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June 9, 2011

The Honorable Cass R. Sunstein

Administrator

Office of Information and Regulatory Affairs

Office of Management and Budget

Eisenhower Executive Office Building

1650 Pennsylvania Avenue, N.W.

Washington, D.C. 20503

Re: Clean Air Transport Rule, Docket ID No. EPA—HQ-OAR-2009-0491

Dear Administrator Sunstein:

On behalf of the citizens of the state of Texas, we request your attention to specific issues 

associated with the Clean Air Transport Rule (CATR), an EPA rule now before your office for 

consideration that is scheduled for final approval in late July 2012. Despite significant concerns 

raised during the comment period, we understand that the final rule may include Texas in 

CATR. This inclusion would not be limited to ozone effects as proposed, but also for sulfur 

dioxide (SO2) emission contributions to concentrations of ambient particulate matter of less 

than 2.5 microns (PM2.5). This rule, if we correctly understand its final form, puts at risk the 

economic future of power generation and those dependent on affordable electricity in Texas. It 

also places vulnerable citizens at a significant health and safety risk. For example, elderly and 

low-income populations whose health and welfare are dependent on reliable energy would face 

significant adverse consequences of such a rule. While air pollution regulation is certainly 

necessary to protect the health of our citizens, the elements of this regulation pertaining to 

Texas’ SO2 emissions are not necessary for public health protection, and will only result in 

negative consequences.

The CATR, as proposed in August 2010 by EPA, did not include Texas in the annual program for 

nitrogen oxides (NOx) and SO2 emission reductions. EPA’s proposed rule acknowledges that 

Texas power plant emissions, as modeled by EPA, do not exceed the threshold for inclusion in 

the PM2.5 portion of CATR. Within this rule, EPA has developed a questionable scenario under 

which CATR would make higher sulfur coals more cost effective than lower sulfur fuels. The 

cascading result of this price point is that Texas’ SO2 emissions would cause an air quality effect 

exceeding the threshold. EPA uses this scenario to take comment on whether Texas should be 

included in the program as a “group 2” state. EPA conjectures,

[I]f . . . price effects took place and if the rule is finalized as proposed, sources in 

states not covered by the proposed rule might choose to use higher sulfur coals. 
Increased uses of such coals could thus increase SO2 emissions in those states. 1 

(Emphasis added.)

Please note that in no part of this 256-page rule (or its subsequent three notices) does the EPA 

provide Texas with proposed emission limits, allocation budgets, or specify proposed 

requirements for Texas. Further, the rule does not address how Texas’ inclusion would impact 

other states.

Procedurally, this rule satisfies neither the Administrative Procedure Act nor the 

President’s Executive Order calling for adequate notice and participation from 

affected parties. We draw your attention to Executive Order 13563, “Improving Regulatory 

Review.” In a recent speech to the New York University School of Law2, you noted that 

“President Obama set out a distinctive approach to federal review” that calls for public 

participation. “Before rules are finalized, or even proposed, agencies are directed to ‘seek the 

view of those who are likely to be affected including those who are likely to benefit from and 

those who are potentially subject to such rulemaking.’”3

Second, we draw your attention to the technical inadequacy of the rule. Consider that the 

inclusion of Texas relies first on the assumption from EPA’s models that the cost of low sulfur 

coal will increase and the cost of high sulfur coal will decrease. The second assumption on 

which their argument relies is the notion that switching coal types is not only logistically 

possible, but also legally possible. All coal-fired power plants in Texas operate under state and 

federal permits that have explicit restrictions on fuel types as well as SO2 emission limits. 

Significant emission increases resulting from fuel switching would require permit modifications 

that would certainly require an assessment and authorization of additional SO2 emissions. EPA 

ignores or disregards the significant effort that would be required to obtain this type of largescale permit modification, especially in light of the recent revision of the SO2 National Ambient 

Air Quality Standard (NAAQS). In the TCEQ comments on the proposed rule, the agency also 

identified significant mischaracterizations of the current fuel mix for at least four facilities in 

Texas. This type of flawed logic and inaccurate technical analysis should not be used as a basis 

for any rule, much less under the hypothetical scenario that EPA devises as a means to include 

Texas in this program.

Finally, we point to the likely unintended consequences of this regulation. As you yourself have 

noted, the Executive Order calls for “careful analysis of the likely consequence of regulation,

including consideration of underlying science, or alternatives, of costs and benefits and of 

simplified, harmonized, and flexible methods for achieving regulatory goals.”4 Because the 

possibility of including Texas was not adequately fleshed out as a part of the rule proposal, EPA 

certainly did not adequately assess the impacts of this rule on Texas, nor did Texas have the 

opportunity to comment on the possible consequences.

We anticipate that the proposal would require significant SO2 emission reductions to occur in a 

very short time period in order to comply with the proposed effective date of January 2012. Our 

concerns pertain to both the timing and depth of the emission reductions. If coal-fired power 

plants in Texas are faced with these significant emission reductions, decisions regarding the 

power generation of these plants may result in considerable reductions in the safety margins of 

power operation of this state. Said differently, the strong disincentives for operation of coalfired power plants would undoubtedly result in significant cost to energy consumers including 

the possible shutdown of base-load units. This economic “ripple effect” has certainly not been 

fully considered by EPA. Again, because the proposal did not contain any specifics on how 

Texas would be regulated under this scheme, we are not able to fully evaluate the significant 

effects, such as shutdowns, of this rule. 

 1 See 75 FR 45284.

2 “Executive Order 13563: Economic Growth and Public Protection” Speech delivered at New York 

University School of Law, April 4, 2011, Cass R. Sunstein.

3 Id.
On Friday, June 3, 2011, you gave testimony at the “The Views of the Administration on 

Regulatory Reform: An Update” hearing, held by the U.S. House of Representative’s 

Subcommittee on Oversight and Investigations. At this hearing you assured Texas Congressman 

Joe Barton that because the proposed rule “has 100 million dollars in annual cost or a 

significant impact on a sector area, then it counts as significant. So if you like, I will definitely 

look into it.” We respectfully ask that you fully and carefully consider the likely consequences of 

this rule, and in particular the application of the PM2.5 transport portion to Texas, as promised. 

The resulting effect of increased cost of power and power shortages, such as rolling blackouts, 

would not only jeopardize the personal and economic health of Texas citizens, but also endanger 

lives. Whether it is cost-prohibitive to generate electricity or electricity is simply unavailable, 

Texas and her citizens will be placed at significant risk if EPA pursues inappropriate regulation 

of SO2 in Texas under the guise of PM2.5 transport. 

For your convenience, we have attached our comments on the proposed rulemaking and 

subsequent data proposals. We appreciate your consideration on this urgent manner and are 

available for discussion if needed.

Sincerely, 

Chairman Bryan W. Shaw, Ph.D.

Texas Commission on Environmental Quality

Chairman Barry T. Smitherman

Public Utility Commission of Texas

BS/sh

Enclosures

cc: The Texas Delegation

 4 Id.