www.epa.gov/cleanpowerplan). The proposed rule was published in the Federal Register on 

June 18, 2014, 79 Fed. Reg. 34830, at which time the 120-day public comment period began. In 

response to stakeholder requests for additional time for review the proposal, the EPA extended 
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the comment period by 45 days, to December 1, 2014. This comment period extension gave 

stakeholders additional time to review all elements of the proposal—including the topics 

highlighted in the Notice of Data Availability (NODA), the notice “Additional Information 

Regarding the Translation of Emission Rate-Based CO2 Goals to Mass-Based Equivalents" (79 

Fed. Reg. 67406; November 13, 2014), and the technical support document (TSD) that provided 

two examples of how a state, area of Indian country, or territory could translate its rate-based 

goal to total metric tons of carbon dioxide (a mass-based equivalent)—and to submit their ideas 

and suggestions about the proposal, the notices and the TSD. 

At the close of the comment period on December 1, the proposal had been available for public 

review for nearly six months. This extended period for public review and comment complies 

with Clean Air Act section 307(h), 42 U.S.C. § 7607(h), which requires the EPA to “ensure a 

reasonable period for public participation of at least 30 days” when promulgating a regulation 

under section 111. EPA believes the 165-day comment period was reasonable to allow 

stakeholders to formulate and submit their comments. The time provided for public comment on 

the proposed rule was also consistent with the comment periods for previous Clean Air Act rules, 

including the 111(b) NSPS for Greenhouse Gases from New Sources (120 days), the Cross-State 

Air Pollution Rule (60 days), and the Ground-Level Ozone NAAQS (90 days). 

Although the NODA was published in the Federal Register on October 30, 2014, the close of the 

comment period on December 1, 2014, still allowed stakeholders “at least 30 days” to review the 

three topics discussed in the NODA and formulate any additional comments. This was a 

reasonable period for public participation given the limited length and number of topics in the 

NODA, and in light of the fact that the NODA sought comment on issues raised by the 

commenters themselves. Accordingly, no further extension of the public comment period was 

warranted. 

Likewise, while the Technical Support Document concerning the translation of emission ratebased goals to mass-based equivalents was published in the Federal Register on November 13, 

2014, this supporting documentation was intended only to inform and assist stakeholders in 

understanding certain technical aspects of the proposed rule as it was published on June 18, 

2014. The information shared in the Technical Support Document was not prescriptive, but 

rather was developed at the request of state commenters to illustrate potential methods states 

might choose to adopt in implementing the proposed rule. 

Stakeholders will also have the opportunity to participate further during the state plan 

development process. States will have to demonstrate that they are actively engaging all 

members of the public as part of their public participation process. In the initial plan submittal 

and final plan submittal, states will have to provide a summary of how they are engaging with 

stakeholders, including vulnerable communities. 

Comment 2: EPA issued two notices and a technical support document after the June 18, 2014 

proposal: 1) "Notice of Data Availability" (NODA) (79 FR 64543; October 30, 2014), 2) 
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"Notice; Additional Information Regarding the Translation of Emission Rate-Based CO2 Goals 

to Mass-Based Equivalents" (79 FR 67406; November 13, 2014), and 3) associated with the 

second notice, a technical document that provided two examples of how a state, area of Indian 

country or territory could translate its rate-based goal to total metric tons of carbon dioxide (a 

mass-based equivalent). 

A number of commenters requested that the public comment period for the proposal and/or a 

combination of one or more of the notices and the TSD be extended beyond the December 1, 

2014 closing date by a range of 31 to 60 days. Several other commenters requested an 

unspecified extension of the comment period due to the NODA or otherwise commented on the 

inadequacy of time allowed for comment on the notices and TSD. 

Commenters recognized the significant, unprecedented amount of outreach that the EPA had 

done with regard to the proposed guidelines. Commenters also recognized the fact that the EPA 

initially provided a longer time period for review and comment on the proposed guidelines and 

then later provided an extension. Commenters appreciated what the EPA did to engage with 

states throughout the public comment period and is grateful for the longer timeframe for review 

and comment. Commenters said that despite the accommodations provided by the EPA, they 

believe, overall, the timeframe provided for review and comment associated with the proposed 

guidelines was insufficient given the scope and complexity associated with the EPA's proposal, 

the amount of options provided and the EPA's request for comment on them all, the sheer 

amount of material and data in the docket (some provided late in the comment period) and the 

necessity for state agencies to both evaluate and understand the proposal, as well as seek 

stakeholder feedback. Commenters said that this is particularly concerning because of the 

potential magnitude and scope of the proposed guidelines - one that EPA admits could 

potentially be the most significant energy-environmental regulatory action in decades. 

Commenters stated that the volume and complexity of documents associated with the proposed 

guidelines is unprecedented. Commenters said that the EPA issued a pre-publication copy of the 

proposed guidelines on June 2, 2014. Commenters said that the 657-page document was 

officially published in the Federal Register on June 18, 2014. 

Commenters asked the EPA for additional time for review and analysis of the issues addressed in 

the NODA and potential inconsistencies between the rate-to-mass TSD and the proposed rule. 

Commenters stated that, given that: (1) the original draft set of guidelines, plus all the supporting 

appendices total in excess of 1,800 pages of text; (2) with one month to the deadline, the EPA 

Administrator released a 60-page NODA in which substantive new issues were raised to be 

addressed in comments; and (3) the EPA generally provides commenters with at least 60 days in 

which to respond to information requests for additional public comments. 

Commenters stated that, late during the public comment period for the proposed rule, the EPA 

issued the NODA and the "Notice; Additional Information Regarding the Translation of 

Emission Rate-Based CO2 Goals to Mass-Based Equivalents." Commenters said that the 

issuances provided critical information regarding the proposed rule, but that this information, 
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which includes interpretation of the original proposal, as well as supporting information, was not 

available until near the end of the comment period. Commenters said that, accordingly, notice is 

deficient and EPA is required to re-open the notice and comment period for a period of at least 

60 days, in accordance with the CAA and Administrative Procedures Act, 5 U.S.C. Sections 551 

et seq. 

Commenters stated that the EPA cannot cure defects in the proposed rule through the untimely 

submission of support documents. Commenters said, in an attempt to cure defects in the content 

of its original proposal, the EPA has published notices of data availability and technical support 

document on October 30, 2014 and November 13, 2014 (79 FR 64543; 79 FR 67406). 

Commenters said that these new documents raise a series of complex, new issues regarding both 

EPA's BSER analysis and the procedures for states to submit implementation plans. Commenters 

noted that providing full and complete responses to the myriad issues raised by the EPA in these 

documents will require extensive research and cannot be completed in the few weeks provided 

by the EPA. Commenters said that, for this reason, they requested an extension of the comment 

deadline in order to respond more completely to the EPA's proposals. Commenters said, on 

November 18, 2014, the EPA denied that request. Commenters said that the lack of time 

provided by the EPA has prevented them and other interested stakeholders from receiving a full 

and fair opportunity to comment on the proposed rule. Commenters said, for this reason, they 

urge the EPA to reopen the comment period for this rule to give interested stakeholders the 

additional time necessary to respond to the issues raised in the NODA and technical support 

documents and how they relate to EPA's proposed rule. 

Commenters also stated that the EPA's NODA raised substantial new issues that may 

dramatically expand the potential scope and stringency of the proposed rule. Commenters said 

that, as such, they believe that thirty (30) days (with an intervening Thanksgiving holiday period) 

is inadequate to allow meaningful state review and consideration of the many substantial new 

issues raised in the NODA. Commenters said that, for the reasons outlined above and based upon 

other comments submitted by the states, the EPA should 1) withdraw the proposed rule, and 2) if 

the administration insists on pursuing carbon dioxide emission regulations, initiate an 

atmosphere of cooperation by working with the states to develop a plan that follows the law and 

acknowledges state differences and energy make up, state infrastructure, available technology for 

existing sources and legal limitations. Commenters said that, if EPA is unwilling to withdraw the 

proposed rule, it should, at a minimum, grant an extension of the public comment period for an 

additional forty five (45) days. Commenters said that this additional time is critical to allow for 

meaningful dialogue on the issues noted above and to allow meaningful consideration of the 

EPA's NODA. 

Commenters stated that, while they appreciated EPA's efforts to address some of the issues that 

have been raised by stakeholders since the proposal of the Clean Power Plan, the NODA 

includes very significant potential changes to the proposal and was released only one month 

before the comment deadline on this very significant and complex rule. Commenters said, 

because of the complexity of the rule, numerical analysis is necessary to understand how the 
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proposed changes might affect our states and our customers. Commenters said that analysis is 

lacking at this time. Commenters requested that the EPA provide more information and more 

time to comment on the implications of the NODA. 

Commenters stated, EPA originally provided 120-days for stakeholder comment on this 

proposal. Commenters requested a much needed extension of 90-days on the comment period on 

July 16, 2014 to appropriately analyze the proposal. Commenters said that the request was 

denied on July 25, 2014. Commenters said, however, at the urging and request of a 60-day 

comment period extension from 53 United States Senators, the EPA announced on September 

16, 2014, one-month prior to the close of the comment period, an additional 45-days would be 

granted (closing December 1, 2014). 

Commenters said that the October 30, 2014 NODA requested comment on numerous other 

alternatives based on early stakeholder comments, all of which have the potential to significantly 

impact state goals. Commenters said that the November 13, 2014 notice provides options for a 

very important aspect of this proposal, the conversion of the rate-based goal to a mass-based 

goal. Commenters said that the EPA noticed these additional modifications to the original 

proposal with very little time remaining and offered no extension to the comment period. 

Commenters stated that the EPA proposed and requested comment on not only a regulation, but 

numerous TSDs that would greatly impact the implementation of such a regulation. Commenters 

said that the original rule alone asked for specific comments in 497 different locations. 

Commenters said that the numerous TSDs, supporting materials and NODA's also specifically 

requested comment. Commenters said that many more elements not specifically identified for 

comment most definitely warrant comment from stakeholders. Commenters said that these 

comment requests stretched from simple requests to requests on long-term strategic impacts 

regarding what would work best for states, regions and the nation. Commenters said that this rule 

would impact entities far beyond the scope of what the majority of states have ever traditionally 

regulated. Commenters indicated that they had been placed in a situation where consultation with 

other entities and agencies, in order to understand the true impact of the proposed regulation, was 

paramount to their ability to provide meaningful comments. 

Commenters stated that the overwhelming amount of material that was provided in the docket 

and subject to comment, combined with the magnitude and far reaching impact of the proposed 

regulation, has made reviewing this proposal and accompanying NODAs in the time provided, 

and providing a comprehensive analysis was virtually impossible. 

Commenters stated that, in addition to reviewing and evaluating all the documents and 

underlying data noted above, they were overwhelmed with the vast number of stakeholders that 

wanted to provide input as to both their particular interest in the proposed guidelines and their 

recommendations for state action. 
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Commenters stated that, in September 2014, the EPA extended the original deadline to submit 

comments from October 16, 2014 to December 1, 2014. Commenters were grateful for the 

extension of time to review the over 1,700 pages of highly technical content included within the 

docket for the proposed guidelines. Commenters said that this timeframe, however, still only 

provided 123 business days between June 18, 2014 and December 1, 2014. Commenters said 

that, then, on October 28, 2014 and November 6, 2014, the EPA issued additional data and 

documents related to the proposed guidelines but did not extend the comment period. 

Commenters said that, in short, the EPA provided over 150 additional pages of information and 

data with only 23 business days remaining in the comment period. Commenters said that those 

documents include data files for 2010 and 2011, as well as documents related to translating state 

goals from emissions rates to mass-based equivalents. 

Commenters stated that the EPA also provided data and IPM modeling run results for comment. 

Commenters said that those modeling runs contained over 70 megabytes of data. Commenters 

found that the review of this data alone could take weeks to months, depending on the resources 

that were available to the department. Commenters said that various other revisions to documents 

or data, as well as additional information, were issued throughout the comment period. 

Commenters simply did not have time to review and evaluate it all. Commenters said that this is 

particularly troubling given the nature of the proposed guidelines and the critical role states must 

play in developing effective, workable state plans. Commenters requested that the EPA consider 

extending the deadline for comments specifically relating to information and data issued during 

the late October and November time frame. 

Commenters recommended that, as stated in a November 13, 2014 letter to the EPA 

Administrator, the EPA provide the public with more time to comment on the issues raised in the 

NODA. Letter from Allison D. Wood, Hunton & Williams LLP, to Regina A. McCarthy, Adm'r, 

EPA at 2 (Nov. 13, 2014). Commenters said that, although the agency had not proposed any 

specific changes to its original June 18, 2014 proposed guidelines, commenters’ members needed 

additional time to prepare fully informed and well-considered comments on the issues that have 

been raised for the first time in the NODA. Commenters said that the October 30, 2014 Federal 

Register notice was published barely a month before the due date for comments. Commenters 

said that the proposed guidelines are extraordinarily complex and, as discussed below, the issues 

raised in the NODA on which EPA solicits comment are very broad, seem to contain some 

approaches that are either new or that contradict its previous positions, and ultimately obscure to 

the point of incoherence what approach EPA might ultimately take. Commenters said that 

obscuring what action an agency might take late in a comment period does not provide adequate 

notice to the public, is not reasoned decision-making and provides no grounds for the EPA to 

assert that its unsupported policy musings are a logical outgrowth of the original proposal. 

Commenters recommended that the EPA provide a reasonable time period beyond the proposed 

comment period deadline of December 1, 2014, to allow states to assess the feasibility of the 
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building block assumptions and provide information to justify any adjustments needed to the 

states' goals. Commenters said that, during the comment period ending on December 1, 2014, it 

will be difficult to ascertain whether states unable to implement one or more of the building 

blocks per EPA's assumptions will have the flexibility to increase the stringency of other 

building blocks or measures to achieve their goals. Commenters said that entities such as the 

Western Electricity Coordinating Council (WECC) are currently undertaking studies to assess 

the potential impacts of the proposal on resource adequacy and reliability and the results of such 

studies will be available after the comment deadline. Commenters said that, in many cases, these 

reliability studies will likely not be completed until after promulgation of a final EPA rule setting 

the states' emission rate goals. 

Commenters stated that recently issued EPA support documents fail to provide adequate notice 

to interested parties or a reasonable opportunity to draft and submit comments. Certain lateissued "notices", including EPA's NODA and Technical Support Document (TSD), are vague 

and do not provide a clear rule to respond to or time to prepare appropriately tailored 

comments. Commenters said that recently released support documents do not provide a 

meaningful opportunity to comment. Commenters said that federal agencies are required to 

provide the public with adequate notice of a proposed rule and a meaningful opportunity to 

comment on the rule's content. Commenters said that, with the proposed rule, the EPA is poised 

to enact arguably, the most consequential and expensive environmental regulation ever imposed 

on the electric power sector. Commenters said, affected parties are therefore entitled to a noticeand-comment process in a manner that is respectful of the magnitude and complexity of the rule: 

a mere 30 days before the comment period is set to close for a NODA along with other material 

guidance that address key compliance concerns, is not appropriate. 

Commenters stated that, due to the complexity of this proposal and the significance this rule will 

play in the lives of so many American citizens, the EPA should consider extending the comment 

period. Commenters said that the EPA provided supplemental technical documents and 

spreadsheets near the end of this comment period (October 28, 2014 and November 6, 2014) to 

explain some of the concepts presented in greater detail. Commenters said that, because the EPA 

has stated "once the final goals have been promulgated, a state would no longer have an 

opportunity to request that the EPA adjust its CO2 goal", states should be granted ample time to 

review the data that has been used to calculate the final state goals. Commenters said, the final 

state goals "would reflect any adjustments as appropriate based on comments provided to the 

EPA to address any data errors in the analysis for the proposed goals." Commenters said that the 

comment period for this proposed rule is essential for the reasons mentioned above. Commenters 

said that the EPA should be fair in allowing the states ample time to review these new documents 

since that are key factors in the final goal calculation. 

Commenters stated that the EPA mentions that states are allowed flexibility to adopt the ratebased goal established by the EPA or the mass-based form of the goal. Commenters said that, 

however, the EPA did not provide sufficient information needed to calculate the state mass-based 

goals on the front end. Commenters said that it was not until November 6, 2014, that the EPA 
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released the mass-based states goals and supporting documents. Commenters said, insufficient 

time has been granted to understand and examine the methodology for the mass-based state 

goals. Commenters said, prior to this release of information, states struggled to understand how 

to calculate the mass-based goal. Commenters said that, while they appreciate that the EPA 

providing the November 6, 2014, supplemental data, additional time should be granted to review 

this information and provide comments. Commenters said, this portion of the rule is substantial 

in that it offers an entirely different alternative means of compliance. 

Commenters stated, given the short 30 days comment period on the NODA, they have been 

prejudiced in being able to fully evaluate the impact of the NODA on the Proposed Rule and on 

its operations, in order to provide meaningful and protective comments on the 

NODA. Commenters supported the request from certain energy producing states for an 

extension of time to comment on the NODA. 

Commenters stated, EPA published a NODA on October 30, 2014, seeking specific comment on 

a number of additional proposals and/or issues identified in the original proposal. Commenters 

noted frustration with the late-issued NODA, which provided several significant rule alternatives 

for consideration, but with no additional time for review/comment, and no additional data 

provided to assist States in their review. Commenters said, without additional time and data to 

review NODA alternatives, it is difficult for states to fully understand and address specific 

impacts at this time. 

Commenters stated, since EPA published the NODA just one month before the deadline for 

submission of comments on the proposed rule, stakeholders have not had adequate time to fully 

understand the implications of the NODA in relation to the proposed rule. Commenters said, 

issuing a NODA that late, particularly since the proposed rule is likely the most complex 

rulemaking ever undertaken by the EPA, does not appear to comply with EPA's obligation under 

the Administrative Procedures Act and Clean Air Act. Commenters said, EPA should allow 

additional time for stakeholders to fully assess the NODA. 

Commenters stated, the administrative process by which the CPP was drafted and released has 

been problematic since day one. Commenters said, first, EPA continues to refuse to release 

critical modeling runs on the grounds that the assumptions contained therein are proprietary. 

Commenters said, without complete information, however, it is impossible to test the veracity of 

the Agency's claims about the feasibility of the CPP. Commenters said, second, EPA did not 

extend the public comment period for the CPP after releasing a Notice of Data Availability 

("NODA") that contained new information critical to a thorough evaluation of the rule. 

Commenters said that, specifically, EPA made two additional years of data available that the 

agency intends to use in formulating the baseline for energy demand in all fifty states. 

Commenters said that this new information required stakeholders to completely re-structure their 

modeling efforts, with no extra time. Commenters said that they wanted to remind the agency 

that an "adequate" comment period is required, not only for the proposal but for the NODA as 

well - particularly when its impact is so significant. Commenters said that the NODA purports to 
200 

 

restate the glide path for implementation. Commenters said that, even later, the EPA placed a 

substantive interpretation of the process for calculating the mass-based approach for 

demonstrating compliance. Commenters said that both of these efforts required adequate time to 

comment; neither received it. See e.g., Fla. Power & Light Co.v. U.S., 846 F.2d 765, 772 (D.C. 

Cir. 1988). 

Response 2: As some commenters noted, the EPA did engage in extensive outreach to 

stakeholders and the general public at every stage of development of this rule. The EPA’s 

outreach included direct engagement with energy and environmental officials in states, with 

tribes, and with a full range of stakeholders including leaders in the utility power sector, labor 

leaders, non-governmental organizations, other federal agencies, other experts, community 

groups and members of the public. The EPA participated in more than 300 meetings before the 

rule was proposed and more than 300 meetings after the rule was proposed. 

The agency’s outreach prior to proposal, as well as during the public comment period, was 

designed to solicit policy ideas, concerns, and technical information. In the notice of data 

availability (NODA) that we issued on October. 28, 2015, we described specific issues and ideas 

that had been raised by stakeholders and discussed approaches stakeholders had suggested that 

may have gone beyond the June 18, 2014 proposal, and we sought comment on these through the 

notice. We issued the notice to ensure that other stakeholders and the public had the opportunity 

to consider these ideas as they formulated their own comments on the proposal. 

The EPA signed and announced the proposed rule on June 2, 2014, and the full text of the 

proposal was available for public review that same day on the EPA website 

(www.epa.gov/cleanpowerplan). The proposed rule was published in the Federal Register on 

June 18, 2014, 79 Fed. Reg. 34830, at which time the 120-day public comment period began. In 

response to stakeholder requests for additional time for review the proposal, the EPA extended 

the comment period by 45 days, to December 1, 2014. This comment period extension gave 

stakeholders additional time to review all elements of the proposal—including the topics 

highlighted in the Notice of Data Availability (NODA), the notice “Additional Information 

Regarding the Translation of Emission Rate-Based CO2 Goals to Mass-Based Equivalents" (79 

Fed. Reg. 67406; November 13, 2014), and the technical support document (TSD) that provided 

two examples of how a state, area of Indian country, or territory could translate its rate-based 

goal to total metric tons of carbon dioxide (a mass-based equivalent)—and to submit their ideas 

and suggestions about the proposal, the notices and the TSD. 

At the close of the comment period on December 1, the proposal had been available for public 

review for nearly six months. This extended period for public review and comment complies 

with Clean Air Act section 307(h), 42 U.S.C. § 7607(h), which requires the EPA to “ensure a 

reasonable period for public participation of at least 30 days” when promulgating a regulation 

under section 111. EPA believes the 165-day comment period was reasonable to allow 

stakeholders to formulate and submit their comments. The time provided for public comment on 

the proposed rule was also consistent with the comment periods for previous Clean Air Act rules, 
201 

 

including the 111(b) NSPS for Greenhouse Gases from New Sources (120 days), the Cross-State 

Air Pollution Rule (60 days), and the Ground-Level Ozone NAAQS (90 days). In addition, 

although the comment period closed on December 1, 2014, the EPA has considered all 

comments that were received by December 31, 2014, so as to accommodate potential delays in 

the EPA’s receipt of submitted comments. 

Although the NODA was published in the Federal Register on October 30, 2014, the close of the 

comment period on December 1, 2014, still allowed stakeholders “at least 30 days” to review the 

three topics discussed in the NODA and formulate any additional comments. This was a 

reasonable period for public participation given the limited length and number of topics in the 

NODA, and in light of the fact that the NODA sought comment on issues specifically raised by 

the commenters themselves. Accordingly, no further extension of the public comment period was 

warranted. 

Likewise, while the Technical Support Document concerning the translation of emission ratebased goals to mass-based equivalents was published in the Federal Register on November 13, 

2014, this supporting documentation was intended only to inform and assist stakeholders in 

understanding certain technical aspects of the proposed rule as it was published on June 18, 

2014. The information shared in the Technical Support Document was not prescriptive, but 

rather was developed at the request of state commenters to illustrate potential methods states 

might choose to adopt in implementing the proposed rule. 

The EPA further notes that the substantive concerns identified by commenters who requested an 

extension of the public comment period have been adequately addressed in the final rule, even in 

the absence of an additional extension. Commenters noted, for example, the importance of 

ensuring that the final guidelines acknowledged state differences and energy make up, state 

infrastructure, and available technology for existing sources. The final rule better recognizes 

state differences and each states’ different mix of energy sources and provides states with further 

flexibilities beyond those in the proposal, as described in section I.A.4 of the preamble. 

Commenters also expressed concern over whether states unable to implement one or more of the 

building blocks as for the BSER determination will have the flexibility to increase the stringency 

of other building blocks or measures to achieve their goals. In the proposal, states could choose 

to include non-BSER measures in their state plans. The final rule maintains that approach, as 

explained in sections VIII.I-VIII.K of the preamble. 

Commenters also identified concerns with potential impacts of the rulemaking on resource 

adequacy and reliability and, in the final rule, we have made adjustments from the proposal to 

address these concerns further, as described in section VIII.G.2 of the preamble. The EPA’s TSD 

titled “Resource Adequacy and Reliability Analysis TSD for CPP Final Rule,” provides an 

analysis of resource adequacy and electric system reliability associated with this final rule. The 

TSD is available in the docket for this rulemaking.

Other commenters indicated that “once the final goals have been promulgated, a state would no 

longer have an opportunity to request that the EPA adjust its CO2 goal.” In the final rule, under 
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certain circumstances, as explained in sections VII.E and VIII.E.6.b of the preamble, a state may 

adjust its CO2 goal. 

Comment 3: Commenters would like to clarify some of the information found in the Technical 

Support Document for Calculating Carbon Pollution Goals for Existing Power Plants in 

Territories and Areas of Indian Country that accompanies the Proposed CO2 Guidelines for the 

U.S. Territories. Moreover, Commenters are interested in submitting specific comments to the 

proposal and its supporting documents and therefore, need a 45-day extension to submit 

comments on the proposal. Commenters requested that the EPA grant a 45-day extension of the 

public comment period so that they could provide comments on the CO2 Guidelines for the U.S. 

Territories and its supporting documents. 

Response 3: The EPA signed and announced a supplemental proposal to limit carbon pollution 

from existing power plants in Indian Country and U.S. Territories on October 28, 2014, and the 

text of the proposal was available for public review that same day on the EPA website 

(www.epa.gov/cleanpowerplan). This supplemental proposal was published in the Federal 

Register on November 4, 2014, 72 Fed. Reg. 65482, and the 45-day public comment period 

began. The Technical Support Document (TSD) for Calculating Carbon Pollution Goals for 

Existing Power Plants in Territories and Areas of Indian Country was also issued with the 

supplemental proposal. 

The information provided in these documents was supplemental to the June 18, 2014 proposal, 

and primarily proposed emission rate-based CO2 goals for U.S. territories and areas of Indian 

country with one or more affected EGUs. In tandem with the extended public comment period 

for the proposed rule, the 45-day public comment period for the supplemental proposal provided 

stakeholders with a reasonable opportunity to review elements of the proposal specific to Indian 

Country and U.S. Territories and to provide comments on these additional features. 

In the final rule, the EPA has determined that additional information is needed before the EPA 

will be able to establish goals for the U.S. territories and the non-contiguous states. 

Comment 4: Several commenters stated that the 165-day public comment period is insufficient, 

arbitrary, and capricious. 

Commenters stated that the EPA only provided a 165-day period for the public to evaluate and 

submit comments and data on the proposed rules, which are the most complex and far-reaching 

environmental rules ever proposed by the EPA. Commenters said that these rules significantly 

affect almost every electrical generating facility in all 50 states and contemplate significant 

changes to state regulatory structures for the electric utilities that operate those facilities. 

Commenters said that, given the breadth, complexity, and impact of these rules, a 165-day 

comment period is insufficient to evaluate and understand the proposal and the regulatory and 

technical data and analyses that have been provided in support, much less to develop and submit 

meaningful comments and data in response. 
203 

 

Commenters stated that the EPA's proposal for existing sources covers over 130 pages in the 

Federal Register, with references to numerous TSDs, a Regulatory Impact Analysis, and 

complex modeling analysis. Commenters said that the material posted in the online rulemaking 

docket for existing sources comprises over 1,300 voluminous documents that cover thousands of 

pages. Commenters said, the 165-day period provided to review and comment on this sweeping 

rule and the voluminous supporting information is unreasonable and arbitrary. Commenters said, 

for this reason alone, EPA's 165-day deadline for comments is in arbitrary and capricious. 

Commenters said that the agency should allow a longer public comment period to ensure 

meaningful public participation and a fully-developed record in support of the proposed rule. 

Response 4: The EPA signed and announced the proposed rule on June 2, 2014, and the full text 

of the proposal was available for public review that same day on the EPA website 

(www.epa.gov/cleanpowerplan). The proposed rule was published in the Federal Register on 

June 18, 2014, 79 Fed. Reg. 34830, at which time the 120-day public comment period began. In 

response to stakeholder requests for additional time for review the proposal, the EPA extended 

the comment period by 45 days, to December 1, 2014. This comment period extension gave 

stakeholders additional time to review all elements of the proposal—including the topics 

highlighted in the Notice of Data Availability (NODA), the notice “Additional Information 

Regarding the Translation of Emission Rate-Based CO2 Goals to Mass-Based Equivalents" (79 

Fed. Reg. 67406; November 13, 2014), and the technical support document (TSD) that provided 

two examples of how a state, area of Indian country, or territory could translate its rate-based 

goal to total metric tons of carbon dioxide (a mass-based equivalent)—and to submit their ideas 

and suggestions about the proposal, the notices and the TSD. 

At the close of the comment period on December 1, the proposal had been available for public 

review for nearly six months. This extended period for public review and comment complies 

with Clean Air Act section 307(h), 42 U.S.C. § 7607(h), which requires the EPA to “ensure a 

reasonable period for public participation of at least 30 days” when promulgating a regulation 

under section 111. EPA believes the 165-day comment period was reasonable to allow 

stakeholders to formulate and submit their comments. The time provided for public comment on 

the proposed rule was also consistent with the comment periods for previous Clean Air Act rules, 

including the 111(b) NSPS for Greenhouse Gases from New Sources (120 days), the Cross-State 

Air Pollution Rule (60 days), and the Ground-Level Ozone NAAQS (90 days). In addition, 

although the comment period closed on December 1, 2014, the EPA has considered all 

comments that were received by December 31, 2014, so as to accommodate potential delays in 

the EPA’s receipt of submitted comments. 

Although the NODA was published in the Federal Register on October 30, 2014, the close of the 

comment period on December 1, 2014, still allowed stakeholders “at least 30 days” to review the 

three topics discussed in the NODA and formulate any additional comments. This was a 

reasonable period for public participation given the limited length and number of topics in the 

NODA, and in light of the fact that the NODA sought comment on issues specifically raised by 

the commenters themselves. Accordingly, no further extension of the public comment period was 

warranted. 
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Likewise, while the Technical Support Document concerning the translation of emission ratebased goals to mass-based equivalents was published in the Federal Register on November 13, 

2014, this supporting documentation was intended only to inform and assist stakeholders in 

understanding certain technical aspects of the proposed rule as it was published on June 18, 

2014. The information shared in the Technical Support Document was not prescriptive, but 

rather was developed at the request of state commenters to illustrate potential methods states 

might choose to adopt in implementing the proposed rule. 

1.15 OTHER 

1.15.1 CAA/Section 111(d) issues 

Comment 1: Commenters state that section 111(d) explicitly directs states and the EPA to 

consider the “remaining useful life” of existing sources when applying any standard of 

performance. This demonstrates 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. 

Response 1: As noted above, the EPA believes its standards of performance reflect achievable, 

cost-effective measures that can be undertaken by individual affected sources to reduce their 

emissions. However, the EPA but not agree that the standards of performance established in the 

emission guidelines must be determined by considering each individual source’s capabilities 

divorced from the electrical system in which the affected sources operate. The “remaining useful 

life” provisions in 111(d) do not affect this conclusion (we discuss our interpretation of the 

“remaining useful life” provision at length in the Legal Memorandum). Section 111(d)(1) states 

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.” As is evident from the plain language, this provision bears on 

states’ considerations when “applying” the standard of performance to a “particular” source 

covered by a state “plan,” and so instructs the EPA to ensure that the emission guidelines provide 

proper direction to states on doing so. The “remaining useful life” provision thus governs how 

states – as guided by the EPA – may give practical effect to the standards of performance on a 

case-by-case basis. But this provision does not speak to how the standards themselves should be 

established or the proper scope of the BSER used to determine them. In fact, the wording of the 

remaining useful life provision suggests the opposite of what commenters suggest. By requiring 

EPA’s guidelines to provide reasonable mechanisms for states to address situations where the 

achievability or cost-effectiveness of the standards of performance may be limited by the 

remaining useful life of the facility, these provisions reinforce the fact that the standards of 

performance established in the emission guidelines are set on the basis of what the category of 
205 

 

sources can generally achieve. Notably, the “remaining useful life” provision that applies where 

the EPA is implementing a federal plan reinforces this distinction. In that instance, the EPA is 

directed to consider the remaining useful “lives” of the “sources in the category of sources” to 

which standards of performance are applied. The wording and structure of the statute make clear 

that this is a factor to be considered in the implementation of standards of performance, rather 

than a factor that is part of the determinations made under section 111(a)(1).

Comment 2: Commenters stated that the EPA's 1975 regulation implementing section 111(d) 

(40 CFR 60, subpart B) exceeds the EPA's authority and are subject to challenge under section 

307(b)(1). 

Commenters stated, in its legal arguments in support of the Proposed Rule, EPA relies heavily on 

its own 1975 regulations (40 C.F.R. sections 60.20 - 60.29) implementing Section 111(d). See 40 

Fed. Reg. 53,340. Commenters said, EPA describes the 1975 regulations as documenting its 

authority to determine the BSER and issue emission guidelines in the form of the State emission 

goals. 79 Fed. Reg. at 34,852; Legal Memorandum at 30-32. Commenters said, EPA further 

identifies these regulations as implementing Congress' directive in Section 111(d) that EPA's 

regulations "shall permit" States to consider "among other factors, remaining useful life" of 

existing units in setting standards of performance. 79 Fed. Reg. at 34,925. Commenters said, 

each time that EPA identifies the 1975 regulations in the Proposed Rule, it is careful to include a 

footnote stating that it does not intend to re-open the 1975 regulations to challenge by relying on 

them in the Proposed Rule. Commenters said, but it is the manner of EPA's application of these 

regulations in the context of the Proposed Rule, not its self-serving statements, that matters for 

purposes of determining whether the 1975 regulations are subject to challenge and invalidation. 

Commenters said, in the Proposed Rule, EPA applies the 1975 rules for the first time to certain 

fossil-fired EGUs and to CO2, and purports to extend authority and discretion under the 1975 

regulations far beyond the scope of prior applications. Commenters said, these new applications 

provide a valid legal basis to challenge and invalidate the 1975 regulations as beyond the scope 

of the authority delegated to EPA under Section 111(d). 

Commenters stated, EPA describes in the Proposed Rule its interpretation of and reliance on the 

1975 regulations: 

Some stakeholders have suggested that states themselves should be allowed to quantify the level 

of emission reduction resulting from the application of BSER or, if the EPA establishes goals, 

the states should be allowed to adjust the goals or to treat the goals established by the EPA as 

advisory rather than binding. Consistent with the existing implementing regulations for CAA 

section 111(d) at 40 CFR part 60, this quantification is the EPA's role... The regulations provide 

that the EPA is to promulgate an "emission guideline that reflects the application of the BSER 

(considering the cost of such reduction) that has been adequately demonstrated for" affected 

sources. In this manner, the regulations make clear that the EPA determines the BSER. In this 

rulemaking, as discussed above, the EPA identifies the BSER. In addition, in this rulemaking, 

the EPA applies the BSER to each state, and then, for each state, calculates the average emission 

rate that, in the words of the regulations just quoted, "reflects the application of the [BSER]." 

That average emission rate is the state goal. 
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By the same token, because the state goals are an integral part of the emission guidelines that the 

framework regulations authorize the EPA to establish, the goals are binding, and the states, in 

their CAA section 111(d) plans, must meet those goals and may not make them less stringent. 

This matter, too, is resolved by the implementing regulations. . . . These flexibilities, discussed 

further in Section VIII of this preamble, ensure that states will be able to achieve their final CO2 

emission goals and that no special provision for state adjustment of goals outside the normal 

notice-and-comment rulemaking process is warranted. 79 Fed. Reg. at 34,897-98. 

Commenters stated, EPA has exceeded its statutory authority under Section 111(d) by virtue of 

the design of its goal-setting and implementation requirements in the Proposed Rule. 

Commenters said, EPA's interpretation of the 1975 regulations as a basis for the Proposed Rule 

also calls into question the validity of those original regulations under Section 111(d). 

Commenters said, if EPA proceeds with its Proposed Rule, the 1975 regulations will be subject 

to judicial review and should be deemed beyond EPA's scope of authority. 

The commenters stated that the 1975 regulations are subject to challenge by sources that were 

not previously regulated under Section 111(d). 

Commenters stated, CAA Section 307(b)(1) provides an exception to the general requirement 

that a petition for review be filed within 60 days of promulgation: "if such petition is based 

solely on grounds arising after such sixtieth day, then any petition for review...shall be filed 

within sixty days after such grounds arise." 42 U.S.C. section 7607(b)(1). Commenters said, in 

Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 130-131 (D.C. Cir. 2012), the 

D.C. Circuit recognized that such other "grounds" could include the fact that certain entities that 

were not previously subject to the regulations at issue were now included under the scope of the 

regulations. Commenters said, the D.C. Circuit held that industry groups representing home 

builders and oilseed processors - source categories that were not subject to PSD until EPA began 

to regulate CO2 - did not have ripe claims until the Tailpipe Rule was promulgated. Id. 

Commenters said, therefore, any prior challenge would have alleged only speculative injuries if 

these groups could show "only the possibility that their members would be injured if EPA were 

someday to determine that greenhouse gases were a pollutant that endangers human health and 

welfare and to adopt a rule regulating the greenhouse gas emissions of stationary sources." Id. 

Commenters stated, the Proposed Rule constitutes the first application of Section 111(d) and the 

1975 regulations to EGUs. Commenters said, at the time the 1975 regulations were promulgated, 

EPA had not made any determination regarding regulation of EGUs, and had made no 

determination that any source was to be regulated for CO2. Commenters said, thus, EGU owners 

had no basis on which to challenge the potential future application of the 1975 regulations at the 

time they were issued. Commenters said, consistent with the D.C. Circuit's holding in Coalition 

for Responsible Regulation, the 1975 regulations became ripe for challenge by EGU owners only 

when EPA relied on them in issuing the Proposed Rule regulating EGUs. Commenters said, 

therefore, any challenge brought within 60 days of the issuance of the final ESPS would be 

timely under Section 307(b)(1). 
207 

 

The commenters stated that the EPA has constructively reopened the 1975 regulations for 

challenge under Section 307(b)(1). 

Commenters stated, a revision of accompanying regulations that "significantly alters the stakes 

of judicial review" as the result of a change that "could not have been reasonably anticipated" 

can constructively reopen a rulemaking. Sierra Club v. EPA, 551 F.3d 1019, 1025 (D.C. Cir. 

2008) (citing Envtl. Def. v. EPA, 467 F.3d 1329, 1334 (D.C. Cir. 2006)). Commenters said, 

moreover, an official interpretation of a regulation (or withdrawal of a proposed reinterpretation) 

can constructively reopen a rulemaking. Public Citizen v. NRC, 901 F.2d 147, 151 (D.C. Cir. 

1990). Commenters said, EPA's drastic expansion of BSER based on its reading of the 1975 

regulations far exceeds any prior interpretation that it has provided of those provisions and its 

purported authority under Section 111(d). Commenters said, in addition, EPA's interpretation of 

the authority reserved to states to consider remaining useful life and other factors in its Proposed 

Rule is substantially more narrow that the authority granted under Section 111(d) or 

contemplated in the 1975 regulations and accompanying preamble. Commenters said, the 1975 

rulemaking anticipated that states would set standards and promised the states flexibility that is 

not reflected in the Proposed Rule. Commenters said, the Proposed Rule deviates substantively 

from the 1975 rulemaking in that it does not provide the flexibility that was promised in 1975, 

changing the stakes of judicial review. Commenters said, EPA specifically recognized in 1975 

that States were permitted to apply less stringent standards to particular sources (or classes of 

sources) when economic factors or physical limitations specific to particular sources (or classes 

of sources) make such application significantly more reasonable. 40 Fed. Reg. at 53,341. 

Commenters said, given these significant changes in the manner that EPA is interpreting the 

1975 regulations to support its Proposed Rule, those regulations have been constructively 

reopened and can be challenged as beyond EPA's authority under Section 111(d). 

Response 2: EPA disagrees with these comments. As a factual matter, the agency is not 

reopening subpart B, nor are we relying on subpart B regulations as the basis for the BSER in 

this rulemaking. The regulations currently allow for emissions guidelines to vary from general 

provisions of the subpart B regulations as appropriate. For instance, 60.24(f) which provides for 

facility specific variances in certain limited circumstances, also provides “unless specified in the 

applicable subpart,” reflecting that in the case of a particular emission guideline, the general 

variance procedure may not be appropriate. Furthermore, for all pertinent aspects of the agency’s 

discussion of authority under section 111(d), the structure and language of the statute itself 

remains the touchstone for its interpretation. The agency has pointed to the 1975 regulations or 

preamble in a number of places in today’s action as evidence of consistency with its 

longstanding interpretations of the statute or policy. Commenters’ comments about authority to 

challenge the implementing regulations in Court may be relevant in any litigation raising “afterarising” issues over this rule, but are not relevant for this rulemaking. 

Comment 3: Commenters stated that the proposal would result in many changes to Subpart B. 

However, the commenters noted that the preamble states that the proposal is not reopening 

Subpart B for comment, [79 FR 34844] and the proposed regulation text states that Subpart B 

remains in place except where it is inconsistent with the proposed regulation text. [proposed 40 
208 

 

CFR 60.5700] The commenters contended that the current Subpart B has many requirements that 

are inconsistent with Section 111(d) - e.g. calling for EPA to issue "guideline documents" and 

"emission guidelines," and calling for states to set an EPA-defined "emission standard" rather 

than the statutorily required and well-defined "standard of performance." The commenters stated 

that the EPA should withdraw the rule, or revise the current Subpart B to conform to Section 

111(d) as part of a re-proposal. 

Commenters stated that the EPA should abandon this rulemaking and postpone any further 

action to regulate CO2 emissions from existing EGUs. The commenters stated that neither the 

CAA nor EPA's regulations require the Agency to take action to regulate existing EGUs within 

any specific time frame: Subpart B states only that EPA "will publish a draft guideline 

document" for existing sources in a listed category; at some point in time either "[c]oncurrently 

upon or after proposal of standards of performance" for new sources in that category. [40 CFR 

60.22(a) (emphasis added).] Therefore, the commenters stated that it would be reasonable and 

well within the Agency's authority to postpone this rulemaking to a later date. 

Response 3: The EPA disagrees with these comments. The present guidelines are consistent 

with the subpart B framework. The EPA disagrees that delaying action to reduce carbon dioxide 

from power plants is reasonable in light of the vast amount of information in the record 

supporting the need for action to reduce this greenhouse gas pollutant. 

Comment 4: Several commenters stated that because the 111(b) proposal is fatally flawed, EPA 

must withdraw the 111(d) proposal. 

Commenters requested that the EPA withdraw its proposed rules entitled "Carbon Pollution 

Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units" 

("Section 111(d) Proposal") and "Carbon Pollution Standards for Modified and Reconstructed 

Stationary Sources: Electric Utility Generating Units ("Section 111(b) Modification Proposal"). 

Commenters stated, in order for the EPA to issue performance standards for existing sources 

under section 111(d), the Clean Air Act requires the EPA to have issued performance standards 

under section 111(b) that would cover newly constructed sources of the same type that the EPA 

seeks to regulate under section 111(d). Commenters stated, in a letter dated April 24, 2014, 

commenters explained why the EPA's proposed standards of performance for new electric utility 

generating units under section 111(b) did not constitute a new source performance standard as 

defined in section 111 of the Clean Air Act and why this fatal flaw required the proposed rule to 

be withdrawn by the Agency. Commenters stated, because the proposed new source performance 

standards under section 111(b) are unlawful and must be withdrawn by the EPA, the statutory 

prerequisite for the Section 111(d) Proposal is lacking and that proposal too should be 

withdrawn. 

Similarly, commenters stated, the EPA's current proposal to regulate new fossil-fuel fired electric 

utility units under Section 111(b) of the Act is based on their finding that carbon capture and 

sequestration, CCS, has been adequately demonstrated. Commenters said, CCS has, in fact, 

not been adequately demonstrated. Commenters said, the legal implication is critical since the 
209 

 

EPA is barred from implementing an existing source rule under 111(d) without having 

successfully promulgated a new source standard under 111(b). 

Commenters stated, the Carbon Pollution Standard Rule - the CCP's Prerequisite - is invalid. 

Commenters stated under CAA section 111(d), EPA must promulgate performance standards for 

new sources before it can promulgate performance standards for existing sources. Commenters 

stated the Carbon Pollution Standard (CPS) rule is the prerequisite for the CPP. Commenters 

stated the CPP cannot stand if the CPS rule falls. Commenters stated the CPS rule is unlawful in 

several ways, including CCS is not adequately demonstrated. 

Commenters stated, EPA's proposal also lacks a lawful New-Source Standard predicate whereby 

the EPA must first have established lawful standards under Section 111(b) for new sources in a 

particular industrial category. 

Commenters stated, Section 111(d)(1)(A) requires that each state shall submit to the EPA a plan 

which "establishes standards of performance for any existing source for any air pollutant ... to 

which a standard of performance would apply if such source were a new source." Commenters 

said, the clear meaning of this provision is that EPA is forbidden under the Act from adopting 

Section 111(d) rules without having previously promulgated a valid Section 111(b) rule as a 

predicate. Commenters said, EPA has stated that its Section 111(b) new-source rule proposal 

("New-Source 111(b) Rule Proposal") and its Section 111(b) modified- and reconstructed-source 

rule proposal ("Modified/Reconstructed Source 111(d) Rule Proposal") can serve as this 

predicate. Commenters have filed comments on both proposals clearly outlining the legal and 

technical flaws that prevent these rule proposals from serving as a valid predicate for this Rule 

Proposal. 

Commenters stated, both 111(b) rule proposals are still merely that - proposals - and until they 

are finalized and survive legal challenge, they cannot serve as a valid basis for this Rule 

Proposal. Commenters said, if EPA was to proceed on this course, and the 111(b) rules are 

vacated, it will remove the foundation for this Rule Proposal as well. 

Commenters stated, regarding the technical and legal flaws of the 111(b) rule proposals, the 

New-Source 111(b) Rule Proposal flaws, include, but are not limited to: 

- The rule proposal relies on commercially unavailable carbon capture and sequestration ("CCS") 

technology, which is not achievable and has not been "adequately demonstrated" under the 

requirements of the CAA, to establish unachievable emissions limits; 

- EPA failed to properly assess alternatives to CCS technology which could meet the 

requirements of the CAA; 

- EPA's "component" approach to finding CCS had been adequately demonstrated violates the 

CAA; 

- By imposing one type of control technology, EPA is attempting to dictate the fuel choice of 

power plants in contravention of CAA; 

- The rule proposal does not include appropriate subcategories for different types of generation 

technologies, including lignite-fired EGUs; 
210 

 

- The rule proposal will result in excessive and unreasonable costs, particularly in comparison to 

the minimal (if any) benefits of the alleged CO2 reductions in the rule; EPA inappropriately 

incorporated enhanced oil recovery ("EOR") capabilities as part of the technical review process; 

and 

- EPA failed to account for challenges that utilities will face at the regional level to comply with 

the rule, including lack of natural gas transmission, CO2 transmission (for EOR), and other 

infrastructure. 

Commenters stated, the technical and legal flaws of the Modified/Reconstructed Source 111(b) 

Rule Proposal include, but are not limited to: 

- The rule proposal treats modified and reconstructed sources concurrently as both existing and 

new sources, which directly conflicts with the plain language to the CAA; 

- The rule proposal does not include appropriate subcategories for different types of generation 

technologies, including a separate subcategory for lignite-fired EGUs; 

- The proposed emissions standards for modified and reconstructed EGUs are legally invalid and 

technically unachievable; and 

- The regulatory impact analysis is significantly flawed, establishing little or no expected benefits 

from the rule proposal's reduction in CO2 emissions despite the rule proposal potentially 

resulting in significant costs and harm. 

Commenters stated, given these numerous technical and legal flaws, it is impossible for EPA to 

use either of the 111(b) rules as a valid foundation for this Rule Proposal. 

Commenters stated, in order for EPA to require states to submit Section 111(d) plans to control 

emissions from existing sources in particular industrial categories, EPA must first have 

established lawful standards under Section 111(b) for new sources in that category. Commenters 

said, because EPA has failed to establish such standards for fossil fuel-fired power plants and its 

existing regulatory proposal is unlawful, EPA may not finalize any Section 111(d) proposal until 

it has rectified this issue. 

Commenters stated, section 111(d) provides that Section 111(d) is appropriate to regulate only 

"existing source[s] for any air pollutant ... to which a standard of performance under this section 

would apply if such existing source were a new source ... " C.A.A. section 111(d)(1)(A)(ii), 42 

U.S.C. section 7412(d)(1)(A)(ii). Commenters said, the Section 111(d) proposal concedes the 

plain language of this provision: that a lawful Section 111(b) rulemaking is a "requisite 

predicate" for a Section 111(d) rule. 79 Fed. Reg. at 34,852. 

Commenters stated, the Section 111(d) proposal identifies two pending 111(b) proposals as 

providing this predicate: the proposed rule regulating carbon dioxide emissions from new power 

plants, issued in January 2014, and the proposed rule regulating such emissions from modified 

and reconstructed power plants, issued in June 2014. Commenters said, but neither of these 

proposals have been finalized. 
211 

 

Commenters stated, 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. 

Response 4: This comment is primarily about the section 111(b) rule establishing new source 

performance standards (NSPS) for certain fossil fuel-fired EGUs. As such, much of this is 

outside the scope of the section 111(d) emission guidelines for existing EGUs. We note that the 

agency is not finalizing the proposed interpretation that sources remain subject to section 111(d) 

even if they modify or reconstruct so as to become subject to a section 111(b) NSPS. The agency 

will finalize the relevant section 111(b) NSPS rules, and they are lawful. Therefore, commenters’ 

assertions that these guidelines are unlawful because a lawful section 111(b) rule must be 

finalized first before finalizing a section 111(d) rule are based on an incorrect factual premise. 

Comment 5: Commenters stated that the section 111(b) rules are unlawful and therefore cannot 

provide the requisite predicate for the 111(d) proposal. Commenters 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 governmentsubsidized 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 said, the modified-source proposal is unlawful because there is no 

authority under Section 111(b) to issue a regulation covering only modified sources, which the 

Clean Air Act treats as "new" sources without exception. See C.A.A. section 111(a)(1), 42 

U.S.C. section 7411(a)(1) ("The term 'new source' means any stationary source, the construction 

or modification of which is commenced after" proposal or finalization, whichever is earlier, of 

Section 111 standards). Commenters said, these defects preclude EPA from promulgating 

Section 111(d) standards until such time (if ever) that it adopts lawful Section 111(b) standards. 

Response 5: EPA disagrees that the 111(b) rules are unlawful. Issues relating to EPAct05 are 

addressed at preamble section III.H.3.g and RTC chapter 2. EPA’s authority to issue regulations 

covering modified sources that differ from the regulations for newly constructed sources comes 

from section 111(b)(2), which authorizes EPA to distinguish within categories of sources. 

Comment 6: Multiple commenters stated that the EPA Cannot Regulate CO2 under Section 

111(d) without First Adopting a Valid Section 111(b) CO2 NSPS 

Commenters stated, section 111(d)(1)(a)(iii) requires that EPA establish standards of 

performance for air pollutants emitted by any source "to which a standard of performance would 

apply if such source were a new source." Commenters said, thus, EPA must issue standards of 

performance under Section 111(b) regulating the same types of pollutants from new sources 

within the same source category before it can issue a rule under Section 111(d). Commenters 

said, no valid Section 111(b) predicate rule regulating emissions of CO2 from coal or gas-fired 

power plants exists. Commenters said, therefore, the proposed rule exceeds EPA's authority 

under Section 111(d). 
212 

 

Commenters stated, EPA argues that two newly proposed rules will be finalized before the 

proposed rule and that each provides the requisite predicate rule. Commenters said, the first of 

these rules (the Proposed NSPS) establishes standards of performance for CO2 emissions from 

new EGUs. Commenters said, the second rule (the Proposed Modified and Reconstructed Source 

Rule) establishes standards of performance for CO2 emissions from certain modified and 

reconstructed EGUs. Commenters said, even if finalized, neither of these rules can serve as the 

predicate rule for the proposed rule because each is illegal. 

Commenters stated, the Proposed NSPS relies on the utilization of unproven Carbon Capture and 

Storage (CCS) technology as its standard of performance. Commenters said, CAA Section 

111(a)(1) requires that any "standard of performance" be based on technology that has been 

"adequately demonstrated." Commenters said, adequately demonstrated requires that a standard 

of performance "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." 

Commenters stated, CCS is not currently in operation at any commercial EGU in the U.S. 

Commenters said, although a few small experimental sites exist, CCS certainly has not been 

"adequately demonstrated." Commenters said, this, along with a number of other fatal flaws, 

makes the Proposed NSPS invalid and ripe for post-finalization challenge. Commenters said, 

since an invalid rule cannot serve as the required Section 111(d) predicate rule, the proposed rule 

is likewise invalid. 

Response 6: This comment is primarily about the section 111(b) rule establishing new source 

performance standards (NSPS) for certain fossil fuel-fired EGUs. As such, much of this is 

outside the scope of the section 111(d) emission guidelines for existing EGUs. The agency will 

finalize the relevant section 111(b) NSPS rules, and they are lawful. Therefore, commenters’ 

assertions that these guidelines are unlawful because a lawful section 111(b) rule must be 

finalized first before finalizing a section 111(d) rule are based on an incorrect factual premise. 

Comment 7: Commenters stated, the Proposed Modified and Reconstructed Source Rule also 

cannot serve as the Section 111(d) predicate rule. Commenters said, in the Proposed Modified 

and Reconstructed Source Rule, EPA treats modified and reconstructed sources as both new and 

existing sources. Commenters said, it does this by requiring that sources subject to the rule are 

also subject to any applicable CPP requirements. Commenters said, as defined by the CAA, once 

a source is modified it becomes a new source subject to NSPS. Commenters said, an existing 

source is "any stationary source other than a new source." Commenters said, a source cannot 

simultaneously be both. Commenters said, the CPP rule applies only to existing sources. 

Commenters said, thus, if EPA decides to treat modified and reconstructed sources as existing 

sources by making them subject to CPP requirements as well as NSPS, then EPA cannot 

simultaneously claim that the Proposed Modified and Reconstructed Source Rule applies to new 

sources and is the predicate rule for Section 111(d) purposes. 
213 

 

Response 7: The premise of this comment is that EPA has concluded that existing sources that 

modify or reconstruct and become subject to requirements under section 111(b) continue to be 

subject to requirements under section 111(d). As explained in section VIII of the preamble, the 

EPA is not finalizing its proposal on that point. 

Comment 8: Commenters stated, the Proposed Rule includes performance standards that are 

completely inconsistent with the standards of performance proposed for new sources. 

The commenters said, in proposing an approach for existing sources that is completely unrelated 

to and operates independently of the proposed approach for regulating new sources, the Proposed 

Rule ignores the statutory relationship between the regulation of new and existing sources under 

Section 111. Commenters said, for good reason, the regulation of existing sources under Section 

111(d) is intended to represent what amounts to a more flexible and limited version of the 

standards established for new sources under Section 111(b). Commenters said, however, the 

Proposed Rule would actually work toward the opposite result - i.e., it would impose standards 

of performance on existing sources that are more stringent than those proposed for new sources. 

Response 8: We disagree that the section 111(d) standards are more stringent than the section 

111(b) standards. Further, we explain in the preamble and the Legal Memorandum why the 

section 111(b) and (d) standards are based on different determinations of the BSER. 

Comment 9: Commenters state that the EPA employs an unprecedented and unreasonable 

redefinition of what constitutes a "system of emission reduction," by concluding that a "system 

of emission reduction" can be "virtually any ‘set of things' that reduce emissions,” including the 

"reduced utilization" of a source. This is a stunning departure from the plain meaning of Section 

111, which has been read over its 44-year history to authorize only standards of performance that 

limit a source's rate of emissions based on methods incorporated into the design or operation of a 

source itself. The EPA’s broad definition of "system" is not supported by the statute's plain 

language or context, or by the EPA's past rulemakings under Section 111. Commenters further 

state that the EPA erroneously conflates the two operative phrases of Section 111(d) that 

describe its authority. The Agency may require each State to promulgate a state plan that (1) 

"establishes standards of performance" for (2) "any existing source for any air pollutant." On its 

face, the term "best system of emission reduction" relates only to the "standard of performance" 

and the scope of the pollution control measures that may be imposed on the regulated stationary 

source. While the definition of BSER may give the EPA latitude with respect to the forms of 

pollution controls that can be imposed directly on the emitting source, it does not mean that the 

EPA has any latitude with respect to whether controls can be imposed on entities that do not emit 

pollutants. 

Response 9: The EPA disagrees that the term “system” is limited to measures that can be 

incorporated into the design or operation of an affected EGU. Our interpretation of the BSER is 

discussed in section V.B. of the final rule preamble and in the Legal Memorandum. The ordinary 

meaning of the word “system,” as noted in the final rule preamble, is a set of things or parts 

forming a complex whole; a set of principles or procedures according to which something is 
214 

 

done; an organized scheme or method; or a group of interacting, interrelated, or interdependent 

elements. Section 111 does not define a “system of emission reduction” and the plain language 

does not restrict the EPA’s consideration of “system[s] of emission reduction” to a narrow class 

of technological or design fixes at a facility. In fact, Congress rejected such a narrow definition 

through the 1990 CAA Amendments, when it rewrote the definition of “system” in section 

111(a)(1) to omit the requirement that such a system be “technological” and “continuous.” 

In the absence of language narrowing the EPA’s consideration of potential “system[s] of 

emission reduction,” the EPA interprets the plain meaning of this phrase to mean a set of 

measures that work together to reduce emissions. The EPA further interprets that because the 

standards of performance reflect the degree of emission limitation achievable through the 

“application” of the BSER, that the scope of systems that the EPA may consider are those that 

can be implemented – or applied – by the sources themselves. The fact that some of the measures 

that EGUs use to reduce emissions may incorporate or depend upon actions by third parties does 

not mean they are not implementable by the affected EGUs: as explained in section V.A. of the 

preamble, the BSER selected in this final rule reflect proven strategies that are already being 

implemented within the electricity industry. Furthermore, as the Legal Memorandum describes, 

section 111 standards have long embraced the notion that source owners or operators can rely on 

measures undertaken by a third party. The EPA’s application of the BSER thus falls within the 

forms of pollution control that can be imposed directly on the emitting source, because they rely 

on measures that affected EGUs can take to reduce their emissions as part of the interconnected 

electrical grid. 

Furthermore, the commenters’ reliance on previous section 111(d) rulemakings is misplaced. As 

explained in section V.A.2.b. of the final rule preamble, this rulemaking addresses a pollutant 

and a source category each with unique properties that inform the application of section 111(d). 

Few industries share the characteristics of the electricity industry, where generation occurs 

within a coordinated, interconnected network and the operation of individual source works in 

concert with the operation of numerous other sources of the same or different type. This 

networked system allows affected sources within the electricity industry, unlike other industries, 

to employ a broader range of strategies to operate and manage both production and emissions at 

a single EGU. Consequently, this final rule is tailored to what is achievable within the particular 

industry and with respect to this particular pollutant. Whether or not the same strategies are 

available to or in use in other industries – or would be selected as the “best system of emission 

reduction” by the EPA in another rulemaking – does not bear on the EPA’s determination of the 

BSER for this industry. Moreover, as noted above and as further discussed in the Legal 

Memorandum, emission reduction measures that can be implemented by sources but that depend 

upon actions of third parties have long been a component of the EPA’s rulemaking under section 

111. 

Finally, the EPA is not imposing controls on any entities other than the affected EGUs, so 

comments regarding the EPA’s latitude to place controls on entities that do not emit pollutants 

are beyond the scope of this rulemaking. 
215 

 

Comment 10: Commenters state that section 111(a)(1) 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. 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 into the design or production 

process of) an individual source. 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. For example, a standard of performance for coalfired EGUs that is based on a "system" of reducing the EGU's operations by increasing 

generation at NGCC units and renewables and discouraging electricity consumption would not 

be achievable for individual coal-fired EGUs. The achievability requirement thus demonstrates 

that a system of emission reduction cannot go beyond the fence-line of a source. 

Response 10: The EPA disagrees that the term “achievable” binds the EPA to consider only 

measures related to the design or production process of an individual EGU. Commenters suggest 

that only measures related to design or production are within the EGU’s “control” and are thus 

“achievable.” As a preliminary matter, the plain language of section 111(a)(1) does not limit the 

EPA to emissions reductions that can be achieved through the application of a particular 

technology or achieved at a particular location, although such specifications exist in other 

sections of the Clean Air Act. Had Congress intended that the EPA consider only the narrow 

class of technologies that could be applied on site at the affected source, it could have so 

specified. In fact, the 1990 CAA Amendments evidence that Congress intended the opposite 

result, as the amendments removed language in section 111(a)(1) that had previously required 

that the “best system” be “technological” and “continuous.” Thus it is reasonable to conclude 

that Congress intended the EPA to consider broader systems where the affected EGU might 

achieve the emission reductions through other, non-technological or non-continuous means. 

In addition, the BSER adopted in the final rule reflects strategies that are already wellestablished and well-documented within the electricity industry. As evidenced by actual industry 

practice, EGUs routinely achieve emission reductions through a broad array of strategies – 

including emissions based redispatch – that may not be directly incorporated into the design or 

production process of the facility. Industry acknowledges the feasibility and desirability of many 

of these broad strategies in comments addressing compliance with the standards of performance, 

which advocate for allowing a wide array of EGU actions beyond the facility to be credited as 

reducing emissions under the final rule. Moreover, the interconnected nature of the electric 

utility system already requires broad coordination of generation resources. The final rule reflects 

the existing features of the industry and aligns the BSER with the types of actions and controls 

that already govern generation. If affected EGUs can meet the emission limits set according to 

the BSER through the measures available to them, then the standards are achievable – even if 

such measures operate through the coordinated, interconnected actions of the industry as a 

whole. 

Further discussion of the basis of our interpretation appears in section V. of the final rule 

preamble and in the Legal Memorandum. Further discussion of the measures selected as the best 
216 

 

system of emission reduction and of their achievability appears in section V. of the final rule 

preamble. 

Comment 11: Commenters state that section 111 may only be used to regulate the source's 

performance, i.e., the amount of a certain pollutant that the source emits at a particular level of 

operations. By its terms, a “standard of performance” assumes that the source will continue to 

“perform.” A “standard of performance” cannot mandate “non-performance.” 

Response 11: As discussed in section V.B. of the preamble, in this final rule, we do not consider 

reduced utilization alone as an alternative BSER; building blocks 2 and 3 are based on substitute 

generation. Nevertheless, the EPA disagrees that the use of the word “performance” prevents the 

EPA from setting standards that may rely in part on an individual source’s utilization rate. 

Changes to the nature or magnitude of a source’s operation are routine aspects of emission 

regulation and are regularly employed as a strategy within the industry to comply with federal 

regulations, or state or industry initiatives. The Legal Memorandum accompanying the final rule 

includes a detailed discussion of examples of CAA regulations and permits that incorporate 

reduced production or utilization. In this instance, reduced utilization also reflects a reality of the 

electrical system itself, where a coordinated dispatch system increases or reduces the power 

produced by any single EGU at any given time according to a number of variables. Under this 

system, the particular “performance” of an EGU is dependent on the performance of the other 

EGUs within its interconnected region. In any case, the final rule does not mandate the reduced 

utilization of any affected EGU, nor does it require that any EGU cease all operations. The final 

rule establishes national uniform emission rates for each of the two affected source 

subcategories, that are achievable at all EGUs using proven, industry-recognized strategies. The 

final rule also gives states significant flexibility to decide what standards are placed on individual

sources, or what suite of equivalent measures they will take to comply with the emission 

guidelines. 

Comment 12: Commenters stated, it is fundamental that a standard of performance under 

section 111 must "reflect[] 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." [CAA Section 111(a)(1) 

(emphasis added).] Commenters said, EPA may not base its determination that a standard is 

achievable on "mere speculation or conjecture." [Lignite Energy Council v. EPA, 198 F.3d 930, 

934 (D.C. Cir. 1999) (per curiam).] Commenters said, rather, the Agency bears the burden of 

showing that a standard is achievable "for the industry as a whole" and "under the range of 

relevant conditions which may affect the emissions to be regulated," including "under most 

adverse conditions which can reasonably be expected to recur." [Nat'l Lime Ass'n v. EPA, 627 

F.2d 416,431 n.46, 433 (D.C. Cir. 1980).] Commenters said, in order to show that the Proposal is 

achievable, EPA must "(1) identify variable conditions that might contribute to the amount of 

expected emissions, and (2) establish that the test data relied on by the agency are representative 

of potential industry-wide performance, given the range of variables that affect the achievability 
217 

 

of the standard." [Sierra Club v. Castle, 657 F.2d 298,377 (D.C. Cir. 1981) (citing Nat'l Lime 

Ass'n 627 F.2d at 433)).] 

Commenters stated, EPA has not done so in this rulemaking. Commenters said, rather, the 

Agency has set targets under each Building Block that far exceed what is feasible or costeffective. Commenters said, in particular, the targets under Building Blocks 1 and 2 (i.e., the 

Building Blocks that involve measures taken by affected EGUs, either individually or 

collectively across a state) are not supported by the rulemaking docket and are simply not 

achievable. Commenters said, Building Block 3 is based on unrealistic assumptions, and 

Building Block 4 gives rise to enforcement difficulties. Commenters said, as a result, compliance 

with the state goals will be extremely costly and difficult (if not impossible) for any state as a 

whole and will certainly be impossible for many individual affected EGUs to achieve. 

Response 12: 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 also explain in section V.B., the BSER is not based on demand-side energy efficiency 

measures and comments on building block 4 are therefore moot. Lastly, as we explain in section 

V.A. of the preamble, the emission limits are achievable through the application of the BSER, 

and, as we explain in section VIII of the preamble, the state goals can be achieved in a cost 

effective manner. 

Comment 13: Commenters found the following issues with EPA's legal interpretation: 

1. Section 111(d) specifically prohibits EPA from regulating power plants under Section 

111(d) because the EPA has chosen to regulate those plants under Section 112; 

2. The proposed Section 111(d) rule is illegal because EPA has not finalized any lawful rule 

for equivalent new sources; 

3. Section 111(d) cannot be used to override state authority to manage power resources; 

4. Section 111(d) limits EPA's role to procedure and not substance; 

5. Section 111(d) is limited to source level, inside the fence line, unit by unit, emission 

reduction measures; and 

6. Recent Supreme Court authority confirms that Section 111(d) does not authorize EPA's 

proposal. 

The commenters recommended that the EPA withdraw this proposed rule and draft a rule that 

identifies and supports a best system of emission reductions for the following categories 

separately: coal-fired; integrated gasification combined-cycles; and natural gas fired combined 

cycle power plants. 

Response 13: This comment raises a number of issues that are fully addressed elsewhere in the 

preamble to the proposed rule, the legal memo and other responses in this RTC. 
218 

 

Comment 14: Commenters stated that the EPA has failed to follow CAA requirements for 

addressing international pollution. 

Commenters stated, section 115 of the CAA requires EPA to formally notify state governors 

with emissions that impact public health and welfare in foreign countries; and to develop plans 

under Section 110; and under reciprocity requirements of Section 115, if the foreign country is 

preventing air pollution from similar sources to the same degree it is being prevented in the U.S. 

commenters said, the EPA has not done any of the above. 

Response 14: The emissions guidelines are under the authority of section 111 of the CAA, not 

section 115. Nothing in section 115 precludes regulation under section 111. 

Comment 15: Multiple commenters questioned the legality of the proposal as justified under 

section 111(d). 

Commenters stated that the legality of the proposed rule is tenuous. The commenters stated that 

the EPA is not the appropriate body to develop new greenhouse gas laws of this scope. The 

commenters stated that the unique qualities and widespread impact of new carbon rules require 

state leadership and congressional action. The commenters stated that it is improper and legally 

defective for the EPA to drive energy policy and wide-spread changes to the U.S. power system. 

The commenters stated, given that the EPA possesses only the authority given to it by Congress, 

it is concerning that the EPA has ignored Supreme Court guidance to narrowly interpret its 

authority under the Clean Air Act (CAA) in developing this rule. [Utility Air Regulatory Group 

v. Environmental Protection Agency, 573 U.S., U.S. Supreme Court Case, 2014.] 

The commenters stated that the EPA's proposal is an unprecedented application of the Clean Air 

Act (CAA). The commenters noted that the EPA has generally only applied the CAA Section 

111 standards to direct power-plant emissions or "inside-the-fence" measures where costeffective actions, such as installing pollution controls, can be implemented directly by the 

regulated facility. The commenters noted that the proposal mandates aggressive targets, which 

would almost certainly require "outside-the-fence" measures to achieve including significant redispatch of power from coal to natural gas generation, renewable portfolio standards, and 

stringent energy efficiency. The commenters stated that the EPA has not established its legal 

authority to enforce "outside-the-fence" provisions, and the EPA also fails to justify its 

assignment of unequal carbon reduction targets to different states and does not adequately 

address the implications of this unequal treatment. 

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). The 

commenters stated that the Proposed Rule is built on new and redefined terminology never 

before used in the CAA section 111(d) program instead. The commenters noted that the state-bystate "goals" EPA seeks to set are legally enforceable mandates for all states, however, EPA 

lacks the authority under either CAA section 111(d) or EPA's CAA section 111(d) regulations to 
219 

 

set binding statewide "goals." The commenters also noted that the "system" of emission 

reduction EPA defines to be mandated reductions in the amount of time facilities within the 

regulated source category are allowed to operate, however, forcing coal-fueled EGUs to reduce 

operation (or retire) is not a "system" of emission reduction under CAA section 111(d). 

The commenters stated that the new "interpretation" of CAA section 111(d) set forth in the 

Proposed Rule encourages states to submit plans that contains what EPA calls "portfolio" 

measures which would be used, for instance, to dramatically increase the use and deployment of 

renewable energy and energy efficiency measures throughout the states, targeting citizens and 

businesses as necessary agents in the reduction of electric consumption. However, the 

commenters stated that upon EPA approval of a State CAA section 111(d) Plan, these measures 

would become "federally-enforceable" against those agents (citizens and businesses) required to 

implement them. The 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, rather, CAA section 111 authorizes standards to 

be set for facilities within EPA-listed source categories. The commenters noted 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 15: 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 in light of legal 

precedent, the statutory text, statutory context, statutory purpose, and legislative history. 

Further, it cannot be said that because environmental requirements may have an effect on the 

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, to the extent this comment objects to the portfolio approach, which the EPA is not 

finalizing, the comment is moot. 

Comment 16: Commenters stated that the EPA impermissibly reaches beyond the individual 

regulated source in setting its proposed standards of performance. 

The commenters stated that the EPA's legal rationale depends on a reading of section 111 that is 

divorced from the rest of the CAA. [EPA Legal Memorandum at 52.] The commenters stated 

that other CAA programs and their governing authorities demonstrate that Congress knows the 

difference between source-specific and broad, general programs, that it uses specific language to 

create each type of program, and that section 111 clearly falls into the source-specific category. 

The commenters argued that the EPA is required to read these various provisions as a whole and 

its failure to do so here has resulted in an unlawful interpretation of section 111. [UARG v. EPA, 

134 S. Ct. at 2441 (Agencies must construe the words of a statute "in their context and with a 

view to their place in the overall statutory scheme.)] 
220 

 

In addition, the commenters stated that the EPA never addresses the decades of precedent 

conflicting with its new interpretation of section 111. The commenters stated that the Subpart B 

regulations, every single NSPS rulemaking, and every 111 (d) existing source standard that EPA 

has promulgated contradict the rationale for the authority the Agency now claims. The 

commenters noted that when EPA does discuss precedent, moreover, it does so misleadingly 

(suggesting that its emission guidelines for municipal waste combustors and CAMR support its 

reliance on the types of measures provided for under Building Blocks 2, 3, and 4). [EPA Legal 

Memorandum at 63 & n.51.] The commenters argued that these rules do not support the EPA's 

position. The commenters stated that the emission guidelines for municipal waste combustors 

were not based on measures anything like Building Blocks 2, 3, and 4; they were based on 

controls that could be implemented at the covered sources. The commenters stated that CAMR 

also was based on implementation of pollution controls at individual EGUs. [70 FR 28617-20, 

28621] The commenters concluded that these rules do not support EPA's position, but undermine 

it. 

The commenters stated that every piece of evidence points to the conclusion that section 111 

requires standards of performance to be achievable by individual sources based on measures 

implemented at the source. The commenters asserted that the EPA has ignored all of that 

evidence and stretched beyond credibility to reach the opposite conclusion. 

Response 16: EPA disagrees with these comments. The commenters have not pointed to any 

specific conflicting interpretation of statutory authority in these prior agency actions. That the 

agency has taken various approaches to standard setting under section 111 in the past does not 

equate to “conflicting precedent” with its view of an appropriate approach to the BSER in this 

instance. We note that the emission guidelines provide states with the ability to establish 

standards of performance that are achievable by the affected EGUs. 

Comment 17: Commenters stated that the EPA should withdraw and re-propose a rule that 

follows CAA BSER precedent based on activities within the fence line of the source, and 

not through elimination of the source. 

Commenters stated that even if existing fossil fuel-fired electric generating units could be 

regulated under Section 111(d), EPA's proposed guidelines do not comply with the Clean Air 

Act. The commenters stated that contrary to the direction provided by the Clean Air Act, the 

Proposal seeks to impose regulatory requirements that do not fit the statutory definition of a 

"standard of performance" and seeks to impose requirements on facilities and entities that are not 

subject to the Clean Air Act at all. The commenters referred to Section 111(d)(A)(1) and the 

definition of "standard of performance" in Section 111(a). The commenters stated that in these 

provisions, it is clear that the Congress intended BSER to be "applied" to existing stationary 

sources and reflect a "standard of performance" that involves emissions reductions through 

process changes, operation changes, direct emission control, or other methods applied at the 

emissions unit. According to the commenters, "standards of performance," while broadly 

defined, cannot be based on the elimination of the source itself (i.e., no performance) or reduced 

utilization of the source, which is what EPA's Proposal would mandate. The commenters noted 
221 

 

that, with the exception of Building Block 1, the Proposal, through Blocks 2, 3, and 4, is based 

on reducing the amount of power generation at certain existing sources and increasing generation 

from others. The commenters argued that approach does not meet the statutory definition of 

"standard of performance" and thus violates the Clean Air Act by seeking to require NGCC units 

to operate at higher capacity factors and thus emit more CO2. In addition, the commenters stated 

that requiring coal units to operate at lower capacity factors is not the BSER because reduced 

operating levels will result in higher CO2 emission rates at coal units, as their efficiency 

declines. The commenters stated that the EPA's approach also violates the Act by effectively 

imposing regulatory requirements on renewable resources, nuclear facilities, and end users of 

electricity that do not emit anything at all. 

In contrast to EPA's Proposal, the commenters stated that the EPA's prior Section 111(d) 

programs have remained within the confines of the statutory authority Congress granted to the 

Agency. The commenters stated that in the past, EPA's definition of BSER in establishing 

Section 111(d) emission guidelines has always been based on activities that can be applied 

within the fence line of the emitting unit. The commenters noted for example, in developing 

Section 111(d) emission guidelines for Kraft Pulp Mills to control emissions of total reduced 

sulfur emissions (TRS) in the 1980's, the EPA produced a guideline document (Kraft Pulping - 

Control of TRS Emissions at Existing Mills) which contained the determination of BSER for 

various mill emission sources. The commenters stated that one of the emitting sources evaluated, 

a black liquor recovery boiler, is very similar to many of the steam generators utilized in the 

electric utility industry in that they both produced high pressure steam used for electricity 

generation. The commenters stated that the EPA determined that BSER at existing recovery 

boilers included state-of-the-art process controls and black liquor oxidation (pre-treatment of 

fuel). In addition, the commenters stated that the Section 111(d) program provided for subcategorization of recovery boiler units with different limits assigned based on unit design and 

unit age. The commenters stated that in Louisiana, for example, LDEQ set the TRS emission 

limit for existing boilers at 20 PPM, but in Arkansas the emission limits on existing recovery 

boilers ranged from 40 PPM to 100 PPM. The commenters stated that this precedent illustrates 

how EPA should craft its Section 111(d) emission guidelines for electric utilities - identifying the 

best control options that can be applied to the performance of the emitting units covered by the 

rule, and then allow states to determine the specific level of performance required for the specific 

emitting units within its borders. 

The commenters stated that the EPA cites a vacated rule, the Clean Air Mercury Rule (CAMR), 

as support for its authority to determine flexible compliance mechanisms under Section 111(d), 

such as cap and trade. However, the commenters stated that CAMR was crafted based only on 

emission reductions that could be achieved through application of control technology at units 

within the affected source category. The commenters stated that the cap-and-trade option did not 

serve as the basis for determining the BSER; it was simply a compliance option to be 

implemented at the discretion of the states. 
222 

 

The commenters stated that the EPA should withdraw its Proposal and re-propose its Section 

111(d) emission guidelines to follow the Clean Air Act and past precedent by determining BSER 

only at the emissions source. 

Response 17: 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 in light of legal 

precedent, the statutory text, statutory context, statutory purpose, and legislative history. 

Additionally, we disagree that the cap-and-trade aspect of CAMR was designed as “simply a 

compliance option”. As discussed in the preamble to this rule, 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. 

Accordingly, we disagree that cap-and-trade was simply a compliance option and, for the reasons 

discussed in the preamble, believe it is an informative rulemaking under section 111. 

Comment 18: The Clean Air Act ("CAA") Section 111(a) defines Best System of Emissions 

Reduction (BSER). Even though the same definition of BSER applies to both Sections 111(b) 

and 111(d), EPA interpreted BSER much more liberally under the proposed 111(d) rule for 

existing units than it did under the proposed 111(b) rule for new units. EPA cannot apply a 
223 

 

different interpretation of BSER when setting performance standards for new EGUs under 

Section 111(b) than for existing EGUs under Section 111(d), when both sections are subject to 

the same BESR definition. 

Response 18: This comment is legally incorrect. The agency is not “interpreting” section 

111(a)(1) differently in section 111(b) versus section 111(b). Rather, we are applying the term to 

two quite different classes of facilities: those that are new versus those that are existing. 

Congress recognized this difference itself in establishing a direct federal standard setting regime 

under section 111(b) while setting up a section-110 like cooperative-federalism planning regime 

under section 111(d). 

Comment 19: Commenters argued that the emission guidelines for existing sources are more 

stringent than the NSPS. 

Commenters stated that the EPA's Proposal would unreasonably and illegally impose more 

stringent emission standards on existing units than it has proposed for new units. The 

commenters stated that the EPA should recognize that one of the fundamental policies 

underlying the structure of the CAA is that existing unit standards must be less stringent than 

new units standards, given that fewer options are available to reduce emissions from existing 

units and even the options that are available for control retrofits are often more expensive and 

less cost-effective. The commenters stated that control technologies and improved processes can 

be incorporated far more easily into the design of a new unit than that of an existing unit. 

However, for Louisiana, the commenters stated that the proposed final limit of 883 lb/MWh is 

well below the proposed emission limit of 1,000 lb/MWh for a new large gas-fired unit and the 

proposed limits of 1,100 lb/MWh for new coal-fired units and small gas-fired units. The 

commenters stated that these unreasonable results illustrate the EPA's failure to follow the 

direction of Congress in Section 111(d) and the Agency's own implementing rules. 

Commenters stated that the ESPS cannot be more stringent than, or regulate sources not covered 

by, the corresponding NSPS. The commenters stated that the CPP nationwide average emission 

performance goal for existing power plants in 2030 is 990 lb CO2/MWH (based on their 

calculation of state-by-state targets), which is below EPA's proposed NSPS for both new coal 

power plants (1,100 lb CO2/MWh) and new NGCC power plants (1,000 lb CO2/MWh). The 

commenters stated that roughly half the states' existing-source CO2 performance targets are more 

stringent than the corresponding new source standards for either new coal or new NGCC. 

The commenters stated that an ESPS that is more stringent than the corresponding NSPS is 

unheard of in the history of the CAA, and defies the logic and intent of section 111(d), which is 

to use the experience gained from NSPS regulation to develop performance standards 

appropriate for the corresponding existing sources.

The commenters stated that section 111(d) regulations "will ordinarily be less stringent than 

those required by standards of performance for new sources because the costs of controlling 
224 

 

existing facilities will ordinarily be greater than those for controlling new sources," EPA's 1975 

implementing regulation states. The commenters noted that the regulation implies that in 

infrequent cases, ESPS may be as stringent as NSPS but it clearly does not contemplate that 

ESPS will be more stringent. 

The commenters argued that ESPS that are more stringent than the corresponding NSPS are 

unreasonable. The commenters noted that the ESPS in the CPP are more stringent than EPA's 

proposed NSPS because the ESPS require shifting base-load generation from coal to gas and 

from both to wind, solar, and nuclear. The commenters noted that the ESPS also require reduced 

production achieved through changes in consumer demand. Thus, the commenters stated that the 

ESPS regulate not only fossil-fuel power plants but also entities different from those regulated by 

the NSPS. The commenters contended that Congress did not intend for section 111(d) to operate 

in this way. 

Commenters stated that in the alternative methods outlined in the NODA, the underlying 

algorithm that combines all four building blocks provides a state-wide emission rate target that is 

even more stringent than EPA proposed for existing and new power plant and is not a realistic or 

reasonable outcome. The commenters stated that to highlight the extreme nature of this final 

result, they calculated a final goal of 336 lb/MWh under this alternative approach, which is 

significantly more stringent than the 531 lb/MWh final goal set by EPA in the proposed rule. The 

commenters stated that when viewed from a statewide performance perspective, EPA is 

requiring more stringent emission reductions from existing sources than new sources; 

specifically, EPA is subjecting existing sources to a standard that is 66 to 69 percent more 

stringent than it is proposing for new sources. 

Response 19: We disagree that the section 111(d) standards are more stringent than the section 

111(b) standards. Further, we explain in the preamble and the Legal Memorandum why the 

section 111(b) and (d) standards are based on different determinations of the BSER. Thus, the 

commenter makes an apples-to-oranges comparison. 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. 

While the agency believes the factual predicate of this comment is incorrect, we note that in at 

least one other part of the CAA, Congress addressed the issue of relative stringency of standards 

for existing versus new sources. In section 129(a)(2), Congress provided that “emissions 

standards for existing units in a category may be less stringent than standards for new units in the 

same category but shall not be less stringent than [standards not relevant here].” 42 USC 

7429(a)(2). Thus, in a place where Congress explicitly addresses the issue, Congress merely 

authorizes the use of less stringent standards for existing sources, subject to conditions; Congress 
225 

 

does not mandate less stringent standards for existing sources.The EPA notes that the 

performance rates in the final guidelines are not nearly as stringent as the commenter calculated. 

Comment 20: The commenters stated that existing sources should not be held to a more 

stringent standard than new sources because it may be more difficult to retrofit existing facilities 

with new emission technology due to siting impossibilities, prohibitive costs or design 

constraints. The commenters stated that additionally, existing sources may have limited 

remaining useful lives and not be able to reduce emissions without a modification or 

reconstruction; additional regulatory burdens and multiple regulatory schemes governing an 

existing facility may likely endanger the facility's future viability. The commenters stated that for 

25 of 48 states for which interim emission limitation rates have been proposed, and 26 of 48 

states for which final emission rates are proposed, the proposed rates are more stringent than 

rates for new NGCC units (1,000 lbs CO2/MWh) under the proposed NSPS. The commenters 

stated that like Idaho, many state emission targets are 40 to 50 percent lower than the emission 

rates required for new sources; this outcome is illogical and contrary to Congressional intent 

under Section 111(d). 

Commenters commented that the proposed rule appears to allow for more stringent regulation of 

existing EGUs than new EGUs. 

Commenters stated 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 stated that by going "outside the fence line" in setting mandatory state goals, EPA 

is proposing requirements for existing units that are more stringent than new unit new source 

performance standards, which establishes a policy with no basis in the statute or no precedent 

under regulatory guidance. The commenters stated that EPA offers no justification for proposing 

source specific standards under Section 111(b) and source specific standards for the proposed 

modification and reconstruction rule but not allowing states to set source specific standards for 

affected sources within each state's jurisdiction to satisfy Section 111(d). 

Commenters stated that the proposed rule is flawed because: it purports to establish emission 

standards for entities other than existing fossil fuel-fired EGUs; and, section 111 further provides 

that standards of performance may be imposed only on stationary sources of air pollutants, i.e., 

any building, structure, facility, or installation that emits or may emit any air pollutant. The 

commenters stated that, as defined in the EPA's NSPS proposal for GHG emissions from new 

EGUs and consistent with section 111(b), the sources appropriate for inclusion in these proposed 

rules are electric utility steam generating units, integrated gasification combined cycle (IGCC) 

units, and stationary combustion turbines that meet certain capacity and operational criteria. The 

commenters stated that, however, under the EPA's section 111(d) proposal, State plans must 
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include emission standards that impose requirements applicable to any affected entity other than 

an affected source that has the effect of reducing utilization of one or more affected sources; 

further, the EPA defines affected entity to include any entity with obligations under this subpart 

for the purpose of meeting the emissions performance goal requirements in these emission 

guidelines. The commenters stated that by this definition, the EPA expands its emission 

guidelines to encompass any entity that the regulatory authority believes could contribute to 

reducing the demand for electricity from EGUs. Commenters stated the building blocks chosen 

as BSER will include owners and operators of renewable energy generators, entities that do not 

generate electricity but only distribute it to end-use customers, large industrial consumers and 

even residential consumers of electricity, thereby expanding the universe of regulated entities 

beyond existing electric utility boilers, IGCC units, and stationary combustion turbines that 

would be regulated under the proposed NSPS. The commenters stated that under the EPA's 

proposal, it appears that the States themselves are affected entities potentially subject to 

compliance requirements. The commenters stated that the proposal defines an affected entity as 

any entity with obligations under this subpart, and the agency states in no uncertain terms that its 

proposed interim and final goals would establish binding emission guidelines for state plans. 

Commenters stated the proposal expands EPA's authority and is plainly impermissible under 

Section 111(d), i.e., no language in that provision authorizes the EPA (or even the States) to 

impose obligations on any affected entity other than existing sources in a regulated source 

category; the EPA must withdraw its proposed rule because it depends on States imposing 

regulatory obligations under Section 111 on facilities other than existing fossil fuel-fired EGUs. 

Response 20: The agency disagrees that the existing source guidelines are more stringent than 

the new source standard and explains in response 52.1 why this is an apples-to-oranges 

comparison. Further, the agency explains how it is permitting states to consider remaining useful 

life in Section VIII of the preamble and Section IX of the Legal Memo. 

Comment 21: Commenters stated that in the alternative methods outlined in the NODA, the 

underlying algorithm that combines all four building blocks provides a state-wide emission rate 

target that is even more stringent than EPA proposed for existing and new power plant and is not 

a realistic or reasonable outcome. The commenters stated that to highlight the extreme nature of 

this final result, they calculated a final goal of 336 lb/MWh under this alternative approach, 

which is significantly more stringent than the 531 lb/MWh final goal set by EPA in the proposed 

rule. The commenters stated that when viewed from a statewide performance perspective, EPA is 

requiring more stringent emission reductions from existing sources than new sources; 

specifically, EPA is subjecting existing sources to a standard that is 66 to 69 percent more 

stringent than it is proposing for new sources. 

Commenters stated that EPA has proposed for state-based CO2 emission performance interim 

and final goals of 647 lb/MWh and 531 lb/MWh, respectively and, for new EGUs, emission 

limits ranging from 1,000 lb/MWh /MWh to 1,100 lb/MWh, depending on the type and size of 
227 

 

the unit. The commenters stated that according to EPA's Technical Support Document: Goal 

Computation, New Jersey's existing EGUs are achieving an emission rate of 1,035 lb/MWh. The 

commenters stated that if the existing EGUs were to be replaced by new EGUs, the fleet would 

be subjected to a collective emission rate of 1,000 lb/MWh to 1,100 lb/MWh, which is in the 

range of New Jersey's existing EGUs. The commenters stated that it is not reasonable to expect 

deeper emissions reductions from existing EGUs than what is required from new EGUs. 

Commenters stated a uniform national goal in this range could achieve the same 30 percent CO2 

reduction as EPA projects it will achieve under the rule proposal. 

Commenters stated that in places EPA has used an NGCC emission rate, in lb/MWh, in 

calculating the Interim and Final Goals for some states that is lower than the rate specified in 

EPA's pending NSPS for EGUs. In Arizona, the commenters stated that the EPA used an NGCC 

emission rate of 900 lb/MWh, based on the average performance of Arizona's NGCC units in 

2012; the commenters believed that this is unreasonable. The commenters stated that for 

purposes of goal setting, an existing NGCC unit should not be expected to perform at a better 

level than a new, post-NSPS unit with newer technology; even if the existing NGCC unit is 

temporarily exhibiting a better level of performance, it is not clear that such performance would 

continue over the life of the NGCC unit or would survive the change in operating regime from an 

intermediate or peaking load unit to baseload usage (as contemplated by EPA's proposed 

redispatch). The commenters stated that while they believe that use of the graduated NSPS rates 

would be best, for purposes of simplicity in goal setting, the commenters believed that use of the 

1,000 lb/MWh in the proposed NSPS would be an acceptable solution given that most NGCC 

units would be subject to the 1,000 lb/MWh limit if they had been constructed post-NSPS 

proposal. 

Response 21: We note that the subcategorized emission performance rates in the final rule are 

significantly less stringent the numbers calculated by these commenters. 

Comment 22: Commenters stated that in places EPA has used an NGCC emission rate, in 

lb/MWh, in calculating the Interim and Final Goals for some states that is lower than the rate 

specified in EPA's pending NSPS for EGUs. In Arizona, the commenters stated that the EPA 

used an NGCC emission rate of 900 lb/MWh, based on the average performance of Arizona's 

NGCC units in 2012; the commenters believed that this is unreasonable. The commenters stated 

that for purposes of goal setting, an existing NGCC unit should not be expected to perform at a 

better level than a new, post-NSPS unit with newer technology; even if the existing NGCC unit 

is temporarily exhibiting a better level of performance, it is not clear that such performance 

would continue over the life of the NGCC unit or would survive the change in operating regime 

from an intermediate or peaking load unit to baseload usage (as contemplated by EPA's proposed 

redispatch). The commenters stated that while they believe that use of the graduated NSPS rates 

would be best, for purposes of simplicity in goal setting, the commenters believed that use of the 

1,000 lb/MWh in the proposed NSPS would be an acceptable solution given that most NGCC 

units would be subject to the 1,000 lb/MWh limit if they had been constructed post-NSPS 

proposal. 
228 

 

Response 22: We note that the subcategorized emission performance rates, and the state of 

Arizona’s equivalent state goal, as expressed in mass or in rate, in the final rule, have been 

adjusted from the proposal in response this and similar comments. We believe the final 

guidelines set an achievable emission performance level for the affected EGUs in Arizona, and 

the apples-to-oranges comparison of the stringency of standards under section 111(b) does not 

alter that conclusion. 

Comment 23: Commenters stated EPA does not propose these same requirements for existing 

coal-fired EGUs because it is impractical and unachievable. The commenters stated that existing 

sources should not be held to a more stringent standard than new sources because it may be more 

difficult to retrofit existing facilities with new emission technology due to siting impossibilities, 

prohibitive costs or design constraints. The commenters stated that additionally, existing sources 

may have limited remaining useful lives and not be able to reduce emissions without a 

modification or reconstruction; additional regulatory burdens and multiple regulatory schemes 

governing an existing facility may likely endanger the facility's future viability. The commenters 

stated that for 25 of 48 states for which interim emission limitation rates have been proposed, 

and 26 of 48 states for which final emission rates are proposed, the proposed rates are more 

stringent than rates for new NGCC units (1,000 lbs CO2/MWh) under the proposed NSPS. The 

commenters stated that like Idaho, many state emission targets are 40 to 50 percent lower than 

the emission rates required for new sources; this outcome is illogical and contrary to 

Congressional intent under Section 111(d). 

Commenters stated that in the modified and reconstructed source rule, EPA proposes requiring 

modified coal-fired EGUs to achieve CO2 emissions of 2 percent below the best performing year 

since 2002, with a hard floor of 1,900 lbs. CO2/MWh-net; yet EPA incongruously sets 

Pennsylvania's final target under the existing source rule much lower, at 1,052 lbs. CO2/MWh. 

The commenters stated that this is an unattainable target for their EGU or any similarly situated 

coal-fired EGU, EPA provides no basis for holding existing sources to more stringent standards 

than those proposed for new sources (1,100 lbs./MWh) and modified and reconstructed sources 

(no more stringent than 1,900 lbs/MWh). 

Commenters stated that the EPA's proposed emission reduction goals for existing fossil fuelfired sources are far more stringent than the proposed goals for modified/reconstructed sources 

and for many states, new sources. The commenters stated that the imposition of more stringent 

goals for older, less flexible, existing sources defies logic. The commenters stated that generally, 

new sources are required to adhere to more stringent requirements as new sources can install the 

most current and state-of-the-art emissions control technology during construction and can make 

siting and design decisions necessary to best install and operate those technologies; new sources 

can be designed and constructed in compliance with both Section 111 and Section 112 in the first 

place. The commenters stated that this is demonstrated by EPA's own proposed NSPS for new 

coal-fired EGUs requiring the level of emissions achievable through installation of partial carbon 

capture and storage and through operation of combined cycle plants for new natural gas-fired 

turbines; EPA does not propose these same requirements for existing coal-fired EGUs because it 
229 

 

is impractical and unachievable to mandate this technology on existing units after they have been 

built. 

Response 23: We believe the final guidelines set an achievable emission performance level for 

the affected EGUs, and the apples-to-oranges comparison of the stringency of standards under 

section 111(b) does not alter that conclusion. 

Comment 24: Commenters requested that the EPA withdraw the proposed rule because EPA 

has no authority to enforce the measures contained in its Proposal, and it is therefore unlawful. 

The commenters stated that the EPA cannot adopt a federal plan that governs the order of 

dispatch, that requires state agencies to run energy efficiency programs, or that would order the 

construction and operation of renewable energy generation sources. Further, the commenters 

noted that state agencies do not have the authority to regulate the activities of cooperatives and 

municipal power providers. The commenters stated that all of this demonstrates how unworkable 

the Proposal is. 

The commenters argued that Section 111 of the CAA authorizes a narrow regulatory program 

that applies to sources within listed source categories and that authorizes standards of 

performance based on measures that can be achieved through actions taken at the source itself. 

The commenters stated that the EPA's Proposal would require something very different: state 

enacted measures to reduce aggregate emissions from each state's total fleet of existing EGUs, 

based on measures that individual EGUs cannot themselves implement or based on curtailment 

of operations. The commenters stated that the Proposal is inconsistent with the requirements of 

the CAA and wanders so far afield from EPA precedent as to be unrecognizable as a rulemaking 

made pursuant to section 111. 

Response 24: 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 in light of the 

statutory text, statutory context, statutory purpose, and legislative history. 

Additionally, we disagree with these comments because the authority or practical ability of the 

EPA to implement or enforce the BSER itself is irrelevant and based on a false premise. In fact, 

for new sources, the statute plainly forbids EPA from requiring sources to implement a particular 

BSER. 

By the same token, the EPA could not enforce many logistical aspects of a control requirement 

such as a scrubber – for instance, the EPA does not have the authority to order the creation of 

companies that manufacture scrubbers, or order their construction or delivery on a certain 

schedule. The EPA need not have before it at the stage of determining the BSER all of the 

information regarding manufacturing, transportation of parts, or other logistical requirements to 

ensure that each scrubber gets constructed and delivered to a source. Nonetheless, the agency can 

determine the BSER premised on a reasonable assumption that all of those things can actually 

happen. 
230 

 

What is relevant is that the control requirements that the EPA identifies meet the statutory 

considerations to qualify as the BSER, which include that the owners or operators of the affected 

sources be able to implement the control measures and achieve their emission limits through 

those control measures. As we discuss elsewhere, that is the case for all of the building blocks in 

the final rule. Thus, the EPA can reasonably determine that the federally enforceable emission 

standards that would be set in a federal plan, just as in a state plan, are achievable by the affected

EGUs and will be met either through the measures in the building blocks or, if the affected EGUs 

so choose, through other measures that contribute to its compliance. The agency will provide for 

the implementation of the standards of performance via the same types of regulatory mechanisms 

being made available to states in the emission guidelines. 

Lastly, to the extent this comment objects to the portfolio approach, which the EPA is not 

finalizing, the comment is moot. 

Comment 25: Commenters stated that EPA's inclusion of energy efficiency and renewable 

energy programs is inconsistent with "cooperative federalism." 

Response 25: As discussed in the legal memo the clean power plan is consistent with the roles 

the 111(d) defines for EPA and the states. We note that we are not including energy efficiency 

as an element of BSER in the final rule. 

Comment 26: Commenters argued that the CPP is an impermissible regulation of emissions that 

are regulated elsewhere in the CAA. 

The commenters stated that instead of setting standards of performance, EPA adopts the 

reduction or retirement of coal generation as the standard of performance for affected EGUs. The 

commenters stated that while not setting CO2 emissions limitations, the EPA takes credit for 

reducing other emissions associated with coal-fired EGUs such as mercury, SOx, NOx, and PM 

by reducing coal generation. The commenters stated that these air pollutants are regulated 

elsewhere in the CAA and cannot justify the CPP. The commenters noted that many of the coalfired EGUs impacted by the proposed rule have recently installed new control technology to 

reduce these other air pollutants as required by EPA's other regulations. The commenters stated 

that these new controls are significant capital investments that will be stranded as a result of the 

CPP. 

Response 26: The agency determined the BSER through a bottom-up approach to what is 

reasonably achievable in this source category. The co-benefits, while significant, are not the 

basis for this rule. However, as recognized through many years of practice and consistent with 

longstanding policy in the content of regulatory impact analyses, the agency believes information 

it can provide about the co-benefits of its actions are just as important as information about costs, 

in order to fully inform the public of the impacts of its regulations. Regarding so-called “stranded 

assets,” the agency conducted a “stranded assets” analysis that shows that the emission 
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performance levels in the final guidelines can be met without the retirement of affected EGUs 

before the end of their book life, and without the retirement of affected EGUs before the end of 

the book life of capital-intensive pollution control retrofits installed on those EGUs. For 

additional detail, see the July 15 docket memo titled “Stranded assets analysis.” 

Comment 27: Commenters stated that the EPA has clearly over-reached its authority under the 

Clean Air Act in several ways: 

a) EPA's interpretation is fundamentally inconsistent with the Federal Power Act's (FPA) 

division of regulatory authority over the electric utility industry between the federal government 

and the states. 

b) EPA is effectively mandating a restructuring of state electric systems rather than regulating 

the environment. EPA is assuming authority greater than even that which Federal Energy 

Regulatory Commission (FERC) has under the FPA. 

c) EPA's encroachment on FERC authority includes an attempt to force utilities "not to serve" 

customers (i.e., through jeopardizing reliability and mandating reduced use by consumers), 

which conflicts with the traditional FERC-recognized utility obligation to serve customers. It 

also interferes with some RTO/ISO designated "reliability must run" arrangements. 

d) EPA has exceeded its authority in setting state emission limits. Under the CAA, EPA is to 

"establish a procedure ... under which each State shall submit to the Administrator a plan" which 

establishes standards of performance. CAA Section 111(d)(1). By setting the limits, EPA has 

usurped state authority. 

e) If a state fails to submit a satisfactory plan, EPA would be required to implement a federal 

plan. EPA does not currently have the authority to enforce the requirements necessary to meet 

the emission rate limits established in the proposal. For example, EPA cannot currently legally 

force re-dispatch and increased utilization of NGCCs. 

f) The Clean Air Act ("CAA") Section 111(a) defines Best System of Emissions Reduction 

(BSER). Even though the same definition of BSER applies to both Sections 111(b) and 111(d), 

EPA interpreted BSER much more liberally under the proposed 111(d) rule for existing units 

than it did under the proposed 111(b) rule for new units. EPA cannot apply a different 

interpretation of BSER when setting performance standards for new EGUs under Section 111(b) 

than for existing EGUs under Section 111(d), when both sections are subject to the same BESR 

definition 

g) Because of the regulatory scope of the CPP, no single regulatory agency in Florida has 

adequate authority to implement the performance standards of the CPP. A Florida statute limits 

the regulatory scope of its Department of Environmental Protection (FDEP) to environmental 

policy. Aspects of the CPP that are not environmental in nature will have to be addressed by 

other regulatory agencies and by the Florida Legislature. The elements of the four CPP building 

blocks are implemented/enforced by different state agencies and each element will likely require 

State legislative direction to those different agencies. The commenters expressed concern as to 
232 

 

what it will have to do and to whom it will be required to demonstrate compliance or 

demonstrate progress towards meeting goals. FDEP normally enforces EPA rules, but it has no 

statutory authority to enforce standards associated with generation re-dispatch or the 

development of new renewable energy (RE) sources or the level of energy efficiency (EE) 

achieved by electricity end-users. While RE and EE are within the sole purview of the Florida 

Public Service Commission (FPSC), it is not clear if any Florida regulatory agency can direct the 

re-dispatch of generation. This approach will require almost every state to develop a new 

regulatory construct to meet an unprecedented federal rule. 

h) CPP implementation in Florida could also be hampered by state law that may require 

legislative review or ratification. Florida's legislature meets for one 60-day session annually. In 

addition to this confounding any state plan's implementation, EPA should not discount the 

political reality of a legislature's inability to reach consensus on a state's development and 

implementation of the CPP requirements, especially in states that are wary of expansive 

regulation. 

Response 27: We disagree with commenters. The guidelines set emission performance levels 

for an air pollutant, GHGs (here, specifically, carbon dioxide), from a category of sources—in 

this case, the category responsible for the largest amount of GHG emissions in the United States. 

We disagree that we are expanding our authority to include wholesale energy market regulation 

or state retail regulation nor are we inconsistent with the Federal Power Act’s division of 

regulatory authority over the electric utility industry between the federal government and the 

state. 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. States that do 

not submit approvable state plans, possibly due to their lack of state law authority, will have a 

federal plan promulgated for them to accomplish the same result. Further, the flexibility inherent 

in the final rule allows states and affected EGUs to meet the final rule requirements without 

jeopardizing reliability. For example, an affected EGU needed to run for reliability reasons 

(including one that has a reliability must run contract) could trade for the necessary ERCs or 

allowances to continue generating. For a more comprehensive discussion of reliability issues, 

please see preamble section VIII.G.2. Finally, we note that we are not including building block 4 

as a component of the final rule. 

Comment 28: Commenters stated that this overall proposal design to achieve 30% or 

"meaningful" emissions reductions on a sector-wide basis is clearly inconsistent with the Section 

111(d) requirement for establishing state standards of performance on two specific existing 

source categories. The commenters stated that Section 111(d) regulation cannot be used as an 

"opportunity" to institute requirements that are not authorized by the Clean Air Act. The 
233 

 

commenters stated that throughout the proposal, EPA discusses the use of Section 111(d) to take 

advantage of "opportunities" to reduce carbon dioxide emissions, regardless of what Section 

111(d) actually authorizes or requires. The commenters provided numerous quotes from the 

proposal to support their point. 

Response 28: As explained in the preamble, the final rule is consistent with the requirements of 

the Act. 

Comment 29: Commenters stated that EPA failed to conduct an evaluation of how the measure 

will affect employment as required by section 321(a) of the CAA. 

Commenters asserted that the proposed rulemaking is unlawful because EPA has - as it admits - 

failed to satisfy its mandatory obligation under section 321(a) of the CAA, 42 U.S.C. 7621(a), to 

conduct continuing evaluations of how employment is affected by EPA's actions under the Act. 

The commenters asserted that the Proposed Rule would in fact have a substantial employment 

impact and would cause widespread job losses. The commenters noted that section 321(a)'s 

requirements are mandatory, and EPA's conceded failure to comply with section 321(a) renders 

its proposed rulemaking unlawful. The commenters elaborated extensively on the following 

points (details omitted from this summary): 

(1) Section 321(a) mandates "continuing evaluations" of employment impact. 

 (a) The statute's use of the word "shall" establishes its nondiscretionary nature 

 (b) Section 321(a)'s legislative history removes any doubt about its mandate. 

(2) EPA confesses that it does not perform continuous section 321(a) employment evaluations. 

(3) EPA has wrongly interpreted section 321(a) as discretionary. 

Similarly, commenters stated that section 321(a) of the CAA contains a simple and 

straightforward mandate: EPA "shall conduct continuing evaluations of potential loss or shifts of 

employment which may result from the administration or enforcement of the provisions of this 

chapter and applicable implementation plans, including where appropriate, investigating 

threatened plant closures or reductions in employment allegedly resulting from such 

administration or enforcement." The commenters stated that EPA failed to conduct such a study 

with respect to the Clean Power Plan or any other CAA legislation in the past six years, which is 

in direct defiance of the requirements of section 321(a). The commenters noted that, in a lawsuit 

filed against EPA by Murray Energy Corp. and other energy employers, the plaintiffs request 

that EPA be required to conduct a section 321(a) analysis with respect to its implementation of 

the CAA over the past six years to determine whether it resulted in "job losses or shifts in the 

coal industry." The commenters stated that plaintiffs further demand that EPA be enjoined from 

enacting new regulations - such as the Clean Power Plan - until this analysis has been completed. 

The commenters stated that without such a study, it will be impossible for states, employers, and 

the public to comment meaningfully on the Proposed Rule. 
234 

 

Commenters stated that the EPA persists in its failure to consider in any significant way the 

employment impacts of Clean Air Act regulations like this one. The commenters stated that the 

Agency did not use a whole-economy modeling approach here, which would have captured a 

much more accurate picture of the likely job losses from this proposal. The commenters stated 

that the EPA also continues to avoid undertaking an employment analysis under Section 321(a) 

of the Clean Air Act, which requires the continuous review of potential job losses and shifts in 

employment due to the implementation of the Act. 

Response 29: The EPA disagrees with these comments. Section 321(a) does not require EPA to 

conduct employment evaluations as part of the rulemaking process or as a prerequisite to the 

issuance of a rule. The broad language of Section 321(a) does not address the scope, frequency, 

or timing of employment evaluations, leaving these matters to the discretion of EPA. In the 

exercise of its discretion, however, EPA does routinely evaluate employment impacts when it 

conducts new rulemaking. Indeed, contrary to the commenters’ patently false assertions, EPA 

conducted a robust employment analysis for this action, including a discussion of economic 

theory and employment, recent employment trends, and projected sectoral employment changes 

that may result due to the issuance of the final emission guidelines. See Chapter 6 of the RIA for 

the proposed rule and Chapter 6 of the RIA accompanying this final rule. EPA has conducted 

similar assessments for other rulemakings and continues to evaluate employment impacts 

generally and to refine its employment-analysis methods. Together, these efforts constitute 

“continuing evaluations of potential loss or shifts in employment” for the purposes of Section 

321(a). 

To the extent that the commenters are suggesting that Section 321(a) requires EPA to evaluate 

the cumulative employment impacts of all its rules or prescribes a specific analytical tool, such 

as whole-economy modeling, Section 321(a) contains no such requirements. Nevertheless, in 

EPA’s continuing effort to advance the evaluation of costs, benefits, and economic impacts 

associated with environmental regulation, EPA has formed a panel of experts as part of its 

Science Advisory Board (SAB) to advise the Agency on the technical merits and challenges of 

using economy-wide economic models to evaluate the impacts of regulations. The panel of 

experts will consider a variety of issues related to the use of economy-wide modeling, including 

their technical appropriateness for assessing employment impacts. Answers from the panel of 

experts will help EPA assess whether economy-wide models can be used to evaluate 

employment and other economic impacts in the future. 

Comment 30: EPA should articulate clear limitations on the precedential effect of its systemwide approach to BSER 

Commenters stated the logical extension of the CPP's proposed systems-based approach to 

BSER would create near-boundless EPA authority in the context of the EPA regulating other 

sectors. Commenters said the EPA's proposed approach departs substantially from previous 

regulation in a number of ways. Commenters stated at the core of the EPA's proposal is a goal of 

reducing the operation of affected EGUs in favor of: (1) other section 111(d)-regulated EGUs 

with lower-carbon intensity (Building Block 2); (2) EGUs not subject to regulation under 111(d) 
235 

 

(Building Block 3); and (3) measures to reduce consumption of electricity (i.e. reducing the 

electricity consumption of completely independent customers, Building Block 4). Commenters 

stated the consequence of this approach is that the EPA has, in effect, expanded its reach beyond 

environmental regulation to regulation of the broader, energy system. Commenters said this 

broad approach has serious implications for the EPA's potential regulation of other sectors. 

Commenters stated there is no apparent limit to the EPA's use of a "systems" approach to 

reducing greenhouse gas emissions from the energy and transportation sectors. Commenters said 

in theory, the EPA could equally apply a systems approach to other sectors of the economy that it 

may next address, such as the extraction, refining and distribution of fuels; the movement of 

goods and even the manufacturing of products. Commenters said it could, for example, establish 

state carbon intensity targets based on its own determinations regarding the relative carbon 

intensity of different raw materials or feedstocks, of refining or manufacturing processes or of 

distribution. Commenters stated it could impose obligations on states, and indirectly on retailers, 

for the carbon intensity implications of mode choice, such as whether raw materials, fuels, or 

goods should move by ship, rail, pipeline or by other means of transport. Commenters said or in 

the realm of passenger vehicle use, it could impose state performance obligations based on levels 

of multiple occupancy that it deems achievable as a strategy to reduce vehicle miles travelled 

(VMT). Commenters stated there may be significant national energy, transportation and 

environmental benefits associated with advances in these sectors. Commenters said but it is 

highly doubtful that Congress intended for the EPA alone to determine the nation's industrial, 

energy or transportation choices in such a single-purpose manner. Commenters stated as 

proposed, the CPP does not define the dividing line between its approach to regulating EGUs and 

the potential for it to address other sectors of our economy in similar fashion. Commenters 

strongly urged the EPA to consider and define the limits to its authority to alleviate concern that 

the CPP's definition of BSER heralds a broad shift in the EPA authority beyond Congressional 

intent. 

Response 30: 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 in light of the statutory text, 

statutory context, statutory purpose, and legislative history. 

As we explain in section V. B. of the preamble and in the Legal Memorandum, 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. 

Moreover, 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. Further, in 

determining the BSER, the EPA is required to take into account “energy requirements,” which, 
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as we discuss in section V., the D.C. Circuit has viewed as indicating that Congress understood 

that regulation of air pollution was intimately connected with energy needs and policy. In this 

rulemaking, the agency is considering energy requirements, on either or both an individualsource basis and an industry- or nation-wide basis. Among other things, the agency believes the 

measures in building blocks 2 and 3 should be included in the BSER because they will conserve 

fossil fuel resources, both for individual sources and on an industry-wide basis, and because 

renewable resources such as wind and solar are not just environmentally beneficial, but plentiful. 

To the extent the rule has the effect of incentivizing and accelerating the development and 

deployment of renewable energy technologies, this promotes the goal of reducing emissions 

while maintaining the supply of electricity, consistent with Congress’ direction to consider 

“energy requirements” in setting the BSER. Contrary to these comments, this rulemaking has 

precedent in other EPA rules, described in the preamble, that are based on generation shifting 

and renewable energy. Indeed, the relative scarcity of lower-emitting fuels was at the center of 

Congress’s concerns at the time of the 1977 Amendments. As discussed in section V.B. of the 

preamble, one of the reasons Congress revised the requirements for determining the NSPS for 

new power plants was to free up the availability of lower-emitting fuels, such as low-sulfur coal 

and oil, that could then be used by existing plants. Thus, in considering energy requirements on 

an industry- or nation-wide basis, it is appropriate to exercise expertise and balanced policy 

judgment in considering fuels availability and energy needs. The agency is not outside of its 

lawful authority in doing just that here. 

Comment 31: The EPA’s interpretation of BSER appears to conflict with the text of the Clean 

Air Act 

Commenters stated, EPA's position that increasing emissions at NGCC units while reducing 

them at coal-fired power plants constitutes BSER appears to conflict with the text of the Clean 

Air Act. Commenters said, the Act contains two definitions of the term "standard of 

performance," one of which defines the term 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 42 U.S.C. section 7602(l). Commenters said, therefore, in 

order to satisfy the plain language of the Act, state performance standards must require 

continuous, or constant, reductions in emissions of CO2 from all affected sources covered by the 

standards. 

Commenters stated, EPA's proposal to require states to set performance standards based on redispatch from coal to natural-gas fired units would directly contradict this requirement because it 

would require NGCC units to increase their emissions of CO2. Commenters said, thus, EPA's 

proposal to incorporate re-dispatch into the BSER on which states must base their standards of 

performance is plainly at odds with the CAA's requirement that performance standards for 

stationary sources such as NGCCs ensure "continuous emission reduction." 

Response 31: 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 in light of legal precedent, the 

statutory text, statutory context, statutory purpose, and legislative history. Moreover, 
237 

 

implementing our emission guidelines will ensure reduced emissions at affected sources and will 

not result in an increase in overall emissions of CO2. 

Comment 32: Commenters indicated that treating RE and EE measures as "implementing" 

measures because they facilitate sources' compliance with their standards of performance, 

incorrectly assumes that "implementation" can be understood to mean "facilitation." The 

commenters cited the Webster definition of "implement" to mean "to carry out"; "to give 

practical effect to and ensure of actual fulfillment by concrete measures[.]" The commenters said 

this definition is consistent with EPA's use of the word "implement," in proposed Subpart 

UUUU, to mean "carry out." [40 CFR 60.5710] The commenters stated that "standards of 

performance" are what the states would use to achieve the emission performance level, and that 

the CPP's "emission performance levels" or "state goals" are not "standards of performance." The 

commenters said that the fact that renewable energy and energy efficiency measures might help 

states achieve their emission performance levels could mean, at most, that such measures help 

the states "implement" those emission performance levels; it does not mean that those measures 

would help EGUs achieve their standards of performance. The commenters also noted that EPA 

acknowledges that RE and EE measures "are not directly tied to emission reductions that 

affected sources are required to make through emission limits" and "are not intended or designed 

to assist affected EGUs in meeting the performance standards." [79 FR 34,903] 

Commenters stated that EPA takes the term "implemented" out of context when claiming that 

measures applicable to facilities outside the regulated source category are measures that 

"implement" standards of performance. The commenters stated that the "implementation and 

enforcement" measures that states must include under section 111(d)(1)(b) are for the stateestablished standard of performance. 

Response 32: The EPA is not finalizing the portfolio approach, which we proposed to allow 

states to include, as part of the federally enforceable state plan, RE and EE measures as 

“implementing” measures under section 111(d)(1)(b).

Comment 33: Overlap of section 112 and section 111 of the CAA.

Commenters stated that section 111(d) standards cannot apply to sources that are already subject 

to a standard under section 112. Commenters opposed that the proposal's reliance on an 

"ambiguity" created by differing amendments to 111(d) by the House and Senate in the Clean 

Air Act Amendments of 1990, P.L. 101-549 (the "1990 CAA Amendments"), and commenters 

did not agree with the agency's claim that its interpretation of this "ambiguity" is due deference 

under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) 

because section 108(g) of the 1990 CAA Amendments, as published in the Statutes at Large 

provides: "(g) 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[,]" and section 302(a) of P.L. 101-549, which lists 
238 

 

conforming amendments related to the adoption of Title III (the overhaul of section 112), 

contains the following: "(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)." Commenters believed that both sections of 

P.L. 101-549 can be fully incorporated into the Act as amended without any conflict at all, and 

commenters believed that with these amendments, as codified in the U.S. Code, Congress simply 

expanded the list of independent regulatory actions that would displace regulation under 111(d). 

Response 33: See section IV.B of the final rule preamble of the CPP for the EPA’s response to 

the CAA section 112 exclusion. 

Comment 34 Commenters stated that they are also unlawful and therefore cannot provide the 

requisite predicate for the 111(d) proposal. Commenters 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 said the modified-source proposal is unlawful because there is no 

authority under Section 111(b) to issue a regulation covering only modified sources, which the 

Clean Air Act treats as "new" sources without exception. [See C.A.A. section 111(a)(1), 42 

U.S.C. section 7411(a)(1) ("The term 'new source' means any stationary source, the construction 

or modification of which is commenced after" proposal or finalization, whichever is earlier, of 

Section 111 standards).] Commenters said these defects preclude EPA from promulgating 

Section 111(d) standards until such time (if ever) that it adopts lawful Section 111(b) standards. 

Commenters stated, EPA's proposal lacks a lawful New-Source Standard predicate whereby the 

EPA must first have established lawful standards under Section 111(b) for new sources in a 

particular industrial category. 

Response 34: This comment is outside the scope of this rulemaking 

Comment 35: Modification/reconstruction rule does not satisfy prerequisite for 111(d) rule, i.e., 

standard for new source must apply first, not a standard for modified/reconstructed 

Commenters stated that the modified/reconstructed source rule cannot serve as the necessary 

predicate, required by statute, for issuance of the existing source rule. 

Commenters stated that the EPA's assertion that the modified or reconstructed source rule 

proposed concurrently with the proposed carbon pollution emission guidelines for existing EGUs 

provides the prerequisite for section 111(d) is contrary to the plain language of the statute and is 

logically flawed. 
239 

 

Commenters stated that where, as here, EPA has chosen to establish two separate categories of 

NSPS under section 111(b), one for truly new sources and one for modified sources, it cannot 

lawfully base the validity of a section 111(d) regulation for existing sources on the modified 

source regulation. The commenters stated that should the new source regulation in this scenario 

fail against legal challenge, so too must the section 111(d) regulation under the plain language of 

section 111(d). The commenters stated that this legal result is further supported by the practical 

reality that, as the three regulations for EGUs have been proposed by EPA, the section 111(b) 

regulation for existing EGUs has virtually no real world effect; neither does EPA's plan to 

concurrently regulate modified EGUs as existing EGUs under its section 111(d) regulation pass 

legal muster. The commenters stated that as a result, EPA's section 111(d) regulation will be left 

without the necessary section 111(b) regulation controlling "new" sources and this section 111(d) 

regulation will be invalid. The commenters stated that the EPA should abandon this rulemaking. 

The commenters stated that as with the new source rule, the absence of costs or benefits from 

regulation demonstrates that there is no valid regulatory purpose; instead EPA's section 111(b) 

regulation is pretextual; undertaken only with an eye to claiming that a prerequisite for section 

111(d) has been met. The commenters stated that for jurisdictional and regulatory purposes 

pretextual regulation should be regarded as no regulation at all. 

Response 35: EPA disagrees with this comment. 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). 

Comment 36: Standard must be rate-based 

Commenters stated that the language of section 111 requires EPA to provide guidance to states 

for existing sources to which a standard of performance under this section would apply if such 

existing source were a new source. The commenters stated that this mandates that the style of 

standards under 111(d) should be structurally the same as 111(b). The commenters stated that the 

programs do not have to be identical nor would such an outcome be anticipated by anyone but 

the "as if" tenor of 111(d) clearly denotes a congressional intent for similarity. 
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Response 36: We disagree with this comment. By its terms, section 111(d)(1) requires an 

applicable standard of performance under section 111(b), but does not mandate, or indicate 

congressional intent, that the form of the section 111(d) standards of performance must match 

the form of the section 111(b) standard of performance. 

Comment 37: Allowance systems vacated under NJ v EPA 

Commenters stated that any re-proposed Section 111(d) rule must omit provisions such as 

allowance systems vacated under New Jersey v. EPA. Commenters stated that current Subpart B 

still contains remnants of the Clean Air Mercury Rule (CAMR), that was vacated in its entirety 

in New Jersey v. EPA. The commenters stated that the decision vacated both the Delisting 

Rule40 and the CAMR; EPA has removed some but not all of the CAMR-related regulation 

changes from Subparts A, B, Da, and HHHH in the CFR, but some CAMR-related changes to 

Subpart B are still there. The commenters stated that specifically, in 40 CFR Subpart B, 

regulation sections 60.21(f) (definition of emission standard) and 60.24(b)(1) (emissions 

standards and compliance schedules), still include "allowance system" as an allowable method 

for states to set an emission standard under Section 111(d); this is contrary to the New Jersey v. 

EPA decision that vacated the entire CAMR. 

Response 37: The EPA disagrees that the Emission Guidelines must omit provisions for 

allowance systems. The EPA also disagrees with the commenters that 40 CFR 60.21(f) and 40 

CFR 60.24(b)(1) are not promulgated and effective. These subpart B framework regulations are 

promulgated and effective, and they authorize the use of allowance systems as a form of 

emission standard. However, to resolve any residual doubt that allowance systems are an 

acceptable form of emission standard in the Clean Power Plan, we are including regulatory text 

in the final subpart UUUU regulations authorizing the use of allowance systems as a form of 

emission standard under section 111(d). We recognize that the subpart B regulations to which the 

commenters refer were originally amended in 2005 to include recognition of allowance systems 

as a form of emission standard in the Clean Air Mercury Rule (CAMR) (70 FR 28606, 28649; 

May 18, 2005). As the commenters note, CAMR was vacated in its entirety in New Jersey v. 

EPA, 517 F.3d 574 (D.C. Cir. 2008). However, the reason for vacatur was wholly unrelated to 

the question of whether an allowance system could be a form of emission standard. In response 

to the New Jersey decision, the agency removed CAMR provisions from the Code of Federal 

Regulations. The agency chose to retain the language of 60.21(f) and 60.24(b)(1) generally 

recognizing allowance systems. This language is broader than CAMR and unrelated to the 

reasons for its vacatur. The EPA re-promulgated these provisions in the final Mercury and Air 

Toxics Standard (MATS) in February of 2012 (77 FR 9304, 9447; Feb. 16, 2012). Even if this 

were not the case, the agency would not concede that simply because “allowance systems” were 

not provided for in the framework regulations of subpart B, they could not be relied upon in 

specific emission guidelines, such as these for carbon dioxide. The framework regulations 

generally serve a gap-filling role where there are not more specific provisions laid out in the 

relevant emission guidelines. In order to resolve any question whether allowance systems are 
241 

 

authorized under the Clean Power Plan, we are including regulatory text in subpart UUUU to 

make this authorization explicitly clear. 

Comment 38: Can EPA require of the states what it cannot do itself? 

Commenters stated that a related problem arises from EPA's effort to force state and even federal 

(for regional systems) utility regulators to be participants in its "BSER." Commenters said the 

statutes governing those regulatory processes typically require consideration only of cost and 

reliability when approving generation projects and rates, except as may be allowed under 

specific, legislatively directed renewable portfolio standards. Commenters said that EPA's 

assumptions about each state's capabilities fail to account for the fact that slowing or shuttering 

coal and gas plants and replacing them with wind turbines and solar arrays may raise costs and 

diminish reliability. Commenters said that the market, as monitored and managed by the utility 

regulatory system and system operators, takes care of optimizing the generation mix from these 

two standpoints. Commenters said the ESPS disturbs the intended operation of those regulatory 

systems. 

Response 38: 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, to meet the final rule’s requirements in the most costeffective and efficient manner possible. 

1.15.2 APA issues 

Comment 1: Commenters stated that the proposal is entitled to deference. 

Commenters stated, the Clean Air Act defines a "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." 

Commenters stated, Congress did not define "best system of emission reduction" nor did it 

define "system," and the Act does not expressly preclude EPA from considering the availability 

of measures that reduce the carbon intensity of affected EGUs. Commenters said, this discretion 
242 

 

for the Agency is in contrast to other sections of the Act, where Congress requires EPA to 

consider specific control technologies. Commenters said, for example, Congress clearly directed 

EPA to require the installation of the Best Available Control Technology under section 169(3) 

and the Best Available Retrofit Technology under section 169A(g)(2). Commenters said, 

Congress's use of "system" in section 111 as opposed to "technology" signals its clear intent to 

allow EPA the discretion to identify the best means to reduce emissions from a source category. 

Commenters stated, this lack of detail from Congress makes it clear that Chevron deference is 

appropriate and agency expertise is necessary to design specific requirements. Commenters said, 

the Court recognized this in AEP v. Connecticut: 

The Clean Air Act entrusts such complex balancing to EPA in the first instance, in combination 

with state regulators. Each "standard of performance" EPA sets must "tak[e] into account the 

cost of achieving [emissions] reduction and any nonair quality health and environmental impact 

and energy requirements." section 7411(a)(1), (b)(1)(B), (d)(1). . . . It is altogether fitting that 

Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of 

greenhouse gas emissions." 

Commenters stated, thus, it is EPA's role to identify what emission reduction measures can 

reduce emissions from the source category based on its examination of existing state and 

industry practice. 

Response 1: The agency believes this comment is generally consistent with its own views. 

Comment 2: Commenters stated, EPA's interpretations of section 111(d) are unreasonable, 

arbitrary, and capricious, and are not entitled to deference. 

The commenters noted, "[W]hen an agency-administered statute is ambiguous with respect to 

what it prescribes, [courts will presume] Congress has empowered the agency to resolve the 

ambiguity." Commenters said, in such instances, courts will defer to an agency's "permissible 

construction of the statute." Commenters said, the agency's interpretation must be "reasonable," 

however. Commenters said, even where Congress has explicitly directed the agency to 

promulgate rules, courts will not give "[s]uch legislative regulations ...controlling weight [if] 

they are arbitrary, capricious, or manifestly contrary to the statute." Commenters said, courts will 

not defer when "the statute simply will not bear the meaning the [agency] has adopted." 

Commenters said, for example, "[t]he EPA may not construe [a] statute in a way that completely 

nullifies textually applicable provisions meant to limit its discretion." 

Commenters stated, in weighing an agency's interpretation, the court "must be guided to a degree 

by common sense as to the manner in which Congress is likely to delegate a policy decision of 

[significant] economic and political magnitude to an administrative agency." Commenters said, 

reviewing courts "expect Congress to speak clearly if it wishes to assign an agency decisions of 

vast 'economic and political significance.'" Commenters said, 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." Commenters said, an agency interpretation that 
243 

 

"would bring about an enormous and transformative expansion in [its] regulatory authority 

without clear congressional authorization will be rejected as unreasonable." 

Response 2: The agency disagrees. As discussed in the Legal Memo, its interpretations of 

section 111(d) are reasonable, and in any case are entitled to deference because the agency is 

tasked with implementation of the Clean Air Act, including section 111(d). The commenter, in 

the agency’s view, reads certain dicta in UARG out of context. In Utility Air Regulatory Group v. 

EPA, 134 S. Ct. 2427 (2014), the Court recognized that greenhouse gases like carbon dioxide are 

“atypical pollutants” that are emitted in “vast quantities.” Id. at 2442; see also AEP v. 

Connecticut, 131 S. Ct. 2527, 2538 (2011) (“Congress could hardly preemptively prohibit every 

discharge of carbon dioxide unless covered by a permit.”). Notably, the Court in UARG 

recognized, and did not disturb, the agency’s conclusion that greenhouse gases are a pollutant 

under the CAA because they endanger public health and welfare by fostering global climate 

change. See UARG, 134 S. Ct. at 2436-37. Moreover, the Supreme Court has repeatedly affirmed 

the authority and responsibility of the agency, charged with implementing the Clean Air Act, to 

deploy its expertise and the exercise of its discretion to fashion workable regulatory frameworks 

for greenhouse gases. UARG, 134 S. Ct. at 2441, 2442 (directing the agency to use its discretion 

and look to “statutory context” in applying the CAA to greenhouse gases); AEP, 131 S. Ct. at 

2539 (“Congress delegated to EPA the decision whether and how to regulate carbon dioxide 

emissions from power plants . . . .”). The UARG dicta reflect the facts at issue in that case, 

regarding implications for CAA permitting programs of an interpretation of the statute the 

agency itself recognized was likely not consistent with congressional intent. The agency’s 

approach in this rule does not create conflicts with clear statutory text like numeric thresholds 

and would be recognizable to the Congress that enacted the law. Further, it is based on a 

common sense approach to reducing emissions of the GHG air pollutant from the source 

category that is singularly responsible for the largest quantity of its emissions in the United 

States. 

Comment 3: Several commenters stated that the proposal is arbitrary and capricious. 

Commenters provided comments identifying aspects of the Proposed Regulation that, as 

currently drafted, are arbitrary, capricious, unsupported, and unlawful. 

Commenters stated, section 307(d)(9)(A) of the CAA allows a court to reverse a rulemaking by 

EPA that is found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in 

accordance with law." Commenters said, the proposed rule is riddled with contradictions and 

inconsistencies. Commenters said, therefore, as proposed, it is arbitrary and capricious. 

Commenters stated, an EPA rulemaking may be invalidated if it is "arbitrary, capricious, an 

abuse of discretion, or otherwise not in accordance with law," or is "in excess of statutory 

jurisdiction, authority, or limitations, or short of statutory right." Commenters said, a rulemaking 
244 

 

is both not in accordance with law and in excess of statutory authority if it asserts the power to 

go "beyond what Congress has permitted it to do." Commenters said, and it is arbitrary and 

capricious if, among other things, its terms or application are premised upon a fact or factor that 

"Congress has not intended [EPA] to consider," or fails to articulate a "rational connection 

between the facts found and the choice made." 

Response 3: The agency must disagree: our action is lawful and reasonable. Blanket, conclusory 

assertions that the agency’s action is arbitrary and capricious or unlawful, without further detail, 

do not give the agency a basis to evaluate a particular concern or complaint. 

Comment 4: Commenters stated that the EPA's nationwide BSER analysis is arbitrary and 

capricious because it fails to account for state-specific conditions 

Commenters stated, in the proposed rule, EPA conducts its BSER analysis on what is essentially 

a uniform national level, using State electricity generation data from 2012 as a starting point. 

Commenters said, thus, aside from plugging State-specific generation data into a national 

uniform model, EPA fails to address a single State specific condition that may warrant additional 

scrutiny and, in some cases, a departure from EPA's generally applicable BSER analysis. 

Commenters said, unless EPA addresses the practical reality that the nation's energy 

infrastructure is highly dependent upon State specific issues in virtually every instance, EPA's 

BSER analysis will be arbitrary and capricious. 

Commenters stated, first, for example, EPA's treatment of different types of zero-emission 

sources in conducting its BSER analysis results in arbitrary and disproportionate treatment of 

States. Commenters said, for renewable energy sources other than hydroelectric power, EPA 

includes all electricity generation, including future generation from new sources. Commenters 

said, for nuclear energy, EPA includes all electricity generation from sources under construction 

and six percent of electricity generation from existing sources. Commenters said, for 

hydroelectric power, EPA excludes all existing electricity generation. Commenters said, for 

States such as Arizona, with significant amounts of nuclear and hydroelectric generation, this has 

a significant effect on the emission reduction target that EPA proposed for the State through its 

BSER analysis. 

Commenters stated, second, by conducting a State-level BSER analysis that assumes a perfectly 

fungible electricity generation and transmission system, EPA failed to consider the challenges 

faced by States which are members of multiple RTOs. Commenters said, in such States, for 

example, dispatching decisions are made by different regulators for different parts of the State 

and electricity may not be able to move easily between RTOs. Commenters said, thus, NGCC 

facilities located in one RTO may not be capable of substituting for a coal-fired EGU located in a 

different RTO. Commenters said, in the same manner, portions of a State with potential for new 

renewable energy capacity may not be able to serve growing demand in a different RTO. 

Commenters said, South Dakota, for example, has two fossil fuel-fired EGUs: the gas-fired Deer 

Creek Generating Station, which is dispatched through the SPP, and the coal-fired Big Stone 
245 

 

plant, which is dispatched through MISO. Commenters said, despite the fact that these facilities 

serve different customer bases and are subject to dispatching by different system operators, EPA 

assumes that because they are located in the same State, electricity can be shifted seamlessly 

from Big Stone to Deer Creek. Commenters said, similar problems may exist in other States, 

such as Arkansas, where electricity is managed by multiple ISOs or RTOs. Commenters said, 

thus, for States with multiple ISOs or RTOs, the ability of a State to reduce its emissions using 

the four Building Blocks may be significantly less than what EPA has projected. Commenters 

said, it is arbitrary and capricious for EPA to set State emission reduction goals on a system basis 

without considering how the electricity system in each State is managed. 

Commenters stated, third, EPA has failed to account for and credit States that have taken early 

action with respect to renewable energy and energy efficiency programs. Commenters said, for 

example, States such as Pennsylvania have already enacted RPS standards and EERS programs 

and have made strides in implementing those programs. Commenters said, the same concerns 

arise in the ERCOT grid in Texas. Commenters said, to place those States on equal footing with 

other States, EPA should give the early actors credit for the emission reductions they achieve in 

the same manner that EPA proposes to give credit to other States that initiate such programs in 

the future. Commenters said, instead, EPA has used those early actions to set a more stringent 

baseline for early acting States and is demanding more, rather than less, in the form of future 

emission reductions. Commenters said, in this manner, EPA is treating different States in an 

arbitrary and capricious manner. 

Response 4: We disagree with commenters. While the EPA is setting a uniform CO2 emission 

performance rate for each of two affected source subcategories, there is flexibility in the final 

rule with respect to how states and affected EGUs meet the final rule requirements. 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 and taking into account the unique circumstances, set of 

resources, and infrastructure within their own states. Additionally, trading of ERCs or 

allowances provides affected EGUs with an additional way to comply with final rule 

requirements. 

We note that with respect to the nuclear issue raised by commenters, the final rule does not 

include new or existing nuclear generation in BSER, but does allow new nuclear to be eligible 

for compliance. This includes capacity uprates resulting from a relicensing process. We are also 

not including existing RE (including hydropower) in the BSER calculation. However, we are 

including new RE as BSER. This includes capacity uprates at an existing RE facility. For a more 

comprehensive discussion of these issues, please see preamble section V.E. and the GHG 

Mitigation Measures TSD. 
246 

 

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 5: Commenters stated that the EPA's nationwide BSER analysis is arbitrary and 

capricious because it fails to account for state-specific conditions 

Response 5: The final guidelines took into account this and similar comments in determining the 

emission performance rates. In particular, we used data from the least stringent region in order to 

ensure achievability nationwide. Further, the agency calculated state-specific equivalent goals to 

the performance rates that reflect the unique mix of affected EGUs in each state. And we are 

allowing states to design state plans that take into account state-specific issues. 

Comment 6: Commenters stated, first, for example, EPA's treatment of different types of zeroemission sources in conducting its BSER analysis results in arbitrary and disproportionate 

treatment of States. Commenters said, for renewable energy sources other than hydroelectric 

power, EPA includes all electricity generation, including future generation from new sources. 

Commenters said, for nuclear energy, EPA includes all electricity generation from sources under 

construction and six percent of electricity generation from existing sources. Commenters said, 

for hydroelectric power, EPA excludes all existing electricity generation. Commenters said, for 

States such as Arizona, with significant amounts of nuclear and hydroelectric generation, this has 

a significant effect on the emission reduction target that EPA proposed for the State through its 

BSER analysis. 

Response 6: EPA made adjustments in the final rule to address these concerns, and we note that 

nuclear power is no longer included in the BSER while certain hydroelectric is included; both of 

course, may be used to contribute toward meeting the emission performance level. In general, the 

agency set goals that are based on achievability while avoiding extremely disproportionate 

emission reduction targets that would vary dramatically according to which state a unit is located 

in. We note that comments such as in 14.1 are in tension with comments such as in 14.2. On the 

one hand, some commenters complained that the agency was not focused on unique state and 
247 

 

facility-specific circumstances. On the other hand, other commenters complained that the agency 

proposed emission reduction goals that varied too widely from state to state. Our final rule 

strikes a balance between these two equally valid concerns and produces an emission 

performance rate that could be applied uniformly nationwide, but which also provides for 

equivalent expression as state-level rate or mass-based goals but which do not vary too wildly 

from one state to another. Ultimately, of course, states will have the flexibility to design state 

plans that achieve the emission performance levels in a way that works best for the units in their 

state. 

Comment 7: Commenters stated, second, by conducting a State-level BSER analysis that 

assumes a perfectly fungible electricity generation and transmission system, EPA failed to 

consider the challenges faced by States which are members of multiple RTOs. Commenters said, 

in such States, for example, dispatching decisions are made by different regulators for different 

parts of the State and electricity may not be able to move easily between RTOs. Commenters 

said, thus, NGCC facilities located in one RTO may not be capable of substituting for a coalfired EGU located in a different RTO. Commenters said, in the same manner, portions of a State 

with potential for new renewable energy capacity may not be able to serve growing demand in a 

different RTO. Commenters said, South Dakota, for example, has two fossil fuel-fired EGUs: the 

gas-fired Deer Creek Generating Station, which is dispatched through the SPP, and the coal-fired 

Big Stone plant, which is dispatched through MISO. Commenters said, despite the fact that these 

facilities serve different customer bases and are subject to dispatching by different system 

operators, EPA assumes that because they are located in the same State, electricity can be shifted 

seamlessly from Big Stone to Deer Creek. Commenters said, similar problems may exist in other 

States, such as Arkansas, where electricity is managed by multiple ISOs or RTOs. Commenters 

said, thus, for States with multiple ISOs or RTOs, the ability of a State to reduce its emissions 

using the four Building Blocks may be significantly less than what EPA has projected. 

Commenters said, it is arbitrary and capricious for EPA to set State emission reduction goals on 

a system basis without considering how the electricity system in each State is managed. 

Response 7: EPA has addressed these comments through the final determination of the BSER, 

which reflects a more regionalized approach to the formula. Further, commenters misunderstand 

that the agency is not mandating implementation of the building blocks. States and sources have 

flexibility to achieve their targets through BSER and non-BSER measures. 

Comment 8: Commenters stated, third, EPA has failed to account for and credit States that have 

taken early action with respect to renewable energy and energy efficiency programs. 

Commenters said, for example, States such as Pennsylvania have already enacted RPS standards 

and EERS programs and have made strides in implementing those programs. Commenters said, 

the same concerns arise in the ERCOT grid in Texas. Commenters said, to place those States on 

equal footing with other States, EPA should give the early actors credit for the emission 

reductions they achieve in the same manner that EPA proposes to give credit to other States that 

initiate such programs in the future. Commenters said, instead, EPA has used those early actions 

to set a more stringent baseline for early acting States and is demanding more, rather than less, in 
248 

 

the form of future emission reductions. Commenters said, in this manner, EPA is treating 

different States in an arbitrary and capricious manner. 

Response 8: EPA has addressed these comments to some extent in the final determination of the 

BSER, by reducing the disparity in goal-setting between states. The EPA is also establishing a 

mechanism in the final rule that states can use to recognize certain early actions to increase RE 

and EE prior to the beginning of the interim performance period in 2022. 

Comment 9: Commenters stated, fourth, EPA is treating different States differently by requiring 

emission reductions that vary dramatically with respect to the amount of GHGs currently emitted 

by affected EGUs in the State. Commenters said, for example, Texas is responsible for more than 

20% of the total CO2 reductions required under EPA's BSER analysis, despite the fact that is 

only responsible for 11% of the total CO2 emitted from fossil fuel-fired EGUs nationwide. 

Commenters said, the reductions required by sources within a State should bear some 

resemblance to the CO2 emissions for which that State is responsible. Commenters said, it is 

arbitrary and capricious for EPA to require some States to shoulder a burden so far out of line 

with their relative of CO2 emissions. 

Response 9: Ultimately the agency set the BSER, the emission performance rates, and the 

equivalent state goals based on its expert determination of what is achievable. The final numbers 

have changed from the proposal to reduce disparities between states. However, ultimately, the 

agency is not charged under section 111(d) to achieve perfect equality among states but to 

determine the degree of emission limitation that is achievable using the best system of emission 

reduction. 

Comment 10: Several commenters suggested that EPA re-propose the rule. 

Commenters stated that the EPA has already publicly acknowledged that changes will be made 

to the final rule. The commenters recommended that the EPA should provide a comment period 

after any final rule is issued because of the rule's complexities. 

Commenters were concerned that the current rule has such significant uncertainties that 

comments provided herein are based on assumptions which may not prove to be true in the final 

Rule. Commenters said, this concern stems from three basic issues. Commenters said, first, to a 

degree that appears to be singularly unprecedented, EPA has requested comment on virtually 

every aspect of the Rule including, most significantly, underlying principles that are fundamental 

to how the Rule will be implemented. Commenters said, how EPA chooses to respond to these 

comments could alter the Rule to a degree that its final form is virtually unrecognizable. 

Commenters said, second, EPA has chosen to set a standard based on assumptions of state 

actions that may not come to pass - calling into question compliance pathways to meet EPA's 

goals. Commenters said, finally, as affected entities that will have a significant compliance 

obligation, the setting of goals based on actions that lie well outside our sphere of influence calls 

into question our ability to comply. 
249 

 

Commenters stated that the high degree of uncertainty in how EPA might choose to finalize this 

rule suggests EPA has an obligation to offer an additional round of comments on a more focused 

rule. The commenters stated that the EPA should reissue the current Rule after assessing and 

answering some of the myriad of questions it poses in the rule to allow for a more narrowly 

tailored analysis by both states and affected entities. The commenters stated that EPA has 

proposed a legally vulnerable, massive expansion of CAA authority over energy decisions and 

energy markets in a manner contrary to the statute and inconsistent with existing EPA regulatory 

guidance and prior statutory interpretations. Commenters stated that the EPA should withdraw 

this Rule and re-propose the Rule based on firmer legal grounds and inside the fence emissions 

reductions. The commenters acknowledging that EPA may be reluctant to limit reductions to 

inside the fence actions, we raise the concern that EPA's Rule is insufficiently developed to be 

finalized, even after comments are filed. The commenters stated that given the number of 

unresolved issues and questions posed for comment by EPA, the Proposed Rule should at the 

very least be re-proposed after EPA has had the opportunity to evaluate the first round of 

comments and refine the proposal. The commenters stated, however, EPA must be advised that 

failure to withdraw the Rule and reissue it based on inside the fence reductions will inject 

enormous regulatory and legal risk into a system that already is under considerable strain due to 

other environmental and market constraints. 

Commenters stated, on November 13, 2014, EPA issued a Technical Support Document 

regarding the translation of emission rate-based CO2 goals to mass-based equivalents (TSD on 

Rate to Mass). Commenters said, when EPA issued its TSD on Rate to Mass, it set new massbased limits for each state. Commenters said, these new limits effectively revised the CPP. 

Commenters said, however EPA neglected to re-propose the rule after this substantial revision. 

Commenters said, EPA's issuance of the TSD on Rate to Mass without re-proposing the CPP 

violates the Administrative Procedures Act. Commenters said, EPA is sidestepping the 

procedures that were established to ensure that the regulated community has adequate time to 

provide meaningful comments on proposed rules. Commenters said, eighteen days is not 

sufficient time to provide in depth analysis and comment on this critical revision to the CPP. 

Commenters said, EPA must re-propose the CPP with the revised limitations from the TSD on 

Rate to Mass and allow adequate time for comment. 

Commenters said this rule proposal is more appropriately a pre-proposal, given the many 

uncertainties within the proposal itself and the roughly 200 instances in which EPA requested 

comments on its proposed approach. Commenters said, with this late publication of the 

"Additional Information Regarding the Translation of Emission Rate-Based CO2 Goals to MassBased Equivalents," coupled with the recent publication of the NODA, EPA again underscores 

New Jersey's position that the rule proposal simply leaves too many significant and material 

terms in doubt for regulated entities to evaluate and provide comments. Commenters said, given 

these deficiencies, the Rule Proposal does not comply with the requirements of the 

Administrative Procedure Act (APA). Commenters said, EPA should --- as it did with standards 

for new EGUs under section 111(b) --- issue a new proposal with more specificity, so that 

commenters can actually understand the intricacies of the proposed rule, which is impossible to 

glean from the current proposal. Commenters said, additionally, if the proposed rule is adopted 
250 

 

as is, it will not only be violative of the APA, but also void for vagueness under the Due Process 

Clause of the Fifth Amendment. See, e.g., Fed. Cmmc'ns Comm'n v. Fox Television Stations, 

132 S. Ct. 2307 (2012). Commenters said EPA does not propose a clear method to determine 

compliance with the proposed goals, which is necessary to understand the proposal and a basic 

component of any performance standard. 

Response 10: The agency has been committed to transparency and public engagement 

throughout the rulemaking process. The proposed rule and subsequent notices satisfy the 

procedural requirements of the CAA and/or the APA by providing meaningful notice and gave 

giving commenters an adequate basis on which to comment. In addition to providing notice and 

soliciting comment in the Federal Register, EPA conducted an extensive outreach effort 

including numerous meetings with stakeholder groups. Many of commenters’ suggestions have 

been reflected throughout the final rule. With respect to the Fifth Amendment due process clause 

assertion, the agency notes that in addition to its legal disagreement with this comment, we 

believe such a comment may reflect a misunderstanding of the rule. The agency is issuing 

emission guidelines for states to follow in the design of approvable state plans. Where the 

commenter sees “vagueness” the agency sees a high degree of flexibility for states reflective of 

the structure and purpose of section 111(d). In any case, the requirements states must follow in 

order to have approvable plans are clearly set forth in the final rule. 

Comment 11: Commenters stated, as part of this NODA, EPA is providing insufficient 

additional "data" for states to be able to provide meaningful comments on the alternatives to the 

June 18, 2014 proposal, let alone any analysis of feasibility or costs. Commenters said, if EPA is 

to consider finalizing any of these alternatives as part of the Section 111(d) requirements, EPA 

must provide states with a full proposal with all supporting data, analysis, legal support, and 

adjusted goals so that states may provide meaningful comments. 

Commenters stated, the inadequacy of EPA's public comment process for this Proposal is most 

egregiously highlighted by the Agency's release of a NODA on October 28, 2014 and of the 

Translation of the Clean Power Plan Emission Rate-based CO2 Goals to Mass-Based 

Equivalents Technical Support Document ("Rate to Mass TSD") on November 6, 2014, a mere 

thirty-four and twenty-five days prior to the comment deadline, respectively. Commenters said, 

these documents raise numerous additional issues, alternatives, and methodologies, and the 

public needs additional time to prepare fully informed and well-considered comments on the 

issues that have been raised for the first time in the NODA and Rate to Mass TSD. 

Commenters stated, EPA acknowledges that the various alternative approaches the Agency 

provided for the first time in the NODA could fundamentally alter the proposed emission 

guidelines and lead to more stringent goals for all or some states. Commenters said, EPA also 

recognizes that many issues in the NODA - and the four Building Blocks generally - "interact 

with each other." Commenters said, and, realistically there is no way to assess how stringent any 

state's goals will actually be unless EPA provides additional data and support for these new 

alternatives and methodologies. Commenters said, because of these gaps, EPA cannot finalize 

any of the changes discussed in the NODA without issuing a supplemental proposal that clarifies 
251 

 

the Agency's position, provides the basis and purpose for its approach pursuant to CAA section 

307(d)(3), provides specific details of how each state would be affected, provides sufficient 

economic analysis of the changes, and provides proposed regulatory text. Commenters said, none 

of these things are present in the NODA. 

Commenters stated, CAA section 307(d)(3) requires EPA to include in its rulemaking docket on 

the date of publication of a proposed rule "[a]ll data, information, and documents . . . on which 

the proposed rule relies." Commenters said, EPA's failure to provide the Rate to Mass TSD at the 

time of proposal violates this requirement and demonstrates that EPA's proposal remains a work 

in progress that is more akin to an Advanced Notice of Proposed Rulemaking than a proposed 

rule. Commenters said, even more fundamentally, EPA's issuance of the Rate to Mass TSD 

twenty-five days prior to the comment deadline flies directly in the face of CAA section 307(h), 

which requires EPA to provide "a reasonable period for public participation of at least 30 days . . 

." prior to promulgating regulations under the CAA. Commenters said, EPA's late issuance of the 

NODA and the Rate to Mass TSD and the number of new issues first raised in these documents 

leaves the Agency with no permissible choice but to withdraw its June 18, 2014 proposal, repropose it along with all supporting materials, and provide an adequate time for the public to 

comment. 

Commenters expressed concern that the current rule that the EPA has requested or invited 

comment on virtually every aspect of the Rule including, most significantly, underlying 

principles that are fundamental to how the Rule will be implemented. The commenters stated 

that the EPA has chosen to set mandated state goals based on assumptions of state actions that 

may not come to pass, and that affected entities that will have a significant compliance 

obligations based on actions that lie well outside their sphere of influence. The commenters 

stated that the high degree of uncertainty in how EPA might choose to finalize this rule suggests 

EPA has an obligation to offer an opportunity for an additional round of comments on a more 

focused rule that meets all section 111(d) requirements. The commenters asserted that the EPA 

should issue a revised proposal for public comment, but only after assessing and answering some 

of the myriad of questions it poses in the rule to allow for a more narrowly tailored analysis by 

both states and affected entities. 

Commenters stated, EPA should withdraw this Rule and re-propose the Rule based on firmer 

legal grounds and inside the fence emissions reductions. Commenters said, acknowledging that 

EPA may be reluctant to limit reductions to inside the fence actions we raise the concern that 

EPA's Rule is insufficiently developed to be finalized even after comments are filed. 

Commenters said, given the number of unresolved issues and questions posed for comment by 

EPA, the proposed rule should at the very least be re-proposed after EPA has had the opportunity 

to evaluate the first round of comments and refine the proposal. Commenters said, however, EPA 

should understand that failure to withdraw the Rule and reissue it based on inside the fence 

reductions will inject enormous regulatory and legal risk into a system that already is under 

considerable strain due to other environmental and market constraints. 
252 

 

Response 11: The basis for the agency’s actions under the Clean Air Act and other statutes is 

provided in the administrative record, which is publicly available. The agency has been 

committed to transparency and public engagement throughout the rulemaking process. The 

proposed rule and subsequent notices satisfy the procedural requirements of the CAA and/or the 

APA by providing meaningful notice and gave giving commenters an adequate basis on which to 

comment. In addition to providing notice and soliciting comment in the Federal Register, EPA 

conducted an extensive outreach effort including numerous meetings with stakeholder groups. 

Many of commenters’ suggestions have been reflected throughout the final rule. 

Comment 12: Commenters identified instances where it would be beneficial for EPA to provide 

further guidance or clarification. Commenters said, before going final with the two 111(b) 

actions and this Proposed Rule, WDEQ requests EPA provide opportunity for further public 

evaluation and comment of these interrelated proposed regulations. Commenters said, due to the 

quantity of requests for comment, and the level of detail EPA is seeking comment on, this 

proposal more resembles an advanced notice of proposed rulemaking. Commenters said, in 

addition to the challenge of assessing a lengthy rule proposal of such premature condition, 

WDEQ had little time to fully evaluate the subsequent NODA published on October 28, 2014, 

nor the Technical Support Document (TSD) on conversion from rate based to mass based state 

goals released on November 6, 2014. Commenters said, due to the heightened public interest in 

this, and the 111(b) proposed rules, WDEQ anticipates that the EPA will receive extensive 

comments and data, which will likely influence and change the rule. Commenters said, 

moreover, the interdependency of all three rule proposals does not allow them to be severable. 

Commenters said, fundamental pieces of these rules are dependent on each other, and a decision 

made for one rule could have consequences in another. Commenters said, as such, this and 

the 111(b) rule proposals should be changed to follow the intent and authority as specified in 

Section 111 of the CAA and re-proposed jointly. 

Commenters stated that considering the numerous requests for comment from EPA (indicating 

that EPA has not resolved many fundamental issues) and the late release of additional 

information, the Final Rule will look very different from the Proposed Rule. The commenters 

stated that this is especially concerning to states, since goals and compliance options may change 

significantly without opportunity for further comment unless EPA provides an additional 

comment period. The commenters stated that one option is for EPA to release a revised Proposed 

Rule with an appropriate comment period before releasing the Final Rule. The commenters 

stated that an alternative is to continue ongoing outreach and afford stakeholders an additional 

comment period focusing on mass-based goals and the rate-to-mass translation methodology. 

The commenters also stated that also recommended an additional comment period should EPA 

alter the goal setting methodology or limit the compliance options available to states. The 

commenters stated that if the Final Rule is significantly different from the Proposed Rule, they 

recommend the first option - releasing a revised Proposed Rule with an appropriate comment 

period to allow states and other stakeholders to analyze the changes. Commenters continued that 
253 

 

the ambiguity in the Proposed Rule, the current data gaps, and the lack of time to fully analyze 

the data create uncertainty which may lead to unintended consequences. 

Commenters stated that the authority required to implement BB #3 and BB #4 and likely BB #2 

appear to be well beyond the authority granted to EPA by the CAA. The commenters stated that 

the rule as proposed is not only legally vulnerable but also inconsistent with existing EPA 

guidance and prior statutory interpretations. The commenters stated that the unnecessarily 

accelerated timelines and emission reduction goals set forth in the proposal would put at risk the 

reliability of the electric grid and affordability of electric power if finalized as proposed without 

providing significant global temperature reduction. The commenters stated that the EPA should 

withdraw this rule and re-propose it based on its statutory authority under the CAA and "inside 

the fence" emissions reductions. The commenters argued that EPA should also be more 

transparent with the American public as to the actual miniscule impact this proposed rule will 

have on global climate temperature change in 2050 and 2100 as well as the rule's massive 

economy-wide economic impact. 

Commenters stated, if EPA makes any major changes to the proposed rule through this NODA, 

EPA must re-issue the rule with those proposed changes so that affected companies and states 

have adequate opportunity for comment. 

Commenters stated, the NODA was released by EPA far too late in the comment period to 

inform necessary technical analyses, modeling, or otherwise be adequately reviewed. 

Commenters said, this lack of timely information on important elements of the proposal is 

unacceptable. Commenters said, the NODA offers additional alternatives to EPA's original 

proposal which, if adopted, would impact other important elements of the proposal. Commenters 

said, therefore, it is critical that EPA provide the public with the opportunity to comment on the 

next version of the Clean Power Plan proposal, in its entirety, prior to finalizing any rule. 

Commenters stated, EPA should provide an additional comment period if the final rule is 

significantly different from the currently proposed rule. 

Commenters stated, EPA's basis for "best system of emission reduction" (BSER) is flawed since 

it neglects to properly take costs into consideration, substantially exaggerates the purported 

benefits, relies on nebulous predictions of future fuels trends, fails to take the effects of each 

block in concert with the others, and penalizes those who have taken early action. Commenters 

said, EPA's proposal does not comply with the CAA section 111(a)(1) requirements that the 

standards of performance take into account "cost" and "energy requirements" (in the form of 

energy diversity) and be "adequately demonstrated." Commenters said, EPA's proposal does not 

comport with the CAA section 111(d)(1) requirements since the proposal effectively precludes 

states from taking "remaining useful life" of an existing unit into consideration. Commenters 

said, EPA should withdraw the subject proposal, work with states to develop a workable standard 

as intended by the CAA, and reissue the proposal for comment. 

Commenters stated, the vagueness and uncertainty of this Proposed Rule, as well as the absence 

of a BSER analysis relevant to Alaska, dictates an additional opportunity to evaluate and 
254 

 

comment on a revised and re-published rule. Commenters stated Alaska has spent considerable 

resources studying and analyzing the Proposed Rule designed for states with highly 

interconnected electricity systems. Commenters added it is apparent that the Proposed Rule is not 

crafted for a state lacking such interconnectedness and that its potential application to Alaska has 

not been sufficiently analyzed. Commenters stated a thorough evaluation of the Proposed Rule 

proved challenging within even the extended comment period. Commenters stated the absence of 

a relevant BSER analysis and the sheer volume of information, compounded by the release of 

additional data late in the comment period, contributed to this challenge. Further, the 

commenters added, the absence of final 111(b) rules for new electric generating units inhibits our 

ability to fully understand the impacts of the Proposed Rule for existing units. If EPA does not 

withdraw the Proposed Rule or exempt Alaska, the commenters urged EPA to re-publish a more 

concrete Proposed Rule with some analysis of the relevant impacts on Alaska to allow for 

meaningful comment. 

Commenters urged the EPA to carefully consider comments and re-propose the rule applying a 

definition of BSER that is consistent with its authority and past practices under Section 111(d) of 

the Act. The commenters stated that the EPA cannot correct the fundamental legal and technical 

flaws inherent in the Proposed Rule through amendments to its Proposed Rule. However, if EPA 

continues down its current path, the commenters stated that at a minimum, EPA must: (1) 

properly evaluate resource adequacy and potential reliability impacts; (2) provide states with 

additional time to craft implementation plans that address all factors identified under Section 

111, including remaining useful life; (3) correct the data errors in the Building Blocks; and, (4) 

take steps to mitigate the consequences of EPA's goal-setting methodology. 

Commenters stated, EPA's Regulatory Impact Analysis ("RIA") of the proposed rule does not 

provide an adequate administrative record to allow for proper evaluation of the proposed rule and 

subsequent public comment. Commenters said, furthermore, the methodology for assessing both 

costs and benefits is deeply flawed where information is present to be evaluated. Commenters 

said, the following areas have been identified as having either inadequate and incomplete 

information or information which was misinterpreted and/or misused within EPA's assessment of 

the potential cost, impacts and benefits of the proposed rule: 

- Lack of Information on State Compliance Actions 

- Conflicts Between Results and Purported BSER Elements 

- Incomplete and Improper Assessment of Compliance Actions, Infrastructure Timing and Costs 

- Incomplete Assessment of Employment Impacts 

- Improper Treatment of Energy Efficiency 

- Improper Use of Social Cost of Carbon 

- Incomplete Assessment of Alternative Futures 

- Misrepresentation of Energy Efficiency Expenditures/Costs 

Commenters stated, EPA should provide another opportunity for comment before issuing its 

final rule. Commenters said, the Proposed Rule is very broad in scope and would have an 

extensive impact affecting a host of regulatory, compliance and operational issues. Commenters 
255 

 

said, the EPA has solicited comment on a large number of issues associated with assumptions 

used in developing the Proposed Rule, making the permutations of the possible final rule 

unmanageable. Commenters said, after EPA has reached a conclusion on these issues, the 

Proposed Rule should be reissued in a more definitive form to permit more specific evaluation 

and comment prior to the issuance of the final rule. 

Commenters stated, EPA should return the CPP to the drawing board and correct the legal and 

technical deficiencies identified in these comments. Commenters said, the EPA should re-issue a 

revised CPP that sets substantially more stringent targets for carbon emission reductions, that 

eliminates reliance on nuclear energy, and that prepares the way for more significant carbon 

emission reductions in the future by relying much more heavily on renewable energy sources. 

Commenters requested that EPA issue a second proposed rule after incorporating comments 

received on this initial proposal and after preparing all referenced documents and corresponding 

frameworks. Commenters said, without all supporting documents prepared, the proposal is not 

complete and ready for full public comment. 

Commenters stated, EPA should consider additional opportunities for stakeholder comment, 

considering the myriad of ways the Final Rule could change from the Proposed Rule. 

Commenters said, in the original Proposed Rule, EPA expressly requested comment on 194 

distinct issues. Commenters said, the Notice of Data Availability (NODA), released on October 

28, 2014 provided new information and requested additional comment. Commenters said, in 

addition, during various conference calls, EPA's answers to States' questions were often not 

definitive, with EPA inviting comment on how the questions should be resolved. Commenters 

said, further, the NODA's late release date allows insufficient time for states to analyze the 

information presented and to respond appropriately. Commenters said, finally, EPA did not 

release the rate-to-mass translation methodology and presumptive mass-based state goals (critical 

elements of the Proposed Rule) until November 6, 2014, less than one month from the end of the 

comment period. 

Response 12: The EPA disagrees with that its rulemaking process was inadequate. The agency 

has been committed to transparency and public engagement throughout the rulemaking process. 

The proposed rule and subsequent notices satisfy the procedural requirements of the CAA and/or 

the APA by providing meaningful notice and gave giving commenters an adequate basis on 

which to comment. In addition to providing notice and soliciting comment in the Federal 

Register, EPA conducted an extensive outreach effort including numerous meetings with 

stakeholder groups. Many of commenters’ suggestions have been reflected throughout the final 

rule. 

Comment 13: Commenters noted that only 9 pages of regulatory text comprise the guidelines, 

and asserted that guidance and support documents such as the NODA and TSD released late in 

the comment process are not substitutes for regulatory language. Noting the Administrative 

procedures Act, the commenters stated that EPA must re-issue draft regulations. 
256 

 

Commenters stated, EPA's regulatory language and structure - a mere 9 pages - is a shell for a 

program that is vague, ill-defined but breathtaking in scope. Commenters said, rather than use 

the thousands of pages of technical support documents, legal justifications and questions to elicit 

input from the regulated community to propose a well-reasoned rule, EPA has instead proposed a 

vague and sparse regulation that, standing without the explanatory documents, is unsupportable. 

Commenters said, the Administrative Procedure Act ("APA"), 5 U.S.C. section 551 et seq., 

requires more. Commenters said, indeed, at its very core, administrative rulemaking must 

provide those affected with the opportunity to comprehend and comment on actual regulation. 

Commenters said, an agency cannot substitute guidance and support documents for wellreasoned regulatory language. Commenters said, to do so obfuscates the transparency in 

regulation that this Administration has so championed. Commenters said, such support 

documents, whatever their merit, do not constitute legally enforceable Agency determinations 

and certainly are not binding on any court that would have occasion to interpret the CPP. 

Appalachian Power Co., 208 F.3d at 1021. Commenters believed that the proposed regulatory 

provisions lack the clarity and well-reasoned decision-making necessary to constitute lawful 

notice-and-comment rule-making. 

Commenters stated, EPA notice-and-comment rulemaking is dictated by the requirements set 

forth in the APA. Commenters said, EPA must publish a notice of proposed rulemaking in the 

Federal Register. Commenters said, this notice must contain the "terms or substance of the 

proposed rule." See 5 U.S.C. section 553(b). Commenters said, more specifically, NSPS 

rulemakings are subject to section 307(d) of the CAA. CAA section 307(d)(1)(C). Commenters 

said, among other requirements, the rulemaking proposal must "be accompanied by a statement 

of its basis and purpose," that includes: (A) the factual data on which the proposed rule is based, 

(B) the methodology used in obtaining the data and in analyzing the data; and (C) the major legal 

interpretations and policy considerations underlying the proposed rule. Id. section 307(d)(3). 

Commenters said, after consideration of public comments, EPA may then publish a final rule. 

Commenters said, the final rule incorporates a general statement of its basis and purpose. 5 

U.S.C. section 553(b). 

Commenters stated, the APA's notice-and-comment rulemaking process, however, cannot be 

used as a fishing expedition to determine what the scope of a rule should be and how it should be 

implemented. See Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 519 (D.C. 

Cir. 1983) (the fundamental purpose of section 307(d)(3) is to require that "EPA ....give a 

detailed explanation of its reasoning at the 'proposed rule' stage" of the rulemaking process"). 

Commenters said, as it has in the past, EPA should have used an "Advanced Notice of Proposed 

Rulemaking" ("ANPR") to gather input from the regulated community necessary to propose a 

well-reasoned CPP rule. Commenters stated, EPA recognizes as much. Commenters said, in 

2008, the Agency issued an ANPR associated with greenhouse gas regulation. See ANPR for 

Regulating Greenhouse Gas Emissions Under the Clean Air Act, EPA-HQ-OAR-2008-0318 

(July 11, 2008). Commenters said, EPA rationalized that issuance of the ANPR was appropriate 

"on matters of great complexity, controversy, and active legislative debate" so as to provide EPA 

the opportunity to "seek comment on the full range of issues" that were raised by the proposed 

greenhouse gas regulation. See Preface from the Administrator of the EPA on the ANPR for 
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Regulating Greenhouse Gas Emissions Under the Clean Air Act, RIN 2060-AP12, at 2 (July 11, 

2008). Commenters said, indeed, the EPA Administrator explained that significant public input 

was required before issuing a draft rule addressing greenhouse gas emissions because "the Clean 

Air Act, an outdated law originally enacted to control regional pollutants that cause direct health 

effects, is ill-suited for the task of regulating global greenhouse gases. Based on the analysis to 

date, pursuing this course of action would inevitably result in a very complicated, timeconsuming and, likely, convoluted set of regulations." Id. at 5. 

Commenters said, for example, nowhere in the rule does EPA mention "building blocks" or "heat 

rate improvement" or "re-dispatch." Commenters said, yet these concepts, intended to be used by 

and incorporated by states into state plans, are integral to an understanding of what states, and 

the existing EGU source category, are expected to do. Commenters said, relying solely on the 

proposed rule and without reviewing the TSDs, no one could possibly understand the CPP as 

EPA has defined it. 

Commenters stated, further, the process by which EPA has proposed the CPP makes a mockery 

of the rulemaking process. Commenters said, since initiating the CPP rulemaking docket on June 

18, 2014, EPA has supplemented, corrected data, or otherwise updated the docket on 1,436 

separate occasions. Commenters said, in fact, in its October 28, 2014, Notice of Data 

Availability ("NODA"), EPA again floated a series of trial balloons for comment. Commenters 

said, in fact, EPA's calculations for converting a given state's final 2030 target from a rate to 

mass emission basis was not provided until November 6, two days after the midterm elections. 

Commenters asked, how can the states much less the regulated community provide meaningful 

comments on an ever evolving rulemaking that shifts with each official docket entry? 

Commenters Commenters said, this is insufficient and contrary to the APA. Commenters said, 

Ameren, as well as the rest of the regulated community must have an opportunity to comment on 

the rule as proposed, not the rule as it might possibly exist. Commenters said, for these reasons, 

Ameren believes the CPP does not constitute proper notice-and-comment rulemaking sufficient 

to support the issuance of final regulations. Commenters said, rather, EPA should give due 

consideration to the comments that thousands of parties have spent countless hours preparing, 

engage in proper stakeholder and sister agency consultation, and reissue draft regulations for 

comment that embody the actual structure and components of the regulatory program. 

Response 13: The agency has been committed to transparency and public engagement 

throughout the rulemaking process. The proposed rule and subsequent notices satisfy the 

procedural requirements of the CAA and/or the APA by providing meaningful notice and giving 

commenters an adequate basis on which to comment. In addition to providing notice and 

soliciting comment in the Federal Register, EPA conducted an extensive outreach effort 

including numerous meetings with stakeholder groups. Many of commenters’ suggestions have 

been reflected throughout the final rule. Further, this comment is based on a misunderstanding 

that the rule would directly apply the building blocks through regulatory text. The BSER is a 

technical determination. The regulatory text of the guidelines does not need to discuss the 

building blocks because it does not mandate that states implement the building blocks. Rather, 
258 

 

the final guidelines provide states the emission performance levels or state-goal equivalents that 

their sources are to achieve via state plans. To some degree, the lack of specific in the rule text at

proposal is a reflection of that flexibility provided to states. The regulatory text of the final rule is 

is a logical outgrowth of the proposed rule, and while more detailed in some respects, maintains 

a great deal of flexibility for states. The requirements for what states must submit in order to 

have an approvable plan are clearly set forth in the final rule. 

Comment 14: Some commenters indicated that states need more prescriptive guidance (for 

different reasons). 

Commenters stated that, as presently structured, the rule is prone to failure and unlikely to 

achieve meaningful results. The commenters stated that granting excessive flexibility to states 

(or groups of states), the rule lacks clear, consistent, and enforceable criteria to evaluate emission

reductions or the wide variety of substitute actions contemplated in lieu of reducing existing 

facility emissions. The commenters contended that this is an open invitation to develop vague 

requirements, questionable metrics, and convoluted methods for assessing reductions that could 

occur (or supposedly already have occurred), particularly in states hostile to taking action on 

climate change. 

In addition, commenters charged that the rule promotes inequitable standards, allowing emission 

requirements for similar power plants to vary from state to state, or even plant to plant. The 

commenters stated that, aside from the negative climate consequences of continuing to let some 

facilities pump high levels of greenhouse gas into the atmosphere while others conform to a 

higher standard, this inconsistency regarding what is expected of facilities complicates 

compliance, monitoring, and enforcement. The commenters stated that vague provisions that 

allow for demand-side action instead of reducing power plant emissions also invite questionable 

hand-waving or the counting of consumer actions that would likely occur without the rule. 

Because individual state targets are very weak, the commenters stated that the rule could even 

encourage plans that simply perpetuate "business as usual." For example, the commenters noted 

that a state like California, which is expected to exceed its proposed target before 2030 without 

any additional effort, could transfer its "over-compliance" to other states, thus discouraging 

action that should be taken in all states to reduce emissions. The commenters stated that the 

wholesale deferral of authority to state legislatures, lack of clear enforcement responsibility, and 

severely misguided strategies for natural gas and renewables place this rule on incredibly shaky 

ground. The commenters stated that to avoid these problems, the EPA should revise the 

proposed rule to offer the most prescriptive guidance possible. 

Similarly, commenters asked for strong federal enforcement to ensure the rule is implemented in 

West Virginia. 

Other commenters stated that the EPA must provide a second round of public comment prior to 

issuing the final rule for the proposal. The commenters stated that a regulatory agency must 

provide adequate notice and a fair opportunity to be heard by those it regulates. [K. Davis, 
259 

 

Administrative Law Treatise section 6.1 at 450 (2d ed. 1978)] The commenters noted that the 

Proposal seeks comments on so many aspects of the rule (approximately 150), it is unclear 

whether the final rule will remotely resemble the Proposal and consequently what potential 

impacts may result from implementing the rule. The commenters requested that EPA reissue its 

Proposal with a template State plan with suggested compliance approaches to address these 

uncertainties. The commenters noted that one area of uncertainty is how a State will convert its 

proposed emission rate-based target for all affected EGUs to a mass-based approach. The 

commenters noted that understanding exactly how the conversion from a rate-based goal to a 

mass-based goal will occur is absolutely critical in order for a State to be able to understand the 

implications of complying with its proposed State goal. Specifically, the commenters stated that 

there should be no ambiguity as to a State's mass-based goal, because a State must be able to 

look at this mass-based goal relative to the various Building Blocks to determine the feasibility 

of achieving its mass-based goal. The commenters noted that a State will not be able to analyze 

the feasibility of entering into a multi-state cap and trade arrangement with neighboring States 

until after it knows its mass-based goal. The commenters noted that the Proposal touts the 

flexibility given to the States vis-a-vis the various Building Blocks, but this flexibility is 

meaningless without a clear understanding of what a State's mass-based compliance target will 

be. The commenters noted that, similarly, the regulated industry should not be placed in the 

untenable position of speculating on the ramifications of compliance with the Proposal based on 

an uncertain mass-based compliance target. Here again, the commenters requested that a 

template State plan be provided, which would describe how a model State would achieve its 

State goal if it were to take either a rate-based or mass-based approach. The commenters noted 

that the EPA's recent TSD on converting a rate-based target to a mass-based target, due to its 

vague nature, falls short of providing States with adequate guidance on this critical aspect of the 

CPP. The commenters stated that a template plan should also illustrate how a State could 

participate in a multi-state plan. 

Response 14: The EPA is confident that the final rule provides clear criteria for states to follow 

in developing state plans that achieve the emission performance rates or equivalent, and that will 

be enforceable. States following the state measures approach will be required to have a backstop 

in place to ensure they are meeting their goals. Other forms of state plan will be based on 

federally enforceable emission standards. EPA is taking additional steps for rate-based emission 

standard plans to ensure that ERCs are permanent, non-duplicative, and reflect real and verifiable 

quantities of clean generation. EPA is proposing a federal plan this summer that it will 

implement in the event states do not submit approvable state plans. This federal plan will also set 

enforceable emission standards on the affected EGUs. The federal plan will also serve as a model 

rule, satisifying this, and many other commenter’s concerns, that the agency should provide 

additional support for states on the design of approvable plans. EPA’s action goes beyond a BAU 

scenario and will achieve real and additional reductions in carbon pollution. 

Comment 15: Several commenters noted that EPA has allowed insufficient time for rule 

development and implementation. 
260 

 

Commenters were concerned that the time set aside from proposal to compliance is overly 

ambitious. Commenters said they are aware that the timeline the EPA is following is the result 

of a Presidential Memorandum, but observe that President Obama's timeline may not adequately 

account for the magnitude of this rule. Commenters said, the complexity of the Rule has 

required considerable analysis and even with the 165 days allowed for comment, significant 

uncertainty remains as to the real impact of the proposal on the electric sector given the inability 

to fully analyze how individual states may act under the rule. 

Commenters stated, unfortunately, because energy efficiency is such a large part of the overall 

compliance regime, leaving this for resolution until after the state goal is set virtually assures that 

affected entities cannot adequately comment on EPA's proposed goals. Commenters said, 

utilities, regulators and states continue to grapple with these and a host of other 

questions. Commenters said, FERC is just beginning to assess the reliability impacts of the rule 

on the electric grid. Commenters said, a North American Electric Reliability Coordinating 

Council (NERC) report released on November 5th clearly states that the industry has had 

insufficient time to develop analysis of the proposal and that EPA has failed to adequately assess 

reliability concerns. 

Commenters were concerned that EPA will have insufficient time to analyze and synthesize the 

comments it receives. Commenters said, EPA should abandon the current schedule to finalize the 

rule in June 2015. Commenters said, the June 2015 deadline, set by the President and not a 

statutory deadline, allows only slightly more than six months to analyze the comments received, 

weigh the merits of both legal and technical matters raised, revise the rule in a manner consistent 

with the CAA that can be attained without jeopardizing the economy, submit the proposal to 

OMB for inter-agency review and release the rule by the President's deadline of June 

2015. Commenters said, given that this proposal anticipates incorporating the application of 

CAA authorities over large segments of the economy heretofore never regulated, this is no small 

endeavor. 

Commenters stated, finally, the state process is compressed to a degree as to virtually assure 

regulatory and compliance mayhem. Commenters said, under the proposal, a state which requires 

more time to develop multi-state compliance options will have until June of 2018 to submit a 

final plan to EPA. Commenters said, this allows a very short 18 months for "affected entities" 

(which constitute a very broad segment of the economy) to understand their obligations under the 

state plan and to react accordingly to comply with 2020 requirements. Commenters said, while 

some actions can certainly be taken by "affected entities" in advance of submission of a final 

rule, major investments may not be prudently undertaken until such time as the State Plan is 

complete and approved by EPA. Commenters said, for electric utilities, whose investments 

generally require significant planning, design, engineering, financing and permitting even before 

construction begins, 18 months is a blink of an eye. 

Commenters stated, six months is an insufficient time period for EPA to review and incorporate 

the comments provided into a final rule. 
261 

 

Response 15: The EPA disagrees with this commenter regarding the timelines for this 

rulemaking. However, 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 16: Commenters stated that the Proposed Rule goes beyond EPA's statutory 

authority. The commenters stated that the Proposed Rule is part of EPA's attempt to implement a 

June 2013 speech by President Obama in which he announced the Administration's "Climate 

Action Plan." [http://www.whitehouse.gov/climate-change] The commenters stated that this 

speech cannot provide EPA with the authority to promulgate the Proposed Rule. The 

commenters stated that Presidential speeches do not have the force of law; indeed, the Supreme 

Court has dismissed them even as aids to statutory interpretation. [See Horne v. Flores, 557 U.S. 

433, 459 n.8 (2009)] The commenters stated that a President's public speech "is an insufficient 

basis for the exercise of lawful authority by executive agencies." [American Fed'n of Gov't 

Emps., AFL-CIO v. Freeman, 498 F.Supp. 651, 658 (D.D.C.1980)] 

Commenters added, as another court remarked, "what President Obama 'thinks' about [an issue], 

and his characterization of those beliefs in public speeches, has no legal effect. [Int'l Internships 

Programs v. Napolitano, 798 F.Supp.2d 92, 101 n.11, (D. D.C. 2011), vacated after appeal 

dismissed as moot, 463 F. App'x. 2 (D.C. Cir. 2012).] The commenters stated that nor can an 

international agreement entered into unilaterally by the President create the basis for a sweeping 

regulation like the Proposed Rule. [See Laurence H. Tribe, Taking Text and Structure Seriously: 

Reflections on Free-Form Method in Constitutional Interpretation, 108 HARV. L. REV. 1221, 

1249-77 (1995).] 

The commenters stated that policymaking-by-speechifying is an inherently arbitrary process, 

because the policy can be reversed by another speech, or by a stroke of the pen, with no political 

accountability. The commenters noted that 5 months after the Proposed Rule was announced in 

June 2014, the President announced a new climate target (as part of a U.S.- China November 12 

climate agreement) of reducing U.S. greenhouse gas (GHG) emissions to 26-28 percent below 

2005 levels by 2025. 

The commenters stated that while the President asserts the ability to change goals and policies in 

the next speech or the next announcement, decisions by utilities, their suppliers, and their 

customers must be made on a much longer time horizon. The commenters stated that in the real 

world, these groups must make long-term investments, build plants and other facilities that last 

for decades, and enter into multiyear contracts. The commenters stated that an executive 

regulation - let alone a speech or announcement - "altering future regulation in a manner that 

makes worthless substantial past investment incurred in reliance upon the prior rule" "may for 
262 

 

that reason be 'arbitrary' or 'capricious.'" [Bowen v. Georgetown University Hosp., 488 U.S. 204, 

220 (1988) (Scalia, J., concurring)] The commenters stated that such an after-the-fact disruption 

of reliance interests would conflict with "fundamental notions of justice" that have been 

recognized throughout history. [Kaiser Aluminum & Chemical Corp. v. Bonjorno, 494 U.S. 827, 

855 (1990) (Scalia, J., concurring)] The commenters stated that the Supreme Court has thus 

condemned changes in the law that "can deprive citizens of legitimate expectations and upset 

settled transactions." [General Motors Corp. v. Romein, 503 U.S. 181, 191 (1992)] The 

commenters stated that the Administration's cavalier disregard for the well-settled expectations 

of millions of Americans underscores why any deference to the "Climate Action Plan" would be 

inappropriate. 

Response 16: The EPA’s action is under the statutory authority Congress provided in the Clean 

Air Act. The fact that it is consistent with, and carrying out, the policy of the Executive Branch 

as directed by the President, does not somehow make the action any less lawful or any less 

authorized by Congress itself. For this reason, all of the cases cited by the commenter are 

distinguishable. 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.”). 

1.15.3 Constitutional issues 

Comment 1: Commenters stated that the proposed rule would upset well-settled investmentbacked expectations developed in reliance on longstanding federal policy and would single out a 

few to bear burdens that in fairness should be borne by society as a whole. 

The commenters stated that the Proposed Rule represents a radical shift in federal policy that 

would upset settled, investment-backed expectations, with no corresponding climate or 

environmental benefits. The commenters noted that the agency does not contend that the 

proposal would affect the climate in any way. The commenters stated that the EPA has sought to 

justify the EPA Power Plan as an economic measure, not a "pollution control" plan. The 

commenters stated that the EPA Administrator Gina McCarthy testified before the Senate 

Environment and Public Works Committee on July 23, 2014: "The great thing about this [EPA 

Power Plan] proposal is that it really is an investment opportunity. This is not about pollution 

control. It's about increased efficiency at our plants, no matter where you want to invest. It's 

about investments in renewables and clean energy." [U.S. House. Energy Commerce Comm. 

Press Release, Pollution vs. Energy: Lacking Proper Authority, EPA Can't Get Carbon Message 

Straight (Jul. 23, 2014), available at http://energycommerce.house.gov/pressrelease/pollution-vsenergy-lacking-proper-authority-epa-can%E2%80%99t-get-carbon-message-straight (emphasis 

added)] 
263 

 

The commenters argued that the Proposed Rule represents the epitome of arbitrary decisionmaking because the Proposed Rule will entail significant harm to society and disruption of wellsettled reliance interests that are not counterbalanced by any gain. The commenters stated that 

the Proposed Rule is different from other regulations by EPA under the Clean Air Act, in that it 

is a constitutionally infirm agenda-driven regulation that has no benefit in achieving the stated 

goal. 

Response 1: The EPA disagrees with this commenter. The Clean Power Plan is under authority 

of section 111(d) of the Clean Air Act, and is entirely supportable on the basis of the degree of 

emission limitation of GHG air pollutants, here, CO2 as determined by application of the BSER 

and taking into account factors such as cost, identified in section 111(a)(1). As explained in the 

preamble, the rule will have economic and public health co-benefits. Consistent with 

longstanding practice across the federal government, the agency discloses those benefits, along 

with information regarding costs, to inform the public of the impacts of its actions. We address 

allegations regarding stranded assets in the preamble at VIII.B.1. Insofar as this comment’s 

reference to investment-backed expectations is intended to reference the Penn Central balancing 

test for regulatory takings, see the discussion of the Just Compensation Clause in the Legal 

Memorandum accompanying the final rule. 

Comment 2: Commenters argued that the EPA's proposal clearly violates the Tenth 

Amendment which defines the respective roles of the federal government and the states. 

According to the commenters, the Tenth Amendment makes it abundantly clear that the federal 

government has only those powers provided by the U.S. Constitution and all other powers are 

reserved to the states. U.S. Const. Amend. X; Printz v. United States, 521 U.S. 898, 918-19 

(1997) (quoting U. S. Const. Amend. X. ("Residual state sovereignty ... was rendered express by 

the Tenth Amendment's assertion that '[t]he powers not delegated to the United States by the 

Constitution, nor prohibited by it to the 'States, are reserved to the States respectively, or to the 

people.")). The commenters indicated that while Congress has authority to regulate interstate 

commerce via U.S. Const. Art. I, section 8, the states retain authority over intrastate commerce 

and general police powers, including the power to regulate electric utilities. Bond v. United 

States, 134 S. Ct. 2077, 2086 (2014) (citing United States v. Lopez, 514 U.S. 549, 567 (1995). 

According to the commenters, consistent with the Tenth Amendment, Congress recognizes 

in section 101 of the Act that "air pollution prevention . . . and air pollution control at its source

is the primary responsibility of the States and local governments." 42 U.S.C. section 7401(a)(3). 

The commenters stated that section 111(d) establishes a clear division of authority between EPA 

and the states in setting performance standards for existing sources, and is thus consistent with 

the principles of cooperative federalism under the Tenth Amendment. 

The commenters stated that if EPA's interpretation of section 111(d) and its proposed standards 

are promulgated, they would violate the Tenth Amendment and well recognized federalism 

doctrines. The commenters stated that the EPA not only strips state environmental agency 

authority in setting binding performance standards under section 111(d), but it also mandates that 

state legislatures and public service commissioners set energy policy according to these new 
264 

 

EPA standards. The commenters noted that Mississippi elects, rather than appoints, its public 

service commissioners. The commenters stated that the EPA cannot, in the guise of CO2 

standards, effectively require any elected officials, including our PSC Commissioners, to revise 

long-range energy policies and resource plans to accommodate EPA's vision of what a 2030 

electric sector should look like. The commenters argued that this type of commandeering of 

elected state officials by a federal agency that is not accountable to the electorate significantly 

undermines the accountability of those elected officials to the voters in our states. See New 

York, 505 U.S. at 169 (stating that "when due to federal coercion, elected state officials cannot 

regulate in accordance with the view of the local electorate," "[accountability is thus 

diminished"). 

The commenters stated that the Act establishes a clear division of authority between EPA and the 

states in setting standards under section 111. The commenters noted that Mississippi does not 

question that EPA has authority to establish standards of performance for new sources 

under section 111(b), however Congress clearly reserved for the states the authority to set 

binding standards for existing sources under section 111(d). In fact Section 111(b) provides that 

"the Administrator shall publish proposed regulations establishing Federal standards of 

performance for new sources...." 42 U.S.C. section 7411(b)(1)(B). The commenters stated that 

section 111(d), however, only authorizes EPA to issue regulations that establish a procedure 

similar to that provided by section [110 of the Act] under which each state shall submit to the 

Administrator a plan which ... establishes standards of performance. 42 U.S.C. section 

7411(d)(1)(A). The commenters stated that the statute is clear on its face that Mississippi and 

thus MDEQ, not EPA, has the authority for individual facilities within its jurisdiction to 

"establish" standards of performance. The commenters noted that Congress also provided 

flexibility to the states in terms of how those standards are applied to individual sources within 

their borders. Section 111(d)(1) provides that "the Administrator shall permit the State in 

applying standards of performance to any particular source .... to take into consideration, among 

other factors, the remaining useful life of existing source to which the standard applies." 42 

U.S.C. section 7411(d)(1)(B). The commenters noted that Congress authorized "EPA to set 

binding existing source standards only if and when a "state fails to submit a satisfactory plan...." 

42 U.S.C. section 7411(d)(2)(A). 

The commenters stated that the EPA's own implementing regulations confirms its role under 

section 111(d) because those regulations provide that EPA will establish "guidelines," not 

emission standards for existing sources. 40 CFR 60.22. The commenters noted that the EPA 

itself defines an "emission guideline" as "a guideline ...which reflects the degree of emission 

reduction achievable through application of the best system of emission reduction..." 40 CFR 

60.21(e). Yet notwithstanding clear language to the contrary and by EPA's own admission, the 

commenters noted the proposal would establish legally enforceable ("binding") allowable 

emissions rates for existing sources on a state-wide basis for each state. 79 FR 34892 ("As 

promulgated in the final rule following consideration of comments received, the interim and final 

goals will be binding emission guidelines for state plans."). According to the commenters, the 

proposal establishes "emission standards," not guidelines, which clearly violates EPA's own role 

under 40 CFR 60.22. The commenters asserted that in no regulation has EPA ever set binding 
265 

 

state-wide emission rates under section 111(d) and there is no legal authority or precedent that 

EPA can point to for the approach it proposes to take in this rule. 

Response 2: EPA disagrees with these comments. The Emission Guidelines do not establish 

binding standards of performance on affected EGUs, and are consistent with the subpart B 

regulations. The agency has done exactly what is provided for in the statute, and 60.21 and .22: it 

has determined the degree of emission reduction achievable through the application of the BSER. 

States now have the opportunity to develop state plans that achieve that degree of emission 

performance, and have flexibility in the manner in which they set unit-level standards of 

performance. Further, these commenters misunderstand the nature of the emission performance 

levels or state goals EPA is finalizing. They are only “binding” in the sense that the state must 

develop a plan that meets them, should the state wish to do so. They are not enforceable CAA 

obligations under section 113, on either the source, or the state. Rather, if the state plan is such 

that performance levels are not achieved by the affected EGUs, the consequence is that EPA 

disapproves the plan and promulgates a federal plan. EPA has always interpreted section 

111(d)(2) as giving it authority to review the substantive adequacy of these plans, to disapprove 

them if they are unsatisfactory, and to promulgate a federal plan that does accomplish the degree 

of emission limitation that is achievable. For the reasons discussed in the Legal Memorandum 

accompanying the final rule, neither this rule nor CAA section 111(d) violate the principles of 

federalism embodied in the Tenth Amendment. 

Comment 3: Commenters disagreed with adoption of policies that favor certain fuel sources. 

Commenters argued that there is no state "flexibility" in the rule or any discretion provided to 

states to develop their own standards of performance or develop variances and exceptions to the 

standards, as required by the Act. The commenters stated that the EPA's own modeling shows 

many of the coal-fired units that will be forced into retirement by state CO2 budgets were built in 

response to, and in reliance upon, the Power plant and Industrial Fuel Use Act of 1978. [42 

U.S.C. 8301(b)(2)] The commenters stated that the Act included as one of its purposes "to 

encourage and foster the greater use of coal and other alternate fuels, in lieu of natural gas and 

petroleum, as a primary energy source." [Id] The commenters stated that for EPA to undermine 

the hundreds of millions of dollars investment that resulted from the Act without an express 

directive of Congress to do so is a punitive abuse of the agency's powers that fundamentally 

violates the separation of powers doctrine. 

Commenters stated that even where the Proposal's state goals would not require coal-fired EGUs 

to shut down entirely, the goals are based on reduced utilization of these units, which could limit 

their ability to recover the costs of installing emission controls. 

Commenters stated that the Clean Power Plan's methodology for calculating each state's 

emission reduction goal forces states to enact laws that are preferential to specific energy 

sources. The commenters argued that it is not the role of federal agencies to use regulatory 

authority to force states to adopt policies that favor specific energy sources. The commenters 

noted that such tactics set a dangerous precedent for future regulation of energy production. 
266 

 

Response 3: Section 111(d) of the Clean Air Act does not create exemptions for facilities on the 

basis of whether they received federal support in any way under other laws. Furthermore, for the 

reasons discussed in section 1.2 of this response to comments document, this rule provides states 

significant flexibility and meaningful choice consistent with cooperative federalism principles of 

the CAA. Finally, for the reasons discussed in the Legal Memorandum accompanying the final 

rule, this rule does not coerce or commandeer states into implementing a federal regulatory 

program in violation of the Tenth Amendment. 

Comment 4: Commenters stated that the CPP undermines the separation of powers and that 

the EPA is making law rather than implementing it. The commenters noted that the CPP and 

NSPS are similar to the Waxman-Markey bill which failed, and that the CPP is an attempt to 

circumvent the democratic process. 

Commenters stated that the CPP undermines the separation of powers. The commenters stated 

that, even assuming for the sake of argument that the CAA authorizes EPA to regulate CO2 as an 

"air pollutant," the EPA stretches section 111(d) beyond all recognition. 

The commenters argued that states cannot meet their CPP emission-reduction requirements by 

applying demonstrated emission-control technology to existing power plants. Rather, the 

commenters noted that they must, in varying degrees, transform their electric power sectors. The 

commenters stated that there is no evidence in the text of section 111(d), EPA's implementing 

regulations, or legislative history that Congress authorized EPA to restructure state electricity 

markets, revise state electricity policies, or set CO2 emission caps for state electric-power 

sectors. The commenters argued that the EPA is making law rather than implementing it. 

The commenters stated that when striking down EPA's Timing and Tailoring Rules, the Supreme 

Court cautioned the agency not to interpret the CAA in ways that "would bring about an 

enormous and transformative expansion in EPA's regulatory authority without clear 

congressional authorization." The commenters stated that the CPP runs afoul of the Supreme 

Court's admonition that "Congress does not hide elephants in mouse holes." 

The commenters stated that Congress, after all, debated and declined to approve similar policies 

during the first Obama administration. The commenters stated that the CPP sets CO2 emission 

reduction requirements that states can meet only by enacting (or tightening) three of the four 

main climate policies contained in H.R. 2454, the American Clean Energy and Security Act of 

2009, commonly known as the Waxman-Markey bill. The commenters stated that those policies 

are: CO2 emission caps, renewable energy quota, and demand-side reduction mandates. 

The commenters noted that the fourth major Waxman-Markey policy - new source performance 

standards (NSPS) requiring new coal power plants to install carbon capture and storage (CCS) 

technology - is the centerpiece of EPA's Carbon Pollution Standard (CPS) rule. The commenters 

stated that the EPA anticipates no CO2 emission reductions or climate benefits from the CPS 

rule, since the agency assumes no new coal power plants would be built anyway. The 

commenters noted that the CPS rule is a regulatory stepping stone to the CPP. The commenters 
267 

 

stated that under the CAA, the EPA must promulgate performance standards for new sources 

before it can promulgate performance standards for existing sources. 

Response 4: The agency is acting under the statutory authority provided it by Congress, and as 

recognized by the Supreme Court in Massachusetts v. EPA, AEP v. Connecticut, and UARG v. 

EPA. In all of those cases, the Court recognized that EPA had substantial authority to regulated 

GHGs, as well as substantial discretion to use its delegated authority reasonably in light of 

statutory context and a variety of important policy considerations. EPA disagrees with this 

comment insofar as it claims that EPA may not promulgate regulations addressing CO2 

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

section IV of the final rule preamble. Furthermore, 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 under the Clean Air Act in the manner cautioned against by the UARG 

Court. 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 5: Multiple commenters (citing the 2014 UARG v. EPA decision on the Tailoring 

Rule) stated that the CPP must be withdrawn because it violates Separation of Powers 

principles. 

Commenters stated that the EPA's proposed regulations are unlawful at the most fundamental 

level. The commenters stated that the Administration has decided to bypass Congress in 

implementing far-reaching Executive Branch energy and environmental policy goals. The 

commenters stated that basic Separation of Powers principles, however, prohibit the 

Administration from doing so. The commenters stated that the EPA should withdraw this rule 

and abandon its attempt to remake the US electricity system by a misguided and highly flawed 

executive fiat, and limit itself, at most, to allowing the states to determine what reductions can be 

made through realistic efficiency improvements on a case-by-case basis at individual existing 

sources. 

Response 5: We disagree with this comment. With respect to the separation of powers aspect of 

this comment, EPA may promulgate regulations addressing CO2 emissions from existing power 

plants under section 111(d) for the reasons stated in section IV of the final rule preamble. 

Furthermore, 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. 
268 

 

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. Accordingly, commenters are 

incorrect to claim that this rule expands EPA authority under the Clean Air Act in contravention 

of UARG v. EPA. Additionally, for the reasons stated in the Legal Memorandum, this rule does 

not violate the Tenth Amendment. 

Comment 6: Commenters stated that the EPA's proposed Clean Power Plan is illegal and 

unconstitutional and should be withdrawn. 

The commenters stated that the EPA has only just recently been reminded that it cannot simply 

seize massive new regulatory authority for itself. In Utility Air Regulatory Group v. EPA, 134 S. 

Ct. 2427 (2014) ("UARG v. EPA"), the Supreme Court of the United States invalidated another 

of EPA's regulations aimed at limiting the emission of CO2 because EPA overstepped the 

authority granted to it in the Clean Air Act. In doing so, the Court provided valuable lessons that 

EPA should heed in these proceedings. The commenters noted that the Supreme Court made 

clear that regulation of greenhouse gases, including CO2, cannot be "'extreme,' 'counterintuitive,' 

or contrary to 'common sense.'" Id. at 2441 (quoting Massachusetts v. EPA, 549 U.S. 497, 531 

(2007)). The commenters stated that regulations often fall into those impermissible categories, 

the Court explained, when an agency interprets a statute in a way that "would ... bring about an 

enormous and transformative expansion in [its] regulatory authority without clear congressional 

authorization." Id. at 2432 (citing FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 

160 (2000)). The commenters stated that the Supreme Court further cautioned 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 its announcement with a measure of 

skepticism." Id. at 2,444 (quoting Brown & Williamson, 529 U.S. at 159). 

The commenters argued that the EPA lacks the authority under the CAA to advance this proposal 

to a final rule. The commenters stated that the EPA is prohibited from regulating power plants 

under section 111(d) because it has regulated these same plants under CAA section 112. 42 

U.S.C. 7411(d)(1)(A). In addition, the commenters stated that CAA section 111(d) does not 

allow EPA to set the CO2 reduction goals of each state or to go "beyond the fence" - that is, 

beyond the boundaries of a power plant which is the source of a pollutant - to regulate that 

pollutant. It is limited by statute to "establish[ing] a procedure - under which each State shall 

submit - a plan which establishes standards of performance for any existing source. Id. 

(emphasis added). 

The commenters stated that the proposal blatantly disregards the mandate that EPA must 

explicitly take into account the remaining useful life of the sources being regulated, i.e. power 
269 

 

plants. The commenters noted that CAA 111(d)(2)(B) states "... the Administrator shall take into 

consideration, among other factors, remaining useful lives of the sources in the category of 

sources to which such standard applies." Id. (emphasis added). The commenters stated that the 

Clean Power Plan is structured in such a way as to eliminate useful life from the entire range of 

considerations for a state plan to take into account to achieve compliance. The commenters 

stated that although the proposal purports to take into account remaining useful life by 

"provid[ing] states with the flexibility to determine how to achieve reductions ... and to adjust the 

timing in which reductions are achieved in order to address key issues such as cost to consumers, 

electricity system reliability and the remaining useful life of existing generation assets[,]" it is a

baseless assertion. 79 FR 34836. 

According to the commenters, first, the statute requires that the Administrator take into account 

the remaining useful life (not the state plan) and second, the proposal rigidly establishes 

deadlines for compliance. The commenters stated that it does not give states meaningful control 

to "adjust the timing" of either the glide path or the final goal, despite its claims that allowing 

regulation of specific EGUs creates a situation where a state could potentially consider 

remaining useful life. 79 FR 34926. The commenters contended that there is virtually no way 

that a state plan can take into account remaining useful life given the interim goals and 

compliance time frames that are established in the rule. The commenters asserted that the rigid 

compliance deadlines have effectively denied states any meaningful opportunity to use any 

"flexibility" in setting compliance for EGUs based on their remaining useful life. 

The commenters noted that the Notice of Data Availability (NODA) addresses some of these 

issues when it asks for additional comment on glide path issues and a book value approach to 

avoid stranded costs. 79 FR 64547-549. However, the commenters stated that because it simply 

requests additional input, it too entirely fails to resolve the failure of the plan to provide 

meaningful consideration of the remaining useful lives of coal plants. 

Commenters stated that the CPP is unconstitutional and should be withdrawn. The commenters 

contended that the CPP violates the Article I Contracts Clause, the Fifth Amendment's Takings 

Clause, and the Tenth Amendment (state sovereignty). The commenters elaborated extensively 

on each of these points. The commenters stated that it is likely that additional constitutional 

issues, including possible Commerce Clause, and Separation of Powers claims, among others 

may prove fatal to the CPP because the proposed rule is drafted in such a way as to provide 

optional compliance paths for states. 

For similar reasons, commenters concluded that the proposed 111(d) existing-source power plant 

rule must be withdrawn. The commenters stated that the proposed rulemaking is contrary to the 

plain language of Section 111(d), which expressly prohibits the regulation of source categories 

already regulated under Clean Air Act section 112. The commenters stated that the proposed 

existing source-rule also is unlawful because no final new-source rule has been promulgated 

under Clean Air Act section 111(b). The commenters stated that the proposed rulemaking is 

based on a contemplated "Best System of Emission Reduction" that arbitrarily includes factors 

well beyond the EGUs themselves and which has not been adequately demonstrated. Finally, the 
270 

 

commenters stated that contrary to the clear mandates of the Federal Power Act and the 

principles of federalism, the proposed existing-source rule extends the EPA's authority to reach 

Ohio's fundamental economic structures and unlawfully usurps authority from the State of Ohio 

to control its distribution of electricity. 

Response 6: We disagree with this comment. As an initial matter, Commenters’ citation of 

section 111(d)(2)(B) is beside the point; that provision applies to federal plans, not these 

emission guidelines. As explained in section VIII.G.1 of the preamble and the Legal 

Memorandum, these emission guidelines permit States, consistently with section 111(d)(1), to 

consider remaining useful life through several reasonable mechanisms. We respond there to 

comments about adjusting the goals. We respond elsewhere to comments about the NODA. 

With respect to the separation of powers aspect of this comment, EPA may promulgate 

regulations addressing CO2 emissions from existing power plants under section 111(d) for the 

reasons stated in section IV of the final rule preamble. Furthermore, 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. 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. Accordingly, commenters are incorrect to claim 

that this rule expands EPA authority under the Clean Air Act in contravention of UARG v. EPA. 

Finally, the Legal Memorandum accompanying the final rule responds to commenters’ concerns 

about the constitutional implications of this rule under the Contract Clause, Takings Clause, and 

Tenth Amendment. 

Comment 7: Commenters stated that states cannot implement building block 3 without 

arbitrarily penalizing in-state generators or violating the contracts clause. 

The commenters stated that there is no feasible means for states to incorporate renewable energy 

into the state compliance plans without penalizing electric generating companies operating 

within their borders or illegally disrupting existing contracts. The commenters mentioned that the 

Proposed Rule uses all existing renewable generation within a state to set emission rate goals, but 

states may not be able to utilize the portion of renewable generation sold out of state toward 

compliance. The commenters stated that most contracts for renewable generation also contract 

for the environmental attributes associated with the generation and states do not have the 

authority to abrogate these contracts in order to comply with the proposed emission rate goals. 

The commenters stated that any attempt to do so would violate the Contracts Clause in the 

constitution. The commenters stated that exporting states like Oklahoma are placed in the 
271 

 

untenable position of needing to make additional reductions in state to offset the portion of 

renewable generation embedded in the state goal that is sold out of state, as a result. 

Response 7: We disagree with this comment. For the reasons stated in the Legal Memorandum 

accompanying this rule, state implementation of building block 3 measures is unlikely to violate 

the Contract Clause. 

Comment 8: Commenters stated that the EPA has clearly over-reached its authority ways 

because EPA's interpretation violates the Tenth Amendment ("The powers not delegated to the 

United States by the Constitution, nor prohibited by it to the States, are reserved to the States 

respectively, or to the people.") 

Response 8: For the reasons stated in the Legal Memorandum, the EPA disagrees that this rule 

coerces or commandeers states in violation of the Tenth Amendment. 

Comment 9: Commenters stated that federal commandeering of state governments is such a 

novel phenomenon that the Court's first experience with it did not occur until the 1970s, when 

the EPA promulgated regulations requiring States to prescribe auto emissions testing, monitoring 

and retrofit programs, and to designate preferential bus and carpool lanes. The commenters noted 

that the Courts of Appeals for the Fourth and Ninth Circuits invalidated the regulations on 

statutory grounds in order to avoid what they perceived to be grave constitutional issues, and the 

District of Columbia Circuit invalidated the regulations on both constitutional and statutory 

grounds. According to the commenters, after [the Court] granted certiorari to review the statutory 

and constitutional validity of the regulations, the Government declined even to defend them, and 

instead rescinded some and conceded the invalidity of those that remained, leaving [the Court] to 

vacate the opinions below and remand for consideration of mootness. [Printz, 521 U.S. at 925 

(internal citations omitted).] 

The commenters stated that the history of this overreach had developed as follows: 

• In 1970, Congress passed the Clean Air Amendments. 

• In 1971, EPA promulgated the first rule requiring state air quality plans under the new 

amendments. 

• On December 6, 1973, EPA promulgated regulations to reduce motor vehicle emissions through 

tailpipe controls, but also mandated outside-the-vehicle conservation measures such as express 

bus lanes, bicycle concourses, inspection programs and commuter surcharges. 

The commenters stated that the EPA purported to require the States to enact laws and appropriate 

monies to guarantee enforcement of these regulations in their CAA state plans. The commenters 

stated that the D.C. Circuit, in District of Columbia v. Train, rejected EPA's rule, however, 

finding that Congress did not delegate to EPA the power to require States to adopt and enforce 

the changes that the Agency wanted to implement, and that EPA could not do so by requiring 

States to hand over their police power, under pain of federal penalty. The commenters noted that 

following on the heels of the Fourth and Ninth Circuits, which had struck down EPA's vehicle 
272 

 

emissions rules on statutory grounds [See Maryland v. EPA, 530 F.2d 215, 226 (4th Cir. 1975); 

Brown v. EPA, 521 F.2d 827, 838-42 (9th Cir. 1975).] in order to avoid "grave constitutional 

problems," the D.C. Circuit also invalidated EPA regulations on both statutory and constitutional 

grounds. [District of Columbia v. Train, 521 F.2d 971, 986-88, 992 (D.C. Cir. 1974), vacated and 

remanded as moot, EPA v. Brown, 431 U.S. 99 (1977) (per curiam).] The commenters stated that 

court rejected EPA's attempt "to commandeer the regulatory powers of the states, along with 

their personnel and resources, for use in administering and enforcing a federal regulatory 

program." [Train, 521 F.2d at 992.] The commenters stated that the Train Court further 

repudiated "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 

...." [Id. at 984; see Id. at 992-94] 

According to the commenters, it is well-established under Printz and New York both that the 

United States may not commandeer state officials or commandeer state authority in order to 

administer a federal program and that the anti-commandeering doctrine has an historical 

association with the CAA. The commenters stated that there are three ways that the coercion and 

commandeering doctrines are likely to come up under the Proposed Rule: (1) if EPA fails to 

disclaim the intent and authority to impose highway sanctions if a State refuses to issue a SIP at 

all; (2) if a State refuses to issue a SIP acceptable to EPA; and (3) if a State ceases to enforce a 

SIP that depends on state powers that EPA does not itself have under the CAA. According to the 

commenters, under the commandeering doctrine, EPA cannot order an unwilling State to issue a 

SIP in the first instance nor command that it use its police power - a power not possessed by 

EPA - to continue enforcement of a SIP it initially agrees to issue. 

The commenters stated that the latter situation was recently addressed by the Sixth Circuit in 

Sierra Club v. Korleski. [681 F.3d 342] The commenters explained that in 1980 the Sixth Circuit, 

in a 2-1 decision, in United States v. Ohio Department of Highway Safety, [635 F.2d at 1204-05] 

had permitted EPA to sue Ohio state administrative officials to order them to deny vehicle 

registration to certain vehicles, as provided in a SIP, despite the failure of the Ohio legislature to

adopt implementing legislation. The commenters noted that Korleski reversed Highway Safety 

with the observation that Highway Safety "came during an era whose conception of the statefederal relationship has been superannuated by the Supreme Court's later decisions in New York 

and Printz." [681 F.3d at 351-52] The commenters noted, according to Korleski, if a State fails to 

enforce a SIP, EPA "can order the regulated parties to comply . . . , or impose an administrative 

penalty upon them, or sue them." [Id.] With respect to a State, however, the commenters noted 

"the EPA can [only] engage the State directly through the process of dialogue and inducement so 

plainly contemplated by the Act's sanctions provision, section 7509." [Id.] The commenters 

noted that sanctions provision permits a partial withholding of highway funds, in nonattainment 

areas, with numerous exceptions, following lengthy negotiations. [42 U.S.C. 7509(b)(1)(A), (B).] 

The commenters noted that there is also an offsets penalty running against private parties. [42 

U.S.C. 7509 (b)(2)] The commenters stated that even these statutory powers are limited by a 

second constitutional doctrine: non-coercion. 
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The commenters explained that although EPA may try to convince the States to cooperate, it may 

not resort to "outright coercion." [Virginia v. Browner, 80 F.3d 869, 881 (4th Cir. 1996)] The 

commenters stated that this means that the penalty imposed for non-cooperation must be small 

enough to leave States with the ultimate decision whether to conform to federal desires. [See 

United States v. Dole, 483 U.S. 203, 211-12 (1987) (upholding five percent reduction in highway 

funds as representing "relatively mild encouragement to the States")] the commenters noted that 

when the Medicaid expansion penalty was struck down by a 7-2 vote in NFIB v. Sebelius, it was 

held to be impermissible coercion both because the penalty for not expanding Medicaid - loss of 

all Medicaid funding - was too large and because the mandated Medicaid expansion represented 

too fundamental a shift in the program to be deemed part of the earlier bargain to accept 

Medicaid funding. [132 S. Ct. at 2603-07] The commenters stated that regulating greenhouse gas 

emissions beyond the fence line of existing sources, including by mandating the establishment of 

renewable energy portfolios and the imposition of conservation programs upon the State's 

citizenry, is the same sort of programmatic shift and very far removed from the agreed terms 

under which highway funds were originally accepted. 

Response 9: For the reasons stated in the Legal Memorandum, the EPA disagrees that this rule 

coerces or commandeers states in violation of the Tenth Amendment.

1.15.4 General illegality/exceedance of EPA authority 

Comment 1: Commenters stated, as proposed, the guidelines would allow environmental 

regulatory agencies to establish programs that are more related to achieving desired social and 

economic outcomes rather than developing and implementing performance standards to achieve 

emission reductions. Commenters said, Pennsylvania believes these types of social and economic 

decisions should be made by elected officials. 

Commenters stated that they serve on the judiciary committee and the legislature, and the 

legislative rulemaking and review committee in the West Virginia legislature. The commenters 

noted that not all states have a legislative review of rules; West Virginia does. The commenters 

stated that they have the opportunity to have some oversight over not only state agency rules, but 

also the State agency rules that are promulgated as a result of federal rules. The commenters 

expressed concern that the Proposed Rule is just coming from a Federal agency without the 

support of the elected officials in D.C. 

Commenters stated, because stabilizing the concentrations of GHGs in the atmosphere will 

require the transformation of our energy, transportation and manufacturing systems, they believe 

that the existing Clean Air Act (CAA) is not the appropriate vehicle for regulation toward that 

goal. Commenters said, rather, Congress should craft national climate legislation that balances 

multiple national priorities, including economic stability, energy independence, national security 

and defense, and energy reliability and affordability, in addition to environmental goals, and that 

assigns responsibility across federal departments and agencies according to their respective 

expertise. The commenters recognized, however, that such an ambitious, coordinated approach is 
274 

 

unlikely to occur in the near term. Commenters said, instead, EPA needed to respond to the 

Supreme Court's decision in Massachusetts v. EPA by addressing the question of endangerment 

under section 202(a) and, in doing so, chose to proceed with certain rulemakings. Commenters 

also recognized that states and regions already are developing significant regulatory programs to 

address GHG emissions and that prompt EPA action, if structured appropriately and designed to 

avoid harmful impacts, may provide a useful national framework for action in the form of a 

federal program that could avoid difficulties likely to arise under a patchwork of state and 

regional programs. Commenters said, EPA rulemaking activity may also assist Congress in 

developing appropriate national legislation. 

Commenters believed that Congress, and not EPA, should determine the framework to address 

greenhouse gases and ensure the balance of affordable and reliable electricity from a variety of 

fuels and sources. Commenters asked the EPA to withdraw or reconsider its proposed rules for 

regulating carbon dioxide emissions from existing EGUs. Commenters said, the complex and 

far-reaching issue of reducing greenhouse gas emissions is best addressed by Congress and the 

states. Commenters said, the proposal is legally and technically problematic. Commenters said, 

the proposal is an unprecedented application of the CAA to the power sector, is inadequately 

justified, and unfairly seeks to shift the enormous burden. 

Commenters were concerned that the proposed rule attempts to establish climate change policy 

not yet approved through an act of Congress. Commenters believed that federal legislation is the 

proper place to address climate change policies and not through administrative action. 

Commenters urged EPA to withdraw the proposed rule. 

Commenters supported the supremacy of Congress to make laws. Commenters said, it is the 

responsibility of Congress, not the administration, to define the scope of regulatory jurisdiction 

under the CPP and not for EPA to seek to expand the area of its jurisdiction through rulemaking 

processes. 

Commenters stated, national energy policy should be determined by Congress, not by EPA. 

Commenters said, if Congress decides that transitioning to a lower-carbon economy is the energy 

policy path to pursue, then that transition should be done in an orderly and cost-effective fashion 

- one that recognizes reliability concerns and realistic time horizons and considers the useful life 

that remains in the valuable generating resources that currently exist. 

Commenters stated, if enacted, the proposed rule would, in effect, set energy policy for the 

United States. Commenters contended that such an important socioeconomic decision should be 

made by the legislative branch of government, especially so given that, by EPA's own admission, 

this effort is symbolic. Commenters said, if the United States is to offer a high-cost, low-impact, 

symbolic reduction program to spark similar actions world-wide, Congress is the appropriate 

body to do so. 

Commenters suggested that a better overall approach would have the EPA working with 

Congress on a legislative action that involves all sectors for a balanced approach to carbon 

limited economies, and to eliminate legal obstacles that the proposed rule is bound to face. 
275 

 

Commenters stated, while they applaud EPA's efforts in addressing this complex and 

controversial issue, a rule of this magnitude with such far-reaching effects is best addressed 

through the legislative, rather than administrative, process. Commenters said, uniform national 

policy is needed. Commenters said, EPA's unprecedented effort is indeed clear through the large 

body of work that comprises the proposed Clean Power Plan. Commenters said, the City of 

Tallahassee aligns with the EPA in their significant efforts to address climate change through 

responsible regulation, and appreciates the EPA's dedication to this topic, not taking this charge 

lightly. Commenters said, however, it is also clear through the comments, identified errors in 

data and calculation, as well as the questionable statutory basis noted above, that this is not yet 

"ready for press". Commenters said, this in no way suggests that the EPA's efforts are not fruitful 

- just that the magnitude of this undertaking is enormous and it would be unadvisable, undue 

haste to rush to a final rule with so many areas of comments and known errors needing to be 

resolved. Commenters said, while the need to address climate change is present, the need to get a 

final regulation correct based on accurate data, science, and statistics is even greater. 

Commenters said, an accurate and appropriate regulation is especially necessary for a rule with 

such far-reaching impacts, and at least as proposed, an unchangeable (even for cause) state goal 

that will last forevermore. Commenters said, as such, the City of Tallahassee suggests that an 

additional re-proposal is necessary after resolving these and others' comments, and that a final 

rule promulgated by June 1, 2015 under a politically-imposed-only deadline would not allow the 

necessary input from all stakeholders to ensure EPA's updates to this proposal also undergo 

appropriate review. Commenters said, the City also suggests that EPA use the feedback from this 

comment period and work with Congress to develop a national framework under a new law that 

is written for this purpose. Commenters said, the new proposal can then be derived from a statute 

designed to address the challenges of climate change regulation, and not rely on a creative 

redefinition of a 44-year old statute. 

Commenters stated, as proposed, the guidelines would allow environmental regulatory agencies 

to establish programs that are more related to achieving desired social and economic outcomes 

rather than developing and implementing performance standards to achieve emission reductions. 

Commenters said, Pennsylvania believes these types of social and economic decisions should be 

made by elected officials. 

Response 1: We discuss our authority to promulgate this rule in section IV of the preamble. The 

EPA disagrees; as recognized multiple times by the Supreme Court, Congress empowered the 

agency through the Clean Air Act to address air pollution problems in the United States, 

including the problem of GHG pollution. The final rule does set energy policy for the country. It 

sets an achievable level of emissions performance from the affected EGUs and gives states the 

opportunity to design state plans in the first instance to achieve these emission reductions. The 

EPA itself could implement emission standards itself through a federal plan if necessary. The 

rule is not “symbolic” in the commenter’s sense. It will achieve actual emission reductions. 

Comment 2: Commenters stated that requiring re-dispatch from coal to NGCC exceeds EPA's 

authority. 
276 

 

Commenters stated that the dramatic increase in NGCC utilization set forth in the Proposed Rule 

would require a fundamental redesign of the existing electric grid and force substantial changes 

in how the natural gas industry and organized markets operate, both of which are outside the 

scope of the Proposed Rule and EPA's lawful authority under the CAA. 

Commenters stated that the EPA's proposed revisions to Block 2 stringency are largely illegal, 

provide little relief to coal-generating units, and may actually increase stringency on coal 

electricity generators. The commenters explained that even if these shifts in generation in lowNGCC states do contribute to a reduction in the stringency of Block 2 for high-NGCC states, the 

proposal is still fundamentally flawed. For example, the commenters noted that the EPA is 

considering mandating low-NGCC states to build more NGCC plants. The commenters stated 

that, like all of Block 2 through Block 4 requirements, this sort of forced operational/construction 

changes are not allowed by the CAA - they are beyond-the-fence requirements that are not 

"systems of emissions reductions." See 42 U.S.C. 7411(a)(1). The commenters asserted that 

this existing-source 111(d) Rule Proposal is in direct conflict with the CAA to mandate the 

construction of new sources to comply with an existing-source rule. 

Commenters stated concerns about the significant impact of the very recent additional EPA 

proposal for creating a minimum value of re-dispatched coal to non-existent NGCC power plants 

or to co-firing natural gas in existing coal-fueled boilers. The commenters mentioned that EPA is 

further proposing another potential means for increasing the stringency of a state "goal" by 

adding incremental renewable energy and energy efficiency to the "goal" which replaces coalfueled generation pro-rata or prioritizes there-dispatch of coal-fueled generation based on 

historic emissions. The commenters stated that the EPA's NODA also discusses that the 

anticipated emission rate reductions calculated under building block 2 are inconsistent from state 

to state because certain states have little or no NGCC affected EGUs. The commenters stated that 

EPA then asserts that one way to address this discrepancy would be to require a floor on the 

amount of re-dispatch in each state, and finally argued that for states with little or no existing 

NGCC units this floor could be achieved through the construction and utilization of new NGCC 

units. The commenters noted that there is nothing in the text of CAA 111(d) that even remotely 

suggests that EPA has the authority to set limits or require emission reductions for existing 

sources premised on the construction of new sources nor does EPA have the authority to require 

re-dispatch. Accordingly, the commenters noted that EPA is precluded from applying this 

approach in any final rule. 

The commenters objected to the lateness of the NODA-raised issues in the comment period for 

the Proposed Rule, with especial concerns that EPA would seek comment on changing the goal 

without providing a new proposed rule. The commenters noted that EPA merely states "this 

adjustment to goal-setting formula would yield more stringent state goals" instead. 

Response 2: The EPA disagrees with this commenter. Section 111(d) does not specify which 

technologies or measures may comprise a “system of emission reduction.” The term is 

intentionally very broad. The legal authority for the rule is explained in the Legal Memo and 

Section V of the preamble. The authority of the agency to directly order dispatch is irrelevant 
277 

 

and misunderstands the rule, as explained in Section VII of the Legal Memo. In addition, the 

agency believes the NODA process, including opportunity to comment, satisfies procedural 

requirements. 

Comment 3: Commenters asserted that the EPA is mandating that states impose a carbon tax 

which the federal government is not itself authorized to levy. The commenters stated that the tax 

would have to be calculated and enacted on a state-by-state basis. If not, then the commenters 

stated that the EPA would assert the 111(d) analog of a Federal Implementation Plan (FIP) and 

have to enact its own tax, which is outside the EPA's authority under this section of the Clean Air 

Act. The commenters argued that the Agency does not point to where the authority exists to 

implement such a tax under current federal law and in particular Section 111(d). The 

commenters stated that while they would have no argument regarding each state's individual 10th 

Amendment right to impose a tax of its own volition, they take issue with the federal government 

mandating states to do so. 

Response 3: This comment is incorrect. Nowhere do the emission guidelines direct states to 

establish a carbon tax; nor is EPA proposing a carbon tax in the proposed federal plan. 

Comment 4: Commenters stated that the Administration has disregarded whether EPA even has 

the legal authority under the Clean Air Act to move forward with this proposal. 

The commenters stated that the existing source proposal goes beyond the plain reading of the 

Clean Air Act, and it includes failed elements from the cap-and-trade program rejected by the 

United States Senate in June 2008. 

Response 4: The commenter is incorrect that the agency has disregarded whether it has legal 

authority. It has provided extensive analysis of its authority for the public to comment on in the 

Legal Memo at proposal, and it is issuing its updated legal analysis in Section V of the preamble 

and in the Legal Memo accompanying the final rule. Further, the failure of Congress to enact 

other legislation does not detract from the agency’s analysis of its legal authority. As discussed at 

length in the Legal Memo, EPA’s authority is located in the Clean Air Act as enacted by 

Congress, and interpreted by the Supreme Court. 

Comment 5: Commenters stated that the proposed rule establishes new energy policy, exceeds 

EPA's authority, and will result in prolonged legal battles 

Commenters stated that EPA is essentially establishing new national energy policy by setting 

emission goals that are so stringent that they cannot be accomplished by end-of-stack control or 

internal source process changes. The commenters noted that the EPA has constructed CO2 

budget goals that must rely on the growth of renewable energy (RE) generation and energy 

efficiency projects for their attainment. The commenters stated that in effect, the rule is 

controlling, not merely CO2 emissions, but the amount of energy on the grid and the means of 

energy generation which the commenters argued exceeds EPA's traditional authority as given it 

by the Clean Air Act of 1970. 
278 

 

The commenters asserted that by delving into the realm of energy generation and dictating its 

means, the Clean Power Plan proposal expands the previously-recognized bounds of regulatory 

authority beyond that of emissions controls for an emissions unit (in this case a fossil fuel fired 

power plant) and into that of micro-management of an entire industry. The commenters stated 

that the proposed rule would essentially create a brand new paradigm for how electrical 

generation is dispatched in the United States. According to the commenters, under the Clean 

Power Plan, the EPA may now have final authority not only on what electrical generation can be 

dispatched throughout the year, but also when existing plants must be retired and when and what 

type of new electrical generation must come on line based only on annual average carbon 

intensity. The commenters stated that the proposed rule may even create a situation where 

renewable generation capacity is added just to average down a utility's overall carbon intensity 

and achieve compliance with the rule limits, even though additional power is not actually needed 

at the expense of utility customers and other potential environmental impacts. 

The commenters stated that the EPA has long held a role in defining the resulting impact of air 

emissions allowed from dispatched and new generation, but the Clean Power Plan goes beyond 

approval of environmental impacts and allows EPA to regulate decisions which have necessarily 

included additional considerations, such as a combination of environment, economics and 

reliability. In addition, the commenters stated that this authority overlaps the jurisdiction of 

traditional state agencies such as the Florida Public Service Commission which regulates the 

state's energy market, and may be viewed by rule opponents as outside the allowable limits of 

EPA's current authority. The commenters expressed concern that the proposed rule, and 

particularly several of the building blocks, are founded on questionable statutory interpretation 

and may allow for prolonged legal battles creating regulatory uncertainty and deferring when 

additional reductions in CO2 emissions will occur. 

Response 5: The Clean Power Plan sets achievable emission performance levels for the affected 

EGUs taking into account the factors identified in section 111(a)(1), and it does not dictate any 

particular means of energy generation. Thus the rule does 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 agency 

explains it role vis-à-vis states and the affected EGUs, and how this is consistent with 

congressional intent and longstanding agency interpretation in section VII of the Legal Memo. 

Comment 6: Commenters stated that the CPP violates the REA's federal mandate that rural 

America receive reliable, low cost electric services because it will result in the significant 

reduction in operation of or retirement of nearly all coal-fired generation. 

The commenters noted that the EPA recognizes in the proposal that there is no technological 

option to reduce CO2 emissions from power plants, yet EPA determines that the BSER for CO2 

emissions from EGUs is primarily the reduction or elimination of coal generation. The 

commenters explained that grid reliability is threatened with coal generation, and that coal 
279 

 

generation is essential to serving this county's electric load, ensuring that the owners and 

operators of coal generation remain viable and preventing dramatic increases in electricity rates. 

The commenters noted that rural electric cooperatives are particularly vulnerable to the impacts 

of reduced coal generation, and these impacts will unacceptably fall on the poorest electric 

consumers in the country. Because of the CPP, the commenters contended that the CAA and the 

REA (and it progeny) can no longer be read and applied harmoniously. The commenters stated 

that the CPP and EPA's promulgation of the CPP is, therefore, illegal and must be withdrawn. 

The commenters noted that the NODA published on October 30, 2014 in this docket seeks 

additional comments on CPP options that either will worsen or not address the rule's impacts on 

reliability and excessive costs. 

Response 6: The agency believes the emission performance levels it is establishing are in 

general affordable, achievable, and will not pose reliability issues for the power sector, including 

in rural areas. Section VIII.G.2 of the preamble and section 9.8 of the RTC discuss the agency’s 

treatment of reliability concerns and how they will be addressed. In addition, the agency 

conducted a “stranded assets” analysis as discussed in Section VIII.B.1. The agency disagrees 

that anything in the Rural Electrification Act of 1936 was intended to trump the agency’s 

authority and responsibility under the Clean Air Act with respect to air pollution control, and the 

commenter has not pointed to any specific provisions of the REA that are directly in conflict 

with either the CAA or the Clean Power Plan. 

 

Comment 7: Commenters stated that the CPP is a major federal action warranting NEPA 

review, and that EPA should voluntarily develop an EIS for the proposed rule to satisfy each 

criteria needed to inform EPA regarding whether to voluntarily develop a NEPA document. 

Commenters suggested that the EIS process would allow: improved coordination with other 

federal agencies, such as FERC, which may be involved in future licensing actions; assessment 

of the large-scale environmental impacts that may result from the build-out of the nation's 

energy-supply infrastructure that may arise as a result of the Proposed Rule's mandates; 

expansion of public involvement to address matters of controversy such as the significant 

reliability impacts the will result from the proposed rule implementation; full consideration of 

impacts on special resources and public health. 

Commenters also discussed the possible elements of the build out, including more than 100 GW 

of generating capacity, associated electrical transmission infrastructure, natural gas transmission 

infrastructure, and renewable-energy capacity, some of which may be constructed in remote or 

as-yet undeveloped areas. Commenters stated that some of the impacts will fall 

disproportionately on minority or low-income populations and trigger environmental justice 

implications without a robust EIS process. 

Response 7: This action under the CAA is not subject to the National Environmental Policy 

Act. See 15 U.S.C. 793(c)(1). Project-specific licensing and environmental reviews may need to 

be conducted at the time of actual project development and implementation undertaken to 

achieve emission standards set by state plans or a federal plan. This does not undermine in any 
280 

 

way the legality of this action or the agency’s determination that the degree of emission 

limitation of the BSER is achievable. The agency includes robust discussion of the effects and 

impacts of the final guidelines in Sections IX – XII of the Preamble, including potential impacts 

on EJ and low-income communities. 

Comment 9 Commenters stated that the EPA has gone far beyond simply proposing 

"guidelines" for the states and asserts that the emissions performance goals 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 EPA. 

The commenters stated that the mandatory state goals leave no room for states to treat certain 

units differently or otherwise to modify their plans in a meaningful manner as provided by the 

statute. 

Response 9: We disagree with this comment. We discuss the legal authority for the goals in 

section VII of the preamble. 

1.15.5 Data and information 

Comment 1: Commenters stated, EPA's October 30, 2014 Notice of Data Availability (NODA) 

does not contain any specific EPA proposals or proposed regulatory language and for the most 

part cannot be included in any final guidelines. 

• The NODA contains virtually no "data," and is rather a series of questions and musings about 

different policies the Agency could employ. The content in this document is more appropriate for 

an advance notice of proposed rulemaking. 

• EPA provided insufficient time to allow stakeholders to provide fully informed and wellconsidered comments on the NODA. The Proposed Guidelines are extraordinarily complex, and 

the issues raised in the NODA are broad and seem to contain some approaches that are either new 

or that contradict its previous positions. 

• The regionalized approach to Building Block 3 and the regional approach to re-dispatch under 

Building Block 2 were not included in the Proposed Guidelines and are not actually proposed in 

the NODA. There is insufficient information such as technical analyses and the other items 

required by section 307(d)(3) of the CAA that would allow UARG to comment on these 

approaches in a meaningful way. 

Commenters stated, late in this rulemaking process EPA issued a "notice of data availability" 

(NODA), 79 Fed. Reg. 64,543-53 (Oct. 30, 2014). For the most part, NODA is a misnomer; it 

contains virtually no discussion of any relevant new "data," but instead is described as a means 

to "provid[e] additional information on several topics raised by stakeholders.' Id. at 64,543. The 

NODA identifies three topics that the Agency says have been raised either in public or private 
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meetings with certain unnamed stakeholders: (1) "the emission reduction compliance trajectories 

created by the interim goal for 2020 to 2029"; (2) "certain aspects of the building block 

methodology"; and (3) "the way state-specific [CO2] goals are calculated." Id. Although some of 

the stakeholders' suggestions regarding EPA's Proposed Guidelines might have profound effects 

on the requirements that states and regulated entities might have to meet in any final guidelines, 

the Agency has not budged on its December 1, 2014 deadline for comments on the Proposed 

Guidelines or on the NODA itself. Id. In any event, the NODA contains no EPA proposals or 

proposed regulatory language but rather is musings about different policies that the Agency 

might prefer. These seem more appropriate for an advance notice of proposed rulemaking rather 

than a NODA on the eve of a comment deadline. Most of the suggestions that are discussed in 

the NODA cannot be pursued without EPA undertaking additional analyses after which it could 

re-propose the rule for comment. See CAA section 307(d)(3). 

Commenters stated, EPA acknowledges that the various alternative approaches the Agency is 

now contemplating in the NODA could fundamentally alter the proposed emission guidelines 

and lead to more stringent goals for all or some states. 79 Fed. Reg. at 64,544. Commenters 

stated EPA also recognizes that many issues in the NODA - and the four Building Blocks 

generally - "interact with each other." Id. Commenters stated realistically there is no way to 

assess how stringent any state's goals will actually be until EPA provides greater certainty on its 

preferred approach. Because of this fundamental ambiguity, commenters stated EPA cannot 

finalize any of the changes discussed in this NODA without issuing a supplemental proposal that 

clarifies the Agency's position, provides the basis and purpose for its approach pursuant to CAA 

section 307(d)(3), provides specific details of how each state would be affected, provides 

sufficient economic analysis of the changes, and provides proposed regulatory text. None of 

these things are present in the NODA. UARG is pleased that EPA appears to recognize some of 

the legal flaws and irrational consequences inherent in the Proposed Guidelines. For example, 

commenters stated EPA now appears to recognize that the Proposed Guidelines do not consider 

the remaining useful lives of existing EGUs, despite the explicit statutory command to do so in 

section 111(d)(1)(B) of the CAA. Id.; see also Id. at 64,549. Commenters stated the Agency has 

discovered that if finalized the Proposed Guidelines would create an enormous stranded asset 

problem with the required shutdown of many coal-fired EGUs that have recently been 

constructed or have recently received significant capital investment to comply with other EPA 

regulations, such as the MATS Rule and measures to reduce emissions of visibility-impairing 

pollutants. Id. at 64,546. Commenters stated EPA now concedes that its requirement for redispatch in Building Block 2 will in many situations distort regional electricity markets. Id. at 

64,549. Finally, commenters stated the Agency now seems to acknowledge that the Proposed 

Guidelines render illusory its oft-stated purpose of providing states with flexibility with respect 

to time and emission reduction strategies. Id. at 64,544. The commenters stated that the EPA 

should withdraw the Proposed Guidelines, resolve the many problems that it has finally 

recognized, and propose a fundamentally different approach. The commenters stated that the 

EPA's scattershot efforts to date fail to satisfy the basic elements of notice and comment 

rulemaking. See CAA section 307(d)(3); 5 U.S.C. section 553. 
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Response 1: The EPA disagrees with this comment for numerous reasons. The NODA gave the 

public notice of the changes it was considering making from the proposal and provided an 

opportunity to comment on those. The agency disagrees that this information must as a matter of 

law need take the form of a re-proposal of the rule itself, when the proposal itself is just a 

proposal, and could, as in any rulemaking process, change from proposal to final. Further, the 

commenter misunderstands the building blocks, and particularly building block 2. The agency is 

not mandating particular building blocks be implemented in every case, and the agency believes 

the sector can implement necessary reductions from measures in the BSER, or using other 

compliance measures, that do not “distort regional electricity markets.” Further, the agency 

conducted a stranded assets analysis to accompany the final rule, in response to this and other 

comments, which shows that in general, assets with extended remaining book life need not be 

forced to shut down. The final rule, like the proposal, provides real flexibility to the states. See 

Section VIII of the preamble. 

Comment 2: Commenters argued that the EPA has not provided all critical documents for 

review, nor engaged in a meaningful dialogue with FERC regarding reliability. 

The commenters stated that the EPA has not provided all critical documents necessary for a 

thorough review of the proposed Guidelines and should provide additional time for states and 

affected sources to review these new materials and for EPA to respond meaningfully to concerns 

raised by the recent report on reliability by the North American Reliability Council, and as 

reflected in the comments filed in this matter by the Midcontinent Independent System Operator 

(MISO) and other regional transmission organizations. The commenters stated that the EPA has 

been adding documents to the Federal Register throughout the pendency of the public comment 

period. As an example, the commenters noted that the EPA recently released two years of data 

on electric consumption - components of the modeling underlying EPA's proposed Guidelines - 

as late as October 28. The commenters stated, more importantly for states like Indiana that have 

predominantly coal-fired generation and a significant number of announced retirements, EPA has 

failed to provide sufficient guidance on how to calculate a mass-based emissions target. The 

commenters stated that on November 6 EPA finally released a technical support document which 

seeks to illustrate potential methodologies for converting a state's rate-based goal to a 

comparable mass-based goal. However, the commenters stated that 3 weeks is not sufficient time 

to review the conversion examples and the multiple economic assumptions about future electric 

demand, future fuel usage and other important modeling inputs that EPA used to make the rate 

conversion. 

In addition to the administrative process concerns noted above, the commenters stated that the 

EPA has not held a robust dialogue regarding reliability with the Federal Energy Regulatory 

Commission (FERC), regional reliability organizations, regional transmissions organizations, or 

state regulatory commissions. The commenters stated that these federal and state agencies are the 

agencies tasked under federal and state law with the authority that EPA attempts to extend to 

itself under Section 111(d), namely regulation of regional power markets, and implementation of 

renewable energy standards and energy efficiency programs. The commenters stated that the 

FERC, through the North American Reliability Council (NERC), is charged under federal law 
283 

 

with ensuring reliability of the electric grid. The commenters noted that on November 5, NERC 

issued its preliminary report on potential reliability impacts from EPA's proposed Guidelines, 

finding that the interim goals required by EPA may threaten reliable electricity delivery in 2020, 

the proposal's initial compliance deadline. As NERC is the federal entity charged with grid 

reliability, the commenters stated that the EPA should pause the current administrative 

rulemaking process to thoroughly review and address NERC's reliability concerns before going 

forward with the current proposal. At a minimum, the commenters stated that the EPA should 

revise the interim deadlines for compliance in accordance with the recommendations in the 

NERC report. 

Response 2: We disagree with commenters. The EPA has fully considered reliability issues in 

developing this final rule. 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. 

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. 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. 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. 

1.15.6 Economic/industry issues 

Comment 1: Commenters stated that this proposal is a precedent for future GHG rules. 

Commenters stated, EPA's regulations on power plants are only the first step of the 

Administration's broader greenhouse gas regulatory agenda. Commenters said, as the agency has 

committed to a suite of follow-on rules, many partnership member organizations will be 

impacted twice - both as electricity customers and also as industries "next in line" for subsequent 

rules that EPA has committed to pursuing. Commenters said, for example, last month EPA 

proposed new rules restricting emissions from municipal landfills, and the agency's current 

budget request to Congress notes it will soon begin considering new GHG regulations on the 

following sectors: refineries, pulp and paper, iron and steel production, livestock operations, and 
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cement manufacturing. Commenters said, the substance, process, and ultimate outcome of the 

initial regulations on power plants are certain to influence the regulations that follow. 

Response 1: Comments regarding other sources categories are outside the scope of this 

rulemaking. As we have previously indicated the Agency intends to take a common sense 

approach to regulating GHGs and thus, at this time, consistent with the President’s climate 

Action plan and Methane strategy, the Agency has announced plans to further address emissions 

from landfills and oil and gas operations. The Agency disagrees that future regulations will result 

in “double impacts.” Each NSPS applies to a unique category of sources. Regulating municipal 

landfills will not impact electricity prices. 

Comment 2: Commenters stated that the proposed guidelines are not justified by their purported 

benefits when those benefits are characterized properly. 

Commenters stated, if the benefits of the Proposed Guidelines are properly characterized - that is, 

without inappropriately claiming benefits from the U.S. Government's social cost of carbon 

("SCC") estimates and the benefits of reducing pollutants that are regulated to protective levels 

by other rules - there are no benefits to weigh against the exorbitant costs. Commenters said, the 

Proposed Guidelines therefore cannot be justified and are thus unlawful. Commenters said, in 

fact, EPA never claims the Proposed Guidelines will mitigate climate change, despite describing 

the issue of climate change at length as a purported rationale for the rule. Commenters said, 

while the Agency quantifies the estimated emission reductions that the Proposed Guidelines will 

achieve, it never makes the connection between those emission reductions and the resulting 

impact on climate change, raising questions about the purpose of the rule. Commenters said, a 

"standard of performance" for purposes of section 111 is defined as the degree of emission 

limitation achievable through the best, adequately demonstrated system of emission reduction, 

"taking into account the cost of achieving such reduction . . . ." CAA section 111(a)(1) (emphasis 

added). Commenters said, a section 111 standard that imposes greater costs than benefits is 

therefore unlawful. Commenters said, EPA's reliance on the SCC and public health benefits to 

claim benefits from the Proposed Guidelines is arbitrary and capricious. Commenters said, any 

regulation whose costs outweigh its benefits is unlawful and is also ineffective and misguided. 

See CAA section 301(a) (authorizing EPA to adopt "such regulations as are necessary to carry 

out [its] functions under [the Act]"; regulations that yield no benefits cannot be "necessary"). 

Response 2: The commenters are incorrect on multiple fronts. First, there is no requirement that 

a rule’s costs outweigh its benefits. Many benefits are difficult to monetize, so cost-benefit 

analysis is just one tool that the Agency may use when considering costs. Second, the RIA for 

the final rule clearly demonstrates that the benefits of the final rule will far exceed its costs. 

Finally, the commenters’ critiques of the social cost of carbon are self-serving. The social cost of 

carbon is a well-recognized and scientifically sound method of monetizing the damages avoided 

by reducing GHG emissions. 

 
285 

 

Comment 3: Commenters stated that the EPA has not considered the feasibility of specific 

nuclear installations, has not thoroughly assessed economics of nuclear generation, and does not 

appear to have consulted with state public service commissions or the nuclear regulatory 

commission to determine feasibility or planning for future nuclear installations. The commenters 

stated that because EPA lacks authority to require construction or operation of new nuclear units, 

the Rule is ultra vires, arbitrary, capricious, an abuse of discretion, not in accordance with law 

and must be withdrawn. 

Response 3: Nuclear generation has been removed from the BSER calculation. Nonetheless, we 

note that this comment is based on the false notion that EPA is ordering, or requiring states to 

order, the implementation of the specific measures that comprise the BSER. This is incorrect. 

See Legal memo Section VII.C and D. 

Comment 4: Commenters supported a "pledge and review" approach that allows the United 

States to modify its participation in climate action if the rest of the world does not follow suit and

the United States is placed at an untenable economic disadvantage. The commenters stated that 

the Administration's November 12, 2014 announcement of a preliminary agreement with China 

to cut or cap CO2 emissions in China and the United States, although on different timelines and 

to different extents, may develop into a multi-national agreement on this front. However, the 

commenters continued to believe that the pledge and review safety valve, which is not contained 

as part of the Proposed Rule, is needed as part of a national carbon policy. 

Response 4: The Clean Power Plan is under authority of domestic law found within the Clean 

Air Act, and, while supportive of international efforts to address the global problem of climate 

change, is not legally dependent on particular international obligations. The degree of emission 

limitation the agency determined to be achievable was based on analysis of the domestic sector. 

For discussion of the relationship of this action to international actions, see Section II.G of the 

Preamble. 

Comment 5: Commenters stated that the proposed rule must account for unique challenges 

faced by utilities that do not control the units that they own. 

The commenters stated that the EPA's Proposed Rule is also flawed because it is based on the 

faulty assumption that all utilities have full control over the units they own. The commenters 

described partial ownership arrangements of selected plants in Minnesota. Under the O&M 

agreement, during times that the plant is running, two companies are each required to offer 

enough generation so that the co-owned plant can operate at a minimum level of 500 MW. 

Commenters stated neither company unilaterally decide that it does not want to run the unit. 

Thus, commenters added, if one party decides to run its share of the unit, the other party is 

obligated to run its share at the minimum level. 

The commenters stated that these circumstances create unique challenges for the two companies 

in implementing the different building blocks set forth in the Proposed Rule. Commenters stated 
286 

 

if, for example, company 1, whose generation fleet is much more diversified than company 2 

determines that, to meet its obligations under the Proposed Rule, it cannot offer its minimum 

generation at the co-owned unit, while company 2, on the other hand, determines that it could 

continue to run the co-owned plant, both utilities would be put in a very precarious predicament. 

Commenters stated Company 1 would either have to 1) breach its agreement to offer its 

minimum generation from the plant, thereby precluding company 2's ability to run the unit, or 2) 

offer the required minimum generation for the co-owned plant and run afoul of the Proposed 

Rule. The commenters stated that both outcomes are problematic. Accordingly, the commenters 

stated that the EPA must address in any final rule the unique challenges that co-owners face in 

implementing the different building blocks set forth in the Proposed Rule. 

Response 5: The agency recognizes that the compliance strategies for individual units may vary 

and is not mandating facilities use a particular technology or set of measures to achieve 

reductions. We note that the state in which the facility is located will have the first opportunity to

design a state plan that applies emission standards to the unit and has opportunities to provide 

various flexibilities. The guidelines do not require the implementation of the specific building 

blocks that constitute the BSER, rather they establish emission performance levels that the states 

implement through standards of performance. 

1.15.7 State-specific issues 

Comment 1: Comment 14: Commenters expressed concern that the Notice of Data Availability 

("NODA'') published on October 28, 2014 did not comply with the requirements to comply with the 

Administrative Procedures Act (APA), because the information presented in the NODA implied a 

change in the stringency of the proposed BSER, and did not provide an adequate state of basis for the 

proposed changes. 

The commenters noted that the NODA seeks comment on a variety of proposed changes to the states 

"goal" setting without providing a revised rule or the associated time to fully comment on the 

proposed changes. In the case of Wyoming, the commenters argued that these potential "changes" 

may result in a significant further increase in the stringency of any final Wyoming compliance 

obligation with incremental and unavoidable costs of compliance. 

The commenters expressed concerned about the significant impact of the additional EPA proposal for 

creating a minimum value of re-dispatched coal to non-existent NGCC power plants or to co-firing 

natural gas in existing coal-fired boilers. The commenters also noted that the EPA is proposing 

another potential means for increasing the stringency of a state "goal" by adding incremental 

renewable energy and energy efficiency to the "goal" which replaces fossil generation pro-rata or 

prioritizes the re-dispatch of fossil generation based on historic emissions. In addition, the 

commenters objected to the lateness of the NODA-raised issues in the comment period for the 

Proposed Rule, and the fact that the EPA would seek comment on changing the goal (merely stating 

"this adjustment to goal-setting formula would yield more stringent state goals") without providing a 

new proposed rule. 

The commenters noted that EPA readily admits that certain elements proposed in the NODA could 

alter the stringency of the BSER. The commenters argued that the proposed approaches in the NODA 
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do potentially impact the final BSER goal for each state and must undergo the same treatment given 

the BSER put forth in the June 2014 proposal. This would include, but not be limited to, technical 

support documents detailing how each state could apply these alternatives, additional parsed IPM 

results enabling states to understand the unit-by-unit impact of these alternatives, revised regulatory 

impact analyses, substantial demonstration of the technical and economic feasibility of these 

alternatives as part of BSER, and a complete and transparent demonstration of how renewable 

generation and EE measures can displace large amounts of base-load fossil generation on a relatively 

short time frame without impacting the reliability of power grid. Absent this, the commenters argued 

that the additional approaches put forth in the NODA represent only vague and nebulous concepts 

that have not been fully developed and analyzed by EPA. The commenters argued that the burden of 

analyzing these vague and poorly developed alternatives should not be shouldered by the states; a 

burden which is exacerbated given the paucity of supporting data and technical information provided 

by EPA. Going forward on these concepts does not provide the adequate statement of basis as 

required by the APA. 

Response 1: EPA provided adequate notice and opportunity to comment on both the proposed 

rule, and the updated information provided in the NODA. See response to Comment 1 in section 

1.13. 

Comment 2: Commenters, using context from North Dakota, suggested that EPA must repropose the rule. 

Commenters stated, federal agencies are required to provide the public with adequate notice of a 

proposed rule and a meaningful opportunity to comment on the rule's content. Commenters said, 

with the CPP, the EPA is poised to enact the most consequential and expensive environmental 

regulation ever imposed on the electric power sector. Commenters said, given that so much is at 

stake, interested parties are entitled to a notice-and-comment process that does not involve EPA 

floating vague new proposals or handing down crucial technical support documents a mere 30 

days before the comment period is set to close. 

Commenters stated, with its NODA, EPA foists an ill-defined and far-reaching proposal on both 

the people and power sector of North Dakota. Commenters said, after proposing a rule in June 

which apparently calls for no reduction in coal-fired power generation in North Dakota, EPA 

made an about-face in the last week of October, raising for the first time the possibility of 

imposing "some" required shift to natural gas. Commenters said, any "adequacy" such an 11thhour notice might have is undermined when EPA goes on to define "some" as any value between 

0% and 55% of a state's electric generation output. Commenters said, it is difficult for any North 

Dakota stakeholder wishing to draft and submit comments to know where to start with such an 

indeterminate rule, to say nothing of the mere 30-day time clock ticking against their efforts to 

do so. 

Commenters stated, even more recently, EPA issued its long-awaited technical support document 

for the CPP, entitled Translation of the Clean Power Plan Emission Rate-Based CO2 Goals to 

Mass-Based Equivalents. Commenters said, in it, EPA outlines two potential ways for authorities 

to take their state's rate based emission targets and translate them into mass-based equivalents. 

Commenters said, but EPA's guidance provides little help at this juncture in the notice-and-
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comment process. Commenters said, if any changes are made from the goals set in the Proposed 

Rule that increase the stringency of the goals or otherwise increase impacts to states, additional 

opportunity for comment must be provided. 

Commenters stated, under the rate-based regulatory scheme laid out in June, the primary 

difficulty facing state authorities was one of allocation. Commenters said, compelling states to 

reduce their overall rate of CO2 emission by a particular factor state-wide meant authorities 

would have to determine which of their state's EGUs to regulate and to what degree, hoping their 

efforts would land them on their target rate. Commenters said, in the wake of EPA's technical 

support document, however, authorities are faced with a completely different problem. 

Commenters said, unlike rate-targeting regulations, it is easy for states to regulate EGUs by 

telling each how many tons of CO2 they can emit each year in order to hit a mass-based target. 

Commenters said, instead, the primary difficulty in a mass-based regulatory scheme is 

accounting for demand growth. Commenters said, this problem is particularly acute in North 

Dakota which has experienced significant growth in demand for electricity subsequent to the 

2012 baseline year that is used in the CPP. Commenters said, but authorities and interested 

parties are provided with just over three weeks to grapple with this issue and respond to the EPA 

with comments. Commenters said, this is an insufficient amount of time to properly assess 

legitimate party concerns. 

Commenters stated, if EPA wants to include significant limitations on operations of North 

Dakota's coal-fired EGUs in its final rule, it must re-propose the CPP with those limitations and 

provide an adequate opportunity for comment. Commenters said, courts have held that any final 

rule must, at a minimum, be a "logical outgrowth" of its proposed rule. Commenters said, that 

standard requires courts to ask whether a new round of notice and comment would "provide 

commenters with 'their first occasion to offer new and different criticisms which the agency 

might find convincing.'" Commenters said, two policies are reflected by this inquiry: giving the 

regulated a chance to voice concerns to the regulator and ensuring that each regulator considers 

the full scope of relevant evidence that may bear on its decision. 

Commenters stated, under the rate-based regulatory scheme laid out in June, the primary 

difficulty facing state authorities was one of allocation. Commenters said, compelling states to 

reduce their overall rate of CO2 emission by a particular factor state-wide meant authorities 

would have to determine which of their state's EGUs to regulate and to what degree, hoping their 

efforts would land them on their target rate. Commenters said, in the wake of EPA's technical 

support document, however, authorities are faced with a completely different problem. 

Commenters said, unlike rate-targeting regulations, it is easy for states to regulate EGUs by 

telling each how many tons of CO2 they can emit each year in order to hit a mass-based target. 

Commenters said, instead, the primary difficulty in a mass-based regulatory scheme is 

accounting for demand growth. Commenters said, this problem is particularly acute in North 

Dakota which has experienced significant growth in demand for electricity subsequent to the 

2012 baseline year that is used in the CPP. Commenters said, but authorities and interested 

parties are provided with just over three weeks to grapple with this issue and respond to the EPA 
289 

 

with comments. Commenters said, this is an insufficient amount of time to properly assess 

legitimate party concerns. 

Response 2: EPA provided adequate notice and opportunity to comment on both the proposed 

rule, and the updated information provided in the NODA. See response to Comment 1 in section 

1.13. Additional opportunity to consider and comment on this issue of rate-based versus massbased implementation will be available during the comment period on the proposed federal plan 

and model trading rules. But we note that while either approach poses benefits and challenges, 

under the final guidelines, it ultimately remains in the state’s hands to choose which approach is 

best for it. The agency is not mandating a particular form of implementation in the final rule. 

Comment 3: EPA purports to offer the North Dakota Companies, and many others similarly 

situated, with an occasion to submit a full range of criticisms unique to the NODA and TSD, but 

does not actually do so. Commenters said, a combination of the NODA's vague and broadly 

drawn guidelines and a joint comment period totaling just over three weeks conspires to deny 

these parties with a true occasion to submit all "new and different criticisms" each may have. 

Commenters said, through October 29, the North Dakota Companies had no reason to consider 

submitting their own comments to EPA and made no effort to do so. Commenters said, on 

October 30, however, those same companies suddenly faced the prospect of indeterminate 

restrictions on their customer base as a result of the potential loss of anywhere from 0% to 55% 

of the state's coal-fired EGUs. Commenters said, and the futility of comments on these 

indeterminate restrictions became even more pronounced with the issuance of the TSD on 

November 6 that presents mass-based alternatives that do not appear to account for recent 

economic growth in North Dakota. Commenters said, this abrupt and amorphous form of 

regulating, combined with a prohibitively short response period, denies the North Dakota 

Companies of an opportunity to fully evaluate all questions, concerns, and constructive 

suggestions they might have and leaves a pronounced gap in EPA's catalog of relevant 

comments. 

Response 3: EPA provided opportunity to comment on the data in the NODA, as acknowledged 

by the commenter. It is not unusual that the potential range of stringency of regulation under a 

proposed rule could vary greatly depending on the options that are under consideration. 

Comments offered by parties in North Dakota or elsewhere were by no means in futility, 

considering the variety of changes undertaken by the agency to improve the final rule in response 

to the concerns raised. 

Comment 4: Commenters urged that EPA in developing the guidelines for existing power 

plants, to respect the primacy of Virginia and Pennsylvania and other states and to rely on state 

regulators to develop performance standards for CO2 emissions that take into account the unique 

policies, energy needs, resource mix, and economic priorities the states. The commenters stated 

that the guidelines should reflect and approve state-established performance standards 

undertaken at fossil-fueled power plants. Commenters stated that EPA should allow Virginia and 

other states to set less stringent performance standards or longer compliance schedules for power 
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plants within their jurisdiction; and allow stated maximum flexibility to implement CO2 

performance standards for fossil-fueled power plants within their jurisdiction. 

Response 4: We explain our authority to require that in order to be approvable, state plans must 

meet the emission performance levels established in the guidelines in Section VII of the Legal 

Memo and Section V of the Preamble. At least since the promulgation of the subpart B 

regulations in 1975, the agency has interpreted its authority to review and approve or disapprove 

state plans as based on substantive criteria. States do have considerable flexibility in the design 

of their plans here, to take into account local needs. 

Comment 5: Commenters asked that the EPA support a balance approach considering both 

environmental stewardship and the need for affordable, reliable electricity. 

Commenters stated, the MPUC is directed by state law to provide retail consumers of electric 

service in Minnesota with adequate and reliable services at reasonable rates) consistent with the 

financial and economic requirements of public utilities. Commenters said, the MPUC must set 

rates that are just and reasonable, not unreasonably preferential, prejudicial or discriminatory, 

and, to the maximum extent possible, set rates that encourage energy conservation and renewable 

energy use, and reduce the State's reliance on fossil fuels. See Minn. Stat. sections 2168.01 and 

2168.03. Commenters said, these directives guide the decisions of the MPUC as it addresses the 

utilities' requests to build or purchase new generation) refurbish or close existing facilities, 

develop incentives for energy efficiency, and monitor compliance with the statutory renewable 

energy and greenhouse gas reduction goals. Commenters said, environmental stewardship is a 

key element of the Commission's decisions, balanced with the obligation to assure a reliable 

electric system and affordable rates. Commenters said, thus, each decision of the MPUC takes 

into account the type and timing of change, as well as the cost. Commenters urged the EPA to 

support this balanced approach to meeting carbon reduction goals. 

Response 5: The EPA has established a balanced approach to meeting carbon reduction goals. 

The agency believes that state PUCs and relevant state laws can be supportive of, contribute to, 

or otherwise complementary to meeting the emission performance levels of the guidelines, 

depending in part on how a state chooses to design its state plan. 

Comment 6: Commenters stated that the proposed rule does not permit States to consider 

remaining useful life. 

Commenters stated that the Proposed Rule does not permit States to consider the remaining 

useful life of any particular source to which the Proposed Rule will apply. The commenters 

stated that the EPA proposes to require that all states strictly adhere to a carbon emission limit on 

a specified schedule; however, Section 111(d) mandates that EPA allow states to consider the 

remaining useful life of a source when applying standards of performance to that particular 

source. 42 U.S.C. section 7411(d)(1). The commenters stated that with a strict carbon emission 

limit in place, states cannot exercise their statutorily mandated discretion. The commenters stated 
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that the EPA is without authority to deny states this statutory right, and therefore, may not 

proceed with this rulemaking. 

Commenters stated that the EPA claims that the breadth of the proposed BSER imbues these 

regulations with so much flexibility that states do not need to alter the strict emission limits. The 

commenters stated that this claim is false because states are entitled to flexibility over time, 

which the Proposed Rule does not allow. The commenters stated that to meaningfully take the 

remaining life of a source into consideration, states must be able to lengthen the compliance time 

to the source's anticipated retirement date. The commenters stated that strictly limiting emissions 

by a compliance schedule denies states the ability to take the remaining useful life of any source 

into consideration. 

Commenters stated that the EPA should amend its proposed regulation to allow states to adjust a 

state emission limit or provide for longer time to meet the goal to account for the remaining 

useful life, and other site-specific factors, of existing EGUs in accordance with CAA Section 

111(d). The commenters argued that Congress would not have mandated that remaining useful 

life be considered if EPA was to be given the power in CAA Section 111(d) to force retirements. 

In addition, the commenters charged that the EPA has not shown that all of its state emission 

limits are achievable without consideration of remaining useful life - it simply assumes this to 

be so. The commenters noted that if states cannot meet system reliability obligations to their 

citizens, FERC and state regulators under the goals as formulated by EPA, then the goals must 

yield. The commenters noted that since states have the necessary local information to make that 

valuation, not EPA, the rule must give states authority to adjust their goals as necessary to reflect 

reality on the ground, to protect the remaining useful life of sources, and to protect the reliability

and affordability of electric power. The commenters argued that failure to provide states the 

authority to adjust their "goal" to account for remaining useful life will almost certainly result in 

forced early retirements which would constitute a taking of private property in contravention of 

the fifth amendment to the United States Constitution. 

Response 6: We disagree. As explained in Section VIII.G.1 of the preamble and Section IX of 

the Legal Memorandum, these emission guidelines reasonably permit States to consider 

remaining useful life. Most of commenters’ arguments are addressed there; arguments regarding 

the Takings Clause are addressed in section X.D of the Legal Memorandum. For responses to 

reliability concerns, please see Section VIII.G.2 of the preamble. We explain our interpretation 

of remaining useful life in section VIII.G.1 of the Preamble and Section IX of the Legal Memo. 

We explain there that the guidelines reasonably permit states to consider remaining useful life 

and other facility specific factors. The guidelines are designed to permit trading, the creation of 

interstate emission markets, and reallocation of the costs of compliance. We view the remaining 

useful life consideration as primarily regarding a concern for facilities with relatively short 

remaining useful lives and the potential that they may be required to install unreasonably costly 

pollution control devices (these guidelines to not impose such a requirement). Nonetheless, the 

agency also conducted a “stranded assets” analysis to determine if commenters’ concerns were 

correct that the rule would force widespread retirements of units with relatively long book lives. 

As explained in Section VIII.B.1 of the Preamble, we found that this need not be the case. This 
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of course may depend on how states choose to design their state plans, but it cannot be said that 

this rule requires the result. Insofar as this comment asserts that there may be a potential takings 

claim, see the discussion of the Just Compensation Clause in the Legal Memorandum 

accompanying the final rule. 

With respect to the argument that to “meaningfully take the remaining life of a source into 

consideration, states must be able to lengthen the compliance time to the source's anticipated 

retirement date,” we disagree. The result of lengthening compliance time in the way the 

commenter suggests is to not require compliance at all. As explained in section IX of the Legal 

Memorandum, EPA reasonably interprets the remaining useful as not providing an outright 

exemption. 

Comment 7: Commenters noted that the EPA's rules specify that states may set forth their 

compliance schedules for designated facilities, and the state can choose to adopt EPA's 

"guidelines" for implementation or can choose to adopt its own. 40 CFR 60.24. ("Emission 

standards shall either be based on an allowance system or prescribe allowable rates of 

emissions except when it is clearly impracticable."); 79 FR 34844, n. 39 ("In the 1975 

rulemaking, the EPA explained that it used the term 'emissions guidelines' -instead of emissions 

limitations- to make clear that guidelines would not be binding requirements applicable to the 

sources, but instead are 'criteria for judging the adequacy of State plans.' 40 FR 53343."). 

The commenters noted that courts have recognized that the state is in charge of setting its 

compliance timetable. See, e.g., Bethlehem Steel Corp., 742 F.2d at 1036 ("Congress has given 

the states the initiative and a broad responsibility regarding the means to achieve those ends 

through state implementation plans and timetables for compliance.... The CAA is an experiment 

in federalism, and the EPA may not run roughshod over the procedural prerogatives that the Act 

has reserved to the states...."). 

According to the commenters, one would expect the deadlines to be more realistic because 

Congress did not establish compliance deadlines for Section 111(d), as it did with Section 

111(b), but Congress did require EPA to consider remaining useful life, energy and cost 

considerations. The commenters stated that yet EPA allows a 30-year averaging time frame for 

new coal-fired power plants to meet the stringent new standard, while instituting the "carbon 

cliff" in the CPP. Given EPA's oft-stated rationale for the CPP that each state has different 

resources and policy implementation, the commenters stated that one would also expect the rule 

to allow the states themselves to establish a realistic rate of progress given the unique nature of 

each state's legislative and regulatory environment and the makeup of the generation units 

located within the state. The commenters suggested that the EPA should modify the rule to 

require states to set reasonable rates of progress, thereby eliminating the need for interim goals. 

Response 7: We address the binding nature of the emission guidelines in the Legal 

Memorandum. The agency agrees with the commenter that states should have flexibility in 

implementation, and has designed the final emission guidelines to provide a great deal of 

flexibility. Indeed EPA has provided extended timelines for compliance in the final rule and has 

taken steps to address the so called “cliff” problem. Regarding commenters’ assertions that states 
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should be able to determine the degree of stringency, and schedule for compliance for their 

sources, without being subject to the EPA’s oversight, such assertions are simply not borne out 

by the text and structure of section 111(d). Congress twice in section 111(d) directs the agency to 

section 110 for guidance regarding the nature of the section 111(d) program. This is highly 

instructive on the question of whether the agency has the authority to see to it that the ultimate 

end is achieved—i.e., that sources achieve the emission performance levels the agency 

determines are achievable. Under the NAAQS framework, the agency establishes the NAAQS, 

and while states have great flexibility in designing SIPs that assure the NAAQS are attained and 

maintained, they ultimately must achieve that end, subject to the potential that EPA may 

disapprove a plan, call for plan revision, and/or issue a FIP. In Section 111(d), Congress 

established the same framework, where the agency is charged to determine the “degree of 

emission limitation achievable” for particular categories of sources, and then provide guidelines 

for how states may design plans to meet that end result. Congress authorized the agency to 

disapprove state plans that are not satisfactory and, directly cross-referencing to the NAAQS 

program, giving the agency the “same authority to prescribe” a federal plan as it would have to 

promulgate a FIP under section 110(c). See CAA section 111(d)(2). We note that Bethlehem 

Steel is inapposite as that case was about the nature of EPA approval actions on SIPs that had 

the effect of altering the state’s intended SIP. See also 80 FR 33840, 33876–79 (June 12, 2015). 

We disagree that the court cited by commenter recognized the state is “in charge of setting its 

compliance timetable.” The commenter has simply misread the dicta in Bethlehem Steel Corp. v. 

Gorsuch, 742 F.2d 1028, 1036 (7th Cir. 1984), which refers to the schedules set by the Clean Air 

Act. This can be easily seen by following the cite to Train v. Natural Resources Defense 

Council, Inc., 421 U.S. 60, 64-65 (1975) (“The difference under the [1970] Amendments was 

that the States were no longer given any choice as to whether they would meet this 

responsibility. For the first time they were required to attain air quality of specified standards, 

and to do so within a specified period of time.”) (emphasis added). 

The fact that Congress did not specify compliance deadlines in section 111(d) simply means that 

Congress delegated to EPA to reasonably decide what those deadlines should be. (Note that plan 

submittal deadlines should be “similar” to those in section 110, see Section VIII.E.9.a of the 

preamble.) EPA has done so here. As a result of comments, we are permitting States to set their 

own glide path and we are moving the start of the compliance period from 2020 to 2022. We 

disagree with the commenter that our compliance schedule is unreasonable. 

As explained in section V of the preamble, EPA has reasonably determined BSER, and as 

explained in section VIII.G.1 of the preamble and Section IX of the Legal Memorandum, these 

emission guidelines reasonably permit States to consider remaining useful life. 

Comment 8: Commenters stated that the EPA's guidance regarding "reasonable rates of 

progress" as set forth for NAAQS demonstrations is applicable here. The commenters stated that 

the CAA recognizes that states are the front-line implementers for emission sources within their 

jurisdictions. Specifically, the commenters noted that Congress found that "air pollution 

prevention . . . and air pollution control at its source is the primary responsibility of states and 
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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) and (a)(4) (emphasis added). 

The commenters stated that no need for strict interim deadlines exists unless EPA finds that the 

states are not properly demonstrating reasonable progress toward attainment of the goal. The 

commenters noted that if it does make such a finding, EPA has the authority to require an 

additional showing that the state's plan will achieve the goal and/or to impose a Federal 

Implementation Plan. 42 U.S.C. Section 7411(d)(2)(A). Here, the commenters contended that the 

EPA has conflated the distinct division of responsibilities created by Congress in the CAA. 

Response 8: We disagree that the timelines provided in the final rule do not allow for a 

reasonable timeline for progress. We disagree that NAAQS guidance is directly applicable under 

111(d). While the agency agrees with commenters that Congress viewed states and local 

governments should have primary responsibility for air pollution control, the CAA was enacted, 

and authorizes EPA, to ensure that national air pollution control objectives are ultimately 

achieved. The final rule gives states the opportunity to develop state plans in the first instance. 

The commenter is correct that if states do not choose to take advantage of this opportunity, then 

the EPA will develop a federal plan for the affected EGUs in that state. Far from “conflate[ing] 

the distinct division of responsibilities,” this follows the letter of section 111(d). 

Comment 9: Because of the regulatory scope of the CPP, no single regulatory agency in Florida 

has adequate authority to implement the performance standards of the CPP. A Florida statute 

limits the regulatory scope of its Department of Environmental Protection (FDEP) to 

environmental policy. Aspects of the CPP that are not environmental in nature will have to be 

addressed by other regulatory agencies and by the Florida Legislature. The elements of the four 

CPP building blocks are implemented/enforced by different state agencies and each element will 

likely require State legislative direction to those different agencies. The commenters expressed 

concern as to what it will have to do and to whom it will be required to demonstrate compliance 

or demonstrate progress towards meeting goals. FDEP normally enforces EPA rules, but it has 

no statutory authority to enforce standards associated with generation re-dispatch or the 

development of new renewable energy (RE) sources or the level of energy efficiency (EE) 

achieved by electricity end-users. While RE and EE are within the sole purview of the Florida 

Public Service Commission (FPSC), it is not clear if any Florida regulatory agency can direct the 

re-dispatch of generation. This approach will require almost every state to develop a new 

regulatory construct to meet an unprecedented federal rule. CPP implementation in Florida could 

also be hampered by state law that may require legislative review or ratification. Florida's 

legislature meets for one 60-day session annually. In addition to this confounding any state plan's 

implementation, EPA should not discount the political reality of a legislature's inability to reach 

consensus on a state's development and implementation of the CPP requirements, especially in 

states that are wary of expansive regulation. 

Response 9: EPA disagrees with this comment since it commits categorical errors about the 

nature of the BSER, the role of EPA in determining an emission performance level in the 
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guidelines, the role of the states in establishing emission standards through state plans, and the 

responsibility of the sources in achieving them. These roles are explained in Section VII of the 

Legal Memo. Among other things, if a state is incapable of providing itself with the legal 

authority to carry out an approvable state plan, then the EPA will implement a federal plan for 

the sources in that state through setting emission standards on the facilities that achieve the 

degree of emission limitation determined to be achievable in the guidelines. See also RTC 1.15, 

response 70, infra. 

Comment 10: Commenters described state legislative actions that would allow for less stringent 

standards and longer timelines that called for in the CPP. 

Commenters stated that Louisiana has legislation governing carbon emissions regulations. The 

commenters stated that the EPA's proposed rule is inconsistent with Louisiana Revised Statute 

Title 30 section 2060.1, which requires the LDEQ, "in collaboration with and input from the 

Commission" to set fossil-fueled electric generating unit performance standards, not the EPA. 

[La. R.S. 30:2061.1 (2014).] The commenters stated that these agencies are to set the standard 

based on inside-the-fence measures, and allow for a more lenient standard based on such factors 

as cost and impacts on the ratepayers and the economy. The commenters noted that the EPA's 

proposed rule is in direct conflict with the interests of Louisiana citizens, as expressed through 

their elected representatives, by refusing to allow Louisiana a sufficient role in setting the 

standard, or any flexibility or exceptions based on cost, engineering or economic factors. The 

commenters stated that the statute provides: 

In developing a plan for the implementation of any guidelines for greenhouse gas emissions that 

the United States Environmental Protection Agency may issue under Section 111 (d) of the Clean 

Air Act, the Department of Environmental Quality, in collaboration with and input from the 

Public Service Commission, may establish standards of performance for carbon dioxide 

emissions from existing fossil fuel-fired electric generating units. 

The commenters stated that the Louisiana standard of performance shall be based on: 

(1) The best system of emission reduction, taking into account the cost of achieving such 

reduction; 

(2) Reductions that can reasonably be achieved through measures undertaken at each fossil fuelfired electric generating unit; 

(3) Efficiency improvements that can be undertaken without switching to other fuels, co-firing 

with other fuels, or limiting the utilization of the unit. 

The commenters noted that the Louisiana statute goes on to provide that the Department may 

adopt "less stringent standards or longer compliance schedules" than those provided in federal 

rules based on: 

(1) Consumer impacts, including any disproportionate impacts of energy price increases on 

lower income populations; 

(2) Unreasonable cost due to plant age, location, or basic process design; 
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(3) Physical difficulties or impossibility of implementing emission reduction measures; 

(4) Absolute cost of applying the performance standard to the unit; 

(5) Expected remaining useful life of the unit; 

(6) Economic impacts of closing the unit; 

(7) Need to maintain reliability on electric grid; and, 

(8) [A]ny other factors specific to the unit." [Id]

According to the commenters, these criteria for setting a more lenient standard and longer 

compliance schedule in Louisiana are based on the federal implementing regulations 

promulgated by EPA, at 40 CFR 60.24(f). 

Other commenters stated that 2014 legislation in Missouri exempts Missouri utilities from 

compliance with EPA carbon reductions. [Missouri HB 1631 crafted by the American 

Legislative Exchange Council (ALEC)]. The commenters noted that this bill is designed to 

exempt Missouri from acting in compliance with the EPA's rules to reduce greenhouse gases on 

a state by state basis across the U.S. The commenters stated that while it is deceptively worded to 

convey cooperative intent, the operable language of HB 1631 is, 

"The [Air Quality] commission may develop... [power plant] ...emission standards that 

are less stringent, but not more stringent, than applicable federal emission guidelines or 

longer compliance schedules than those required by federal regulations." 

http://www.house.mo.gov/billtracking/bills141/billpdf/truly/HB1631T.PDF 

In other words, the commenters stated that power plants in Missouri would not have to comply 

with the new CO2 emission standards, when the EPA rules are finalized. The commenters stated 

that the bill goes on to specify qualifying factors that are qualitative and inexact, rather than 

quantitative and definitive, and therefore subject to extensive debate. The commenters stated that 

this embraces the utility industry's time-honored tradition of stalling progress in environmental 

protections by tying the rules up in court, for years on end. 

Response 10: EPA thanks these commenters for the information they have provided on the laws 

and regulations of these States. Ultimately, state plans will be subject to the agency’s substantive 

review for approvability, on the basis of meeting the requirements of the federal Clean Air Act, 

including the requirements of the emission guidelines. If a state does not submit plans that are 

approvable, the EPA will promulgate a federal plan for the affected EGUs in that state. We note 

the Act provides that States have reserved authority to set standards more stringent than federal 

guidelines under section 116. We also note that 60.24(f) clearly provides that an applicable 

subpart (i.e., emission guidelines for a particular pollutant from a particular source category) may 

supercede its general provisions. States may in some cases set emission standards under 111(d), 

including in these guidelines, for a particular unit that are less stringent than the subcategorized 

emission performance rates for the two subcategories of sources covered by these guidelines. 

However, in these guidelines, this is subject to conditions such as that the affected EGUs in the 

state continue to meet the overall state goal. (As the agency explains elsewhere, this is possible 

through the availability of trading and other mechanisms that provide flexibility in these 

guidelines.). 
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Comment 11: Commenters stated that as evidence of congressional intent, EPA lacks resources 

to develop and administer the expansive plans required under the proposed rule. 

The commenters noted that in the event that States do not or cannot propose their own plans, 

Section 111(d) tasks EPA with developing those plans instead. 42 U.S.C. section 7411(d)(2). The 

commenters stated that traditional end-of-stack BSER require only limited resources for EPA to 

stand in a State's shoes and prepare a plan for the existing sources of pollution subject to a 

particular BSER. The commenters stated that the variety of existing EGUs and the varied 

circumstances in each State requires resource-intensive analysis and the wise exercise policy 

discretion in deciding which commercial activities will be advantaged and disadvantaged. 

Beyond lacking legal authority, the commenters asserted that the EPA simply does not have the 

staff or expertise or legitimacy to complete these tasks for all 50 States. The commenters stated 

that the fact that EPA is itself subject to these practical constraints is further proof that Congress

did not intend to sanction economy-wide regulation of GHGs through Section 111(d). 

Response 11: The EPA disagrees with this comment. The EPA will be proposing two separate 

approaches to a federal plan, each of which it is fully capable of implementing for every state in 

the country, if necessary, to achieve the emission performance levels established in the 

guidelines. Both are emission trading programs, and the EPA has considerable expertise and 

competency in the implementation of emission markets, which the Congress has widely 

authorized throughout the CAA and particularly in title I, see, e.g., CAA section 110(a)(2)(A) 

and section 302(y). 

Comment 12: The commenters affirmed the TVA's comments, specifically as they pertain to 

TVA's future ability to comply. The commenters noted the TVA's numerous actions to reduce 

carbon emissions have resulted in a more than 20% reduction since 2005 and should be 

commended. However, the commenters stated that the Proposed Rule's inconsistencies and 

technicalities leave TVA with a limited range of feasible actions to achieve compliance because 

of those same early actions. The commenters stated that companies bearing the cost of early 

actions to reduce TVA's carbon footprint should not now be penalized with additional cost(s) 

they would not otherwise be required to bear if these early actions had not been taken - simply 

because the rule fails to credit such early actions towards compliance. The commenters stated 

that this is especially true as it pertains to the Proposed Rule's treatment of under-construction 

nuclear generation. 

The commenters stated that the emission rates are unachievable because the Proposed Rule 

arbitrarily excludes hydropower, a zero-carbon resource, from inclusion in its calculation of a 

state's existing emissions rate, thereby unfairly denying the State the option of counting that 

zero-carbon generation resource toward compliance with the Proposed Rule's requirements (the 

existing hydropower generation is not included in the denominator of the emission rate 

calculation). The commenters noted that it has been stated that the rationale for this method was 

to encourage future behavior, rather than reward past behavior. 

The commenters argued that the exclusion is inexplicable, as other existing zero-carbon 

resources (such as wind and solar) are included in the calculation. The commenters stated that 
298 

 

this inconsistency unfairly punishes companies based on a preference for certain sources of 

carbon-free generation. The commenters stated that existing hydropower supplies as much as 

10% of energy needs, while their state's capacity for wind generation is practically non-existent, 

and the capacity for solar in the Tennessee is severely limited. The commenters stated that the 

rule favors generation methods that are impracticable for them and ignores methods that would 

ease their compliance burden. The commenters stated that the practical application of the 

calculation is to de-incentivize maintenance and expansion of existing hydropower facilities in 

favor of constructing new and much more expensive and limited forms of generation in lieu of 

the hydropower, imposing additional costs that do nothing to reduce carbon emissions. 

Response 12: Nuclear has been removed from the BSER calculation, while certain hydroelectric 

power has been added. We note that under the emission guidelines, depending on how state plans 

are designed, non-carbon emitting sources of incremental generation are generally available to 

states to use in meeting the emission performance rates or equivalent state goals. EPA believes 

the targets in the final rule are achievable. 

1.15.8 Recommend EPA delay, modify, withdraw proposal 

Comment 1: Commenters stated, the EPA appears to be picking winning and losing states for 

economic development. Commenters said, clearly, that should not be the objective and goal of 

the Clean Air Act or any actions to fight climate change. Commenters urged the EPA to 

withdraw and reconsider the proposed rules. 

Response 1: The EPA disagrees with this comment. The agency’s purpose has never been to 

discriminate amongst states. We understand this comment as related to the disparity among state 

goals under the proposed rule. The final guidelines address this comment and similar comments 

by establishing nationally uniform subcategorized emission performance rates, and equivalent 

state goals that vary less dramatically than the proposed rule. 

Comment 2: Commenters said, section 111(d) is extremely prescriptive requiring 

implementation to occur inside the fenceline, using a carbon control technology that is 

established and feasible for existing units. Commenters said, the CPP is too "unprecedented" 

for section 111(d). 

Response 2: We disagree that section 111(d) is “extremely prescriptive.” Its terms are quite 

broad reflecting Congress’s intent that it serve to prevent serious air pollution problems that may 

have been unknown at the time of enactment from going unaddressed under the Clean Air Act. 

Comment 3: Commenters stated, EPA should withdraw the current proposal, convene a Small 

Business Advocacy Review panel, and prepare a regulatory flexibility analysis before proceeding 

with a new proposal under Section 111(d). 
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Response 3: The EGs do not directly regulate small entities and so an SBAR Panel is 

unnecessary. However, the agency did convene an SBAR Panel for the proposed federal plan, 

and many of the Panel’s recommendations will be reflected in that proposal. 

Comment 4: Commenters suggested the EPA to withdraw the Proposed Rule because it is not 

consistent with the federal Clean Air Act. The commenters stated that even if EPA had the 

authority to promulgate a final rule based on the building block approach set forth in the 

Proposed Rule, EPA's proposed requirements for the Wyoming CO2 emission reductions is 

based on numerous material errors. 

Response 4: EPA believes the rule is very consistent with the CAA. Conclusory assertions of 

error do not give the agency a reasoned basis on which to modify the rule. 

Comment 5: Commenters stated, EPA has asked for comment on so many fundamental issues of 

rule design that this proposed rule should have been put forward as an Advance Notice of 

Proposed Rulemaking (ANOPR). Commenters said, we find the rule to be so unrealistic and 

unworkable, based on timelines for both comment and compliance that are totally unrealistic, 

and likely to introduce far greater uncertainty into forward utility and state planning, that we 

respectfully request that EPA withdraw the rule to allow for a more cooperative state-federal 

approach to rule design and addressing CO2 emissions. 

Response 5: The agency believes it followed an incredibly transparent process of rulemaking, 

including substantial outreach even before proposal to all stakeholder groups in every region of 

the country. Its requests for public comment on the proposal should not be mistaken as evidence 

that the agency failed to put forward a complete, intact, proposed rule, upon which this final rule 

is clearly a logical outgrowth. In the course of any rulemaking, the public is free to comment on 

all aspects of the proposal, whether the agency asks for them or not. Requests for comment are 

not in themselves evidence of the agency’s lack of a proposed path, but a recognition that it will 

truly value the input of comments on an important and far-reaching rule. In addition, we note that 

the agency has adjusted compliance timeframes in the final rule in response to comments. 

Comment 6: Commenters stated, with respect to multi-state arrangements, the EPA 

acknowledges that they "could introduce novel enforceability considerations," as if the entire 

Proposed Rule does not do so. The commenters stated that having to go so far beyond traditional 

regulation to describe how the rule might operate demonstrates that EPA has gone beyond its 

authority in ways that UARG warns against. Furthermore, the commenters stated that under the 

principles of Virginia v. EPA, it is already apparent that there will be enough State 

nonparticipation to invalidate EPA's state-by-state target model and so invalidate the Proposed 

Rule. The commenters argued that because these problems are irremediable within the 

framework of the Proposed Rule, it should be withdrawn. 

Response 6: The final rule provides a clear set of requirements for states in order to develop 

approvable plans. The agency explains its view of enforceability in the preamble and the Legal 

Memo. The agency has no reason to believe that the rule is so unworkable that the states or the 

EPA would be unable to enforce a state or federal plan. We note that the permitting 
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consequences that were at issue in UARG are not present in this current rulemaking. We note that 

states are given a wide range of flexibility to design state plans to achieve the emission 

performance levels of the guidelines, and therefore we do not believe there is a Train-Virginiatype concern with this rule either. See also 80 FR 33840, 33876–79 (June 12, 2015).

Comment 7: The commenters argued that the building blocks upon which it rests have never 

been adequately demonstrated, and that the Proposed Rule is thus both unlawful and arbitrary. 

The commenters stated that if EPA is to proceed at all, it must define as BSER the ability of 

companies to manage their own portfolios as necessary to achieve the targeted emission 

reductions without the artificial constraints of political boundaries, which is an approach more 

consistent with the structural foundations of the power supply industry. 

Response 7: To the contrary, EPA believes each of the building blocks are demonstrated by 

themselves and in combination. The EPA has given states in the final guidelines a variety of 

methods by which to give companies flexibility within their fleet. Section 111(d) directs the 

agency to work with states in a cooperative federalism model. The agency will not circumvent 

the states to directly regulate owners and operators of affected EGUs under section 111(d), 

unless through a federal plan in the event a state does not submit an approvable state plan. 

Comment 8: Commenters urged EPA to withdraw its interpretation of CAA Section 111(a)(1) to 

avoid creating numerous constitutional issues. The commenters stated that courts must avoid 

constitutional difficulties by interpreting CAA Section 111(d) narrowly, as a grant of authority to 

regulate only inside the fence line. Jones v. United States, 529 U.S. 848, 857 (2000) ("where 

a statute is susceptible of two constructions, by one of which grave and doubtful constitutional 

questions arise and by the other of which such questions are avoided, our duty is to adopt the 

latter") (citation omitted). 

Response 8: The agency disagrees that this rule of case law is applicable given that the agency’s 

interpretation of the statute does not raise “grave and doubtful constitutional questions,” as 

explained in the Legal Memo. 

Comment 9: Commenters stated that in 2009 the President announced his goal of a 17% 

reduction below 2005 levels by 2020, and the power industry is on track to meet its share of that 

target. The commenters stated that over the long term, they see dramatic long term emission 

reductions in our sector very much in line with the President's 2050 goals given the average 

retirement age of a coal plant, the transformative shift to gas due to the enormous domestic 

resource now economically recoverable, MATS and other proposed EPA rules. Given these 

facts, the commenters questioned the need for the current structure of the proposed rule. 

Response 9: The EPA believes the rule is appropriate even in light of recent reductions in 

GHGs in the sector. The rule builds on these reductions and ensures they will be permanent. In 

addition, the rule appropriately benefits the near-term advantages of natural gas with the longterm advantages of zero-emitting resources such as wind and solar. The EPA also reasonably 

concludes that business-as-usual does not achieve reductions in the GHG air pollutant that reflect 
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the application of the “best” system of emission reduction, taking into account cost and other 

factors. 

Comment 10: Several commenters requested that the EPA withdraw the proposed Rule. 

Commenters stated, the proposal is based on a flawed interpretation of the Clean Air Act, and 

urged EPA to withdraw the current proposal and substantially revise this rule. 

Commenters stated, the EPA appears to be picking winning and losing states for economic 

development. Commenters said, clearly, that should not be the objective and goal of the Clean 

Air Act or any actions to fight climate change. Commenters urged the EPA to withdraw and 

reconsider the proposed rules. 

Commenters urged EPA to withdraw this proposal and work with us on a new common-sense 

approach that will be a true all-of-the-above energy strategy. 

Commenters stated, the EPA needs to go back to the drawing board and publish a rule that 

addresses the global problem. Commenters said, the rule should be based on the best interest of 

the nation, and not designed to pick winners and losers based on the desires of those who make 

the decisions or those who have the ability to influence that decision. 

Commenters stated, the EPA's proposed Clean Power Plan is an assault on electric reliability and 

economic viability of the State of Texas and, particularly on Houston County. The commenters 

requested the EPA withdraw this version of the Clean Power Plan until a plan can be proposed 

that has more realistic expectations and provides more actual flexibility so that the unique 

challenges of each Texas county can be appropriately considered. 

Commenters suggested that the proposal should be withdrawn. The commenters stated that not 

only does EPA lack expertise in the areas of energy generation, transmission, distribution, and 

end-use, rendering the Proposed Rule both unwise and ultra vires, but EPA has not consulted 

with the numerous government entities- for example FERC, state PSCs, entities such as MEAG, 

reliability organizations such as NERC, public power associations, and rural power associations, 

all of which have vast experience and expertise in the matters EPA seeks to directly regulate: the 

nation's entire electric power system. Accordingly, the commenters stated that the EPA has not 

fully assessed the effects of the proposed rule, has made numerous assumptions which are 

contrary to the facts, and has issued a Proposed Rule which is arbitrary, capricious, an abuse of 

discretion, and not in accordance with law. 

Commenters stated that the CPP is illegitimate and unlawful. Commenters said, its 

implementation costs are likely much greater than EPA estimates; it will increase electricity 

prices and raises reliability concerns; its putative climate benefits are illusory; and the regulation

should be withdrawn. 

Commenters stated that the proposal is contrary to the Clean Air Act in several critical ways and 

recommended that the EPA should withdraw the Section 111(d) proposal. The commenters noted 

that if a state fails to submit a "satisfactory" plan under 111(d), EPA is authorized to directly 
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prescribe a plan itself. CAA 111(d)(2), 42 U.S.C. 7411(d)(2). The commenters stated that the 

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 end-use efficiency 

measures. The commenters noted that these measures are the traditional subject of state police 

powers, with federal regulation authorized only where Congress has expressly done so. For this 

reason, the commenters stated that the 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. The commenters stated 

that 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 advised that EPA withdraw the CPP based on the following observations, in 

addition to comments previously stated. Commenters said, first, states and stakeholders have 

made tremendous strides in reducing carbon emissions from the power industry without 

regulation. Commenters said, EPA has indicated that this proposal "would continue progress 

already underway to lower the carbon intensity of power generation in the United States." 

Commenters said, therefore, this proposal is unnecessary to continue the progress established to 

this point. Commenters said, EPA should consider entering into a true partnership with states and 

stakeholders instead of one contrived by mandate and driven by regulation. Commenters said, 

EPA should look to spearhead these collaborations and encourage information sharing to assist 

states in developing state-level energy policies that could be tailored to each state's unique 

resources. Commenters said, second, EPA has called this proposal an "unprecedented effort", yet 

EPA attempts to accomplish implementation through the very restrictive mechanism of section 

111(d). Commenters said, section 111(d) is extremely prescriptive requiring implementation to 

occur inside the fenceline, using a carbon control technology that is established and feasible for 

existing units. Commenters said, the CPP is too "unprecedented" for section 111(d). 

Commenters urged EPA to withdraw the current Proposed Rule and to reissue the rule, if at all, 

with modifications addressing the issues and concerns raised by these comments. 

Commenters stated, EPA should withdraw the current proposal, convene a Small Business 

Advocacy Review panel, and prepare a regulatory flexibility analysis before proceeding with a 

new proposal under Section 111(d). 

Commenters stated, if the U.S. is determined to solve the climate change issue alone, we will be 

at a competitive disadvantage to other countries and, in Arizona, we will be further hampered by 

a competitive disadvantage to other states. Commenters said, our businesses, economy and 

community rely upon reliable and affordable electricity to provide food for the nation. 

Commenters urged EPA to rescind this proposal. 

Commenters stated that EPA lacks the statutory authority to proceed and must withdraw the 

Proposed Rule. The commenters stated that, assuming that EPA has the statutory authority to 

proceed with the Proposed Rule, EPA has failed to follow the requirements of Section 111(d). 
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The commenters noted that in the event that EPA chooses to move forward with the Proposed 

Rule they must do so in a reasoned and rational manner as outlined above. 

Commenters suggested the EPA to withdraw the Proposed Rule because it is not consistent with 

the federal Clean Air Act. The commenters stated that even if EPA had the authority to 

promulgate a final rule based on the building block approach set forth in the Proposed Rule, 

EPA's proposed requirements for the Wyoming CO2 emission reductions is based on numerous 

material errors. 

Commenters requested that this proposal be withdrawn or considered a request for information 

from states and other affected parties. The commenters invited the EPA to engage in a more 

constructive process led by states and Congress to find legally sound, affordable, practical and 

effective approaches to reducing green-house gas emissions. 

Commenters stated, in addition to the burdens that the Section 111(d) proposal would place on 

state governments and ratepayers, the proposal is contrary to the Clean Air Act in several critical 

ways. Commenters said, individually and taken together, these legal infirmities mean that the 

Section 111(d) proposal, if finalized in a manner that includes one or more of these flaws, would 

constitute an unlawful rule. Commenters said, given the fundamental nature of these legal flaws, 

EPA should withdraw the Section 111(d) proposal. 

Commenters concluded that the proposed rule imposes costs on those least able to pay which 

will cause them to forego food, medicine, and medical care and such increases in energy costs 

have been documented to increase illness in these poorest of the poor. The commenters stated 

that the proposal is also illegal. The commenters asked that it be withdrawn until such time as it 

is determined to be a legal exercise of authority under the Clean Air Act, and is shown to in fact 

create more benefit than the costs it imposes. 

Commenters stated, EPA has asked for comment on so many fundamental issues of rule design 

that this proposed rule should have been put forward as an Advance Notice of Proposed 

Rulemaking (ANOPR). Commenters said, we find the rule to be so unrealistic and unworkable, 

based on timelines for both comment and compliance that are totally unrealistic, and likely to 

introduce far greater uncertainty into forward utility and state planning, that we respectfully 

request that EPA withdraw the rule to allow for a more cooperative state-federal approach to rule 

design and addressing CO2 emissions. 

Commenters stated, with respect to multi-state arrangements, the EPA acknowledges that they 

"could introduce novel enforceability considerations," as if the entire Proposed Rule does not do 

so. The commenters stated that having to go so far beyond traditional regulation to describe how 

the rule might operate demonstrates that EPA has gone beyond its authority in ways that UARG 

warns against. Furthermore, the commenters stated that under the principles of Virginia v. EPA, 

it is already apparent that there will be enough State nonparticipation to invalidate EPA's stateby-state target model and so invalidate the Proposed Rule. The commenters argued that because 

these problems are irremediable within the framework of the Proposed Rule, it should be 

withdrawn. 
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Response 10: As explained in the preamble and the legal memo, this action is consistent with 

our authority under 111. Commenters have identified no material infirmity warranting withdraw 

or reproposal. 

Comment 11: Several commenters requested that the EPA withdraw the proposed guidelines 

and issue new guidelines that allow states to establish policies that are in the best interest of their 

respective cities and the nation. Commenters stated the guidelines should: 

1. Respect the primacy of states by allowing states to develop plan that establish performance 

standards and discretion and flexibility in establishing compliance mechanisms. 

2. Maintain an adequate, reliable, affordable electrical generating fleet. 

3. Be based on EPA guidelines for cost-effective, achievable reductions at the affected power 

plant units, rather than for the state. 

4. Establish emission guidelines based on adequately demonstrated systems that are fuel and 

technology specific. 

5. Provide credit for significant emissions reductions already made or being made. 

6. Avoid premature retirements and stranded assets.

7. Be fair and equitable to all electricity consumers; and 

Commenters said the EPA should adopt policies that do not conflict with the responsibility of 

states and their respective cities to provide affordable and reliable supplies of electricity for their 

citizens. 

Response 11: The agency does not believe it needs to withdraw and re-propose a new rule to 

satisfy this commenter’s suggestions. The final rule generally accomplishes these things. 

Comment 12: Commenters discussed the need for conforming changes to the proposed rule to 

accommodate the reliability safety valve (RSV) they suggest. 

Commenters have identified at least three specific provisions of the Proposed Rule that should be 

modified and clarified to accommodate the RSV. Commenters said, these include: 

• The provision of the Proposed Rule that once finalized, the interim and final targets will be 

"binding emission guidelines" for state plans, must be met by the states and may not be made 

"less stringent." [79 FR 34892, 34898] 

• The standard set forth in the Proposed Rule that to seek a modification of a target between the 

proposed and Final Rule, commenters must show that the cost to comply was significantly higher 

than that proposed by EPA; [79 FR 34893] and 
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• The provision that "no backsliding" on overall plan emissions performance through a plan 

modification would be allowed. [79 FR 34917] 

Commenters stated, each of these provisions, although well-intentioned to avoid endless 

litigation over changes to the individual state targets, ignore the dynamic and ever-changing 

nature of the electric grid. Commenters said, as such, these provisions could work to handcuff 

both states seeking to comply with the rule as well as the agency itself as it seeks to adapt to 

changing conditions. Commenters said, in fact, prudent planning and operation of the grid 

requires a discipline to "expect the unexpected" and be able to modify course appropriately. 

Commenters said, the above provisions, as written, are simply too sweeping in their reach and 

could unintentionally hamper efforts to provide a rule that ensures compliance progress while 

being flexible enough to adapt to reliability issues that could make full achievement during the 

compliance period infeasible in a given situation. 

Response 12: The agency has reviewed and adjust the rule in response to concerns about 

flexibility and reliability, and believes the final rule adequately addresses the concerns raised by 

the commenter, while ensuring that the emission performance levels are achieved. 

Comment 13: Commenters stated that under the proposed CPP the City of Springfield, 

Missouri, and its municipal utility, City Utilities of Springfield, will lose close to one-third of its 

base load generation. The commenters stated that this would force the utility and its rate payers 

to buy power from another source outside of the community and a source that is in the business 

of making a profit, not providing reliable and economical electricity to the rate payers and 

citizens of the community. The commenters asked that the EPA not sacrifice our nation's 

economy and electric reliability by developing a rule that does not take into account current 

commercially-proven and economically-viable technology to reduce CO2 such as an American 

Electrical Power Turk plant in Fulton, Arkansas. The commenters requested a delay in the 

implementation of a Clean Power Plan until a common sense approach can be developed to 

reduce CO2, an approach that will give sites and utilities adequate time to develop and 

implement compliance strategies. 

Response 13: The EPA disagrees that the final rule will necessarily have a direct effect on any 

particular generating unit. This misunderstands the nature of the BSER. States including 

Missouri have the opportunity to develop plans that take into account various facility-specific 

factors, so long as overall emission performance levels are met. Even under a federal plan that 

utilizes trading, facilities and utilities will have flexibility to make choices about how to achieve 

compliance that work best for them. 

Comment 14: Several commenters stated that EPA should delay implementation of the rule 

until all legal challenges to the rule have been exhausted. 

Commenters stated, Murray Energy Corporation has asked the U.S. Court of Appeals for the 

District of Columbia Circuit to grant a writ of prohibition against EPA declaring the proposed 

rule for existing stationary source electric generating units is ultra vires, i.e. a prohibited act 

under the Clean Air Act. Commenters said, for the reasons given below, it is. Commenters said, 
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EPA claims otherwise and has stated unequivocally that they have the power to interpret the 

Clean Air Act as they have, under the Chevron doctrine, and that they have done so. 

Commenters said, final briefs on this matter are due in March, 2015. Commenters said, in the 

meantime, the states, utilities and utility customers must proceed under an unreasonably short 

schedule to determine what steps must be taken to comply with the law - a costly set of planning 

activities with the effect of having to make engineering decisions long before any Clean Power 

Plan would actually take effect. Commenters said, this is known as anticipatory regulation. 

Commenters said, it is costly, it limits the economic freedom of states, utilities and customers to 

make investment decisions, and these constitute irreversible harms that can only be remedied if 

EPA withdraws the proposal until such time the Court determines whether the proposed rule is or 

is not legally authorized under the Clean Air Act. Commenters said, anticipatory regulation has 

legal consequences on the regulated industry and on others inexorably tied to the directly 

regulated industry. Commenters said, the Oil and Gas industry is so tied to the electric generating 

industry because electricity is such a large input to industry production. Commenters said, in 

order for a State to prepare a plan under the proposed rule, the states will be forced to reach 

agreements with companies who must therefore make production and investment decisions 

associated with the plan. Commenters said, this fact is evidence of the legal consequences of the 

anticipatory regulatory effect, and fully provides legal standing to seek immediate judicial relief, 

as requested by Murray Energy Corporation. Commenters said, EPA should withdraw this 

proposed rule, or at least suspend all planning until the Courts have fully resolved the issues at 

law. 

Commenters encouraged EPA to delay implementation of the Final Rule until litigation is 

resolved. Commenters said, compliance with the Final Rule will result in significant 

expenditures that will be borne by utility ratepayers. Commenters said, to the extent compliance 

requires the early retirement of electric facilities or earlier-than-planned construction of new 

facilities, the uncertainty of litigation places ratepayers at risk. Commenters said, investment to 

comply with portions of the Final Rule that are later vacated by a court will result in stranded 

assets and wasted costs that will be borne by ratepayers. Commenters said, the planning horizon 

for new NGCC units is 3 to 4 years, and the horizon for new nuclear units is approximately ten 

years, with initial costs incurred at the start of the first year. Commenters said, while EPA is 

doubtlessly confident in the legality of its proposed rule, history shows us that the courts do not 

always agree. Commenters said, in light of the potential for significantly stranded compliance 

costs associated with Building Blocks 2, 3 and 4, it is prudent to delay and/or extend compliance 

requirements until litigation has been resolved. 

Commenters stated, it is widely recognized that the proposed rule raises unprecedented legal 

issues under the Clean Air Act and that there will be legal challenges to the basic structure of the 

rule if adopted as proposed. Commenters said, Colorado's recent experience developing mercury 

and Regional Haze rules has been that the State and affected sources expended substantial 

resources for years developing programs to comply with initial rules that were overruled through 

judicial challenges. Commenters recognized EPA's interest in moving to implement this program 

expeditiously, but appeals to its sense of pragmatism to recognize that changes to the program as 

a result of judicial review are a reasonable possibility. Commenters said, as such, to conserve 
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resources of the Agency, state environmental agencies, and the entire utility industry, it only 

makes sense to defer implementation of the program until judicial review is complete. 

Commenters addressed the issue of limited state resources. Commenters said, if this rule is 

finalized in its current form, states will be immediately required to amend not only their state air 

programs, but will be required to fundamentally restructure the state's entire energy generation 

and delivery system. Commenters said, this significant undertaking will run parallel with judicial 

review of this rulemaking. Commenters said, states have been through several exercises where 

EPA's legal interpretations have resulted in states taking actions to satisfy a federal rule that is 

later determined by the Courts to be illegal. Commenters said, look no further than the Clean Air 

Mercury Rule (CAMR) and the Clean Air Interstate Rule (CAIR). Commenters said, a more 

recent example is the Prevention of Significant Deterioration (PSD) Tailoring Rule for GHG 

permitting. 

Commenters stated, the final rule, whatever form it ultimately takes, should not require states to 

begin taking action until the completion of judicial review. Commenters said, this is to preserve 

the state's limited resources and ensure that actions taken in response to the EPA rule will not be 

for naught. Commenters stated they call this approach a "legal trigger" deadline, and urged the 

EPA to respect their state partners and include this provision in the final rule's implementation 

schedule. Commenters said, finally, urged that the final compliance deadline be tolled by the 

litigation timeframe, similar to how EPA handled the implementation of the Cross State Air 

Pollution rule following the U.S. Supreme Court decision. 

Commenters stated, considering the resources that will be required by states to implement this 

rule as proposed and given the high likelihood that any final rule promulgated by EPA will be 

litigated, EPA must delay implementation of the rule until all legal challenges to the rule have 

been exhausted 

Commenters stated, as Florida has worked to become a national leader in air quality, we have 

simultaneously remained committed to ensuring Florida's families have an affordable and secure 

source of energy. Commenters said, a key factor in maintaining affordable utility prices is 

ensuring new rules and regulations have been fully discussed and vetted before asking families to 

pay for new requirements. Commenters said, to that end, it appears virtually certain that this rule 

will be contested in the courts once it is finalized. Commenters said, as with EPA's relatively 

recent Clean Air Interstate Rule (CAIR) and the Cross-State Air Pollution Rule (CSAPR) 

challenges, there will be significant uncertainty for states and potentially a huge state investment 

being put at risk. Commenters said, given these concerns, EPA should consider voluntarily 

suspending the aggressive implementation deadlines pending the outcome of the challenges to 

avoid the incredible inefficiencies that could result if the rule is not upheld. 

Response 14: The EPA disagrees with comments that it should delay implementation of the rule 

until all legal challenges have been resolved. The legal basis for the rule is set out in Section V of

the preamble, and the agency is confident in its authority to issue the rule and to see it 

implemented. 
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Comment 15: Commenters noted that the Administration announced a negotiated agreement 

with the People's Republic of China on November 11, 2014 covering carbon emissions from the 

two countries post 2020. Commenters stated that the only rulemaking currently underway or 

officially proposed to limit such emissions is the current Emission Guidelines for Existing 

Stationary Sources: Electric Utility Generating Units. Commenters stated that not only does this 

international agreement propose a new range of dates for compliance (2025 rather than 2030), 

but creates an entirely new set of reductions (28% rather than 30% reduction), which are below 

those proposed in this rulemaking. Commenters believed that because the announcement came 

directly from the President of the United States, the President has improperly prejudiced the 

process for this rule. Commenters stated that the only action which can be taken to remove this 

legal impropriety is to withdraw and re-issue this rule. 

Response 15: The agency disagrees with this comment. The EPA is acting under the authority 

of the CAA and this action is related to affected EGUs in the power sector. The numbers the 

commenter is comparing are apples-to-oranges. 

1.15.9 Recommend EPA strengthen proposal 

Comment 1: Commenters stated that this rule fails to satisfy EPA's legal, political and civil 

obligations. 

The commenters stated that uptake of renewables has been much faster than predicted, whereas 

EPA projects only minimal renewables expansion with or without the policy. The commenters 

stated that the proposed rule assumes massive new natural gas plants and a stall in coal-plant 

shutdowns, but at the same time, in the 2013 Proposed Carbon Pollution Standard for New 

Power Plants [79 FR 1429] the EPA is regressive. The commenters stated that the 'new power 

plants' rule proposal creates a BAU pollution standard for NG plants, exempts biomass 

emissions, and endorses new taxpayer subsidized "carbon capture" coal plants in which scrubbed 

CO2 is used to augment oil production. The commenters stated that Carbon Capture with 

Enhanced Oil Recovery independent research indicates results in a net increase in emissions 

(Jarmillo, Paulina. Environ. Sci. Technol. 2009, 43, 8027-8032 

http://pubs.acs.org/doi/pdf/10.1021/es902006h. 

The commenters noted that the EPA is not proposing a federal mandate to meet a mitigation 

target, even though the administration has already agreed to an economy-wide 2020 target of 

17% below 2005 levels, and recently announced a 2025 target of 26-28% in the context of 

negotiations in the United Framework Convention on Climate Change. The commenters stated, 

as EPA notes in RIA included with the proposed rule, "[t]hese state goals are not requirements 

on individual electric generating units. Rather, each state has broad flexibility to meet the rate by 

2030 by lowering the overall carbon intensity of the power sector in the state." The commenters 

asserted that whether in this rule or subsequent rules, EPA has a duty to ensure the US meets 
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international obligations for climate mitigation. The commenters stated that this obligation stems 

not just from the fact that EPA is the logical federal agency to have this duty, but because it has 

been specifically stated in legislation including the Clean Air Act, Global Warming Protection 

Act, inter alia. 

The commenters stated that this policy proposal is a set of carbon intensity targets with estimated 

mitigation objectives that hinge on implementation plans from every state, which will vary 

widely. The commenters noted that some states can propose to achieve the targets in regional 

carbon trading regimes, such as the existing Regional Greenhouse Gas Initiative. However, the 

commenters stated that there is no federal standard for carbon trading. According to the 

commenters, civil society will have to expend resources overseeing that the flexibility of this 

policy doesn't allow weaknesses to be exploited, even if EPA does not technically allow offsets. 

The commenters noted that the flexibility states will have to implement requirements may not 

prevent loopholes and weaknesses, such as well documented problems like carbon leakage 

undermining the integrity of actual mitigation (Van den Berg, et al. 

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400666). 

The commenters asserted that since this policy addresses the largest polluting sector, it should be 

the apex of President Obama's climate action. The commenters noted that the 'climate action 

plan' announced in his fifth year in office compiled possibly everything to be achieved or 

implemented in the his eight years as the US President, and the 'plan' illustrates how President 

Obama is responsible for some territorial emissions reductions. However, the commenters noted 

that the aggregate mitigation achievement of Obama's climate plan so far is less than what was 

achieved by economic downturn and unrelated energy market trends (Hausfather, Zeke. 

http://www.yaleclimateconnections.org/2013/05/whats-behind-the-good-news-declines-in-u-sco2-emissions/). While the Obama administration has expanded extraction and exports of US 

taxpayer-owned coal oil, and gas, the commenters stated that no policy to reduce territorial 

climate pollution achieves more than a few percent reduction in economy-wide greenhouse gas 

mitigation by any end date. The commenters noted that this proposed rule may be the last chance 

for President Obama to demonstrate he understands the seriousness of short to medium term 

action to avoid runaway climate disruption. 

Response 1: The final EGs cover emissions from the affected EGUs only and are under 

authority of the CAA. Therefore, comments regarding other actions and initiatives are generally 

outside the scope of this rule. The emissions performance levels being finalized reflect the 

agency’s determination of the BSER under section 111(d). The agency disagrees with this 

commenter to the extent that they are suggesting the rule should require greater emissions 

reductions from the affected EGUs than has been determined by the agency. 

Comment 2: Commenters stated that the approach laid out in the draft guidelines is 

fundamentally sound in its objectives and that EPA has taken great pains to balance a multitude 

of relevant considerations in the formulation of the Clean Power Plan. The commenters stated 

that it is clear that EPA continues to respond to comments from affected stakeholders as well, 

evident for example in the November 6th Technical Support Document. However, the 
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commenters stated that the draft standards can and should be strengthened, with respect to 

emissions targets, compliance timelines, as well as the addition of clarifying guidance for 

designing and implementing regional compliance pathways. 

Other commenters supported the EPA's Clean Power Plan, and commented on seven areas where 

EPA's proposal can be strengthened and improved. 

Commenters supported the EPA's Clean Power Plan, and commented on seven areas where 

EPA's proposal can be strengthened and improved. 

1. The commenters suggested to encourage additional flexibility by clarifying that the use of 

various types of trading programs can be an acceptable part of a state compliance plan. The 

commenters has developed a model trading program called the Carbon Reduction Credit 

Program which we believe is a means by which states can efficiently implement and administer 

the Clean Power Plan. 

2. The commenters suggested to use renewable energy carbon attribute (RECA) certificates to 

remove concerns over duplication of renewable energy used by states in their compliance plans, 

encourage a nationwide market for the trading of renewable energy, and accelerate the growth of 

renewable energy in the United States. 

3. The commenters suggested to adopt the "alternative methodology" to computing renewable 

energy for building block 3, with a modification which we believe addresses a shortcoming in 

that methodology. 

4. The commenters suggested to develop a way for multi-state plans to be organized so that 

participating states do not have to adopt a single emissions goal. 

5. The commenters suggested to modify or eliminate EPA's proposed inclusion of 6 percent of 

nuclear capacity in setting the state emission goals and in calculating state annual emission rates. 

6. The commenters suggested to assure that credit for early actions, if given, is not "cherrypicked" and does not compromise emission outcomes. 

7. The commenters suggested to preserve the interim targets. 

Response 2: The agency is reflecting a number of these comments in the final rule. The agency 

is not adopting the suggested CRCP or RECA programs. However, two approaches to the federal 

plan, which can also be used as a model trading rule, will be proposed concurrently with the 

finalization of the EGs. 

1.15.10 Information Quality Act Comments 

Comment 1: Commenters stated that the EPA had not properly reviewed whether the NCA3, the 

IPCC AR5 assessment, the CCSP assessments, and other assessments met Information Quality 
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Act (IQA standards). Commenters stated that while the peer review of the NOAA assessments 

did not meet IQA standards, NOAA certified they had been and that EPA improperly accepted 

that certification. Commenters also accused the NCA, IPCC, and CCSP assessments of conflict 

of interests for the peer reviewers that were not disclosed in accord with IQA requirements. 

Specifically, commenters highlighted that contributors and reviewers of these assessments were 

sometimes based at universities or other institutions that had received funding from NOAA or 

EPA, or that reviewers were based at the same universities or government agencies that had also 

provided contributors to the assessments. Commenters stated that because of these claimed IQA 

violations that EPA is precluded from relying on these assessments as support for rulemakings 

until the EPA develops a new peer review that meets IQA standards. 

Validating IQA compliance 

Commenters stated that EPA should have validated "whether other federal agencies, the NRC 

and IPCC vigorously peer reviewed the "major assessments"...which the agency now cites as 

primary scientific support for its proposed power plant rule." 

Commenters said that NOAA developed the Third National Climate Assessment (NCA3-2014) 

report which NOAA claims is compliant with the Information Quality Act (IQA) but 

commenters said it is not compliant because the document fails to discuss the actual peer review 

process, and three documents listed in Appendix 2 that address IQA compliance are not 

publically assessable. 

Commenters emphasized that EPA still needs to release many records to prove that EPA satisfied 

level one, two, and three IQA obligations including the records validating the assumptions that 

support the computer models and datasets for the Highly Influential Scientific Assessments 

(HISAs). Commenters stated that "EPA ultimately was legally responsible for validating the IQA 

compliance of the NCA3-2014." 

EPA & DOC-NOAA Failed to Validate the IPCC AR5 and NCA3-2014 in Conformance With 

the IQA 

Commenters stated that relevant data quality requirements of the Information Quality Act have 

not been achieved for the IPCC's 2013-2014 Fifth Assessment Report (AR5) or the USGCRP's 

2014 "Climate Change Impacts in the United States" (Third National Climate Assessment 

(NCA3-2014), and thus, the EPA cannot rely on those documents. 

Commenters stated that NOAA is financially invested in the climate science research of 43 U.S. 

universities, non-profit institutions and environmental nongovernmental organizations whose 

scientists made "substantive contributions to IPCC AR5 and/or NCA3-2014" and claims that 

"NRC, and by extension, NOAA and EPA" did not disclose or properly address instances of 

conflict-of-interest that violate the Information Quality Act. 
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Commenters presented the argument that a conflict of interest occurred because peer reviewers 

of the IPCC AR5 and NCA3-2014 have research funding connections with EPA, DOC/NOAA or 

other government agencies. Commenters particularly questioned the validity of NAS peer 

review, supporting their statements with a recent article reviewing a NAS review undertaken in 

1956. Based on that article, commenters stated that "improprieties of this magnitude can be 

shown to have permeated as "prestigious" an institution as the NRC/NAS." Commenters stated 

that the EPA and DOC/NOAA have suborned the NRC/NAS' independence and scientific 

integrity by contracting with NRC/NAS to develop studies about climate change and climate 

change mitigation. Commenters discussed institutional and individual forms of conflict of 

interest and subject matter bias, and connected these flaws to the reviews of the IPCC AR5 and 

NCA3-2014. 

Commenters reviewed the affiliations of members of the NRC NCA3-2014 Peer Review Panel, 

the two NRC Boards charged with oversight of the NRC's peer review of NCA3-2014 - the 

Board of Atmospheric Sciences & Climate (BASC) and the Board of Environmental Change & 

Society (BECS). Commenters stated that the NRC, and by extension, DOC-NOAA and EPA, 

failed to identify, disclose and properly address apparent, and to the commenter, possibly real, 

incidents of institutional conflicts-of-interest, subject matter bias and lack of intellectual 

independence, constituting clear violations of the Information Quality Act and relevant OMB 

and EPA IQA-implementing guidelines. Commenters included eight appendices that connected 

reviewers with potential conflicts of interest. Commenters assumed in their discussion that any 

potential conflict of interest was proof that the conflict occurred. 

Commenters further stated that the reviewers charged with reviewing the NRC NCA3-2014 Peer 

Review Panel report, was not likely well-balanced with an equal number of members holding 

majority/popular and minority/unpopular views regarding the credibility of the climate science 

subject to peer review. Commenters stated that this constitutes a violation of the Information 

Quality Act and the relevant OMB and EPA IQA-implementing guidelines.EPA is Precluded 

from Relying Upon Ten NOAA-Developed Highly Influential Scientific Assessments Not Peer 

Reviewed in Conformance With Information Quality Act Standards 

Commenters stated, since the time of ITSSD's August 13, 2014 filing of public comments for 

inclusion in Docket ID No. EPA-HQ-OAR-2013-0602, ITSSD filed with NOAA a new FOIA 

request (Request No. DOC-NOAA-2014-000714) on September 22, 2014. Commenters said, this 

FOIA request contains much new information that is relevant and germane to the EPA 

Administrator's reliance on ten NOAA-developed highly influential scientific assessments 

("HISAs") which, in turn, is relevant and germane to EPA's "Clean Power Plan Proposed Rule." 

Commenters stated, EPA used and disseminated these ten (10) NOAA-developed assessments as 

the scientific foundation, in part, of both the CAA Section 202(a) GHG Endangerment Findings 

and the "Clean Power Plan Proposed Rule." Commenters said, having used and publicly 

disseminated these assessments as its own, EPA had been obliged to ensure that they had been 

peer reviewed in full conformance with the Information Quality Act's peer review conflict-ofinterest, independence and panel balance standards applicable to HISAs. Commenters said, 
313 

 

media outlets had previously taken notice of EPA's failure to ensure that the highly influential 

scientific assessments supporting the Administrator's CAA GHG Endangerment Findings had 

been peer reviewed/validated in conformance with applicable Information Quality Act standards, 

and how EPA can no longer rely upon them as support for the "Clean Power Plan Proposed 

Rule." Commenters said, media outlets also reported about ITSSD's subsequent NOAA FOIA 

request filing which further substantiates these findings. 

Commenters stated, as ITSSD's new NOAA FOIA request makes abundantly clear, NOAA had 

failed to ensure these ten (10) assessments had been internally or externally peer reviewed (by 

NOAA, NOAA-established federal advisory committees, interagency committees or by the 

National Research Council/National Academy of Sciences) in conformance with the welldefined OMB and NOAA Information Quality Act-implementing conflicts-of-interest, financial 

and intellectual independence and panel imbalance standards applicable to HISAs. Commenters 

said, although these peer review practices had not been IQA-compliant, NOAA certified that 

they had been, and EPA had relied upon said certification without performing any further 

validation of said practices when it publicly disseminated such assessments as the scientific 

foundation for both its Endangerment Findings. 

Commenters stated, ITSSD's August 13, 2014 comments make clear that EPA again relied upon 

said assessments as the scientific foundation, in part, of the "Clean Power Plan Proposed Rule," 

but did so without validating whether the peer reviews of such assessments conformed with 

applicable IQA conflict-of-interest, financial and intellectual independence and panel balance 

standards. 

Commenters stated, as with the three (3) EPA-developed HISAs, applicable EPA and OMB 

IQA-implementing peer review conflict-of-interest guidelines preclude EPA from using these ten 

(10) NOAA-developed assessments as the scientific foundation for the "Clean Power Plan 

Proposed Rule," unless and until EPA peer reviews these assessments once again in conformance 

with such IQA standards. 

EPA is Precluded from Relying Upon Three EPA-Developed Highly Influential Scientific 

Assessments Not Peer Reviewed in Conformance With Information Quality Act Standards: The 

IQA Nonconformance of USGCRP/CCSP SAP4.1 

Commenters stated, in accompanying Appendix 7A: "Author-Contributors, EPA-Developed 

USGCRP/CCSP SAP4.1" and 7B: "Technical Expert Reviewers, EPA-Developed USCRP/CCSP 

SAP4.1," please note that at least six peer reviewers had some institutional affiliation with either 

SAP author-contributors or a university or nonprofit institute receiving EPA grant funding. 

EPA is precluded from relying upon three EPA-developed highly influential scientific 

assessments not peer reviewed in conformance with Information Quality Act Standards: The 

IQA Nonconformance of USGCRP/CCSP SAP4.6 
314 

 

Commenters stated, in Appendix 8A: "Author-Contributors, USGCRP/CCSP SAP4.6" and 

Appendix 8B: "EPA External Peer Review Panel/HICCAC Federal Advisory Committee For 

USCRP/CCSP SAP4.6," infra, please note that at least six peer reviewers had some institutional 

affiliation with either SAP author-contributors or a university or nonprofit institute receiving 

EPA grant funding. Commenters stated, in Appendix 8A: "Author-Contributors, USGCRP/CCSP 

SAP4.6" and Appendix 8B: "EPA External Peer Review Panel/HICCAC Federal Advisory 

Committee For USCRP/CCSP SAP4.6," infra, please note that at least six peer reviewers had 

some institutional affiliation with either SAP author-contributors or a university or nonprofit 

institute receiving EPA grant funding. 

EPA is precluded from relying upon three EPA-developed highly influential scientific 

assessments not peer reviewed in conformance with Information Quality Act Standards: The 

IQA Nonconformance of USGCRP/CCSP SAP4.4 

Commenters stated, in Appendix 9A: "Author-Contributors, USGCRP/CCSP SAP4.4" and 

Appendix 9B: "EPA External Peer Review Panel/ASCERAC Federal Advisory Committee For 

USCRP/CCSP SAP4.4," please note that at least six peer reviewers had some institutional 

affiliation with either SAP author-contributors or a university or nonprofit institute receiving 

EPA grant funding. 

Response 1: The EPA has responded at length to critiques of the IPCC and the reliance upon the 

assessments in both the Response to Comments for the 2009 Endangerment Finding (Volume 1 

in particular) and the 2010 Response to Petitions (Volumes 2 and 3). In 2009, the EPA described 

the review and development processes that each of the major assessments go through, and the 

numerous levels of review that these assessments undergo make them appropriate sources of 

scientific information. The approach taken by the EPA of relying on these assessments was 

validated in 2012 by the U.S. Court of Appeals for the D.C. Circuit in Coalition for Responsible 

Regulation v. EPA (684 F.3d 102, 118-124). 

The IQA requires the Office of Management and Budget and federal agencies to issue guidelines 

that “ensur[e] and maximize[e] the quality, objectivity, utility, and integrity of information 

(including statistical information) disseminated by Federal agencies” (Public Law 106-554; 44 

U.S.C. 3516, note). The IQA does not impose its own standard of “quality” on agency 

information; instead, it requires only that an agency “issue guidelines” ensuring data quality. 

Following guidelines issued by the Office of Management and Budget, EPA released its own 

guidelines to implement the IQA 

(http://www.epa.gov/QUALITY/informationguidelines/documents/EPA_InfoQualityGuidelines.

pdf (PDF) (61 pp, 896K)). NOAA’s guidelines to implement the IQA are available at: 

http://www.cio.noaa.gov/services_programs/IQ_Guidelines_011812.html. These guidelines 

describe thorough mechanisms under which the Agencies may review data quality. The 

commenter did not provide evidence to support their assertion that NOAA did not act 

consistently with its information quality guidelines when certifying the Third National Climate 

Assessment, and the EPA has no reason to believe that NOAA’s certification was inadequate. 
315 

 

The EPA has determined that the assessment reports of the IPCC, US Global Change Research 

Program (USGCRP), and the National Research Council (NRC) of the National Academies of 

Sciences have been adequately peer reviewed in a manner commensurate with the guidelines in 

OMB’s Final Information Quality Bulletin for Peer Review for Highly Influential Scientific 

Assessments (HISAs). The IPCC reports undergo multiple rounds of expert review, engaging 

hundreds of scientists from around the world to comment on “the accuracy and completeness of 

the scientific, technical and socio-economic content and the overall balance of the drafts.” The 

IPCC review procedures are described in Appendix A to the Principles Governing IPCC Work.6

A number of revisions to IPCC procedures, governance and management, conflict of interest 

policy, and communications strategy have been made in recent years to strengthen existing 

processes.7 All comments and responses to comments are documented and made publically 

available.8

According to the OMB Final Information Quality Bulletin for Peer Review and guidelines in the 

EPA's Peer Review Handbook, if the Agency has determined that information has already been 

subject to adequate peer review, then it is not necessary to have further peer review of that 

information. For the NRC assessments in particular, the OMB Final Information Quality Bulletin 

for Peer Review states that an agency may, “rely on scientific information produced by the 

National Academy of Sciences,” and that “agencies should presume that major findings, 

conclusions, and recommendations of NAS reports meet the performance standards of this 

Bulletin.”9 Alternatively, an agency may “commission the National Academy of Sciences to peer 

review an agency draft scientific information product”10 in order to meet the performance 

standards of the OMB Bulletin. Because the USGCRP commissioned NAS to peer review its 

Third National Climate Assessment (NCA3)11, EPA determined that NCA3 has been subject to 

adequate peer review and it is not necessary to have further peer review of that information. 

Regarding the accusations of conflict of interest, the commenters apply an unrealistic and flawed 

standard. A reviewer who is affiliated with a government agency or university of thousands of 

 

6 http://www.ipcc.ch/pdf/ipcc-principles/ipcc-principles-appendix-a-final.pdf. 

7 http://www.ipcc.ch/organization/organization_review.shtml

8

 Links to IPCC peer review information: 

http://www.climatechange2013.org/background/review-process/ 

http://ipcc-wg2.gov/AR5/background/review-process/ 

http://mitigation2014.org/background/review-process 

http://ipcc-wg2.gov/SREX/report/review-comments-disclaimer

9

 OMB Final Information Quality Bulletin for Peer Review, page 27. 

10 Ibid. 

11 http://www.nap.edu/catalog/18322/a-review-of-the-draft-2013-national-climate-assessment. 
316 

 

individuals does not have a conflict of interest when reviewing an assessment where one of 

several dozen coauthors also happened to be a member of that agency or university. Similarly, a 

reviewer affiliated with a university that has received at some point a grant (on an unrelated 

matter) from an agency that was leading the development of an assessment report does not have 

a conflict of interest when reviewing that assessment. 

Therefore, EPA has considered these comments and finds that they do not provide credible 

evidence of flaws in EPA’s approach of relying and placing primary weight on the major 

assessments. 

Comment 2: Discussion of IQA requirements, the data and modeling for PM2.5 and ozone used 

as a basis for the endangerment finding and the development of the Social Cost of Carbon. 

Commenters stated that the EPA has violated the requirements of the Information Quality Act in 

the data and modeling for PM2.5 and ozone used as a basis for the endangerment finding and the 

development of the Social Cost of Carbon. 

Commenters stated that the EPA has not produced original data (the Harvard Six Cities Study 

and the American Cancer Society CPS II Study) requested by the House Science, Space and 

Technology Committee and others that had been used as the basis of the ozone modeling. 

Commenters stated that any regulation, including the proposed rule, must be suspended or 

retracted until EPA can provide the public with complete original data and the models that use 

the data. Commenters provided a list of items that the EPA should provide. Commenters stated 

that the EPA is knowingly using incorrect PM2.5 health effects data in the Endangerment 

Finding and the Social Cost of Carbon used to justify this rule. 

Commenters stated that while the OMB is in the process of reviewing public comments on the 

SCC, any use of the SCC to justify the proposed rule is not valid, and stated that the EPA should 

terminate the proposed rule proceeding until the OMB has completed work on the update of the 

SCC TSD. Commenters provided a discussion about the quality of the data and models used to 

support the SCC, stating that the SCC does not meet IQA requirements for process or 

transparency, does not comply with OMB's guidance for developing influential policy-relevant 

information under the Information Quality Act, especially for a Highly Influential Scientific 

Assessment (HISA). 

Commenters stated that his comments are an IQA petition to correct the record in all regulatory 

actions of EPA that either used or cited the SCC2010, SCC2013, or SCC2013r since January 

2009. Commenters provided a list of information that the commenters stated was necessary to 

meet IQA obligations. 

Response 2: The commenters are mistaken. First, the argument that procedural rights are 

violated unless underlying data are made available has been soundly rejected. See American 
317 

 

Trucking Assn’s v. EPA, 283 F. 3d 355, 372 (D.C. Cir. 2002). The court there held both that the 

CAA imposes no such obligation, and that obtaining such data is not only “impractical and 

unnecessary”, but would make “plainly relevant scientific information .... unavailable” . 

The commenters specifically address the American Cancer Society and Harvard 6 Cities Study. 

These studies have been not only peer reviewed multiple times, but have also been replicated. 

See : 

• Original analysis: Dockery DW, Pope CA III, Xu X, Spengler JD, Ware JH, Fay ME, Ferris BG 

Jr, Speizer FE (1993). An association between air pollution and mortality in six US cities. NEJM 

329: 1753-1759. Dockery DW, Pope CA III, Xu X, Spengler JD, Ware JH, Fay ME, Ferris BG Jr, 

Speizer FE (1993). An association between air pollution and mortality in six US cities. NEJM 

329: 1753-1759. 

• Reanalysis: Krewski D, Burnett RT, Goldberg MS, Hoover K, Siemiatycki J, Jerrett M, 

Abrahamowicz M, White WH (2000). Reanalysis of the Harvard Six Cities Study and the 

American Cancer Society Study of particulate air pollution and mortality. A special report of the 

Institute’s particle epidemiology reanalysis project. Cambridge, MA: Health Effects Institute. 

http://pubs.healtheffects.org/view.php?id=6

• Follow-up: Laden F, Schwartz J, Speizer FE, Dockery DW (2006). Reduction in fine particulate 

air pollution and mortality: extended follow-up of the Harvard Six Cities Study. Am. J. Respir. 

Crit. Care. Med. 173: 667-672. 

• Reanalysis of follow-up: Schwartz J, Coull B, Laden F, Ryan L (2008). The effect of dose and 

timing of dose on the association between airborne particles and survival. Environ Health 

Perspect, 116: 64-69. 

There is no requirement in the IQA to re-peer review studies which not only have been peer 

reviewed already but moreover have been successfully replicated multiple times.