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Chapter 2

Legal Issues and StatutoryAuthority

Contents

2.1 Applicability ........................................................................................................................ 2

2.2 GHG Regulation .................................................................................................................. 2

2.2.1 Rational Basis Analysis and Endangerment Finding....................................................... 11

2.3 Applicability to Both 111(b) and 111(d) ........................................................................... 12

2.4 Regulatory Provisions Concerning Modification and Reconstruction, Including the 

Pollution Control Project (PCP) Exemption................................................................................. 14

2.5 Application of BSER for Utility Boilers and IGCC Facilities........................................... 14

2.6 Application of BSER for Combustion Turbines................................................................ 15

2.6.1 Feasibility......................................................................................................................... 16

2.7 NSR and BACT ................................................................................................................. 17

2.8 State Authority................................................................................................................... 18

2.9 CAA Statutory Requirements............................................................................................ 18
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2.1 APPLICABILITY 

Comment 2.1-1: Commenter 0190 stated that the preamble to the NSPS specifically provided 

that existing units that commence modifications would not be treated as new sources subject to 

standards of performance and instead, they would be treated as existing sources. 79 FR 1446. 

The commenter stated that the CAA defines modification identically for purposes of both the 

PSD and section 111 regulations, even though the Supreme Court has held that EPA has the 

discretion to implement the definition differently in each program. The commenter stated that 

they are concerned that EPA will exercise its discretion in a manner other than it is interpreted 

today, for purposes of this proposal. The commenter stated that the EPA indicates that its 

modeling tools do not allow projection of any specific number of utility boilers and IGCC units 

that are expected to trigger the NSPS modification provision; however, EPA believes there are 

likely to be few. The commenter stated that a fundamental assumption in this regard is the 

continuing applicability of the pollution control project (PCP) exemption; even with the PCP 

exemption, there may be circumstances that create uncertainty that EPA should resolve in its 

final rule.

Response 2.1-1: The provisions of EPA’s final rule are clear on the issues raised in this 

comment. 

2.2 GHG REGULATION

Comment 2.2-1: Commenter (0170, 0186) stated that the Modified and Reconstructed Source 

Rule should be withdrawn.

Commenters (0153, 0278) stated that the EPA must withdraw this proposed rule, because 

modified and reconstructed sources would be subject to the same standards as new units under 

the CAA.

Response 2.2-1: The EPA has withdrawn the proposed emission standards for coal-fired EGUs 

that make small modifications and for modified stationary combustion turbines. The EPA is 

promulgating final emission standards for reconstructed coal-fired EGUs and stationary

combustion turbines, as well as for coal-fired EGUs that make large modifications. For more 

details, see the preamble to the final rule.

Comment 2.2-2: Commenter 0259 stated that because of the minimal benefit and costs projected 

for the Proposed Rule, EPA has an opportunity to exercise its 111 discretion to decline regulation 

of modified or reconstructed sources, as it has in past cases. The commenter stated that several 

factors support a good cause showing that EPA should exercise its discretion and decline 

regulation of modified and reconstructed EGUs: the unlikelihood that any existing EGUs will be 

modified or reconstructed between now and 2025, the minimal costs and benefits that the 

proposed rule is hypothesized to produce, the applicability of the proposed 111(d) CO2 emission 

standards to existing EGUs, and (assuming the EPA can justify its 75,000 tpy CO2e threshold) 

the application of BACT requirements under the PSD program for modifications/reconstructions 
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that lead to significant CO2 emission increase. The commenter believes that all those factors 

strongly suggest that there is a minimal chance the rule will ever be actually applied in the real 

world, and that, even without a rule for modified/reconstructed EGU, other regulatory limits 

would assure CO2 emissions would remain at virtually the same level with or without adoption 

of the instant rule.

Commenter 0241 stated that there was a lot of ambiguity in the ruling, and it seems like the EPA 

is unclear as to how they plan to regulate and enforce this ruling. 

Response 2.2-2: As discussed in the preamble, EPA is finalizing requirements for certain 

modified steam turbines and for reconstructed steam turbines and combustion turbines. EPA is 

deferring action on certain modified steam turbines and on modified combustion turbines.

Comment 2.2-3: Commenter (0195, 0211) supported EPA's efforts to address modified and 

reconstructed EGUs in a rulemaking separate from the proposed new source standards. 

Commenter said CAA section 111 requires EPA to issue standards for new sources and to revise 

those standards every 8 years, as appropriate, but does not otherwise prescribe the administrative 

procedure by which EPA carries out this task, other than to specify that standards be set through 

notice and comment rulemaking. Commenter said initiating two separate rulemakings is 

primarily a matter of form, not substance, and that EPA's "two track" approach to setting new 

source standards is fully consistent with the Supreme Court's decision in Massachusetts v. 

EPA. Commenter noted in Massachusetts, the court indicated that when regulating GHGs under 

the authority of the CAA, "EPA no doubt has significant latitude as to the manner, timing, 

content and coordination of its regulations with those of other industries." Commenter said 

proceeding with a separate rulemaking proceeding for modified and reconstructed sources is 

within EPA's discretion to affect the manner and timing of regulations under CAA section 

111(b). Commenter continued that EPA may also set standards for modified and reconstructed 

sources that are different from those applied to new sources. CAA section 111(b)(2) allows the 

Administrator to "distinguish among classes, types, and sizes within categories of new sources 

for the purposes of establishing such standards." As noted in our comments on the new source 

rule, EPA has previously set different CAA section 111 standards for modified and reconstructed 

units. Such an approach likewise may be taken with respect to modified and reconstructed fossil 

fuel-fired EGUs, so long as the achievability of the standards adopted for such sources is 

adequately demonstrated.

Response 2.2-3: EPA agrees that the provisions in section 111(b)(1)(B) provide EPA with the

flexibility to follow the process that it followed here with respect to newly constructed, modified 

and reconstructed sources. 

Comment 2.2-4: Commenter 0280 stated that although not many modifications or 

reconstructions are expected, this proposed rule is needed to ensure that the relationship between 

the 111(d) ESPS and the 111(b) NSPS for new sources is clarified. The commenter said if an 

existing source is reconstructed or modified in a way that would increase its emissions, this rule 

must ensure that the source will "install the latest available control technology" (reference to the 

Portland Cement Association v. Ruckelhaus case) while remaining within the ambit of the CAA 

section 111(d) CO2 standards.
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Response 2.2-4: This comment goes to the issue of whether and how existing sources that 

become new sources are continued to be regulated under section 111(d). This issue is discussed 

in the context of EPA’s section 111(d) rule.

Comment 2.2-5: Commenter 0183 stated that EPA must revisit their approach to divide 

section 111(b) regulated units into multiple rulemakings. The revisions made to the same 

regulatory language creates confusion and obfuscation about how EPA can resolve issues 

identified in the comments of one rulemaking without presupposing the outcome of comments 

on the second rulemaking. The commenter suggested that EPA withdraw both proposals and repropose under a single rulemaking that would allow for commenters to make comprehensive and 

constructive comments on how section 111(b) applies to new, modified and reconstructed units.

Commenter 0282 stated that the proposed standards for utility boilers and IGCC units is much 

less stringent than the agency's proposed section 111(b) standards for the same type of newly 

constructed sources. Commenter said EPA may not set standards for modified and reconstructed 

sources that differ from those for newly constructed sources. The statutory language of section 

111(b) and the relevant statutory definitions contained in section 111(a) legislative intent and 

case law leave no doubt that Congress intended section 111(b) new source performance standard 

to be equally applicable to newly constructed and modified and reconstructed sources. EPA's 

attempt to devise a different standard of BSER for modified and reconstructed sources is 

therefore unsupportable. We urge EPA to assign the same standard to modified, reconstructed 

and newly constructed sources.

Commenter 0192 stated that EPA's separate and later treatment of modified and reconstructed 

sources under section 111(b) is problematic and inconsistent with the CAA. EPA offers no legal 

support for its effort to regulate reconstructed and modified fossil fuel-fired EGUs in a distinct 

rulemaking separate and apart from newly constructed EGUs. By proceeding with separate 

rulemakings on different schedules, EPA has created legal uncertainty that adversely affected 

existing fossil fuel-fired EGUs that have begun or are considering modification or reconstruction 

projects. The commenter suggested that EPA withdraw the proposed rules and propose a single 

rule that addresses new, reconstructed and modified sources simultaneously as different 

subcategories with different standards of performance, or at minimum to finalize the two 

proposals at the same time.

Commenter 0216 stated that EPA should apply the NSPS to reconstructed steam generating 

units. The commenter noted that EPA argues that it is necessary to establish different emission 

standards for reconstructed and newly constructed steam generating units because it may not be 

technologically and economically feasible for reconstructed steam generating units to comply

with the NSPS. However, the commenter stated that this is not a reasoned basis for EPA's 

departure from prior practice of requiring reconstructed sources to meet the NSPS because EPA's 

regulations already provide that a source is exempt from being classified as reconstructed if EPA 

determines that it is not feasible for the source to comply with the new source standard

Commenter 0244 stated that EPA lacks statuatory authority to distinguish between reconstructed 

and new EGUs for NSPS purposes. The commenter stated that Section 111(b) directs EPA to 

issue emission standards for sources that undergo modification or construction, which EPA 

interpreted to included reconstructions. The commenter believes that the EPA cannot distinguish 
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between reconstructed sources and newly constructed sources without a technologically 

compelling reason to consider them separate "classes" or "types" under section 111(b)(2).

Response 2.2-5: As discussed in the preamble, EPA is finalizing requirements for certain 

modified steam turbines and for reconstructed steam turbines and combustion turbines. EPA is 

deferring action on certain modified steam turbines and on modified combustion turbines. EPA 

has the authority to establish different requirements for different types of “new” sources under 

Section 111(b)(2), which expressly provides that EPA “may distinguish among classes, types and 

sizes.”

Comment 2.2-6: Commenter (0183, 0209) stated that the three GHG EGU proposals create 

confusion as to what sources will be regulated under which of the three proposals, and that this 

has made it difficult to provide meaningful comment. Commenter 0183 suggested that EPA 

withdraw all three proposals until they can develop a consistent and cohesive approach instead of 

a piecemeal rulemaking process. Commenter 0209 stated that this proposal is designed to 

complement the NSPS and to apply to sources also subject to the ESPS, and it cannot be 

evaluated independently of the NSPS and ESPS. Key concepts, such as the source categories and 

definition of affected unit, have been public noticed with slightly different details in each 

proposed rule. For example, in this proposal, EPA red-lined numerous parts of the previously 

proposed NSPS; however, in most cases, the red-lines appear to have no necessary relationship 

to modified and reconstructed units, but instead, appear to be corrections to the proposed NSPS. 

Additionally, the text of the proposal was not directly published in the Federal Register. Finally, 

Commenter 0209 stated that the proposed ESPS is, at this point, not sufficiently detailed to 

compare to this proposal. Colorado Springs Utilities requests that all three rules be re-proposed 

at the same time, so that they can be appropriately evaluated for consistency and implementation 

concerns.

Commenter 0271 stated that the three proposed rules are duplicative and will subject sources to 

be applicable to multiple rules. This proposal would result in unnecessary regulatory burdens on 

EGUs resulting in high costs and little emission reduction. The commenter believed that three 

separate standards under section 111 will cause confusion in the interpretation of applicability

for sources and regulatory agencies.

Commenter 0250 stated that this is the first time in the history of NSPS development that a new 

source and modified and reconstructed sources rules have been proposed separately. The 

commenter added that the EPA proposed a range of possibilities for which they are seeking 

comment instead of actual rules, which means that important details are not set forth in the 

language that will govern applicability and compliance. The commenter said these two items 

have made it difficult to comment on this proposal, and they requested that EPA issue a new, 

integrated proposal with actual regulatory language governing all section 111 regulation. 

Response 2.2-6: EPA disagrees that presenting the three proposals separately made it difficult to 

provide meaningful comment, and that the proposals should be withdrawn and re-proposed. The 

final requirements imposed in these rules are clear and not duplicative. 

Comment 2.2-7: Commenter (0218, 0278) stated that the proposed rules violate CAA section 

111 and exceeds EPA's CAA authority because EPA is acting in violation of Congressional 
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intent under the CAA by proposing separate performance standards categories for new, 

existing, modified and reconstructed EGUs.

Commenter 0218 stated because the EPA's authority to promulgate a rule for existing EGUs 

under Section 111(d) is predicated on the existence of a valid rule for new EGUs under 111(b),

CAA Section 111(d)(1)(A)(ii); 79 FR 34852 - 34854, the invalidation of the Section 111(b) rule 

for new EGUs by the courts would place EPA's Section 111(d) rule for existing EGUs in 

jeopardy. So, the commenter stated, as a backstop against the possibility (or, indeed, the high 

likelihood) that invalidation of its "new" new source rule by the courts will leave it without the 

necessary "new source rule" predicate for its Section 111(d) rule for existing EGUs, EPA is 

promulgating a separate "new source rule" for modified EGUs. Commenter stated that there are 

two principal legal issues the commenter sees with EPA's strategy for a Section 111(b) rule for 

modified EGUs. First, a necessary predicate to the promulgation of a valid existing source rule 

under Section 111(d) is the existence of performance standards that "would apply if such existing 

source were a new source." CAA Section 111(d)(1)(A)(ii). The commenter stated that although 

Section 111 defines "new source" to include "modified" sources, CAA Section 111(a)(2), in the 

case of EGUs, EPA has chosen to promulgate separate categories of Section 111(b) rules for 

"new" and "modified" EGUs. In this context, the Section 111(d) language quoted above is clear. 

The commenter believes that in the scenario of a court-invalidated Section 111(b) rule for "new" 

new sources, the surviving Section 111(b) rule that applies only to modified sources will not 

provide the necessary "new" source predicate which Section 111(d) requires for a valid existing 

source rule. The commenter's second stated reason was that EPA's plan to regulate modified 

EGUs under its proposed Section 111(d) rule for existing EGUs is, to the commenter, plainly

illegal. The commenter stated that section 111(b) governs "new" sources, which by definition, 

includes modified sources. CAA Section 111(a)(2). Section 111(d) governs existing sources. By

definition, this excludes new or modified sources: "[t]he term "existing source" means any 

stationary source other than a new source." CAA Section 111(a)(6). The commenter 

concluded by stating that EPA cannot regulate Section 111(b) modified sources under its Section 

111(d) rule for existing sources, as it plans to do.

Response 2.2-7: EPA has the authority to promulgate different requirements for different types 

of sources under section 111(b)(2). With respect to the discussion in the comment concerning 

what 111(b) standards are sufficient to provide a predicate for a 111(d) rule, that issue is 

discussed, among other places, in Chapter 1 of the response to comments document for the 

111(d) rule.

Comment 2.2-8: Commenters (0153, 0278, 0183, 0283) stated EPA's three EGU CO2 proposals 

taken together violate Congress' intent in for the regulation of stationary sources under the CAA 

by creating a separate performance standards category for new, existing, modified and 

reconstructed EGUs. The commenters said CAA Section 111, consistent with CAA Title I, was 

designed to place the more stringent, technology-forcing performance standards on new 

stationary sources so that these sources could be designed to meet these emissions limits. For 

existing sources it is more difficult to meet aggressive performance standards because the units 

cannot be redesigned and must rely on add-on controls or operation changes to meet new 

emissions limits. The modification and reconstruction rules reflect Congress' recognition that 

significant physical changes to sources can also provide the potential for units to be retrofitted to 

meet new unit performance standards. The commenters indicated that the practical reality of this 
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basic structure is that more stringent emissions limits apply to new, modified and reconstructed 

units and less stringent emissions limits apply to existing units. However, if EPA finalizes the 

proposed NSPS, ESPS, and this proposal, the effect will be for many states that the most 

stringent CO2 emissions rate limits will apply to existing EGUs, less stringent limits will apply to 

new EGUs and the least stringent limits will apply to modified and reconstructed EGUs. This 

result perverts Congress' intent for CAA stationary source emissions regulation. EPA in good 

faith cannot create this result.

Response 2.2-8: We disagree that the section 111(d) standards are more stringent than the 

section 111(b) standards. 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. This issue is discussed in section V.B.7. of the 

preamble for the section 111(d) rule, as well as in the preamble for the section 111(b) rule and 

the legal memorandum for the section 111(d) rule.

Comment 2.2-9: Commenter 0209 stated that EPA should further align this proposed rule with 

the ESPS. The commenter was encouraged that EPA contemplates aligning this rule and the 

ESPS in co-proposed alternative 2, but suggested that a better alternative is to recognize 

compliance with the state ESPS plan to be equivalent to compliance with this rule.

Response 2.2-9: EPA has finalized requirements for certain modified sources and for 

reconstructed sources consistent with the requirements of section 111.

Comment 2.2-10: Commenter 0170 stated in the preamble to the proposed Modified and 

Reconstructed Source Rule, EPA claims expansive authority under Massachusetts v. EPA, 549 

U.S. 497, 520 (2007), and American Electric Power Co. v. Connecticut, 131 S. Ct. 2527, 2537--

38 (2011) [hereinafter AEP]. Contrary to EPA's assertion, however, the Supreme Court in 

UARG held that Massachusetts v. EPA established Act-wide, but not necessarily programmatic, 

authority for regulating CO2. With respect to programmatic authority, the "any air pollutant" 

language found in section 111(b) of the CAA will not be judicially construed to include CO2

whenever and wherever the resulting regulation "would bring about an enormous and 

transformative expansion in EPA's authority without clear congressional authorization." To the 

extent EPA would rely on AEP's statements about section 111 authority to justify its overreach, 

EPA's reliance is wholly misplaced. In AEP, the Supreme Court did not decide that greenhouse 

gases ("GHG") were pollutants for all purposes under the CAA, as EPA supposes. In fact, the 

Court in UARG expressly pointed out that no party in AEP had argued that section 111 was illsuited for the control of GHGs, so the Court never reached the issue. Here -- because EPA 

believes it necessary to conflate sections 111(b) and 111(d) to regulate CO2 -- section 111 of the 

CAA, as actually written, is obviously not well-suited for such regulation.
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Response 2.2-10: EPA has considered the statutory language and the applicable case law, 

including the cases cited by commenter, and concluded that it has the authority and discretion to 

regulate CO2 under section 111.

Comment 2.2-11: Commenters (0191, 0268, 0276) stated the EPA's proposed Carbon Pollution 

Standards for Modified and Reconstructed Stationary Sources, combined with the proposed 

Section 111(b) new source performance standards (NSPS) and Section 111(d) emission 

guidelines for existing sources, evidences unparalleled regulatory hubris. Through these three 

rules, the EPA seeks to unlawfully leverage its authority under the Clean Air Act, which is 

limited to regulating air pollutant emissions, to take near total control over the entire electricity 

sector, from generation to transmission and even demand. Commenter 0237 stated that the EPA's 

intention to bypass congressional intent and initiate a unilateral executive agenda is illegal for 

two reasons. The commenter's first reason is that EPA has no authority to regulate outside the 

express structures of the authorizing law enacted by Congress in FDA v. Brown and 

Williamson. The commenter's second reason is that this measure creates an unconstitutional 

intrusion into the sole domain of Congress. The commenter stated that EPA has no authority 

to "enact" new laws, such as eliminating coal-fueled power plants. Commenter 0160 stated 

that Congressional action, not administrative rule, is required to properly address the complex 

and impactful issue of limiting greenhouse gas emissions. The effect of the EPA's action would 

be the crippling of the Nation's electric generation fleet. The EPA should abandon this effort now 

and limit its rulemaking to that which is authorized by the Act.

Response 2.2-11: For the reasons discussed in various places in the preambles and other 

supporting materials for the 111(b) and 111(d) rules, EPA disagrees that its final action here is 

beyond its authority under the CAA and further disagrees that these rules will create the negative 

effects that the commenter claims. 

Comment 2.2-12: Commenter 0256 stated that The EPA should cite the portion of the Clean Air 

Act (CAA) that provides authority to EPA to promulgate rules whose intent is to restrict the 

modification or reconstruction of existing units. Unless it is documented that this is allowed by

the CAA, the proposed rule should be withdrawn since the EPA doesn't have the authority to 

arbitrarily stunt economic development by promulgating regulations that restrict the legitimate 

modification or reconstruction of a unit.

Response 2.2-12: EPA disagrees that this rule is intended to or will have the effect of restricting 

the modification or reconstruction of existing units.

Comment 2.2-13: Commenters (0153, 0278) stated that the CAA was not intended for EPA to 

be able to regulate GHG, and that EPA does not have the authority to promulgate this rule if 

promulgated. Commenter continued that in the Endangerment Finding, the EPA has identified 

climate change as a global problem, and that CO2 emissions from other countries affect the US. 

Commenter noted that EPA previously questioned the practicality and value of establishing 

National Ambient Air Quality Standard (NAAQS) for GHG, and that they have still not issued a 

NAAQS for GHGs despite a petition to do so. The commenter attributed no NAAQS for GHG to 

the fact that EPA recognizes that GHG present global issues and do not present local air quality 

issues in this country.
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Commenter (0153, 0278) stated this proposal is contrary to and not authorized by Title I of the 

Clean Air Act which regulates stationary sources to ensure that the NAAQS are met. Section 

111(b)(1)(B) of the Act requires the EPA Administrator to establish standards of performance 

within one year after including a category of stationary sources in a list as required by

subparagraph (A) of section 111(b)(1). Additionally, the Administrator is required to review 

those standards and, if appropriate, revise them. EPA first established standards of performance 

for new EGUs under Section 111(b) in 1971. Those standards, which are codified in 40 C.F.R. 

Part 60, Subpart D and Da, only cover criteria pollutants particulate matter ("PM"), sulfur 

dioxide ("SO2"), and nitrogen oxides ("NOx"). The standards do not address or limit GHG 

emissions. Accordingly, EPA's action falls outside its statutory authority because EPA is not 

merely revising the existing standards that apply to new EGUs and instead, is illegally adding 

GHGs (CO2) as a new NSPS pollutant for fossil-fired utility sources.

Response 2.2-13: EPA disagrees that it does not have the authority to promulgate this rule.

Comment 2.2-14: Commenter 0144 noted that while the public comment period for the 

Proposed Carbon Emission Guidelines for Existing Stationary Sources: Electric Utility

Generating Units, 79 FR 34830 (June 18, 2104) was extended to December 1, 2014, EPA chose 

to maintain the deadline for comments on the proposed rule for modified and reconstructed 

electric generating units (EGU). Because the rules are so inextricably linked, this puts the 

regulated community and other interested parties at a distinct disadvantage in the preparation and 

submission of substantive comments. EPA's action has all but eliminated the ability to cross 

reference concerns with the rule for modified and reconstructed units with comments related to 

the existing EGU rule.

Commenter 0152 stated that the EPA did not provide adequate time and opportunity to 

understand, analyze and develop comments on this proposal. The commenter said that each rule 

and its supporting documents, as well as other comments, are extremely lengthy and 

interconnected, and suggested that EPA, the regulated community, and the public would have 

benefited from more time in order to provide more thorough analyses.

Response 2.2-14: EPA disagrees that the length of the comment period was insufficient.

Comment 2.2-15: Commenter 0187 stated that based on the sheer number of questions and input 

sought by EPA on the Proposed Rule, it is clear that the Agency does not fully understand the 

implications of the Proposal, or how the proposed standards might apply to Subpart Da and 

Subpart KKKK electric generating units (EGUs). Commenter is concerned that the final rule will 

be developed based almost entirely on feedback on the Proposed Rule, thereby depriving 

affected sources the opportunity to understand and comment on a comprehensive rule prior to it 

becoming final. It is fundamental that persons affected by a proposed rule have an opportunity to 

provide meaningful comment before it is finalized. 5 U.S.C. Section 553(c). The Proposal 

deprives affected sources of this opportunity and, therefore, should be withdrawn.

Response 2.2-15: EPA disagrees that interested parties did not have an adequate opportunity to 

comment.
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Comment 2.2-16: Commenter (0242, 0149) stated that EPA's declaration of the severability of 

the proposed standards and BSER determinations is not EPA's decision. The commenter said 

these rules and BSER determinations would only be determined as severable based on judiciary

decision, not an executive branch (Ackerley Commc'ns of Massachusetts, Inc. v. City of 

Cambridge, 135 F.3d 210, 215 (1st Cir. 1998) (noting that "Severability clauses, though 

probative of legislative intent, are not conclusive"); see also Cmty. for Creative Non-Violence v. 

Turner, 893 F.2d 1387, 1394 (D.C. Cir. 1990) (looking to whether a regulation contains a 

severability clause). The commenter continued that severability is inherently a question of 

interpreting the law and "the ultimate determination of severability will rarely turn on the 

presence or absence of [a severability] clause," this was referenced from United States v. 

Jackson, 390 U.S. 570, 585 n.27 (1968); Reno v. Am. Civil Liberties Union, 521 U.S. 844, 885 

n.49 (1997) (holding that "a severability clause is an aid merely; not an inexorable command") 

(internal quotation marks omitted).

Commenter 0142 stated that there is no legal basis supporting the EPA's contention that each 

proposed section 111 standard "remain in effect" regardless of whether any of the other section 

111 standards were to be vacated or remanded. The commenter stated that EPA provides no 

discussion or rational basis to support this contention in light of the plain language of section 

111(d), which limits regulations under section 111(d) to existing sources "to which a standard of 

performance under this section would apply if such a existing source were a new source." 

Response 2.2-16: EPA’s view on the severability of different provisions in a rule is a relevant 

and important factor for determining what provisions are severable.

Comment 2.2-17: Commenter 0263 stated that there is no statutory basis for delineation 

between a reconstructed new sources and a newly constructed new source. 

Response 2.2-17: Section 111(b)(2) provides EPA’s authority to distinguish between 

reconstructed sources and newly constructed sources.

Comment 2.2-18: Commenter 0242 stated that EPA is requesting comment on having an upper 

capital cost threshold for reconstructions, where if exceeded, would be considered a new 

source. The commenter does not believe that a cost threshold is appropriate. The commenter

believes that U.S. EPA must ensure that these final rules do not inhibit or create a disincentive 

for the types of projects that can be conducted in order to comply with these and other U.S. EPA 

rules and reduce CO2 emissions.

Response 2.2-18: EPA’s final rule does not contain an upper threshold for capitals costs for 

determining what is a reconstructed source. 

Comment 2.2-19: Commenter 0242 stated that EPA's once-in-always-in approach to the 111(b) 

and 111(d) subsections is not allowed under the plain language of section 111, that subjecting all 

sources that are covered by any Section 111(d) plan to forever be subject to that plan changes 

how all Section 111(d) programs are to be applied with real substantive consequences for the 

sources subject to the plans, and is illegal and a retroactive application of a complete regulatory

program. 
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Response 2.2-19: EPA is not finalizing an interpretation under which existing sources would 

continue to be covered by section 111(d) requirements after they become subject to requirements 

under section 111(b).

Comment 2.2-20: Commenter 0214 stated that due to the high variability in CO2 emission rate 

data from potentially affected sources no standards can be reasonably justified for the 

subcategory of modified or reconstructed units. The commenter stated that the high variability in 

emission rate data coupled with the other numerous flaws in EPA's proposal solidify the need to 

affirm that no standards of performance can be established for modified and reconstructed 

sources. The commenter believes that EPA's attempt to establish unit-by-unit standards as a 

solution to this problem is illegal. 

Response 2.2-20: EPA disagrees with this comment. EPA has the authority and discretion under 

section 111 to set unit specific standards, and EPA’s action here is supported by the record.

2.2.1 Rational Basis Analysis and Endangerment Finding

Comment 2.2-21: Many commenters submitted comments on whether EPA is required to do an 

endangerment finding for this rule. Some commenters supported EPA’s view that section 111(b) 

only requires an endangerment finding when a source category is listed and that no additional 

endangerment finding is needed to set standards for additional pollutants emitted from a listed 

source category. Other commenters argued that EPA must make a pollutant-specific 

endangerment finding for any pollutant that it regulates under section 111(b), and so here must 

make a pollutant-specific endangerment finding for CO2. 

Response 2.2-21: An endangerment finding is only required when EPA lists a source category 

under section 111(b)(1)(A). Nothing in section 111 requires that EPA make further 

endangerment findings with respect to each pollutant that it regulates under section 111(b)(1)(B). 

EPA’s views on these issues are discussed in detail in Section III.A. of the preamble. 

Comment 2.2-22: Multiple commenters argued that EPA cannot rely on the CAA section 202 

finding to regulate CO2 emissions under section 111. 

Response 2.2-22: The comments on this point are based on a misunderstanding of the role of the 

2009 endangerment finding in these rules. EPA is not relying on the 2009 endangerment finding 

to be an endangerment finding for this rule. Instead, EPA is considering the information and 

analysis in the 2009 endangerment finding, along with the more recent information that confirms 

and expands on that finding, to support its conclusions in the rational basis analysis. Further, if 

an endangerment finding is required, then (again) the information and analysis in the 2009 

finding, along with more recent information that confirms and expands on that finding, support a 

finding that CO2 endangers human health and welfare. 
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2.3 APPLICABILITY TO BOTH 111(B) AND 111(D)

Comment 2.3-1: Many commenters submitted comments on EPA’s proposed interpretation to 

have existing sources continue to be subject to requirements under 111(d) after they become 

subject to requirements under 111(b).

Response 2.3-1: EPA is not finalizing an interpretation that existing sources continue to be 

subject to requirements under 111(d) after they become subject to requirements under 111(b).

Comment 2.3-2: Two commenters (0214 and 0248) recommended that EPA exclude modified 

and reconstructed sources from regulation under section 111(b) and allow states to regulate them 

under section 111(d). Commenter 0214 stated that EPA should address modified and 

reconstructed units by establishing that no standards should apply because: (1) EPA has already 

conceded that regulating modified and reconstructed units under section 111 will not result in 

any meaningful benefits and (2) the high degree of variability in CO2 emission rates of units that 

could trigger section 111(b) through a modification or reconstruction precludes establishing an 

achievable source category- or subcategory-wide standard. If EPA is determined to regulate 

modified and reconstructed units under section 111, two options are available to the Agency: (1) 

withdraw and re-propose appropriate standards of performance under section 111(b) only for the 

subcategory of "modified or reconstructed" units, or (2) provide an exemption from the 

definitions of modification and reconstruction for those sources under its section 111(b) 

standards and allow states to continue regulating them as "existing sources" under section 

111(d). Because no source category-wide standard of performance can be set for modified or 

reconstructed sources, EPA could affirmatively exclude modified and reconstructed units from 

section 111(b) and allow states to regulate these units under section 111(d).

With regard to modifications, commenter 0214 argued that EPA can exclude them from section 

111(b) despite the statutory provision requiring "new sources" to include "modifications." EPA 

has already further defined the term "modification" in its regulations to include only those 

sources that conduct a physical or operational change that results in an increase in a pollutant "to 

which a standard applies." EPA's definition of "modification" further confirms that "an existing 

facility shall become an affected facility for each pollutant to which a standard applies and for 

which there is an increase in the emission rate to the atmosphere." Therefore, if a physical or 

operational change results in an increase in a pollutant that is not covered by a standard, that 

emissions increase does not constitute a "modification," and the unit remains an "existing 

source" for that pollutant. In other words, under EPA's regulatory definition of "modification," 

sources trigger section 111(b) standards one pollutant at a time. Accordingly, a source may be 

considered "modified" for one pollutant, and an "existing source" for another pollutant, 

depending on whether each pollutant is covered by the section 111(b) standard and whether the 

source has conducted a physical or operational change that causes an increase in that pollutant. 

With this regulatory definition of "modification," EPA has clarified the meaning of the statutory

definition of "modification," which otherwise refers only generally to "increases [in] the amount 

of any air pollutant." EPA's decision to define "modification" one pollutant at a time is a 

reasonable interpretation of the statute--after all, triggering a section 111(b) standard with an 

increase in a pollutant that it does not cover would make little practical sense. EPA's decision to 

limit the scope of the phrase "any air pollutant" to only those already covered by a standard is 

also consistent with the recent U.S. Supreme Court decision in UARG v. EPA, which held that 
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the phrase "any air pollutant" can have different meanings depending on the context. See UARG 

v. EPA, 134 S. Ct. 2427, 2439-2440 (2014) (citing EPA's NSPS program as an example to 

confirm that "where the term 'air pollutant' appears in the Act's operative provisions, EPA has 

routinely given it a narrower, context-appropriate meaning.") EPA started down this path in its 

January 2014 Re-Proposed NSPS: "3. Sources Not Subject to This Rulemaking [for Newly

Constructed Units] We are not proposing standards for certain types of sources. These include 

'existing sources undertaking modifications or reconstructions.' As a result, under the CAA 

section 111(a) definitions of 'new source' and 'existing source,' if those types of sources 

commence construction or modification, they would not be treated as 'new source[s]' subject to 

the standards of performance proposed today, and instead, they would be treated as existing 

sources." As such, those sources could remain "existing sources" for the purpose of their CO2

emissions, and thus subject to section 111(d) standards for that pollutant, not section 111(b).

With regard to reconstruction, commenter 0214 argued that, in contrast to "modifications," the 

CAA does not define or use the term "reconstruction" at all. That term is entirely EPA's creation. 

As such, whether a source "reconstructs" is essentially irrelevant to the question of whether it 

must be considered a "new source" or an "existing source" under the provisions and definitions 

provided within section 111. In the past, EPA has typically regulated a "reconstructed" unit 

under section 111(b) as "new sources," claiming that "reconstructions" are essentially another 

form of "construction," which the statute includes in the definition of a "new source." In 

addition, the same difficulties associated with developing and enforcing an achievable standard 

for modified units apply to reconstructed units, in that there appears to be little rational basis 

upon which EPA could establish a source category-wide, or even subcategory-wide standard, as 

required by section 111(b). As a result of these concerns, EPA could affirmatively exclude 

reconstructions from its section 111(b) regulations and allow states to continue regulating them 

as "existing sources."

In a similar comment, commenter 0248 recommended that modified and reconstructed units be 

exempt from EPA's proposed section 111(b) NSPS provisions, given the relatively small number 

of units expected to be affected by EPA's proposed modified and reconstructed standards and the 

fact that these units may have been drawn from the group of existing units that EPA has 

proposed to regulate for CO2 emissions under section 111(d). The commenter suggested that 

states should have the flexibility to include modified and reconstructed units with existing units 

of similar fuel type and design and provide for regulation of CO2 emissions of these units in their 

state plans, in accordance with the provisions EPA finalizes for existing units as proposed under 

CAA section 111(d). 

Response 2.3-2: In this rule, EPA is finalizing section 111(b) requirements for certain modified 

steam turbines and deferring action with respect to other modified steam turbines and for 

modified combustion turbines. This is discussed in Sections VI and IX of the preamble. EPA is 

finalizing requirements for reconstructed steam turbines and combustion turbines. Further, EPA 

agrees with the conclusion that existing sources that modify or reconstruct but do not become 

subject to a section 111(b) standard continue to be existing sources and subject to requirements 

under 111(d), as discussed in Section IV.A. of the preamble.
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2.4 REGULATORY PROVISIONS CONCERNING MODIFICATION 

AND RECONSTRUCTION, INCLUDING THE POLLUTION 

CONTROL PROJECT (PCP) EXEMPTION

Comment 2.4-1: Many commenters submitted comments concerning the pollution control 

project (PCP) exemption in 40 CFR 60.14(e)(5).

Response 2.4-1: EPA neither proposed nor is taking final action on any changes to the PCP 

exemption in this rule.

Comment 2.4-2: Some commenters suggested changes and raised issues with respect to the 

regulatory provisions governing modification in 40 CFR 60.14 and governing reconstruction in 

40 CFR 60.15.

Response 2.4-2: EPA neither proposed nor is taking final action on any changes to the 

regulatory provisions in 40 CFR 60.14 or 60.15 in this rule.

2.5 APPLICATION OF BSER FOR UTILITY BOILERS AND IGCC 

FACILITIES

Comment 2.5-1: Commenter 0282 argued that the section 111(b) new source standards must 

reduce emissions to the maximum practicable degree, and the manner in which a section 111(b) 

standard for new sources must be determined is set forth in the statutory text and has been 

considered and explained by decades of case law. 

Response 2.5-1: EPA’s standards in this rule meet the requirements of section 111(b).

Comment 2.5-2: Commenter 0192 argued that the plain language of section 111 requires a 

source-based BSER analysis. The plain language of section 111(d) directs EPA to "establish 

standards of performance for new sources within [a source] category" after making an 

appropriate significant contribution endangerment determination. 42 U.S.C. 111(b)(1)(B). 

Section 111 further defines a stationary source as "any building, structure, facility, or installation 

which emits or may emit an air pollutant." The statutory text here is clear. Standards of 

performance under section 111 are not established on an aggregate basis for an entire sector of 

the United States' economy. Instead, they must be established on an individual basis for each 

class or category of sources and, therefore, must be limited to the types of pollution controls that 

can be implemented directly by a source within that class or category. Likewise, the best system 

of emission reduction adequately demonstrated which the standard of performance must reflect 

must also be applied in a source-based manner. See, e.g., Portland Cement Association v. 

Ruckelshaus, 486 F.2d 375, 391 (D.C. Cir. 1973) ("The essential question was whether the 

technology would be available for installation in new plants."). 

The commenter also noted that the narrow source-based approach mandated by Congress in 

Section 111 has been explicitly recognized by the Courts. In ASARCO v. EPA, 578 F.2d 319 

(D.C. Cir. 1978), the court applied a narrow construction of the term "stationary source" under 

section 111. There EPA sought to apply a "bubble concept" to existing stationary sources in a 

manner that would allow certain facilities to avoid regulation under section 111(b) because 
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emissions increases from one source within a facility could be offset by emissions reductions 

from other sources in the same facility. The court held that "[t]he regulations plainly indicate that 

EPA has attempted to change the basic unit to which NSPSs apply from a single building, 

structure, facility, or installation--the unit prescribed by statute--to a combination of such units. 

The agency has no discretion to rewrite the statute in this fashion." Similarly, in Alabama Power 

Co. v. Costle, 636 F.2d 323, 397 (D.C. Cir. 1979), the court confirmed that under "the limited 

scope afforded the term 'source' in section 111(a)(3), however, EPA cannot treat contiguous and 

commonly owned units as a single source unless they fit within the four permissible statutory

terms [of building, structure, facility, or installation]." In contrast, to the narrow scope of the 

NSPS program, the D.C. Circuit held that under the section 169 PSD program, "EPA has latitude 

to adopt definitions of the component terms of 'source' that are different in scope than those that 

may be employed for NSPS and other clean air programs due to differences in the purpose and 

structure of the two programs." 

The commenter further noted that ASARCO and Alabama Power highlight the specific focus of 

section 111 on individual facilities and prohibit EPA from claiming discretion to apply a BSER 

analysis or to establish standards of performance under section 111 at anything broader than a 

source-specific level. Since the court's decision in ASARCO, EPA has never used section 111 in 

a manner that would regulate sources outside of the source category identified in the section 

111(b) significant contribution endangerment determination

Response 2.5-2: EPA disagrees that section 111 requires EPA to establish unit-specific 

standards, but has concluded that section 111 does provide EPA with the authority and discretion 

to do so under appropriate circumstances.

2.6 APPLICATION OF BSER FOR COMBUSTION TURBINES

Comment 2.6-1: Commenter 0215 stated that EPA has identified natural gas combined cycle 

("NGCC") technology as BSER, but it has not adequately defined that term. EPA appears to 

incorrectly believe older NGCC units can meet the same emission limits as new units. EPA must 

revise its definition of "NGCC technology" to ensure that older units are not subjected to the 

same requirements as new units.

Commenter added NGCC is not BSER for simple cycle combustion turbines, and EPA should 

explicitly exclude simple cycle combustion turbines from the rule.

Commenter added that any Subpart KKKK unit that is technologically and economically 

incapable of meeting the NSPS should be excused from the modified standard.

Response 2.6-1: The EPA is withdrawing the proposed emission standard for modified 

stationary combustion turbines, as explained in Section IX.D.3.e of the preamble to the final rule. 

The EPA provided sufficient data to demonstrate that base load combustion turbines that 

reconstruct can essentially be rebuilt as a new unit and meet the same 1,000 lb CO2/MWh-g 

standard. The EPA agrees that, per the regulatory definition of “reconstruction,” a unit that is 

technologically or economically incapable of meeting the final standard can petition to be 

excused from the standard.
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2.6.1 Feasibility

Comment 2.6-2: Commenter 0150 stated that reconstructed units are not required to meet the 

NSPS if it is not "technologically and economically feasible" to do so. EPA must include 

provisions implementing this requirement and should state expressly that imposition of any limit 

that would require the unit to shut down is per se economically infeasible.

Response 2.6-2: The EPA agrees that, per the regulatory definition of “reconstruction,” a unit 

that is technologically or economically incapable of meeting the final standard can petition to be 

excused from the standard. However, base load combustion turbines that reconstruct can 

essentially be rebuilt as a new unit and can easily meet the same 1,000 lb CO2/MWh-g standard.

If an owner or operator can already afford to invest 50 percent of the cost of a new unit, then the 

owner or operator can make the necessary efficiency upgrades to meet the final standard and will 

not need to shut down.

Comment 2.6-3: Commenter 0158 stated that EPA has not provided a sufficient basis for the 

proposed standards covering modified and reconstructed natural gas-based stationary combustion 

turbines, and those standards are arbitrary.

Response 2.6-3: The EPA is withdrawing the proposed emission standard for modified 

stationary combustion turbines, as explained in Section IX.D.3.e of the preamble to the final rule. 

The EPA provided sufficient data to demonstrate that base load combustion turbines that 

reconstruct can essentially be rebuilt as a new unit and meet the same 1,000 lb CO2/MWh-g 

standard. See Section IX.D.3.b of the preamble for more details.

Comment 2.6-4: Commenter 0215 stated EPA has failed to show that its proposed NSPS for 

reconstructed Subpart KKKK units "is achievable 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." See Nat'l Lime Ass'n v. EPA, 627 F.2d 416, 431 n.46, 433 

(D.C. Cir. 1980). A standard that applies to all reconstructed sources, like new sources in the 

same category, must be achievable "for the industry as a whole" and not just for a subset of 

sources. EPA may not base its determination that a standard is achievable on "mere speculation 

or conjecture." Lignite Energy Council, 198 F.3d at 934. Rather, in order to show that its 

proposed emission level 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 of the standard." Sierra Club, 657 F.2d at 377 (citing Nat'l 

Lime Ass'n, 627 F.2d at 433). Commenter continued the validity of EPA's achievability

determination depends on how fully it has accounted for the variations among sources in the 

regulated category that could affect emission levels. Courts have repeatedly rejected NSPS that 

EPA deemed "achievable" based on test data from a narrow set of sample sources that did not 

represent the full range of relevant variability among sources to which the standard will apply. 

See, e.g., Nat'l Lime Ass'n, 627 F.2d at 432; Portland Cement Ass'n, 486 F.2d at 396, 402. 

Commenter said EPA has traditionally set NSPS such that at least 99 percent of units subject to 

the standard would be expected to comply. See, e.g., EPA, EPA-453/R-94-012, New Source 

Performance Standards, Subpart Da - Technical Support for Proposed Revisions to NOx 

Standard at Section 3.2.3 (Analysis of Long-Term Continuous Emission Monitoring Data) at 3-
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43, 3-49, 3-55 (June 1997). Commenter said this reflects the fact that an NSPS "establishes what 

every source can achieve, not the best that a source could do." See Letter from Gary McCutchen, 

Chief, New Source Review Section, EPA OAQPS, to Richard E. Grusnick, Chief, Air Division, 

Ala. Dep't of Envtl. Mgmt. at 1 (July 28, 1987).

Response 2.6-4: The EPA provided sufficient data to demonstrate that base load combustion 

turbines that reconstruct can essentially be rebuilt as a new unit and meet the same 1,000 lb 

CO2/MWh-g standard. Moreover, the EPA demonstrated how the final standard accommodates 

the full range of turbine sizes, operating conditions, site-specific characteristics, and future 

degradation. See Sections IX.D.3.a and b of the preamble for more details.

Comment 2.6-5: Commenter 0215 noted that EPA states that its analysis "with regards [sic] to 

reconstructed natural gas-fired stationary combustion turbines is also applicable to modified" 

NGCC EGUs. See 79 Fed. Reg. at 34,989. As is the case for modified Subpart Da boilers, there 

is no TSD or analysis of emissions data in the rulemaking docket that supports EPA's proposed 

NSPS for modified NGCC EGUs.11 Commenter said the docket is completely devoid of any

analysis demonstrating that the proposed NSPS is achievable for modified or reconstructed 

Subpart KKKK units. Commenter said this defect alone requires that EPA withdraw the 

Proposed Standards until it has developed and included in a docket the necessary supporting 

information as required by section 307(d)(3) of the CAA. 

Commenter 0215 stated EPA has proposed that BSER for modified stationary combustion 

turbines is NGCC technology. See 79 Fed. Reg. at 34,990. Commenter agreed in principle that 

NGCC technology is an appropriate starting point for BSER and that "NGCC technology is the 

most efficient technology for natural-gas fired stationary combustion turbines." Commenter 

agreed that EPA has properly rejected the use of carbon capture and sequestration and high 

efficiency simple cycle aero-derivative turbines as BSER. 

Response 2.6-5: The EPA is withdrawing the proposed emission standard for modified 

stationary combustion turbines, as explained in Section IX.D.3.e of the preamble to the final rule. 

The EPA has rejected CCS and simple cycle turbines as the BSER for reconstructed base load 

units in favor of NGCC. The EPA provided sufficient data to demonstrate that base load 

combustion turbines that reconstruct can essentially be rebuilt as a new unit and meet the same 

1,000 lb CO2/MWh-g standard. See Section IX.D.3.b of the preamble for more details.

2.7 NSR AND BACT

Comment 2.7-1: Multiple commenters (0144, 0149, 0242, and 0267) expressed their concern 

about the impact of the standards for modified and reconstructed units on NSR and BACT and 

recommended that EPA take action to address this issue, including the creation of exemptions

from NSR and BACT requirements.

Response 2.7-1: EPA did not propose nor is taking any final action concerning NSR or BACT or 

the relationship of section 111 standards to BACT. 
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2.8 STATE AUTHORITY

Comment 2.8-1: Commenter 0264 requested that EPA make it clear in the proposed regulation 

for new electric generating units that it does not in any way compromise or jeopardize the 

permitting and enforcement authority of the local air pollution control agencies, such as the local 

air pollution control districts in California. It is critical that permitting for criteria and toxic 

pollutants and the implementation of the applicable NSR programs for these pollutants is not 

hindered by the proposed 111 (b) regulation.

Response 2.8-1: EPA does not intend to nor does the final rule contain any provisions that 

would hinder the administration or enforcement of programs regulating criteria and toxic 

pollutants.

2.9 CAA STATUTORY REQUIREMENTS 

Comment 2.9-1: Multiple commenters stated that EPA violated CAA 307(d) by not including 

sufficient technical support documents, emissions data, economic analyses, calculation 

methodology, and memorandum in the docket for the proposed rule.

Response 2.9-1: EPA disagrees that the docket for the proposed rule did not contain adequate 

information or otherwise was inadequate for commenters to understand the proposal and 

comment on it.

Comment 2.9-2: Commenters 0186 and 0237 state that the regulation violates the Clean Air Act 

because the EPA has failed to satisfy its mandatory obligation under Section 321(a) of the CAA, 

42 U.S.C. Section 7621(a), to conduct continuing evaluations of how employment is affected by

EPA's actions under the Act.

Response 2.9-2: The EPA disagrees with this comment. Section 321(a) authorizes the EPA to 

conduct “continuing evaluations of potential loss or shifts of employment which may result from 

the administration or enforcement of the [CAA].” Section 321(a) does not prescribe the scope, 

timing, or frequency of these evaluations and does not require the EPA to conduct any specific 

type of analysis. Section 321(a) also does not require the EPA to conduct employment 

evaluations as part of the rulemaking process or as a precondition to the issuance of a final rule. 

On the contrary, Section 321(d) clearly states that Section 321 does not authorize or require the 

EPA “to modify or withdraw any requirement imposed or proposed to be imposed under [the 

CAA.]” Nevertheless, in the exercise of its discretion, the EPA did evaluate the potential 

employment impacts of both the proposed and final rules in the RIAs accompanying those rules. 

Thus, the commenters are incorrect that the EPA failed to consider potential employment 

impacts.