Performance Standards: We understand that EPA is considering a hybrid approach in its CAIR replacement rule involving regional emissions trading and unit-specific performance standards (cite: July 9, 2009, testimony by Regina McCarthy before the Subcommittee on Clean Air and Nuclear Safety, Committee on Environment and Public Works, U.S. Senate). As discussed in the September 2, 2009, joint letter, we strongly support and encourage EPA to include regional emissions trading to the fullest extent allowed under the Clean Air Act. We believe, however, that unit-specific performance standards go beyond the requirements of section 110 and the scope of a CAIR replacement rule; inhibit trading; and that performance standards with a near-term compliance timeframe, such as 2017, are not practical for all EGUs. Although we firmly believe that it is not appropriate to include performance standards in a CAIR replacement rule, if EPA decides to consider including performance standards, then EPA should work with the states to take into account the basis and timing of the requirements identified in the September 2, 2009, joint letter, cost effectiveness, site specific factors (such as space limitations) and the pollution control equipment already in place on the existing fleet of EGUs. Specifically, on this last point, we believe that EPA should not require replacement or repowering of units or control systems that are sound technology and operating at a reasonable effectiveness.

LADCO Recommendation 2 B. State- Led Attainment Planning We recommend the use of a state-led attainment planning process concurrent with developing the transport SIP to address areas of interest that are not expected to attain after implementation of the national/regional control program. The advantages of this state-led planning effort include:

 A one-size-fits-all federal solution cannot provide the most appropriate and cost-effective solution for each area;

 Attainment planning is more effective and more likely to succeed if it is done on a nonattainment area basis with a limited number of states;

 Additional controls are identified where they are needed; and

 States maintain their responsibility under the Clean Air Act to establish state implementation plans. A major contributing state (i.e., a state which contributes at least 4% to a downwind area of interest that is not expected to attain after implementation of the national/regional program) must also either: 1. In conjunction with other major contributing states, develop, adopt, and implement an appropriate attainment strategy for the area of interest, as follows: a. An upwind state’s responsibility for achieving air quality benefits in a downwind area should be commensurate with the magnitude of the upwind state’s contribution to the downwind air quality problem. b. To facilitate flexibility in developing control programs and reduce control costs, state planning efforts should accommodate interstate emissions trading to the fullest extent allowed by the Clean Air Act. c. Photochemical modeling, performed in accordance with EPA modeling guidance, should be conducted to determine the amount of emission reduction needed to provide2. In th be a emi s com The s cate con t

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