U.S. Environmental Protection Agency



### Documentation of OMB Review Under Executive Order 12866 Title of Action:**tate** Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA's SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls to Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction Docket#:

### EPA-HQ-OAR-2012-0322 

# I FRL#: 1 9924-05-0AR 

# I RIN: § oso-AR68 This action was submitted to the Office of Management and Budget (OMB) for review under Executive Order (E.O.) 12866 , titled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Whenever EPA makes publicly available a regulatory action that was reviewed under E.O. 12866, section 6(a)(3)(E) of the E.O. directs the Agency to also: (1) Make available to the public a copy of the information that was provided to OMS's Office of Information and Regulatory Affairs (OIRA) for review under the E.O. , i.e., the text of the draft regulatory action and, if applicable, an assessment of the potential costs and benefits, as well as additional info rmation for those actions that are determined to be economically significant under the E.O. (Information requirements are described in sections 6(a)(3)(B) and (C)). (2) Identify for the public any substantive changes between the draft submitted to OIRA and the action that was subsequently issued, using a method that is complete, clear, and simple. (3) Identify for the public those substantive changes made at the suggestion or recommendation of OIRA. For this regulatory action, were substantive changes made to information reviewed under E.O. 12866? [Please check the appropriate answer.] 

### Cl No. (In the docket, include the info rmation identified in item (1) below.] 

### lEI Yes. [In the docket, include the information identified in i tems (1)

- (3) below.] Accordingly, the Agency has included this form and the following information in the public docket for this regulatory action: [Please check the appropriate information.] 

### lEI (1) A copy of the information that was provided to OIRA for review under the E.O. 

### lEI (2) Documentation of any substantive changes made to the draft regulatory text that was submitted to OIRA when compared with what was subsequently made publicly available. The documentation is provided on the pages following this form. Changes made at the suggestion or recommendation of OIRA, if any, are clearly identified through attribution to OIRA. EPA has used one or more of the following methods to note changes: (Select the appropriate option(s).] 

### lEI (a) Red line-Strikeout- A copy of the draft regulatory action submitted, using redlinestrikeout to show the substantive changes that were made. [J (b) Hand Markup- A copy of the draft regulatory action submitted, using handwritten notes to show the substantive changes that were made. [J (c) Note to the file- A document that identifies the substantive changes that were made , with page and paragraph references to the draft regulatory action that was submitted. If you have any questions about this regulatory action or this documentation, please call the contact: Name:**r-~ isa** **tt -------------,1**  Email:**utton.lisa®epa.gov** 

# I Phone:

## (919) 541-3450 Rev1sed 05/05/2010*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 1 of 539 6560-50-P ENVIRONMENTAL PRO TECTION AGENCY

40 CFR Part 52 [EPA-HQ-OAR-2012-0322; FRL-9924-05-OAR]

RIN 2060-AR68 State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA’s SSM Policy Applicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls to Amend Provisions Applying to Excess Emissions During Periods of Startup, Shutdown and Malfunction AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: The Environmental Protection Agency (E PA) is taking final action on a petition for rulemaking filed by the Sierra Club (Peti tioner) that concerns how provisions in EPAapproved state implementation plans (SIPs) trea t excess emissions during periods of startup, shutdown or malfunction (SSM). Further, the EP A is clarifying, restating and revising its guidance concerning its interpreta tion of the Clean Air Act (CAA or Act) requirements with respect to treatment of excess emissions that occur during periods of SSM. The EPA evaluated existing SIP provisions in a number of states for consistency with the EPA’s interpretation of the CAA and in light of recent cour t decisions addressing this issue. The EPA is issuing a finding that certain SIP provisions in 37 states (applicable in 46 statewide and local jurisdictions) are substantially inadequate to meet CAA requirements and thus is i ssuing a “SIP call” for each of those 37 states. Further, the EPA is establishing a due date for states s ubject to this SIP call

action to submit corrective SIP revisions. Finall y, this final action embodies the EPA’s updated SSM Policy as it applies to SIP provisions. The SSM Policy provides guidance to states for*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 2 of 539 compliance with CAA requirements for SIP provi sions applicable to excess emissions during

SSM events. DATES: The effective date of this final action is [INSERT DATE 30 DAYS AFTER PUBLICATION IN THE FEDERAL REGISTER] . The deadline for each affected state to submit its corrective SIP revision is November 22, 2016. ADDRESSES: The EPA has established a docket for this rulemaking under Docket ID No. EPA-HQ-OAR-2012-0322. All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Public ly available docket materials ar e available either electronically

at http://www.regulations.gov or in hard copy at the U.S. Environmental Protection Agency, EPA Docket Center, William Jefferson Clint on West Building, Room 3334, 1301 Constitution Ave., NW, Washington, D.C. The Public Readin g Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Office of Air and Radiation Docket is (202) 566-1742. FOR FURTHER INFORMATION CONTACT: Ms. Lisa Sutton, U.S. EPA, Office of Air Quality Planning and Standards, State and Lo cal Programs Group (C539-01), Research Triangle Park, NC 27711, telephone number (919) 541-3450, email address: sutton.lisa@epa.gov

. SUPPLEMENTARY INFORMATION: For information related to a specific SIP, please contact the appropriate EPA Regional

Office:*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 3 of 539 EPA Regional

Office Contact for Regional Office (person, mailing address, telephone number) State I Alison Simcox, Environmental Scientist, EPA Region 1, 5 Post Office Square, Suite 100, Boston, MA 02109- 3912, (617) 918-1684. Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont. II Paul Truchan, EPA Region 2, 290 Broadway, 25th Floor, New York, NY 10007-1866, (212) 637-3711. New Jersey, New York, Puerto Rico and Virgin Islands. III Amy Johansen, EPA Region 3, 1650 Arch Street, Philadelphia, PA 19103- 2029, (215) 814-2156. District of Columbia, Delaware, Maryland, Pennsylvania, Virginia and West Virginia. IV Joel Huey, EPA Region 4, Atlanta Federal Center, 61 Forsyth Street, SW, Atlanta, GA 30303-8960, (404) 562- 9104. Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. V Christos Panos, Air and Radiation Division (AR-18J), EPA Region 5, 77 West Jackson Boulevard, Chicago, IL 60604-3507, (312) 353-8328. Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin. VI Alan Shar (6PD-L), EPA Region 6, Fountain Place 12th Floor, Suite 1200, 1445 Ross Avenue, Dallas, TX 75202- 2733, (214) 665-6691. Arkansas, Louisiana, New Mexico, Oklahoma and Texas.

VII Lachala Kemp, EPA Region 7, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, KS 66219-9601, (913) 551-7214. Alternate contact is Ward Burns, (913) 551-7960. Iowa, Kansas, Missouri and Nebraska.

VIII Adam Clark, Air Quality Planning Unit (8P-AR) Air Program, Office of Partnership and Regulatory Assistance, EPA Region 8, 1595 Wynkoop Street, Denver, CO 80202-1129, (303) 312- 7104. Colorado, Montana, North Dakota, South Dakota, Utah and Wyoming.

IX Lisa Tharp, EPA Region 9, Air Division, 75 Hawthorne Street (AIR-8), San Francisco, CA 94105-3920, (415) 947-4142. Arizona, California, Hawaii, Nevada and the Pacific Islands.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 4 of 539 EPA Regional

Office Contact for Regional Office (person, mailing address, telephone number) State X Donna Deneen, Environmental Engineer, Office of Air, Waste and Toxics (AWT-107), EPA Region 10, 1200 Sixth Avenue, Suite 900, Seattle, WA 98101-3140, (206) 553-6706. Alaska, Idaho, Oregon, and Washington.

I. General Information A. Does this action apply to me? Entities potentially affected by this rule include states, U.S. territories, local authoritiesand eligible tribes that are currently administering, or may in the future administer, EPAapproved implementation plans (“air agencies”). 1 The EPA’s action on the petition for rulemaking filed by the Sierra Club with the EP A Administrator on June 30, 2011 (the Petition), is potentially of interest to all such entities becau se the EPA is addressing issues related to basic CAA requirements for SIPs. Through this rule making, the EPA is both clarifying and applying its interpretation of the CAA with respect to SIP provisions applicable to excess emissions during SSM events in general. In addition, the EP A is issuing findings that some of the specific SIP provisions in some of the states identifie d in the Petition and some SIP provisions in

1 The EPA respects the unique relationship betw een the U.S. government and tribal authorities and acknowledges that tribal concerns are not in terchangeable with state concerns. Under the CAA and EPA regulations, a tribe may, but is not requ ired to, apply for eligibility to have a tribal implementation plan (TIP). For convenience, the EPA refers to “air agencies” in this rulemaking collectively when meaning to refer in general to st ates, the District of Columbia, U.S. territories, local air permitting authorities and eligible tribes that are currently administering, or may in the future administer, EPA-approved implementation pl ans. This final action does not include action on any provisions in any TIP. The EPA therefore re fers to “state” or “states” rather than “air agency” or “air agencies” when meaning to refer to one, some, or all of the states at issue in this rulemaking. The EPA also uses “state” or “state s” rather than “air ag ency” or “air agencies” when quoting or paraphrasing the CAA or other document that uses that term even when the original referenced passage may have applicability to tribes as well.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 5 of 539 additional states are substantially inadequate to meet CAA requireme nts, pursuant to CAA section 110(k)(5), and thus those states (named in section II.C of this document) are directly affected by this rulemaking. For example, where a state’s existing SIP includes an affirmative defense provision that would pur port to alter the jurisdiction of the federal courts to assess monetary penalties for violations of CAA requirements, then the EPA is determining that the SIP provision is substantially inadequate because the provision is inconsistent with fundamental requirements of the CAA. This rule may also be of interest to the public and to owners and operators of industrial f acilities that are subject to emissi on limitations in SIPs, because it will require changes to certain stat e rules applicable to excess em issions during SSM events. This action embodies the EPA’s updated SSM Po licy concerning CAA requirements for SIP provisions relevant to excess emissions during SSM events. B. Where can I get a copy of this do cument and other related information? In addition to being available in the docket, an electronic copy of this notice will also be available on the World Wide Web. Following signatu re by the EPA Administrator, a copy of this notice will be posted on the EPA’s website, unde r “State Implementation Plans to Address Emissions During Startup, S hutdown and Malfunction,” at http://www.epa.gov/air/urbanair/sipstatus . The EPA’s initial proposed response to the Petition in the February 2013 proposal, the EPA’s revised proposed response to the Petition in the September 2014 supplemental notice of proposed ru lemaking (SNPR) and the EPA’s response to significant adverse comments on these documents ma y be found in the docket for this action. C. How is the preamble organized? The information presented in this preamble is organized as follows:

I. General Information*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 6 of 539 A. Does this action apply to me? B. Where can I get a copy of this document and other related information? C. How is the preamble organized? D. What is the meaning of key te rms used in this document? II. Overview of Final Rule and Its Consequences A. Summary B. What the Petitioner Requested C. To which air agencies does this rulemaking apply and why? D. What are the next steps for states that are receiving a finding of substantial inadequacy and a SIP call? E. What are potential impacts on affected states and sources? F. What happens if an affected state fails to meet the SIP submission deadline? G. What is the status of SIP provisions affected by this SIP call action in the interim period starting when the EPA promulgates the final SIP call and ending when the EPA approves the required SIP revision? III. Statutory, Regulatory and Policy Background IV. Final Action in Response to Request to Rescind the EPA Policy Interpreting the CAA to Allow Affirmative Defense Provisions A. What the Petitioner Requested B. What the EPA Proposed C. What Is Being Finalized in This Action D. Response to Comments Concerning Af firmative Defense Provisions in SIPs V. Generally Applicable Aspects of the Fina l Action in Response to Request for the EPA’s Review of Specific Existing SIP Provisions for Consistency with CAA Requirements A. What the Petitioner Requested B. What the EPA Proposed C. What Is Being Finalized In This Action D. Response to Comments Concerni ng the CAA Requirements for SIP Provisions Applicable to SSM Events VI. Final Action in Response to Request that the EPA Limit SIP Approval to the Text of State Regulations and Not Rely upon Additional Interpretive Letters from the State A. What the Petitioner Requested B. What the EPA Proposed C. What Is Being Finalized In This Action D. Response to Comments Concerning Re liance on Interpre tive Letters in SIP Revisions VII. Clarifications, Reiterations and Revisions to the EPA’s SSM Policy A. Applicability of Emission Limitations During Periods of SSM 1. What the EPA Proposed 2. What is Being Finalized in This Action 3. Response to Comments*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 7 of 539 B. Alternative Emission Limitations Duri ng Periods of Startup and Shutdown 1. What the EPA Proposed 2. What is Being Finalized in This Action 3. Response to Comments C. Director’s Discretion Provisi ons Pertaining to SSM Events 1. What the EPA Proposed 2. What is Being Finalized in This Action 3. Response to Comments D. Enforcement Discretion Provisi ons Pertaining to SSM Events 1. What the EPA Proposed 2. What is Being Finalized in This Action 3. Response to Comments E. Affirmative Defense Provisions in SI Ps During Any Period of Operation F. Relationship Between SIP Provi sions and Title V Regulations G. Intended Effect of the EPA’s Action on the Petition VIII. Legal Authority, Process and Timing for SIP Calls A. SIP Call Authority Unde r Section 110(k)(5) 1. General Statutory Authority 2. Substantial Inadequacy of Automatic Exemptions 3. Substantial Inadequacy of Di rector’s Discretion Exemptions 4. Substantial Inadequacy of Im proper Enforcement Discretion Provisions 5. Substantial Inadequacy of Affirmative Defense Provisions B. SIP Call Process Under Section 110(k)(5) C. SIP Call Timing Under Section 110(k)(5) D. Response to Comments Concerning SIP Call Authority, Process and Timing IX. What is the EPA’s final action for each of the specific SIP provisions identified in the Petition or by the EPA? A. Overview of the EPA’s Evalua tion of Specific SIP Provisions B. Affected States in EPA Region I C. Affected State in EPA Region II D. Affected States in EPA Region III E. Affected States and Local Ju risdictions in EPA Region IV F. Affected States in EPA Region V G. Affected States in EPA Region VI H. Affected States in EPA Region VII I. Affected States in EPA Region VIII J. Affected States and Local Ju risdictions in EPA Region IX K. Affected States in EPA Region X X. Implementation Aspects of EPA’s SSM SIP Policy A. Recommendations Concerning Altern ative Emission Limitations for Startup and Shutdown B. Recommendations for Compliance With Section 110(l) and Section 193 for SIP Revisions*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 8 of 539 XI. Statement of the EPA’s SSM SIP Policy as of 2015 A. Definitions B. Emission limitations in SIPs must a pply continuously during all modes of operation, without automatic or discreti onary exemptions or overly broad enforcement discretion provisions that would bar enforcement by the EPA or by other parties in federa l court through a citizen suit. C. Emission limitations in SIPs may contain components applicable to different modes of operation that ta ke different forms, and numerical emission limitations may have differi ng levels and form s for different modes of operation. D. Recommendations for Development of Alternative Emission Limitations Applicable During Startup and Shutdown E. Enforcement Discretion Provisions F. Affirmative Defense Provisions in SIPs G. Anti-Backsliding Considerations XII. Environmental Justice Consideration XIII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Pl anning and Review and Executive Order 13563: Improving Regula tion and Regulatory Review B. Paperwork Reduction Act (PRA) C. Regulatory Flexibility Act (RFA) D. Unfunded Mandates Reform Act (UMRA) E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution or Use I. National Technology Transfer and Advancement Act (NTTAA) J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations K. Determination Under Section 307(d) L. Congressional Review Act (CRA) XIV. Judicial Review XV. Statutory Authority D. What is the meaning of key te rms used in this document? For the purpose of this notice, the following definitions apply unless the context indicates

otherwise:

The terms Act or CAA or the statute mean or refer to the Clean Air Act.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 9 of 539 The term affirmative defense means, in the context of an enforcement proceeding, a response or defense put forward by a defendant, regarding which th e defendant has the burden of proof, and the merits of which are independently and objectively evaluated in a judicial or administrative proceeding. The term affirmative defense provision means more specifically a state law provision in a SIP that specifies partic ular criteria or preconditio ns that, if met, would purport to preclude a court from imposing monetary penalties or other forms of relief for violations of SIP requirements in accordan ce with CAA section 113 or CAA section 304.

The term Agency means or refers to the EPA. When not capitalized, this term refers to an agency in general and not sp ecifically to the EPA.

The terms air agency and a ir agencies mean or refer to states, the District of Columbia, U.S. territories, local air permitti ng authorities with delegated authority from the state and tribal authorities with approp riate CAA jurisdiction.

The term alternative emission limitation means, in this notice, an emission limitation in a SIP that applies to a source during some but not all periods of normal operation ( e.g. , applies only during a specifically defined m ode of operation such as start up or shutdown). An alternative emission limitation is a component of a continu ously applicable SIP emission limitation, and it may take the form of a control measure such as a design, equipment, work practice or operational standard (whether or not numerical ). This definition of the term is independent of the statutory definitions in sections 111(h)(3) and 112(h)(3). The latter definitions pertain to the conditions under which the EPA may pursuant to sections 1 11 and 112 promulgate emission limitations, or components of emission limitations, that ar e not necessarily in numeric format.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 10 of 539 The term automatic exemption means a generally applicab le provision in a SIP that would provide that if certain c onditions existed during a period of excess emissions, then those

exceedances would not be considered violations of the applicable emission limitations.

The term director’s discretion provision means, in general, a regulatory provision that authorizes a state regulatory offi cial unilaterally to grant exempti ons or variances from otherwise applicable emission limitations or control measur es, or to excuse noncom pliance with otherwise applicable emission limitations or control meas ures, which would be binding on the EPA and the public.

The term EPA refers to the United States Environmental Protection Agency.

The term emission limitation means, in the context of a SIP, a legally binding restriction on emissions from a source or source category, such as a numerical emission limitation, a

numerical emission limitation with higher or lower levels appli cable during specific modes of source operation, a specific technolog ical control measure requiremen t, a work practice standard, or a combination of these things as compone nts of a comprehensive and continuous emission limitation in a SIP provision. In this respect, the term emission limitation is defined as in section 302(k) of the CAA. By definition, an emissi on limitation can take various forms or a combination of forms, but in order to be permissi ble in a SIP it must be applicable to the source continuously, i.e. , cannot include periods during which emi ssions from the sour ce are legally or functionally exempt from regulation. Regardless of its form, a fully approvable SIP emission limitation must also meet all substantive requirements of the CAA applicable to such a SIP provision, e.g. , the statutory requirement of secti on 172(c)(1) for imposition of reasonably available control measures and reasonably available control tec hnology (RACM and RACT) on sources located in design ated nonattainment areas.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 11 of 539 The term excess emissions means the emissions of air pollutants from a source that exceed any applicable SIP emission limitation. In pa rticular, this term includes those emissions above the otherwise applicable SIP emission limitation that occur during startup, shutdown, malfunction or other modes of source operation, i.e. , emissions that would be considered violations of the applicable emission limita tion but for an impermissible automatic or discretionary exemption from such emission limitation.

The term February 2013 proposal means the notice of proposed rulemaking that the EPA signed on February 12, 2013, and published in the Federal Register on February 22, 2013. The February 2013 proposal comprises the EPA’s init ial proposed response to the Petition. The EPA subsequently issued the September 2014 SNPR that updated and revised the EPA’s February 2013 proposal with respect to affirma tive defense provisions in SIPs.

The term malfunction means a sudden and unavoidable breakdown of process or control equipment.

The term NAAQS means national ambient air quality st andard or standards. These are the national primary and secondary ambient air qua lity standards that the EPA establishes under CAA section 109 for criteria pollutants for purpose s of protecting public h ealth and welfare.

The term Petition refers to the petition for rulemaki ng titled, “Petition to Find Inadequate and Correct Several State Implementation Plans under Section 110 of the Clean Air Act Due to Startup, Shutdown, Malfunction, and/or Maintenance Provisions,” filed by the Sierra Club with the EPA Administrator on June 30, 2011.

The term Petitioner refers to the Sierra Club.

The term practically enforceable means, in the context of a SIP emission limitation, that the limitation is enforceable as a practical matter ( e.g. , contains appropriate averaging times,*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 12 of 539 compliance verification procedures and reco rdkeeping requirements). The term uses “practically” as it means “in a pract ical manner” and not as it mean s “almost” or “nearly.” In this notice, the EPA uses the term “practically en forceable” as interchange able with the term “practicably enforceable.”

The term shutdown means, generally, the cessation of operation of a source for any reason. In this notice, the EPA uses this term in the generic sense. In individual SIP provisions it may be appropriate to include a specifically tailore d definition of this term to address a particular source category for a particular purpose.

The term SIP means or refers to a State Implemen tation Plan. Generally, the SIP is the collection of state statutes and regulations approved by the EPA pursuant to CAA section 110 that together provide for implementation, mainte nance and enforcement of a national ambient air quality standard (or any revision thereof) prom ulgated under section 109 for any air pollutant in each air quality control region (or po rtion thereof) within a state. In some parts of this notice, statements about SIPs in general would also appl y to tribal implementati on plans in general even though not explicitly noted.

The term SNPR means the supplemental notice of proposed rulemaking that the EPA signed and posted on the Agency website on September 5, 2014, and published in the Federal Register on September 17, 2014. Supplementing th e February 2013 proposal, the SNPR comprises the EPA’s revised proposed response to the Petition with respect to affirmative defense provisions in SIPs.

The term SSM refers to startup, shutdown or malfunc tion at a source. It does not include periods of maintenance at such a source. An SSM event is a period of startup, shutdown or*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 13 of 539 malfunction during which there are exceedances of the applicable emission limitations and thus

excess emissions.

The term SSM Policy refers to the cumulative guidance that the EPA has issued as of any given date concerning its interpre tation of CAA requirements with respect to treatment of excess emissions during periods of startup, shutdown and malfunction at a source in SIP provisions. The most comprehensive statement of the EPA’s SSM Po licy prior to this final action is embodied in a 1999 guidance document discussed in more detail in this final action. Th at specific guidance

document is referred to as the 1999 SSM Guidance. The final action described in this notice embodies the EPA’s updated SSM Policy for SIP provisions relevant to excess emissions during SSM events. In section XI of this notice, the EPA provides a statement of the Agency’s SSM SIP Policy as of 2015.

The term startup means, generally, the setting in ope ration of a source for any reason. In this notice, the EPA uses this term in the generi c sense. In an individua l SIP provision it may be appropriate to include a specifically tailored definition of this term to address a particular source category for a particular purpose. II. Overview of Final Rule and Its Consequences A. Summary The EPA is in this notice taking final acti on on a petition for rulemaking that the Sierra

Club filed with the EPA Administrator on June 30, 2011. The Petition concerns how air agency rules in EPA-approved SIPs treat excess emissions during periods of SSM of industrial process or emission control equipment. Many of these rules were added to SIPs and approved by the EPA in the years shortly after the 1970 amendm ents to the CAA, which for the first time provided for the system of clean air plans that were to be prep ared by air agencies and approved*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 14 of 539 by the EPA. At that time, it was widely believed that emission limitations set at levels representing good control of emi ssions during periods of so-calle d “normal” operation (which, until no later than 1982, was meant by the EPA to re fer to periods of operation other than during startup, shutdown, maintenance or malfunction) could in some cases not be met with the same emission control strategies during periods of startup, shutdown, maintenance or malfunction. 2 Accordingly, it was common for state plans to in clude provisions for special, more lenient treatment of excess emissions during such pe riods of startup, shutdown, maintenance or malfunction. Many of these provisions took the form of absolute or condit ional statements that excess emissions from a source, when they occur during startup, s hutdown, malfunction or

otherwise outside of the source’s so-called “nor mal” operations, were not to be considered violations of the air agency rules; i.e., these emissions were considered exempt from legal

control. Excess emission provisions for startup, shut down, maintenance and malfunctions were often included as part of the original SIPs that the EPA approved in 1971 and 1972. In the early 1970s, because the EPA was inundated with proposed SIPs and had limited experience in processing them, not enough attention was given to the adequacy, enforceability and consistency of these provisions. Consequently, many SIPs we re approved with broa d and loosely defined provisions to control excess emissions. St arting in 1977, however, the EPA discerned and

2 Since at least 1982, however, the EPA has used the term “normal” in the SSM Policy in the ordinary sense of the word to distinguish betw een predictable modes of source operation such as startup and shutdown and genuine “malfunctions ,” which are by definition supposed to be unpredictable and unforeseen events and which could not have been precluded by proper source design, maintenance and operation. See, e.g. , 1982 SIP Guidance, Attachment at 2, in which the EPA states, “[s]tart-up and shut down of process equipment are pa rt of the normal operation of a source and should be accounted for in the design and implementation of the operating procedure for the process and control equipment.”*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 15 of 539 articulated to air agencies that exemptions for excess emissions during such periods were inconsistent with certain requirements of the CA A. The EPA also realized that such provisions allow opportunities for sources to emit pollutants during such periods repeatedly and in quantities that could cause unacceptable air pol lution in nearby communities with no legal pathway within the existing EPA-approved SIP for ai r agencies, the EPA, the public or the courts to require the sources to make reasonable efforts to reduce these emissions. The EPA has been more careful after 1977 not to give new approval to SIP provisions that are inconsistent with the CAA and has issued several guidance memoranda to advise states on how to avoid impermissible provisions 3 as they expand and revise their SIPs. The EPA has also found several SIPs to be deficient because of problematic SSM provision s and called upon the affected states to amend their SIPs. However, in light of the other high- priority work facing both air agencies and the EPA, the EPA had not until the February 2013 propos al initiated a broader effort to require a larger number of states to remove impermissible provisions from their SIPs and to adopt other, approvable approaches for addressing excess emi ssions when appropriate. Public interest groups, including the Petitioner, have sued the EPA in several state- specific cases concerning SIP issues, and they have been urging the EPA to give grea ter priority generally to addressing the issue of

3 The term “impermissible provision” as used thro ughout this notice is generally intended to refer to a SIP provision that the EPA now believes to be inconsistent with requirements of the CAA. As described later in this notice ( see section VIII.A), the EPA is proposing to find a SIP “substantially inadequate” to meet CAA require ments where the EPA determines that the SIP includes an impermissible provision.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 16 of 539 SSM provisions in SIPs. In one of these SIP cases , the EPA entered into a settlement agreement requiring it to respond to the Petition from the Si erra Club. A copy of the settlement agreement is provided in the docket for this rulemaking. 4 The EPA emphasizes that there are other appro aches that would be consistent with CAA requirements for SIP provisions th at states can use to addre ss emissions during SSM events. While automatic exemptions and director’s discretion exemptions from otherwise applicable

emission limitations are not consistent with the CAA, SIPs may include criteria and procedures for the use of enforcement discretion by air agen cy personnel. Similarly, SIPs may, rather than exempt emissions during SSM events, include em ission limitations that su bject those emissions

to alternative numerical limitations or other tech nological control require ments or work practice requirements during startup and shutdown events, so long as those components of the emission limitations meet applicable CAA requirements. In this action, the EPA is again articulating its interpretation of the statute in the SSM Policy that reflects these principl es and is applying this interpretation to issue a SIP call for specific existi ng provisions in the SIPs of 37 states. In some cases, the EPA’s review involved a close reading of the provision in the SIP and its context to discern whether it was in fact an exemption, a statement regarding exercise of enforcement discretion by the air agency or an affirmative de fense. Each state will ultimately decide how to address the SIP inadequacies identified by th e EPA in this final action. The EPA acknowledges that for some states, this rulemaking entailed the EPA’s evaluation of SIP provisions that may

4 See Settlement Agreement executed November 30, 2011, in the rulemaking docket at EPA-HQOAR-2012-0322-0039, to address a lawsuit filed by Si erra Club and WildEarth Guardians in the United States District Court for the Northern District of California: Sierra Club et al. v. Jackson , No. 3:10-cv-04060-CRB (N.D. Cal.). A subsequent Modification to the Settlement Agreement specifies a deadline of May 22, 2015, for signature on the final action to re spond to the Petition.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 17 of 539 date back several decades. Aware of that fact , the EPA is committed to working closely with each of the affected states to develop approvabl e SIP submissions consistent with the guidance articulated in the updated SSM Policy in this fina l action. Section IX of th is notice presents the EPA’s analysis of each specific SIP provision at issue in this action. The EPA’s review also involved interpretation of severa l relevant sections of the CA A. While the EPA has already developed and has been implementing the SSM Polic y that is based on its interpretation of the CAA, this action provides the EPA an opportunity to update the SSM Policy and its basis in the CAA through notice and comment. To that end, secti on XI of this notice c ontains a restatement of the EPA’s SSM Policy as revised and updated for 2015. Also, supplementary to the February 2013 proposal, the EPA provided a background me morandum to summarize the legal and

administrative context for this action which is available in the docket for this rulemaking. 5 This

final notice is intended to clarif y how states can resolve the identif ied deficiencies in their SIPs as well as to provide all air agencies guidance as they de velop SIPs in the future. In summary, the EPA is agreeing with the Petitioner that many of the identified SIP provisions are not permissible und er the CAA. However, in some cases the EPA is instead concluding that an identified SI P provision is actually consistent with CAA requirements. In

5 See Memorandum, “Statutory, Regulatory, and Policy Context for this Rulemaking,” February 4, 2013, in the rulemaking docke t at EPA-HQ-OAR-2012-0322-0029. The EPA notes that with respect to the legal basis for affirma tive defense provisions in SIPs, the Agency has revised its views as a result of a court decision, as explained in more detail in the SNPR. Thus, the portions of that background memorandum that concern affirmative defense provisions are no longer germane to this action.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 18 of 539 addition, the EPA notes, this final action does not include a final finding of substantial inadequacy and SIP call for speci fic SIP provisions included in the February 2013 proposal for several air agencies. The state of Kentucky has already submitted, and the EPA has approved, SIP revisions that corrected the problematic provisions applicable in the Jefferson County (Louisville, Kentucky) area. 6 The state of Wyoming has already submitted, and the EPA has approved, SIP revisions that corrected the pr oblematic provisions a pplicable statewide. 7 The state of North Dakota has likewise already s ubmitted, and the EPA has approved, SIP revisions that corrected a portion of the problem atic provisions applicable statewide. 8 Of the 41 states for which SIP provisions we re identified by the Petition or identified independently by the Agency in the SNPR, the EPA is issuing a SIP call for 37 states. The EPA

is aware of other SSM-related SIP provisions that were not identified in the Petition but that may be inconsistent with the EPA’s interpretation of the CAA. For SIP provisions that have potential defects other than an impermissible affirma tive defense, the EPA elected to focus on the provisions specifically raised in the Petition. The EPA may addre ss these other provisions later in a separate notice-and-comment action. States are encouraged to consider the updated SSM Policy laid out in this final action in review ing their own SIP provisi ons. With respect to affirmative defense provisions, however, the EPA elected to identify so me additional provisions

not included in the Petition because that is necessa ry to minimize potential confusion relating to

6 See “Approval and Promulgation of Implementation Plans; Kentucky; Appr oval of Revisions to the Jefferson County Portion of the Kentucky SI P; Emissions During Startups, Shutdowns, and Malfunctions,” 79 FR 33101 (June 10, 2014). 7 See “Approval and Promulgation of Implementati on Plans; Wyoming; Revisions to the Air Quality Standards and Regulations ,” 79 FR 62859 (October 21, 2014). 8 See “Approval and Promulgation of Implementation Plans; North Dakota; Revisions to the Air Pollution Control Rules,” 79 FR 63045 (October 21, 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 19 of 539 other recent rulemakings and court decisions th at pertain generally to affirmative defense provisions. Therefore, in order to give update d and comprehensive guidance with respect to affirmative defense provisions, the EPA has al so addressed additional affirmative defense provisions in 17 states in the SN PR and in this final action. B. What the Petitioner Requested The Petition includes three interrelated reque sts concerning the treatment in SIPs of excess emissions by sources during periods of SSM. First, the Petitioner argued that SIP provisions providing an affirmative defense for monetary penalties for excess emissions in judici al proceedings are contra ry to the CAA. Thus,

the Petitioner advocated that the EPA should resc ind its interpretation of the CAA expressed in the SSM Policy that allows appropriately draw n affirmative defense pr ovisions in SIPs. The

Petitioner made no distinction be tween affirmative defenses for excess emissions related to malfunction, startup or shutdown. Fu rther, the Petitioner requested that the EPA issue a SIP call requiring states to eliminate all such affirma tive defense provisions in existing SIPs. As explained later in this final notice, the EPA ha s decided to fully grant this request. Although the EPA initially proposed to grant in part and to deny in part th is request in the February 2013 proposal, a subsequent court de cision concerning the legal basis for affirmative defense provisions under the CAA caused th e Agency to reexamine this question. As a result, the EPA issued the SNPR to present its revised interpretati on of the CAA with respect to this issue and to propose action on the Petition and on specific existing affirmative de fense provisions in the SIPs of 17 states consistent with the reasoning of th at court decision. In this final action, the EPA is revising its SSM Policy with respect to affirm ative defenses for violations due to excess emissions that occur during st artup, shutdown, malfunction or ot her modes of source operation.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 20 of 539 The EPA believes that SIP provisions that function to alter the jurisdiction of the federal courts

under CAA section 113 and secti on 304 to determine liability and to impose remedies are

inconsistent with fundamental le gal requirements of the CAA, es pecially with respect to the enforcement regime explicitly created by statute. Second, the Petitioner argued th at many existing SIPs contai n impermissible provisions, including automatic exemptions from appli cable emission limitations during SSM events, director’s discretion provisions that in particular provide discretionary exemptions from applicable emission limitations during SSM events, enforcement discretion provisions that appear to bar enforcement by the EPA or citizen s for such excess emissions and inappropriate affirmative defense provisions th at are not consistent with the CAA or with the recommendations in the EPA’s SSM Policy. The Petitioner identified specific provisions in SIPs of 39 states that it considered inconsistent with the CAA and explaine d the basis for its objections to the provisions. As explained later in this fina l notice, the EPA agrees with the Petitioner that some of these existing SIP provisions are legally impermissible and thus finds such provisions “substantially inadequate” 9 to meet CAA requirements. Among the reas ons for the EPA’s action is to eliminate SIP provisions that interfere with enfor cement in a manner prohibited by the CAA. Simultaneously, where the EPA agrees with the Pe titioner, the EPA is issuing a SIP call that

directs the affected state to revise its SIP accordingly. For the remainder of the identified provisions, however, the EPA disagr ees with the contentions of th e Petitioner and is thus denying the Petition with respect to those provisions and taking no further action. The EPA’s action issuing the SIP calls on this portion of the Petitio n will assure that these SIPs comply with the

9 The term “substantially inadequate” is used in the CAA and is discussed in detail in section VIII.A of this notice.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 21 of 539 fundamental requirements of the CAA with respec t to the treatment of excess emissions during periods of SSM. The majority of the state-specific provisions aff ected by this SIP call action are inconsistent with the EPA’s longstanding inte rpretation of the CAA through multiple iterations of its SSM Policy. With respect to SIP provisi ons that include an affirmative defense for violations of SIP requirements, however, the EP A has revised its prior interpretation of the

statute that would have allowe d such provisions under certain very limited conditions. Based upon an evaluation of the relevant statutory provisi ons in light of more recent court decisions, the EPA is issuing a SIP call to address existing affi rmative defense provisions that would operate to alter or eliminate the jurisdiction of courts to assess liability and impose remedies and that would thereby contradict explicit pr ovisions of the CAA relati ng to judicial authority. Third, the Petitioner argued that the EPA s hould not rely on interpretive letters from states to resolve any ambiguity, or perceived ambiguity, in state regul atory provisions in SIP

submissions. The Petitioner reasoned that all regulatory provisions should be clear and unambiguous on their face and that any reliance on interpretive letters to alleviate facial ambiguity in SIP provisions can lead to late r problems with compliance and enforcement. Extrapolating from several instances in which the basis for the origin al approval of a SIP provision related to excess emissi ons during SSM events was argua bly not clear, the Petitioner

contended that the EPA should ne ver use interpretive le tters to resolve such ambiguities. As explained later in this propos al, the EPA acknowledges the conc ern of the Petitioner that provisions in SIPs should be clear and unambiguous. However, the EPA does not agree with the Petitioner that reliance on interpretive letters in a rulemaking context is never appropriate. Without the ability to rely on a state’s interp retive letter that can in a timely way clarify perceived ambiguity in a provision in a SIP s ubmission, however small that ambiguity may be,*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 22 of 539 the EPA may have no recourse other than to disapprove the state’s SIP submission. Thus, the EPA is denying the request that actions on SIP submissions never rely on interpretive letters. Instead, the EPA explains how proper documentation of reliance on interpretive letters in noticeand-comment rulemaking nevertheless addresses th e practical concerns of the Petitioner. C. To which air agencies does this rulemaking apply and why? In general, the final rule may be of intere st to all air agencies because the EPA is clarifying, restating and revisi ng its longstanding SSM Policy w ith respect to what the CAA requires concerning SIP provision s relevant to excess emissions during periods of SSM. For example, the EPA is granting the Petitioner’s requ est that the EPA rescind its prior interpretation of the CAA that, as stated in prior guidance in the SSM Policy, allowed appropriately drawn affirmative defense provisions applicable to malf unctions. The EPA is also reiterating, clarifying or revising its prior guidance with respect to several other issues re lated to SIP provisions applicable to SSM events in order to ensure that future SIP submissions, not limited to those that affected states make in response to this action, are fully consistent with the CAA. For example, the EPA is reiterating and clar ifying its prior guidance concer ning how states may elect to replace existing exemptions for excess emissions during SSM events wi th properly developed alternative emission limitations that apply to th e affected sources duri ng startup, shutdown or other normal modes of source operation ( i.e. , that apply to excess emissions during those normal modes of operation as opposed to during malfunctions). This ac tion also addresses the use of interpretive letters for purposes of resolvi ng an actual or perceived ambiguity in a SIP submission during the EPA’s evaluation of the SIP revision at issue. In addition, this final action is directly relevant to the states with SI P provisions relevant

to excess emissions that the EPA has determined are inconsistent with CAA requirements or with*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 23 of 539 the EPA’s interpretation of those requirements in the SSM Policy. In this final action, the EPA is either granting or denying the Petition with respec t to the specific existing SIP provisions in each of 39 states identified by the Petitioner as allegedly inconsistent with the CAA. The 39 states (for which the Petitioner identified SIP provisions appli cable in 46 statewide and local jurisdictions and no tribal areas) 10 are listed in table 1, “List of States with SIP Provisions for Which the EPA Either Grants or Denies the Petition, in Whole or in Part.” After evalua ting the Petition, the EPA is granting the petition with resp ect to one or more provisions in 35 of the 39 states listed, and

these are the states for which the action on the Pe tition, according to table 1, is either “Grant” or “Partially grant, partially deny.” Conversely, the EPA is denying th e petition with respect to all provisions that the Petitioner id entified in 4 of the 39 states, and these (Idaho, Nebraska, Oregon and Wyoming) are the states for which the fina l action on the Petition, a ccording to table 1, is “Deny.” Table 1. List of States with SIP Provisions fo r Which the EPA Either Grants or Denies the Petition, in Whole or in Part

EPA Region State Final action on petition I Maine ......................................................... Grant New Hampshire ......................................... Partially grant, partially deny Rhode Island .............................................. Grant II New Jersey ................................................. Partially grant, partially deny III Delaware .................................................... Grant District of Columbia .................................. Partially grant, partially deny Virginia ...................................................... Grant West Virginia ............................................. Grant

10 The state has the primary re sponsibility to implement SIP obligations, pursuant to CAA section 107(a). However, as CAA section 110(a)(2 )(E) allows, a state may authorize and rely on a local or regional government, agency or instrume ntality to carry out the SIP or a portion of the SIP within its jurisdiction. As a result, some of the SIP provisions at i ssue in this rulemaking apply to specific portions of a state. Thus, in certain states, submi ssion of a corrective SIP revision may involve rulemaking in more than one jurisdiction.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 24 of 539 IV Alabama ..................................................... Grant Florida ........................................................ Grant Georgia ...................................................... Grant Kentucky .................................................... Partially grant, partially deny Mississippi ................................................. Grant North Carolina ........................................... Grant South Carolina ........................................... Partially grant, partially deny Tennessee ................................................... Grant V Illinois ........................................................ Grant Indiana ....................................................... Grant Michigan .................................................... Grant Minnesota .................................................. Grant Ohio ........................................................... Partially grant, partially deny VI Arkansas .................................................... Grant Louisiana ................................................... Grant New Mexico .............................................. Grant Oklahoma ................................................... Grant VII Iowa ........................................................... Partially grant, partially deny Kansas ........................................................ Grant Missouri ..................................................... Partially grant, partially deny Nebraska .................................................... Deny VIII Colorado .................................................... Grant Montana ..................................................... Grant North Dakota ............................................. Partially grant, partially deny South Dakota ............................................. Grant Wyoming ................................................... Deny IX Arizona ...................................................... Partially grant, partially deny X Alaska ........................................................ Grant Idaho .......................................................... Deny Oregon ....................................................... Deny Washington ................................................ Grant

For each state for which the final action on the Petition is either “G rant” or “Partially grant, partially deny,” the EPA fi nds that certain specific provis ions in each state’s SIP are substantially inadequate to m eet CAA requirements for the r eason that these provisions are inconsistent with the CAA with regard to how the state treats excess emissions from sources during periods of SSM. With respect to the affi rmative defense provisions identified in the Petition, the EPA finds that they improperly impi nge upon the statutory juri sdiction of the courts*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 25 of 539 to determine liability and impose remedies for violations of SIP emission limitations. The EPA believes that certain specific provisions in th ese SIPs fail to meet fundamental statutory requirements intended to attain and maintain the NAAQS, protect prevention of significant deterioration (PSD) increments and improve vi sibility. Equally importantly, the EPA believes that the same provisions may undermine the abilit y of states, the EPA and the public to enforce

emission limitations in the SIP that have been re lied upon to ensure attainme nt or maintenance of the NAAQS or to meet other CAA requirements.

For each state for which the final action on the Petition is either “G rant” or “Partially grant, partially deny,” the EPA is also in this final action calling for a SIP revision as necessary to correct the identified deficient provisions. Th e SIP revisions that the states are directed to make will rectify a number of different types of defects in existing SIPs, including automatic exemptions from emission limitations, imperm issible director’s di scretion provisions, enforcement discretion provisions that have the effect of ba rring enforcement by the EPA or through a citizen suit and affirmative defense pr ovisions that are in consistent with CAA requirements. A corrective SIP revision addressi ng automatic or impermissible discretionary exemptions will ensure that excess emissions during periods of SSM are treated in accordance with CAA requirements. Similarly, a corrective SIP revision addressing ambiguity in who may enforce against violations of these emission limit ations will also ensure that CAA requirements to provide for enforcement are met. A SIP revision to remove affirmative defense provisions will assure that the SIP provision doe s not purport to alter or eliminate the jurisdiction of federal courts to assess liability or to impose remedies c onsistent with the statutory authority provided in CAA section 113 and section 304. The particular provisions for which the EPA is requiring SIP

revisions are summarized in secti on IX of this notice. Many of these provisions were added to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 26 of 539 the respective SIPs many years a go and have not been the subject of action by the state or the

EPA since. For each of the states for which the EPA is denying or is partially denying the Petition, the EPA finds that the particular provisions id entified by the Petitione r are not substantially inadequate to meet the requirements pursuant to CAA section 110(k)(5), because the provisions: (i) are, as they were described in the Petition an d as they appear in the existing SIP, consistent with the requirements of the CAA; or (ii) are, as they appear in the exis ting SIP after having been revised subsequent to the date of the Petition, consistent with th e requirements of the CAA; or (iii) have, subsequent to the date of the Petition, been removed from the SIP. Thus, in this final rule, the EPA is taking no action to issue a SIP call with respect to those states for those particular SIP provisions. In addition to evaluating specific SIP provisi ons identified in the Petition, the EPA has independently evaluated additional affirmative de fense provisions in the SIPs of six states (applicable in nine statewide and local jurisdictions). 11 As explained in the SNPR, the EPA determined that this approach was necessary in order to take into consideration recent judicial decisions concerning affirmative defense provisions and CAA requirements. As the result of this

11 The six states in which the EPA independently evaluated affirmative defense provisions are: California; South Carolina, Ne w Mexico, Texas, Washington and West Virginia. The EPA evaluated the New Mexico SIP with respect to provisions applicab le to the state and Albuquerque-Bernalillo County. The EPA evalua ted the Washington SIP with respect to provisions applicable to the state, the Energy Facility Site Evaluation Council and the Southwest Clean Air Agency.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 27 of 539 evaluation, the EPA finds that specific affirmative defense provisions in 17 states (applicable in 23 statewide and local jurisdicti ons) are substantially inadequate to meet CAA requirements for the reason that these provisions impinge upon the statutory jurisdic tion of the federal courts to determine liability and impose remedies fo r violations of SIP emission limitations. 12 By improperly impinging upon the jurisdiction of th e federal courts, the EPA believes, these provisions fail to meet fundamental statutory requirements intende d to attain and maintain the NAAQS, protect PSD increments and improve vi sibility. As with the affirmative defense provisions identified in the Petition, the EPA be lieves that these provisions may undermine the ability of states, the EPA and the public to enforc e emission limitations in the SIP that have been relied upon to ensure attainment or mainte nance of the NAAQS or to meet other CAA requirements. In this final action, the EPA is issuing a SI P call to each of 37 states (for provisions applicable in 46 statewide and local jurisdictions) with respect to these provisions. The 37 states are listed in table 2, “List of All States with SIP Provisions Subject to SIP Call.” The EPA emphasizes that this SIP call action pertains to the specific SIP provisions identified and

12 The 17 states for which the EPA finds that specific affirmative defense provisions are substantially inadequate to m eet CAA requirements are counted as follows: The EPA evaluated affirmative defense provisions identified by the Petitioner for 14 states: Alaska; Arizona; Arkansas; Colorado; District of Columbia; Geor gia; Illinois; Indiana; Kentucky; Michigan; Mississippi; New Mexico; Virgin ia; and Washington. The EPA evaluated affirmative defense provisions that it independently identified among two states identified by the Petitioner: South Carolina; and West Virginia. Further, the EPA independently identified and evaluated affirmative defense provisions in two states that were not included in the Petition: California; and Texas. In the final action, the EPA is finding one or more affirmative defense provisions to be substantially inadequate in all but one of the 18 states for whic h the EPA evaluated affirmative defense provisions; for one state, Kentucky, the affirmative defense provision, which was applicable in Jefferson County, was corrected prior to the EPA’s issuing its SNPR.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 28 of 539 discussed in section IX of this document. The actions required of individual states in response to

this SIP call action are discussed in more detail in section IX of this action. Table 2. List of All States With SIP Provisions Subject to SIP Call

EPA Region State Area I Maine ......................................................... State New Hampshire .......................................... State Rhode Island .............................................. State II New Jersey ................................................. State III Delaware .................................................... State

District of Columbia ................................... State Virginia ...................................................... State West Virginia ............................................. State IV Alabama ..................................................... State

Florida ........................................................ State Georgia ....................................................... State Kentucky .................................................... State Mississippi ................................................. State North Carolina ............................................ State and Forsyth County South Carolina ............................................ State Tennessee ................................................... State, Knox County and Shelby County V Illinois ........................................................ State

Indiana ........................................................ State Michigan .................................................... State Minnesota ................................................... State Ohio ............................................................ State VI Arkansas ..................................................... State

Louisiana .................................................... StateNew Mexico ............................................... State and AlbuquerqueBernalillo County Oklahoma ................................................... State Texas .......................................................... State VII Iowa ............................................................ State

Kansas ........................................................ State Missouri ..................................................... State VIII Colorado ..................................................... State Montana ..................................................... State North Dakota .............................................. State South Dakota .............................................. State IX Arizona ....................................................... State and Maricopa County*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 29 of 539 California ................................................... Eastern Kern APCD, Imperial County APCD and San Joaquin Valley Unified APCD X Alaska ......................................................... State Washington ................................................ State, Energy Facility Site Evaluation Council and Southwest Clean Air Agency

D. What are the next steps fo r states that are receiving a finding of substantial inadequacy

and a SIP call? The EPA is finalizing a finding of substantia l inadequacy and issuing a SIP call for the states listed in table 2 ( see section II.C of this document). The EPA is also establishing a deadline by which these states must make a SIP s ubmission to rectify the specifically identified deficiencies in their respective SIPs. Pursuant to CAA section 110(k)(5), the EPA has authority to set a SIP submission deadline that is up to 18 months from the date of the final finding of substantial inadequacy. After cons idering comment on this issue, the EPA is in this final rule establishing a deadline of November 22, 2016, by whic h each affected state is to respond to the

SIP call. The deadline falls 18 months from the da te of signature and dissemination of this final finding of substantial inadequacy. Thereafter, the EPA will review the adequacy of that new SIP submission in accordance with the CAA requirements of sections 110(a), 110(k)(3), 110(l) and 193, including the EPA’s interpreta tion of the CAA reflected in the SSM Policy as clarified and updated through this rulemaking. The EPA believes that states should be provided the maximum time allowable under CAA section 110(k)(5) in order to have sufficient time to make appropriate SIP revisions following their own SIP development process. Such a schedule will allow for the necessary SIP development process to correct the deficiencies yet still achieve the necessary SIP*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 30 of 539 improvements as expeditiously as practicable consistent with the maximum time allowed by

statute. E. What are potential impacts on affected states and sources? The issuance of a SIP call requires an affected state to take action to revise its SIP. That action by the state may, in turn, aff ect sources as described later in this notice. The states that are receiving a SIP call in this final action will in ge neral have options as to exactly how to revise their SIPs. In response to a SIP call, a state reta ins broad discretion concer ning how to revise its SIP, so long as that revision is consistent with the requirements of the CAA. Some provisions that are affected by this SIP call, for exampl e an automatic exemption provision, have to be removed entirely and an affected source could no longer depend on the exemption to avoid all liability for excess emissions during SSM even ts. Some other provisi ons, for example a problematic enforcement discreti on provision, could either be rem oved entirely from the SIP or retained if revised appropriatel y to apply only to state enforcem ent personnel, in accordance with the EPA’s interpretation of the CAA as describe d in the EPA’s SSM Policy. The EPA notes that if a state removes a SIP provision that pertains to the state’s ex ercise of enforcement discretion, this removal would not affect the ability of the state to apply its traditional enforcement discretion in its enforcement program. It would merely make the exercise of such discretion case-by-case in nature, as is the normal form of such discretion. In addition, affected states may choose to consider reassessin g particular emission limitations, for example to determine whether those emission limitations can be revised such that well-managed emissions during planned operations such as startup and shutdown would not exceed the revised emission limitation, while still protecting air quality and meeting other applicable CAA requirements. Such a revision of an emission limitation will need to be*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 31 of 539 submitted as a SIP revision for the EPA approval if the existing limitation to be changed is already included in the SIP or if the existing SIP relies on the partic ular existing emission limitation to meet a CAA requirement. In such in stances, the EPA would re view the SIP revision for consistency with all applicab le CAA requirements. A state that chooses to revise particular emission limitations, in addition to removing or revising the aspect of the existing SIP provision that is inconsistent with CAA requirements, could include those revisions in the same SIP submission that addresses the SSM provisions iden tified in the SIP call, or it could submit them separately. The implications for a regulated source in a gi ven state, in terms of whether and how it would potentially have to change its equipment or practices in order to operate with emissions that comply with the revised SIP, will depend on the nature and frequency of the source’s SSM

events and how the state has chosen to revise the SIP to address exce ss emissions during SSM events. The EPA recognizes that af ter all the responsive SIP revisi ons are in place and are being implemented by the states, some sources may need to take steps to control emissions better so as to comply with emission limitations continuously , as required by the CAA, or to increase durability of components and monitoring systems to detect and manage malfunctions promptly. The EPA Regional Offices will work with stat es to help them understand their options and the potential consequences for sources as the states prepare their SIP revi sions in response to

this SIP call. F. What happens if an affected state fails to meet the SIP submission deadline? If, in the future, the EPA finds that a state th at is subject to this SIP call action has failed to submit a complete SIP revision as required, or the EPA disapproves such a SIP revision, then the finding or disapproval woul d trigger an obligation for the EPA to impose a federal*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 32 of 539 implementation plan (FIP) within 24 months af ter that date. That FIP obligation would be discharged without promulgati on of a FIP only if the state makes and the EPA approves the

called-for SIP submission. In additio n, if a state fails to make the re quired SIP revision, or if the EPA disapproves the required SIP revision, then either event can also trigger mandatory 18-

month and 24-month sanctions cl ocks under CAA section 179. The two sanctions that apply under CAA section 179(b) are the 2-to-1 emission offset requirement for all new and modified major sources subject to the nonattainment ne w source review program and restrictions on highway funding. More details conc erning the timing and process of the SIP call, and potential consequences of the SIP call, are provid ed in section VIII of this notice. G. What is the status of SIP provisions affected by this SIP call action in the interim period starting when the EPA promulgates the final SIP call and ending when the EPA approves the required SIP revision?

When the EPA issues a final SIP call to a state, that action alone does not cause any automatic change in the legal status of the exis ting affected provision(s) in the SIP. During the time that the state takes to develop a SIP revision in response to the SIP call and the time that the

EPA takes to evaluate and act upon the resulting SIP submission fr om the state pursuant to CAA section 110(k), the existing affected SIP provisi on(s) will remain in place. The EPA notes, however, that the state regulatory revisions th at the state has adopted and submitted for SIP approval will most likely be already in effect at the state level during the pendency of the EPA’s evaluation of and action upon the new SIP submission. The EPA recognizes that in the interim peri od, there may continue to be instances of excess emissions that adversely affect attainment and maintenance of the NAAQS, interfere with PSD increments, interfere with vi sibility and cause other adverse consequences as a result of the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 33 of 539 impermissible provisions. The EPA is particular ly concerned about the potential for serious adverse consequences for public health in this interim period during which states, the EPA and sources make necessary adjustments to rectify de ficient SIP provisions and take steps to improve source compliance. However, given the need to re solve these longstanding SIP deficiencies in a careful and comprehensive fashion, the EPA believ es that providing sufficient time consistent with statutory constraints for thes e corrections to occur will ultimat ely be the best course to meet the ultimate goal of eliminating the inappropria te SIP provisions and replacing them with provisions consistent with CAA requirements. III. Statutory, Regulatory and Policy Background

The Petition raised issues related to exce ss emissions from sources during periods of SSM, and to the correct approach to these excess emissions in SIPs. In this context, “excess

emissions” are air emissions that exceed the othe rwise applicable emission limitations in a SIP, i.e., emissions that would be violations of such emission limitations. The question of how to address excess emissions correctly during SSM ev ents has posed a challenge since the inception of the SIP program in the 1970s. The primary objec tive of state and federal regulators is to ensure that sources of emissions are subject to appropriate emission controls as necessary in order to attain and maintain the NAAQS, protect PSD increments, improve visibility and meet other statutory requirements. Gene rally, this is achiev ed through enforceabl e emission limitations on sources that apply, as requi red by the CAA, continuously. Several key statutory provisions of the CAA are relevant to the EPA’s evaluation of the Petition. These provisions relate generally to the basic legal requirements for the content of SIPs, the authority and responsibility of air agencies to develop such SIPs and the EPA’s authority and responsibility to review and approve SIP submissi ons in the first instance , as well as the EPA’s*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 34 of 539 authority to require improvements to a previously approved SIP if the EPA later determines that to be necessary for a SIP to meet CAA requirement s. In addition, the Petition raised issues that pertain to enforcement of provisions in a SIP. Th e enforcement issues relate generally to what

constitutes a violation of an emission limitation in a SIP, who may seek to enforce against a source for that violation, and whet her the violator should be subject to monetary penalties as well as other forms of judicial relief for that violation. The EPA has a longstanding interpretation of the CAA with respect to the treatment of excess emissions during periods of SSM in SI Ps. This statutory interpretation has been expressed, reiterated and elabor ated upon in a series of guidance documents issued in 1982, 1983, 1999 and 2001. In addition, the EPA has app lied this interpretation in individual rulemaking actions in which the EPA: (i) approved SIP submissions that were consistent with the EPA’s interpretation; 13 (ii) disapproved SIP submissions th at were not consistent with this interpretation; 14 (iii) itself promulgated re gulations in FIPs that we re consistent with this

13 See “Approval and Promulgation of Implementa tion Plans; Texas; Excess Emissions During Startup, Shutdown, Maintenance, and Malf unction Activities,” 75 FR 68989 (November 10, 2010). 14 See “Approval and Promulgation of State Im plementation Plans; Michigan,” 63 FR 8573 (February 20, 1998).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 35 of 539 interpretation; 15 or (iv) issued a SIP ca ll requiring a state to revi se an impermissible SIP provision. 16 The EPA’s SSM Policy is a policy statement a nd thus constitutes guidance. As guidance, the SSM Policy does not bind stat es, the EPA or other parties, but it does reflect the EPA’s interpretation of the statutor y requirements of the CAA. The EPA’s evaluation of any SIP provision, whether prospectively in the case of a new provision in a SIP submission or retrospectively in the case of a previously approved SIP s ubmission, must be conducted through a notice-and-comment rulemaking in which the EP A will determine whether or not a given SIP provision is consistent with the requiremen ts of the CAA and applicable regulations. 17

The Petition raised issues related to exce ss emissions from sources during periods of SSM, and the consequences of failing to address these emissions correctly in SIPs. In broad terms, the Petitioner expressed concerns that th e exemptions for excess emissions and the other types of alleged deficiencies in existing SIP provisions “underm ine the emission limits in SIPs

and threaten states’ ab ilities to achieve and maintain the NAAQS, thereby threatening public health and public welfare, which includes agri culture, historic proper ties and natural areas.” 18 The Petitioner asserted that such exemptions for SSM events are “loopholes” that can allow dramatically higher amounts of emissions and th at these emissions “can swamp the amount of pollutants emitted at other times.” 19 In addition, the Petitioner ar gued that these automatic and

15 See “Federal Implementation Plan for the Billings/Laurel, MT, Sulfur Dioxide Area,” 73 FR 21418 (April 21, 2008). 16 See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision,” 76 FR 21639 (April 18, 2011). 17 See generally Catawba County, North Carolina et al. v. EPA , 571 F.3d 20, 33–35 (D.C. Cir. 2009) (upholding the EPA’s process for developing and applying its guidan ce to designations). 18 Petition at 2. 19 Petition at 12.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 36 of 539 discretionary exemptions, as well as other SIP provisions that interfer e with the enforcement structure of the CAA, undermin e the objectives of the CAA. The EPA notes that the types of SIP deficienci es identified in the Petition are not legal technicalities. Compliance with the applicable requi rements is intended to achieve the air quality protection and improvement purposes and objectiv es of the CAA. The EPA believes that the results of automatic and discretionary exemptions in SIP provisions, and of other provisions that interfere with effective enforcement of SIPs, are real-world consequences that adversely affect public health. Commenters on the February 201 3 proposal provided illustrative examples of impacts that these types of SIP pr ovisions have on the communities located near sources that rely on automatic or discretionary exemptions for ex cess emissions during SSM events, rather than by designing, operating and maintaining their so urces to meet the applicable emission

limitations. These comments also illustrated th e ways in which such exemptions, incorrect enforcement discretion provisions and affirmative defense provisions have interfered with the enforcement structure of the CAA by raising inappropriate impediments to enforcement by states, the EPA, or citizens. The EPA’s memorandum providing a detailed di scussion of the statut ory, regulatory and policy background for this action can be found in the docket for this rulemaking. 20

20 See Memorandum, “Statutory, Regulatory, and Policy Context for this Rulemaking,” February 4, 2013, in the rulemaking docket at EPA-HQ-OAR-2012-0322-0029.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 37 of 539 IV. Final Action in Response to Request to Rescind the EPA Policy Interpreting the

CAA to Allow Affirmativ e Defense Provisions A. What the Petitioner Requested The Petitioner’s first request was for the EPA to rescind its SSM Policy element interpreting the CAA to allow affirmative defens e provisions in SIPs for excess emissions during

SSM events. 21 Related to this request, the Petitioner al so asked the EPA: (i) to find that SIPs containing an affirmative defense to monetary penalties for excess emissions during SSM events are substantially inadequate because they do not comply with the CAA; and (ii) to issue a SIP call pursuant to CAA section 110(k)(5) to require each such state to revise its SIP. 22 Alternatively, if the EPA denies these two relate d requests, the Petitioner asked the EPA: (i) to require states with SIPs that contain such affirm ative defense provisions to revise them so that they are consistent with the EPA’s 1999 SSM Guidance for excess emissions during SSM events; and (ii) to issue a SIP call pursuant to CAA section 110(k)(5) to states with provisions inconsistent with the EPA’s interpretation of the CAA. 23 The Petitioner requested that the EPA resc ind its SSM Policy element interpreting the CAA to allow SIPs to include affirmative defenses for violations due to excess emissions during any type of SSM events because the Petitioner co ntended there is no legal basis for the Agency’s interpretation. Specifically, the Petitioner cited to two statut ory grounds, CAA sections 113(b) and 113(e), related to the type of judicial relief available in an enforcement proceeding and to the factors relevant to the scope and availability of such relief, that the Petitioner claimed would bar

21 Petition at 11. 22 Id. 23 Petition at 12.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 38 of 539 the approval of any type of affirmative de fense provision in SIPs. The Petitioner drew no

distinction between affirmative defense provisions for malfuncti ons versus affirmative defense provisions for startup and shutdown or other normal modes of opera tion; in the Petitioner’s view all are equally inconsistent with CAA requirements. In the Petitioner’s view, the CAA “unambiguous ly grants jurisdicti on to the district courts to determine penalties that should be assessed in an enforcement action involving the

violation of an emissions limit.” 24 The Petitioner first argued that in any judicial enforcement

action in a district cour t, CAA section 113(b) provides that “s uch court shall have jurisdiction to restrain such violation, to require compliance, to assess such penalty, . . . and to award any other appropriate relief.” The Petitioner reasone d that the EPA’s SSM Policy is therefore fundamentally inconsistent with the CAA because it purports to remove the discretion and authority of the district courts to assess monetary penalties for vi olations if a source is shielded from monetary penalties under an affirma tive defense provision in the approved SIP. 25 The

Petitioner concluded th at the EPA’s interpretation of th e CAA in the SSM Policy element allowing any affirmative defenses is impermissible “because the inclusion of an affirmative defense provision in a SIP limits the cour ts’ discretion—granted by Congress—to assess penalties for Clean Air Act violations.” 26 Second, in reliance on CAA section 113(e)(1), the Petitioner argued th at in a judicial

enforcement action in a district cour t, the statute explicitly specifies a list of factors that the court is to consider in assessing penalties. 27 The Petitioner argued that the EPA’s SSM Policy

24 Petition at 10. 25 Id

. 26 Id

. 27 Petition at 11.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 39 of 539 authorizes states to create affirmative defense pr ovisions with criteria for monetary penalties that

are inconsistent with the factors that the statute specifies and that the st atute explicitly directs courts to weigh in any judicial enforcement actio n. By specifying particular factors for courts to consider, the Petitioner reasoned, Congress has already definitively spoken to the question of what factors are germane in assessing monetary penalties under the C AA for violations. The

Petitioner concluded that the EPA has no authority to allow a state to include an affirmative defense provision in a SIP with di fferent criteria to be considered in awarding monetary penalties because “[p]reventing the district courts from considering these statutory factors is not a permissible interpretation of the Clean Air Act.” 28 A more detailed explanation of the Petitioner’s arguments appears in the 2013 February proposal. 29 B. What the EPA Proposed In the February 2013 proposal, consistent with its interpretation of the Act at that time, the EPA proposed to deny in part and to grant in part the Petition with resp ect to this overarching issue. As a revision to the SSM Policy as embodied in the 1999 SSM Guidance, the EPA proposed a distinction between affirmative defens es for unplanned events such as malfunctions and planned events such as st artup and shutdown. The EPA explai ned the basis for its initial proposed action in detail, including why the Agen cy then believed that there was a statutory basis for narrowly drawn affirmative defense provis ions that met certain criteria applicable to malfunction events but no such statutory basis fo r affirmative defense prov isions applicable to startup and shutdown events. In the February 2013 proposal, the EPA also proposed to deny in part and to grant in part the Pe tition with respect to specific a ffirmative defense provisions in the

28 Petition at 11. 29 See February 2013 proposal, 78 FR 12459 at 12468 (February 22, 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 40 of 539 SIPs of various states identified in the Petition consiste nt with that interpre tation. With respect to these specific existing SIP provisions, the EPA di stinguished between thos e provisions that were consistent with the Agency’s interpretation of the CAA as set forth in 1999 SSM Guidance and

were limited to malfunction events and other affi rmative defense provisions that were not limited

to malfunctions or otherwise not consistent w ith the Agency’s interpretation of the CAA and

included one or more deficiencies. Subsequent to the February 2013 proposal, however, a judicial decision by the U.S. Court of Appeals for the District of Co lumbia Circuit (D.C. Circuit) in NRDC v. EPA concerning the legal basis for affirmative defense provisions in the EPA’s own regulations caused the Agency to reconsider the legal basis for any affirmative defe nse provisions in SIPs, re gardless of the type of events to which they apply, the criteria they may contain or the types of judicial remedies they purport to limit or eliminate. 30 Thus, the EPA issued an SNPR to revise its proposed response to the Petition with respect to whet her affirmative defense provisions in SIPs are consistent with fundamental legal requirements of the CAA. 31 In the SNPR, the EPA also revised its proposed response related to each of the specific affirma tive defense provisions identified in the Petition. Changes to the proposed response included revi sion of the basis for the proposed finding of substantial inadequacy for many of the pr ovisions (to incorporate the EPA’s revised interpretation of the CAA into that basis). Other changes to the proposed response included reversal of the proposed denial of the Petition for some provisions that the Agency previously believed to be consistent with CAA requireme nts but subsequently determined were not authorized by the Act under the analysis prompted by the NRDC v. EPA decision. In order to

30 See NRDC v. EPA , 749 F.3d 1055 (D.C. Cir. 2014). 31 See SNPR, 79 FR 55919 (September 17, 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 41 of 539 provide comprehensive guidance to all states co ncerning affirmative defe nse provisions in SIPs and to avoid confusion that may arise due to rece nt court decisions relevant to such provisions under the CAA, the EPA also addressed additional existing SIP affirmative defense provisions of which it was aware although the provisions were not specifically identif ied in the Petition. The EPA initially examined the specific affirmative defense provisions identified by the Petitioner in 14 states but subsequently broadened its review to include additional provisions in four states, including two states that were not included in the Petition. Most importantly, the EPA provided a detailed explanation in the SNPR as to why it now believes that the logi c of the court in the

NRDC v. EPA decision vacating the affirmative defense in an Agency emission limitation under

CAA section 112 likewise extends to affi rmative defense provisions in SIPs. C. What Is Being Finalized in This Action The EPA is taking final action to grant the Petition on the request to rescind its SSM Policy element that interpreted the CAA to allow states to elect to create affirmative defense provisions in SIPs. The EPA is also taking final action to gran t the Petition on the request to make a finding of substantial inadequacy and to issue SIP calls for specific existing SIP provisions that include an affirmative defense as identified in the SNPR. The specific SIP provisions at issue are discussed in section IX of this notice. These existing affirmative defense provisions include some provisions that the EPA had previously determined were consistent with the CAA as interpreted in the 1999 SSM Guidance a nd other provisions that were not consistent even with that interpretation of the CAA. As explained in the SNPR, the EPA has now concluded

that the enforcement structure of the CAA, embodied in section 113 and section 304, precludes any affirmative defense provisions that would oper ate to limit a court’s jurisdiction or discretion to determine the appropriate remedy in an enforcement action. These provisions are not*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 42 of 539 appropriate under the CAA, no matter what type of event they apply to, what criteria they contain or what forms of remedy th ey purport to limit or eliminate. The EPA is revising its interpretation of the CAA with respect to affirmative defenses based upon a reevaluation of the statutory provisions that pert ain to enforcement of SIP provisions in light of recent court opinions. Section 113(b) provides courts with explicit jurisdiction to determine liability and to impose remedies of various kind s, including injunctive relief, compliance orders and monetary penalties, in judicial enforcement proceedings. This grant of jurisdiction comes directly from Congress, and the EPA is not au thorized to alter or eliminate this jurisdiction under th e CAA or any other law. With respect to monetary penalties, CAA section 113(e) explicitly includes the factors that courts and the EPA are required to consider in the event of judicial or administrative enfo rcement for violations of CAA requirements, including SIP provisions. Because Congress has alre ady given federal courts the jurisdiction to determine what monetary penalties are appropriat e in the event of judicial enforcement for a violation of a SIP provision, neithe r the EPA nor states can alter or eliminate that jurisdiction by superimposing restrictions on th at jurisdiction and discretion gr anted by Congress to the courts. Affirmative defense provisions by their nature pu rport to limit or eliminate the authority of federal courts to determine liability or to im pose remedies through factual considerations that differ from, or are contrary to, the explicit grants of authority in section 113(b) and section 113(e). Accordingly, pursuant to section 110(k) and section 110( l), the EPA cannot approve any such affirmative defense provision in a SIP. If such an affirmative defense provision is included in an existing SIP, the EPA has authority under s ection 110(k)(5) to require a state to remove that provision.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 43 of 539 States have great discretion to devise SIP provisions, but th ey do not have discretion to create provisions that contradict fundamental legal requirements of the CAA. The jurisdiction of federal courts to determine liability and to im pose statutory remedies for violations of SIP

emission limitations is one such fundament al requirement. The court in the recent NRDC v. EPA decision did not remand the regulation to the EPA fo r better explanation of the legal basis for an affirmative defense; the court instead vacated th e affirmative defense and indicated that there could be no valid legal basis for such a pr ovision because it contradicted fundamental requirements of the CAA concerning the jurisdicti on of courts in judicial enforcement of CAA requirements. A more detailed explanation of th e EPA’s basis for determining that affirmative defense provisions in SIPs are similarly contrary to the requirements of the CAA appears in the

SNPR. 32 Couching an affirmative defense provision in terms of merely defining whether or not the emission limitation applies and thus whether or not there is a “v iolation,” as suggested by some commenters, is also problematic. If there is no “violation” when certain criteria or conditions for an “affirmative defense” are met, then there is in effect no emission limitation that applies when the criteria or conditions are met; the affirmative defense thus ope rates to create an exemption from the emission limitation. As explained in th e February 2013 proposal, the CAA requires that emission limitations must apply continuously a nd cannot contain exemptions, conditional or otherwise. This interpretation is consistent with the decision in Sierra Club v. Johnson concerning the term “emission limitation” in secti on 302(k). Characterizing the exemptions as an

32 See 79 FR 55919 at 12931–34 (September 17, 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 44 of 539 “affirmative defense” runs afoul of the requi rement that emission limitations must apply continuously. The EPA recognizes that the original policy ob jectives behind states’ affirmative defense provisions were likel y well-intentioned, e.g. , to encourage better source design, maintenance and operation through the incentiv e of being shielded from certain statutory remedies for violations under certain specified conditions. Nevertheless, cr eation of SIP provisions that would operate to limit or eliminate the jurisdiction of courts to de termine liability or to impose remedies provided for by statute is inconsistent with the enforcement structure of the CAA. The EPA emphasizes

that the absence of an affirmative defense provision in a SIP, whether as a freestanding generally applicable provision or as a specific component of a particular emission limitation, does not

mean that all exceedances of SIP emission lim itations will automatically be subject to enforcement or automatically be subject to impos ition of particular reme dies. Pursuant to the CAA, all parties with authority to bring an enforcement action to enforce SIP provisions ( i.e. , the state, the EPA or any parties who qualify under the citizen suit provision of section 304) have enforcement discretion that they may exercise as they deem appropriate in any given circumstances. For example, if the event that causes excess emissions is an actual malfunction that occurred despite reasonable care by the sour ce operator to avoid malfunctions, then each of these parties may decide that no enforcement ac tion is warranted. In th e event that any party

decides that an enforcement acti on is warranted, then it has enfo rcement discretion with respect to what remedies to seek from the court for the violation ( e.g. , injunctive relief, compliance order, monetary penalties or all of the above), as well as the type of injunctive relief and/or*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 45 of 539 amount of monetary penalties sought. 33 Further, courts have the discretion under section 113 to decline to impose penalties or injunctive relief in appropriate cases as explained below. Similarly, the absence of an affirmative defe nse provision in a SIP does not alter the legal rights of sources under the CAA. In the event of an enforcemen t action for an exceedance of a SIP emission limit, a source can elect to assert any common law or statut ory defenses that it determines is supported, based upon the facts and circumstances su rrounding the alleged violation. Under section 113(b), cour ts have explicit authority to impose injunctive relief, issue compliance orders, assess monetary penalties or fees and impose any other appropriate relief. Under section 113(e), courts are required to consider the enum erated statutory factors when assessing monetary penalties, in cluding “such other factors as justice may require.” For example,

if the exceedance of the SIP emission limitation occu rs due to a malfunction, that exceedance is a violation of the applicable emi ssion limitation, but the source retain s the ability to defend itself in

an enforcement action and to oppose the imposition of particular remedies or to seek the reduction or elimination of monetary penalties, based on the specific facts and circumstances of the event. Thus, elimination of a SIP affirmative defense provision that purported to take away the statutory jurisdiction of the court to exercise its authority to impose remedies does not disarm sources in potential enforcement actions. Sources re tain all of the equitable arguments they could previously have made under an affirmative de fense provision; they must simply make such arguments to the reviewing court as envisioned by Congress in section 113(b) and section

33 The EPA notes that only the state and the Agency have authority to seek criminal penalties for knowing and intentional violation of CAA require ments. The EPA has this explicit authority under section 113(c).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 46 of 539 113(e). Congress vested the courts with the authority to judge how best to weigh the evidence in an enforcement action and determine appropriate remedies. Removal of such impermissible SIP affirma tive defense provisions is necessary to preserve the enforcement structure of the CAA, to preserve the juri sdiction of courts to adjudicate questions of liability and remedies in judicial enforcement actions and to preserve the potential for enforcement by stat es, the EPA and other parties unde r the citizen suit provision as an effective deterrent to violations. In turn, th is deterrent encourages sources to be properly designed, maintained and operated and, in the even t of violation of SIP emission limitations, to take appropriate action to mitigate the impacts of the violation. In this way, as intended by the existing enforcement structure of the CAA, sources can mitigate the potential for enforcement actions against them and the remedies that c ourts may impose upon them in such enforcement actions, based upon the facts and ci rcumstances of the event. D. Response to Comments Concerning Affir mative Defense Provisions in SIPs The EPA received numerous comments concerning the portion of the Agency’s proposed response to the Petition in the February 2013 pro posal that addressed th e question of whether affirmative defense provisions ar e consistent with CAA requiremen ts for SIPs. As explained in the SNPR, those particular comments submitte d on the original February 2013 proposal are no longer germane, given that the EPA has substant ially revised its initial proposed action on the Petition and its basis, both with respect to the overarching issue of whether such provisions are valid in SIPs under the CAA and with respect to specific affirmative defense provisions in existing SIPs of particular states. Accordingly, as the EPA indicated in the SNPR, it considers those particular comments on the February 2013 proposal no longer relevant and has determined that it is not necessary to respond to them. Concerning affirmative defense provisions, the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 47 of 539 appropriate focus of this rulemaking is on th e comments that addre ssed the EPA’s revised proposal in the SNPR. With respect to the revised proposal concer ning affirmative defens e provisions in the SNPR, the EPA received numerous comments, some supportive and some critical of the Agency’s proposed action on the Petition as re vised in the SNPR. Many of these comments raised conceptual issues and arguments concer ning the EPA’s revised interpretation of the CAA with respect to affirmative defense provisions in SIPs in light of the NRDC v. EPA decision and concerning the EPA’s application of that interpre tation to specific affirmative defense provisions discussed in the SNPR. For clarity and ease of discussion, the EPA is responding to these overarching comments grouped by issue. 1. Comments that the EPA is misapplying the decision of the D.C. Circuit in NRDC v. EPA to SIP provisions because the decision only applie s to the Agency’s own regulations pursuant to

CAA section 112.

Comment: Many commenters stated that the EP A’s reliance on the D.C. Circuit’s

decision in NRDC v. EPA is misplaced in the SNPR because the opinion is limited to disapproval

of a Maximum Achievable Cont rol Technology (MACT) standard ’s affirmative defense for

unavoidable malfunctions. The commenters noted that the NRDC v. EPA decision did not address the issue of affirmative defense provisions in SIPs. The commenters argued that the D.C. Circuit’s opinion only stands for the narrow proposition that the EPA may not include an*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 48 of 539 affirmative defense to civil penalties in a National Emission Standard for Hazardous Air Pollutants (NESHAP) 34 under CAA section 112. One commenter noted that the EPA, in the SNPR, stated that the NRDC v. EPA decision did not turn on any factors spec ific to CAA section 112 as su pport for the EPA applying the decision to SIPs. However, the commenter argued th at this fact is not probative because neither party raised any argument specific to CAA section 112 and it is reasonable for a court to limit its analysis to the arguments presented before it.

One commenter also noted that the EPA is not bound to apply D.C. Circuit law to actions

reviewable in other circuits. Response: As explained in the SNPR, the EPA beli eves the reasoning of the court in the

NRDC v. EPA decision indicates that states, like the EP A, have no authority in SIP provisions to alter the jurisdiction of federal courts to asse ss penalties for violations of CAA requirements through affirmative defense provisions. 35 If states lack authorit y under the CAA to alter the jurisdiction of the fede ral courts through affirmative defens e provisions in SIPs, then the EPA lacks authority to approve a ny such provision in a SIP.

34 The NESHAPs are found in 40 CFR part 61 and 40 CFR part 63. The NESHAPs promulgated after the 1990 CAA Amendments are found in 40 CFR part 63. These standards require application of technology-based emissions stan dards referred to as Maximum Achievable Control Technology (MACT). Conse quently, these post-1990 NESHAP s are also referred to as MACT standards. 35 See 79 FR 55929–30; 55931–34.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 49 of 539 The EPA agrees with the comme nters’ statement that the NRDC v. EPA decision pertained to a challenge to the EPA’s NESHAP regulations issued pursuant to CAA section 112 to regulate hazardous air pollutants from sources that manufacture Portland cement. However, the EPA disagrees with the commenters’ contention that, because the NRDC v. EPA decision was based on a NESHAP, it is somehow inappropriate for the EPA to rely on the reasoning of the

D.C. Circuit’s decision as a basis for this action. As acknowledged by a commenter, the EP A explained in the SNPR that the NRDC v.

EPA decision did not turn on the specific provisions of CAA section 112. 36 However, the commenter missed the import of this point. Although the NRDC v. EPA decision analyzed the legal validity of an affirmative defense provisi on created by the EPA in conjunction with a specific NESHAP, the court based its decision upon the provisions of sections 113 and 304. Sections 113 and 304 pertain to enforcement of the CAA requirements more broadly, including to enforcement of SIP requirements. The court addressed section 112 and not sections germane specifically to SIPs, as only that secti on was before it. The EPA has applied the NRDC court’s analysis to sections 113 and 304 with resp ect to SIPs and has concluded that the NRDC court’s analysis is the better reading of the statutory provisions. The affirmative defense provision in the Po rtland Cement NESHAP required the source to prove, by a preponderance of the evidence in an enforcement proceeding, that the source met specific criteria concerning the nature of the even t. These specific criteria required to establish

the affirmative defense in the Portland Cement NESHAP are functionally th e same as the criteria that the EPA previously recommended to stat es for SIP provisions in the 1999 SSM Guidance

36 SNPR, 79 FR 55919 at 55932.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 50 of 539 and that the EPA repeated in the February 2013 proposal notice. Accordingly, the EPA believes that the opinion of the court in NRDC v. EPA has significant impacts on the Agency’s SSM Policy with respect to affirmative defense provisions. The reasoning by the NRDC court, as logically extended to SIP provision s, indicates that neither states nor the EPA have authority to alter either the rights of other parties to seek relief or the jurisdiction of federal courts to impose relief for violations of CAA requirements in SI Ps. The EPA believes that the court’s decision in

NRDC v. EPA compelled the Agency to reevaluate its interpretation of the CAA as described in

the SNPR. The EPA also disagrees with commenters w ho suggested that a decision of the D.C. Circuit should have no bearing on actions that affect states in other Circuits. The CAA vests authority with the D.C. Circuit to review natio nally applicable regulations and any action of nationwide scope or effect, so the EPA believes it is appropriate to apply the reasoning of the

NRDC court, which interprets CAA sections 113 a nd 304, to determine the legality of affirmative defense provisions in this national action. 37 2. Comments that the EPA is misapplying the decision of the D.C. Circuit in NRDC v. EPA to SIP provisions because the court did not addre ss the legality of affirmative defense provisions

in SIPs.

Comment: Many commenters alleged that the EPA inappropriately relied on the D.C.

Circuit’s decision in NRDC v. EPA in the SNPR because the court specifically stated that its

decision did not address whether affirmative defense provisions in SIPs were appropriate. The commenters pointed to the second footnote in the decision, in whic h the court exp licitly stated:

37 CAA section 307(b)(1).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 51 of 539 “We do not here confront the question whether an affirmative defense may be appropriate in a State Implementation Plan.” 38 Accordingly, the commenters argued that the NRDC v. EPA decision is “non-binding” with respect to SIP provisions. Response: The EPA disagrees that the foot note relied upon by commenters renders application of the legal interpretation of the NRDC court to SIP provisions improper. The EPA specifically acknowledged and di scussed the footnote in the NRDC v. EPA decision in the SNPR. The EPA explained its view of the significance of the footnote: “footnote 2 in the opinion does not signify that the court intende d to take any position with resp ect to the application of its interpretation of the CAA to SI P provisions, let alone to suggest that its interpre tation would not apply more broadly.” As discussed in the SNPR in detail, the EPA believes the logic of the

court’s decision in NRDC v. EPA regarding the interpretation of sections 113 and 304 concerning

affirmative defenses does ex tend to SIP provisions.

3. Comment that the EPA is in appropriately relying on the NRDC v. EPA decision because

the D.C. Circuit’s decision was decided in error.

Comment: One commenter alleged that the EPA’s reliance on the NRDC v. EPA decision is misplaced because the court in that decision mistakenly relied on section 304(a) when holding

that the EPA cannot restrict the jurisdiction of the courts with affirmative defense provisions. The commenter alleged that Congr ess did not intend to give th e judiciary “fully-unfettered discretion” in section 304(a) because such a reading cannot be squared with section 304(b), which provides that “[n]o action can be comm enced ... if the Administrator or State has commenced and is diligently prosecuting a civil action in a court of the United States.”

38 749 F.3d 1055, 1064, n.2.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 52 of 539 Response: The EPA does not agree with the commenter’s premise that the NRDC court erred by not considering secti on 304(b) as well as section 304 (a). As the court correctly reasoned, section 304(a) authorizes any person to bring an enforcement action for violations of emission limitations. Section 304(f) defines the te rm “emission limitation” for this purpose very broadly. Section 304(b) does not alter the rights of any person who has given proper notice to bring such an action under section 304(a), unless the EPA or the state is diligently prosecuting a civil action to require compliance. The fact that section 304(b) limits the ab ility of any person to bring an enforcement action (as opposed to interven ing in such action) if the EPA or the state is pursuing enforcement has no bearing upon whether th e EPA or a state could seek to alter or eliminate the jurisdiction of the courts to determine liability or to impose remedies for violations of SIP emission limitations in judicial enforcement.

The EPA also does not believe that this rule making is the appropriate forum in which to challenge the court’s decision. If the commenter believes that th e D.C. Circuit’s holding in

NRDC v. EPA was in error for this reason, the comme nter should have pursued possible remedy through the judicial system, for example by requ esting that the D.C. Ci rcuit grant rehearing en banc to reconsider the NRDC v. EPA decision. 4. Comments that the court’s reasoning in the NRDC v. EPA decision does not apply to affirmative defenses in SIP provi sions because if a source qualifies for an affirmative defense,

then there has been no violation.

Comment: Several commenters stated that th e D.C. Circuit’s analysis in the NRDC v.

EPA opinion is based on statutory language that indicates Congre ss intended the courts, not the EPA, to decide what constitutes an appropria te penalty once a violation has occurred. The commenters argued that if a SIP pr ovision contains an affirmative defense, and if a source meets*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 53 of 539 the requirements to qualify for that affirmative defense, then there is no violation of the SIP requirements. One commenter contended that if there is no violation, th en the courts have no jurisdiction to award any remedies and thus ther e can be no concern that the affirmative defense provision alters or eliminates the jurisdiction of the courts. Another commenter argued that affirmative defense provisions in the context of a SIP can be described as limitations on the application of an emission limitation to the conditions under which the emission reduction technology can be effectively operated. The commenters stated that the NRDC court did not

address the EPA’s or states’ aut hority to establish requirements that determine, in the first instance, whether a vi olation has occurred. Response: The EPA disagrees with the commenters ’ arguments that affirmative defense provisions are appropriate in SI Ps if they merely define wh at constitutes a violation. As explained in detail in the SNPR, the EPA believe s that SIP provisions with affirmative defenses that operate to limit or eliminate the jurisdiction of the courts to determine liability and to impose remedies are not consistent with CAA require ments. Under the commenters’ theory, such provisions would not improperly impi nge on the jurisdiction of the c ourts to impose remedies for violations by redefining what constitutes a “violation.” First, the EPA does not agree that all affirmativ e defense provisions in the SIPs at issue in

this action are constructed in this way. Some, including those th at the EPA previously approved as consistent with the Agency’s 1999 SSM Gu idance, explicitly provide that the excess

emissions that occur are still viol ations, but a source could be excu sed from monetary penalties if

the source met the criteria for the affirmative de fense. Under the EPA’s prior interpretation of the CAA, the legal basis for any affirmative defense started with the fact th at the excess emissions still constituted a violation and injunctive relief would still be available as appropriate. As*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 54 of 539 explained in the SNPR and this notice, the EP A no longer interprets the CAA to allow even narrowly drawn affirmative defense provisions in SIPs, let alone those advocated by the commenters that would provide a complete bar to any type of judicial remedy provided for in section 113(b). Second, even if a specific affirmative defense provision were worded in the way that the commenters’ claim, then that provision would be deficient for other reasons. Under the commenters’ premise, if certain criteria are met then there is no “violation” for excess emissions during SSM events. The EPA’s view is that this formulation of an affirmative defense in effect

means that there is no emission limitation that applies when the criteria are met, i.e. , the affirmative defense operates to create a conditio nal exemption for emissions from the source during SSM events. Such an approach woul d be inconsistent with the decision in Sierra Club v.

Johnson concerning the term “emission limitation” in section 302(k). Exemptions for emissions during SSM events, whether automatic or conditio nal based upon the criteri a of an affirmative defense, are inconsistent with the requir ement for continuous controls on sources. Finally, the EPA believes that the commenter s’ premise that an affirmative defense provision merely defines what a vi olation is also runs afoul of other fundamental requirements for SIP provisions. To the exte nt any such provision would al low state personnel to decide, unilaterally, whether excess emissions during an SSM event constitute a violation ( e.g. , through application of an “affirmative defense”), this woul d interfere with the ability of the EPA or other parties to enforce for violations of SIP requirements. The EPA in terprets the CAA to prohibit SIP provisions that impose the enfor cement discretion decisions of a state on other parties. This includes provisions that are struct ured or styled as an affirmat ive defense but in effect allow ad*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 55 of 539 hoc conditional exemptions from emission lim itations and preclude enforcement for excess emission during SSM events.

5. Comments that the NRDC v. EPA decision, which concerned an emission limitation under section 112, does not apply in the context of section 110, because section 110 affords states flexibility in how to develop emission limitations in SIP provisions.

Comment: Commenters argued that the EPA’s extension of the logic of the NRDC v. EPA decision to affirmative defenses in SIP provi sions is incorrect because the EPA’s NESHAP standards are governed by sect ion 112, whereas SIP provision s are governed by section 110. Under the latter, commenters asse rted, states are afforded wide discretion in how to develop

emission limitations. 39 The commenters stated that secti on 110 governs the development of state SIPs to satisfy the NAAQS, which may address many different types of sources, major and minor, industrial and non-industrial, small and la rge, and old and new. The commenters alleged that states have independent authority to include affirmative defenses in SIP provisions, so long as the provisions are otherwise approvable, be cause the state has met its section 110 planning responsibilities and the SIP is enforceable. Response: The EPA agrees with the commenters that section 110 governs the development of state SIPs and that states are accorded great discretion in determining how to meet CAA requirements in SIPs. However, as explained in the Febr uary 2013 proposal, the

SNPR and sections IV.D.13 and V.D.2 of this doc ument, states are obligated to develop SIP provisions that meet fundamental CAA requirement s. The EPA has the responsibility to review SIP provisions developed by states to ensure that they in fact meet fundamental CAA

39 See, e.g. , Train v. NRDC , 421 U.S. 60, 79 (1975).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 56 of 539 requirements. As explained in the SNPR and this notice, the EPA no longer believes that affirmative defense provisions meet CAA requireme nts. Based on the logic of the court’s opinion

in the NRDC v. EPA decision, the better reading of the stat ute is that such provisions have the effect of limiting or eliminating th e statutory jurisdiction of the c ourts to determine liability or impose remedies. The EPA also disagrees with the commenter s’ arguments that “emission limitations” under section 112 and section 110 are not comparable with respect to meeting fundamental CAA requirements. As an initial matter, both se ction 112 MACT standards and section 110 SIP emission limitations can be composed of vari ous elements that include, among other things, numerical emission limitations, work practice standards and monitoring and recordkeeping requirements. However, whether or not there are other components that are part of the emission limitation to make it apply continuou sly is not relevant for purpos es of determining whether an affirmative defense provision that provides relief from penalties for a violation of either a MACT

standard under section 112 or a SIP provision under section 110 is consistent with the CAA. As explained in the SNPR, the EPA has revise d its interpretation of the CAA with respect to affirmative defense provisions in SIPs , based upon the logic of the court in the NRDC v. EPA decision. Section 304(a) sets fort h the basis for a civil enforcem ent action and section 113(a)(1)

does the same for administrative or judicial enforcement acti ons brought by the EPA. Sections 113(b) and 304(a) provide the fede ral district courts with jurisd iction to hear civil enforcement cases. Furthermore, section 113(e) confers jurisdiction on the district court in a civil enforcement case to determine the amount of penalty to be as sessed where a violation has been established.

6. Comments that the NRDC v. EPA decision does not pertain to the appropriateness of affirmative defense provisions in the context of state administrative or civil enforcement.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 57 of 539 Comment : Some commenters noted that the NRDC court only reviewed whether affirmative defense provisions could be used to limit CAA citizen suit remedies in judicial enforcement actions. The commenters alleged that the use of an affirmative defense in a citizen suit under federal regulations does not dictate the appropriateness of similar provisions in the

context of state administrative or civil actions. According to the commenters, a SIP represents an air quality management system and the state admi nistrative process is distinct from federal citizen suits. Similarly, the commenters believed that SIP emission limitations are enforceable via state regulation penalty provis ions that are separate from the CAA civil penalty provisions.

Because the NRDC court spoke only to the appropriateness of affirmative defense provisions in the context of federal citizen suits, the commenters asserted, the decision is inapplicable in the

EPA’s SIP call action. Response : The EPA agrees that the court in the NRDC v. EPA decision did not speak directly to the issue of whether states can establ ish affirmative defenses to be used by sources exclusively in state administrative enforcement acti ons or in judicial enforcement in state courts. The reasoning of the NRDC court indicates only that such provisions would be inconsistent with the CAA in the context of judicial enforcement of SIP requirements in federal court. Indeed, the

NRDC court suggested that if the EP A elected to consider factors comparable to the affirmative

defense criteria in its own administrative enfor cement proceedings, it may be able to do so. The implication of the commenters, however, is th at the EPA should interpret the CAA to allow affirmative defenses in SIP provi sions, so long as it is unequivo cally clear that sources cannot

assert the affirmative defenses in federal c ourt enforcement actions and cannot assert the

affirmative defenses in enforcement actions brought by any party othe r than the state.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 58 of 539 The EPA of course agrees that states can exercise their own enfo rcement discretion and elect not to bring an enforcement action or seek certain remedies, using criteria analogous to an affirmative defense. It does not follow, howev er, that states can impose this enforcement discretion on other parties by adopting SIP provi sions that would apply in federal judicial enforcement, or in enforcement brought by the EPA or other parties. To the extent that the state developed an “enforcement discretion” type provis ion that applied only in its own administrative enforcement actions or only with respect to en forcement actions brought by the state in state courts, such a provision may be appropriate. This authority is not unlimited because the state

could not create affirmative defens e provision that in effect unde rmines its legal authority to enforce SIP requirements. Section 110(a)(2)(C) re quires states to have a program that provides for enforcement of the state’s SIP, and enforcement discretion provisions that unreasonably limit the state’s own authority to enforce the require ments of the SIP would be inconsistent with section 110(a)(2)(C). The EPA’s obligations with respect to SIPs include determining whether states have adequate enforcement authority. 7. Comments that the EPA’s proposal is inapprop riate because it runs counter to previous court decisions, including the deci sion of the U.S. Court of Appeal s for the Fifth Circuit (Fifth Circuit) in Luminant Generation v. EPA

. Comment: Many commenters on the SNPR argued that the decision of the Fifth Circuit in

Luminant Generation v. EPA precludes the EPA’s proposed action concerning affirmative defenses in SIP provisions, in general and with respect to the provision s in the Texas SIP in particular. The commenters noted that the cour t upheld the EPA’s approval of an affirmative defense provision for unavoidable excess emissi ons during unplanned SSM events in the Texas*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 59 of 539 SIP. 40 The commenters argued that the Fifth Circu it ruled that in approving the Texas SIP affirmative defense provision, the EPA “acted ne ither contrary to law nor in excess of its statutory authority.” 41 According to the commenters, the court specifically considered and rejected arguments by litigants concerning sections 113 and 304. Some commenters argued that the court also considered and “decisively rejected ” the legal arguments articulated by the EPA in the SNPR. The commenters alleged that the Luminant Generation v. EPA decision demonstrates

that affirmative defenses for malfunctions are permissible in SIP provi sions. The commenters contended that, because the Fifth Circuit in Luminant Generation v. EPA specifically considered whether an affirmative defense provision applicab le to malfunctions included in a SIP violates the CAA, unlike the D.C. Circuit in NRDC v. EPA , the EPA should follow the Luminant

Generation v. EPA decision rather than the D.C. Circuit decision in NRDC v. EPA

. Some commenters also pointed out thatthe D.C. Circuit, in the recent NRDC v. EPA decision, mentioned and cited the Luminant Generation v. EPA opinion and did not expressly disagree with the Fifth Circuit’s hol ding. One commenter noted that if the NRDC court believed that the issue it was deciding was the same as the issue decided in Luminant Generation v. EPA , the D.C. Circuit would have explicitly stated th at it was declining to follow the Fifth Circuit on the issue instead of acknowledging that the i ssue upon which the Fifth Circuit ruled was not

before the D.C. Circuit. Several commenters also argued that, because the Fifth Circuit previously determined in

Luminant Generation v. EPA that the Texas SIP affirmative defe nse provision at issue in this SIP

40 714 F.3d 841 (5th Cir. 2013). 41 Id. at 853. The EPA notes that the Fifth Circuit also upheld the Agency’s disapproval of the affirmative defense provisions that the stat e sought to create for “planned” events.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 60 of 539 call action is consistent with CAA sections 113 and 304, the EPA does not have any legal authority under the CAA to finalize the acti on proposed in SNPR. Some commenters further stated that the EPA lacks authority to disagree with the Fifth Circuit’s determination of the law as applied to a state within the Fifth Circuit’s jurisdiction. These co mmenters believed that if the

EPA were to finalize the action discussed in the SN PR with respect to the affirmative defense for malfunctions in the Texas SIP, this action w ould violate the mandate rule. Some commenters also alleged that courts outside the Fifth Circuit, including the D.C. Circuit, will apply principles of claim preclusion, or res judicata , to give effect to the Fifth Circuit’s prior adjudication on the legal basis for the affirmative defense in the Texas SIP. One commenter claimed that the EPA’s “failure” to address how the holdings in Luminant Generation v. EPA will no longer apply and how the EPA is exempt from the court’s mandate render the theories presented in the SNPR unsupported as a basis for the SIP call action. Some commenters alleged that the EPA is bound by its own pr ior representations before the Fifth Circuit, in which it asserted and de fended its approval of the affirmative defense provision for malfunctions in the Texas SIP, under the doctrine of judicial estoppel. 42 Similarly, the commenters alleged that under the doctrine of issue preclusion, or collateral estoppel, the EPA is precluded from re-litigating the issues prev iously considered and determined by the Fifth Circuit, regardless of where any subsequent challenge to this fi nal action is brought.

Some commenters also cited to other Circuit opinions th at have upheld the EPA’s approvals of affirmative defense provisions for malfunctions. 43 The commenters alleged that

42 See, e.g., New Hampshire v. Maine , 532 U.S. 742, 749 (2001). 43 See Montana Sulphur & Chemical Co. v. EPA , 666 F.3d 1174 (9th Cir. 2012); Arizona Public Service Co. v. EPA , 562 F.3d 1116 (10th Cir. 2009).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 61 of 539 other than calling the NRDC v. EPA decision a newer decision, the EPA did not explain its justification for relying on the NRDC v. EPA opinion instead of followi ng the three circuit court decisions that are directly on point. Response: The EPA disagrees with the commenters’ arguments concerning the application of the court’s decision in Luminant Generation v. EPA to this SIP call action. As explained in the SNPR, the EPA acknowledges th at it has previously approved affirmative defenses in SIP provisions or, wh en appropriate, promulgated affi rmative defenses in FIPs. The EPA also acknowledged that its approval of an affirmative defense provision applicable to “unplanned events” ( i.e., malfunctions) in a Texas SIP submission was upheld in 2012 by the U.S. Court of Appeals for the Fifth Circuit. In that litigation, the EPA argued that sections 113 and 304 do not preclude appropriately drawn affirm ative defense provisions for malfunctions in SIPs. Importantly, in upholding the EPA’s approval of the affirmative defense, the Fifth Circuit

determined that Chevron step 1 was not applicable to this case and “turn[ed] to step two of

Chevron ” 44 in holding that the Agency’s interpre tation of the CAA at that time was a “permissible interpretation of sec tion [113], warranting deference.” 45 The Fifth Circuit did not determine that the EPA’s interpretation at the time of the Luminant Generation v. EPA decision was the only or even the best permissible interp retation. It is clearly within the EPA’s legal authority to now revise its interpretation to a diff erent, but still permissible, interpretation of the

44 714 F.3d at 852. 45 Id . at 853.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 62 of 539 statute. 46 The EPA has explained at length in the SN PR, and elsewhere in this final rulemaking, its reasons for changing its pr evious interpretation of th e CAA to permit narrowly drawn affirmative defenses applicable only to penalties and has explained why it now believes that the reasoning of the court in the NRDC v. EPA decision is the better reading of the CAA. Some commenters allege that the Fifth Circuit consider ed and rejected the legal arguments articulated by the EPA in the SNPR to support the Agency’s new interpretation that affirmative defenses in SIP provisions are incons istent with the Act. The EPA disagrees with

commenters’ assertions. As explained above, in the Luminant Generation v. EPA decision the Fifth Circuit analyzed the EPA’s former interp retation of the CAA under step 2 of Chevron and found that the Agency’s position was reasonable. The Fifth Circuit held that the CAA did not dictate the outcome put forth by en vironmental petitioners in the Luminant Generation v EPA case; the court did not hold that the Agency coul d not reasonably interpret the CAA provisions at issue to come to the new position articulated in th e SNPR and other sections of this notice. In fact, the Fifth Circuit upheld the EPA’s reading of the statute to preclude affirmative defense provisions for planned events in the same decisi on as a reasonable interp retation of the CAA. In the SNPR, the EPA also addressed the discussion in the NRDC v. EPA decision that

referred to the earlier Luminant Generation v. EPA decision and explained its view that the court

46 See, e.g. , Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005) and FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009). The Agency also notes that commenters’ position, that the EPA cannot now change its interpretation of the CAA, is at odds with the SIP call provision established by Congre ss in section 110(k)(5). That provision provides the EPA with authority to issue a SIP call “whe never” it determines that an existing SIP is substantially inadequate to meet CAA requirements. In othe r words, section 110(k)(5) expressly envisions cases where the EPA has previous ly approved a SIP provision as meeting CAA requirements, and one that the EPA may have even defended in court, but later determines that the provision no longer meets CAA requirements, and section 110(k)(5) gi ves the EPA authority to issue a SIP call in these situations.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 63 of 539 in NRDC v. EPA did not suggest that its interpretation of th e CAA would not apply more broadly to SIP provisions. It simply declined to address th at issue. As to commenters’ allegation that the

EPA should follow the Luminant court’s reasoning because that court addressed the specific issue of affirmative defenses in SIP provisions, the EPA explained in detail in the SNPR and in

section IV.D.1 of this notice why it now believes that the NRDC court’s reasoning is applicable here and why it believes this is the better interpretation of sections 113 and 304. The EPA acknowledges that other Circuits have also upheld affirmative defense provisions promulgated by the Agency in FIPs. 47 Those decisions were also based upon an interpretation of the CAA that the Agency no longer holds. The EPA fu rther notes that the affirmative provisions at issue in the other Circuit opinions cite d by the commenters are not at issue in this action. However, the EPA may elect to address these provi sions in a separate rulemaking. The EPA also disagrees with commenters’ al legations that this final SIP call action

violates the mandate rule. The mandate rule generally governs how a lower court handles a higher court’s decision on remand. The Agency belie ves that the mandate rule is inapplicable here. Similarly, the Agency beli eves that the principles of res judicata , judicial estoppel and collateral estoppel (issue pr eclusion) raised by commenters are a ll inapplicable in this situation. For reasons the EPA has fully explained in this rulemaking, the Agency is adopting a revised interpretation of the CAA. This necessarily change s the issues or claims that may be raised in any future litigation concerning the Agency’s ac tion here or subsequent Agency actions taken pursuant to this changed interpre tation. As noted previously, the Agency’s ability to change its

47 See Montana Sulphur & Chemical Co. v. EPA , 666 F.3d 1174 (9th Cir. 2012); Arizona Public Service Co. v. EPA , 562 F.3d 1116 (10th Cir. 2009).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 64 of 539 interpretation of the statute is well established, even if cour ts have previously upheld the Agency’s former interpretation as reasonabl e under step 2 of th e Chevron analysis. 8. Comments that affirmative defense provision s are needed or appropriate because sources cannot control malfunctions or the excess emissions that occur during them.

Comment: Several commenters claimed that by re quiring states to remove affirmative defense provisions, the EPA will create a situati on where sources have no potential relief from liability for exceedances resulting from excess emissions during malfunctions. The commenters argued that this will effectively expose sources to penalties for emissions that are not within the

sources’ control. The commenters alleged that the EPA’s proposal is unreasonable because it fails to consider the infeasibility of contro lling emissions during malfunction periods. The commenters believe that because malfunction events are uncontrollable by definition, removing affirmative defense provisions applicable to malfunctions will not reduce emissions but instead will only expose facilities to potential enforcement for uncontrollable exceedances. Response: The EPA disagrees that without affirm ative defense provisions, sources will have no “relief” from liability for violations during actual malfunctions . To the extent that sources have an actual malfunction, sources retain the ability to raise this fact in the event of an

enforcement action related to the malfunction. Congress has already pr ovided courts with explicit jurisdiction and authority to determined liability and to impose appropriate remedies, based on the facts and circumstances surrounding the violation. To the extent that there are extenuating circumstances that justify not holdi ng a source responsible for a violation or imposing particular remedies as a result of a viol ation, sources retain the ability to raise these facts to the court. In addition, the absence of an affirmative de fense provision in the SIP does not impede a violating source from taking appropr iate actions to minimize emissions during a*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 65 of 539 malfunction, so as to mitigate the potential remedi es that a court may impose as a result of the

violation. Furthermore, the EPA disagrees with the comm enters’ premise that states have authority to create affirmative defense provisions in SIPs because some sources may otherwise be subject to enforcement actions for emissions during malf unctions. As explained in the SNPR in detail,

the EPA has concluded that there is no legal basis for affirmativ e defenses in SIP provisions, including affirmative defenses applicable to malfunction events. Because such affirmative defense provisions purport to alter or eliminate the statutory jurisdiction of courts to determine liability and to assess appropriate remedies for violations of SIP require ments, these provisions are not permissible.

9. Comments that there will not be any reduction in overall emissions from the EPA’s SIP

call action because states will need to revise em ission limitations to allow more emissions if affirmative defense provisions are removed from the SIPs.

Comment: Commenters on the SNPR questioned wh ether the elimination of affirmative defenses in SIP provisions woul d result in any reductions of em issions from sources. Several

commenters asserted that affirmative defense provisions allow states to lower emission limitations overall. Thus, the commenters claime d that elimination of the affirmative defense provisions would obligate states to raise affected emission limitations so that sources could comply with them continuously. Another commente r criticized the EPA’s approach as requiring each state to reframe the existing episodic emission s provisions of its SIP as alternative emission limitations, rather than as more limited and c onditional affirmative defenses. This commenter asserted that structuring the provisions as an a ffirmative defense allows a state to impose more*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 66 of 539 stringent numerical limitations w ithout penalizing sources for una voidable emissions when those emissions do not compromise the un derlying air quality objectives. Several commenters also disagreed with the EPA’s belief that removal of affirmative defense provisions would reduce emissions. One commenter noted that some affirmative defense provisions require a source to ev aluate impacts on NAAQS compliance as part of asserting the affirmative defense; the commenter contended that forgoing thes e provisions would thus reduce the incentive for owners and operators to mini mize emissions during malfunctions so that they could qualify for the affirmative defense. Several commenters noted that many sources immediately investigate excess emissions events and implement measures intended to prevent recurrence. Nevertheless, those commenters asse rted that because malfunction events are uncontrollable by definition, removing an affirmativ e defense applicable to malfunctions will not reduce emissions. Commenters also argued that an assumption that elimination of the affirmative defense provisions will reduce emissions is flaw ed because, given the stringent applicability criteria for a “narrowly drawn” affirmative de fense, a facility has no assurance that an affirmative defense will apply to any particular ma lfunction event and that even if the affirmative defense was available, it would not shield the facility from compliance orders or other injunctive relief (or from criminal prosecution). Response: The commenters’ arguments concerning whether elimination of affirmative defense provisions will or will not reduce emi ssions during SSM events and will or will not

reduce incentives for sources to minimize emissions during SSM events do not address the legal basis for any such affirmative defense provisions. As the commenters correctly observed, the EPA’s 1999 SSM Guidance reflected the Agency’s prior interpretation of the CAA to permit such affirmative defense provisions, so long as they were sufficiently narrowly drawn, applied*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 67 of 539 only to monetary penalties and required the source to prove that it met the applicable criteria to the trier of fact in an enforcement proceed ing. The EPA’s arguments for why appropriate affirmative defense provisions could be consis tent with CAA requirements included that they could provide an incentiv e for sources to be properly desi gned, maintained and operated to

minimize emissions at all times. As explained in the SNPR, however, the EPA has determined that affirmative defenses are impermissible in SIP provisions because they operate to alter or eliminate the statutory jurisdiction of the courts . The EPA has reached this conclusion in light of the court’s decision in

NRDC v. EPA . Because affirmative defense provisions are inconsistent with the enforcement structure of the CAA, the EPA is making the finding that such provisi ons are substantially inadequate to meet legal requirements of the CAA. In order to make the finding that these provisions fail to meet legal requirements of the CAA, the EPA is not required to determine or estimate emission reductions that will or will not result from the removal of such provisions from the affected SIPs. The EPA’s obligation would not change even if commenters were correct in

their view that emissions reductions will not result from the removal of the impermissible affirmative defense provisions. The EPA’s interpretation of its authority under se ction 110(k)(5)

is discussed in detail in section VIII.A of this notice. The EPA agrees that in res ponse to this SIP call directi ng the removal of affirmative defense provisions, the affected states may elect to revise affected SIP emission limitation. In so doing, the states may determine that it is appropria te to revise the emission limitations in other respects, so long as they do so consistent with CAA requirements. For example, affected states may elect to create alternative emission limitati ons that apply to sour ces during startup and shutdown. The EPA’s guidance for this approach is discussed in detail in VII.B.2 of this*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 68 of 539 document. Alternatively, states ma y elect to overhaul an affected SIP emission limitation entirely

to account for the removal of the affirmative de fense in some other way. However, states will need to comply with the applicable substantiv e requirements for the t ype of SIP provision at

issue and the EPA will review those SIP revisi ons in accordance with the requirements of the CAA, including section 110(k)(3), section 110(l) and section 193.

10. Comments that the elimination of affirma tive defense provisions will result in sources’ facing inconsistent treatment by courts or states when excess emissions are emitted during

malfunction events.

Comment: Commenters claimed that the concept and framework for affirmative defense provisions are consistent from state to state a nd that by removing these provisions, sources will be subject to inconsistent treatment of exce ss emissions during SSM in different states. The

commenters noted that the EPA r ecognized in the February 2013 pr oposal and SNPR that states may elect to revise their deficien t SIP provisions differently in re sponse to the SIP call and thus the commenters expressed concern that the poten tial difference in treatment among states will lead to “inconsistent regulation of air pollution across the country.” Commenters further argued that without th e consistent regulator y framework provided by an affirmative defense provision, eac h court is likely to evaluate SSM events differently in the context of enforcement actions. The commenters sugge sted that allowing each court to consider

the facts and circumstances of the emission even t in its penalty evaluation without a governing

framework could lead to inconsistent enforcement throughout the country. Response: The EPA disagrees that it is inappropria te to allow states to determine how best to revise their SIPs in response to this SIP call, consistent with CAA requirements. As discussed in this document, and as many commente rs have also noted, th e structure of the CAA*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 69 of 539 is based upon cooperative federalism . Under this structure, Congre ss gave states broad discretion to develop SIP provisions as necessary to atta in and maintain the NAAQS and meet other CAA objectives, so long as the SIPs also meet statut ory requirements. The very nature of the SIP program is that similar sources can be treated di fferently in different states, because the states have discretion with respect to developing their SIP provisions consistent with CAA requirements. Thus, whether or not the affirmative defense provisions at issue in this action

added some level of “consistent” treatment of so urces across the nation (a statement with which the EPA does not agree) is not rele vant for purposes of this SIP call. 48 Rather, for the reasons explained in the SNPR and in this notice, th e EPA has determined that affirmative defense provisions are inconsistent with the fundamental legal require ments of the CAA. For that reason, the EPA is requiring the affected states to revise their SIPs to remove the affirmative defense provisions identified in this action. States have di scretion in how they revise their SIPs in this

context as in all other contexts. As to the concern that different courts might evaluate liability for violations during SSM events differently in the absence of affirmative defense provisions, the EPA notes that this is not the relevant question. The potential for inconsiste nt treatment by the courts is not a basis for allowing states to retain SIP provisions that are inconsistent with the legal requirements of the CAA. In any event, the EPA disagrees that elimin ation of affirmative defenses in SIP provisions make it more likely that there would be “incons istent enforcement” because of a lack of a

48 The EPA notes that the actual affirmative defens e provisions at issue in this action are very dissimilar; some are based on the EPA’s interp retation of the CAA in the 1999 SSM Guidance, but the majority of the provisions are relatively un ique from state to stat e. Accordingly, the EPA disagrees with the commenters’ basic premise that the affirmative defense provisions are consistent from state to state.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 70 of 539 “regulatory framework.” The enforcement struct ure of the CAA embodied in section 113 and section 304 already provides a structure for enfo rcement of CAA requirements in federal courts. For example, the CAA already provides uniform crit eria for courts to apply, based upon the facts

and circumstances of individual enforcement actions. Similar to an affirmative defense provision, section 113(e) already enum erates the factors that courts are required to consider in determining appropriate penaltie s for violations and thus ther e is a consistent statutory framework. In essence the commenters object to th e fact that in any judicial enforcement case, the court will determine liability and remedies based on the facts and circumstances of the case. However, this is an inherent feature of the en forcement structure of the CAA, regardless of whether there is an affirmative defense provision at issue.

11. Comments that the EPA shoul d have acted in a single, co mprehensive rulemaking rather than issuing the supplemental notice of proposed rulemaking.

Comment: Commenters asserted that the EPA’ s issuance of two separate proposals instead of one proposal has prevented states and industry from knowing the entire proposed regulatory action. The commenters claimed that if the EPA is going to issue a SIP call to states concerning the treatment of emissions during SS M events, then it shou ld do so in a single comprehensive rulemaking. The commenters argued this is necessary because states consider different options when revising SI P provisions and that thereafter st ates will have to work with affected sources to revise permits. Response: The EPA disagrees with the argument that states, industry, individuals and other interested parties have not had an oppor tunity to know and comment upon the Agency’s entire action. The EPA’s February 2013 proposal was intended to cover a broad range of issues

related to the correct treatment of emi ssions during SSM events in SIP provisions*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 71 of 539 comprehensively. Because of an intervening cour t decision that affected the substance of the EPA’s initial proposed action, it was necessary to issue a supplemental proposal. The EPA disagrees that the issuance of the SNPR adversely affected the ability of interested parties to understand the Agency’s proposed action, because the SNPR only affected one aspect of the original proposed action. As the EPA expl ained in the SNPR: “In this SNPR, we are supplementing and revising what we earlier proposed as a response to th e Petitioner’s requests but only to the extent the requests narrowly conc ern affirmative defense provisions in the SIPs. We are not revising or seeking further commen t on any other aspects of the February 2013 proposed action.” 49

As to the commenters’ concern that th e EPA should take action in a single comprehensive rulemaking, the Agency is doing s o. This SIP call action a ddresses all aspects of the Petition and it is based upon both the February 2013 proposal and th e SNPR. As advocated by the commenters, the EPA’s objective in this SIP call action is to provide states with comprehensive and up to date guidance concerning the correct treatment of emissions during SSM events in SIP provisions, consistent with CAA requirements as interpreted by recent court decisions. The EPA agrees with the commenters that providing states comprehensive guidance in this rulemaking is important to assist states in revising their SIP provisi ons consistent with CAA requirements. Any necessary changes to permits to reflect the removal of affirmative defense provisions from the underlying SIP will occur later, after the SIP provisions have been revised.

49 79 FR 55919 at 55923.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 72 of 539 12. Comments that the EPA has not proven th at the existence of affirmative defense provisions in SIPs is resulting in specific environmental impacts or interference with attainment and maintenance of the NAAQS.

Comment: Several commenters argued that the EPA has failed to demonstrate that the affirmative defense provisions at issue in th is action have contribu ted to a specific NAAQS violation or otherwise caused harm to public h ealth or the environment. The commenters contend that, because of the narrow scope of affirmativ e defense provisions, it is unlikely that their existence would cause or contribute to any viol ations of the NAAQS. So me commenters further noted that some states have experienced impr oved ambient air quality conditions, despite having SIPs in place with affirmative defense provisions at issue in this action. The commenters alleged that without providi ng specific record-based evidence of the impacts caused by affirmative defense provisions, it is unreasonable for the EPA to determine that existing provisions are substantially inadequate or otherw ise not in compliance with the

CAA. Some commenters further a lleged that the EPA has no author ity to issue a SIP call without “find[ing] that the applicable implementation plan ... is substan tially inadequate to attain or maintain the relevant [NAAQS].” Response: As explained in the February 2013 pro posal, the SNPR and this notice, the EPA does not interpret its authority under section 110(k)(5) to require proof that a deficient SIP provision caused a specific viola tion of the NAAQS at a particular monitor on a particular date, or that a deficient SIP provision undermined a specific enforcement action. Section 110(k)(5) explicitly authorizes the EPA to make a finding that a SIP provisi on is substantially inadequate to “comply with any requirement of” the CAA, in addition to the authority to do so where a SIP is inadequate to attain and main tain the NAAQS or to address inters tate transport. In light of the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 73 of 539 court’s decision in NRDC v. EPA , the EPA has reexamined the question of whether affirmative

defenses are consistent with CAA requirements for SIP provisions . As explained in this action,

the EPA has concluded that such provisions are inconsistent with the requirements of section 113 and section 304. Accordingly, the EPA has the aut hority to issue SIP calls to states, requiring that they revise their SIPs to eliminate the sp ecific affirmative defense provisions identified in this action. Issues related to the EPA’s authority under section 110(k)(5) are discussed in more

detail in section VIII.A of this document. 13. Comments that the EPA is violating the prin ciples of cooperative federalism through this

action.

Comment: Several commenters stated that the EP A’s action with respect to affirmative defenses in SIP provisions is inconsistent with the system of cooperative federalism contemplated by the CAA. The commenters alleged that this action is at odds with established CAA and judicial precedent that states have broad discretion in developing SIP provisions, with the EPA’s role being limited. Some commenters further alleged that the EPA’s action has the effect of unlawfully directing states to impose a particular control measure. The commenters argued that the EPA must defer to a state’s ch oice on how to meet the relevant NAAQS, through whatever SIP provisions they elect to deve lop. One commenter argue d that states have independent authority to include affirmative defense policies in their SIPs, even if the D.C. Circuit has held that the EPA may not include affirmative defense provisions in federal regulations. Response: The EPA agrees that the CAA is based upon the principle of cooperative federalism but disagrees with the commenters’ ch aracterization of the respective authorities and responsibilities of states and the Agency. As explained in the Februa ry 2013 proposal, and in*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 74 of 539 section V.D.2 of this notice, the EPA has the au thority and the obligation to ensure that SIP provisions meet fundamental CAA requirements, when initially submitted and later. In the case of affirmative defenses in SIP provisions, the EPA has determined that such provisions do not comply with CAA requirements because they ope rate to alter or el iminate the statutory jurisdiction of the cour ts, contrary to section 113 and s ection 304. The states have broad discretion to create SIP provision s but must do so consistent with CAA requirements. By issuing this SIP call, the EPA is not in any way compe lling states to impose any specific SIP control measure on any specific source but merely requiring st ates to revise their SIP provisions to make them consistent with CAA requirements.

14. Comments that the EPA failed to account adequately for the amount of time and resources that will be requi red to revise state SIPs.

Comment: Many commenters asserted that the EPA’ s SNPR did not address or recognize that removal of affirmative defense provisions from SIPs will impose enormous burdens on states because they will need to revise SIPs to create alternative emi ssion limitations in lieu of

the affirmative defenses. Commenters contende d that removal of the affirmative defense provisions will necessarily require state air po llution control agencies to make extensive revisions to SIPs and that in many states, such changes will have to be reviewed by the state legislature. Commenters explained that such an effort could not reason ably be completed in many states within the 18 months the EPA proposed to provide for SIP revisions in response to

the final SIP call. Commenters al so stated that the SSM provisi ons that the EPA proposed to require states to remove from their SIPs have been incorporated into thousands of title V operating permits and that those title V permits would, in turn, need to be modified if the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 75 of 539 affirmative defense provisions ar e removed from the approved SI Ps. Commenters indicated that states might also need to amend an even larger number of minor source permits. Commenters also indicated that in conjunc tion with removal of affirmative defenses,

states will also have to reevaluate the emission limitations currently cont ained in their SIPs to

determine if those limitations are still ar e consistent with federal and state law ( e.g. , represent reasonably available control technology). Some commenters expressed the view that the EPA must indicate that states will not be require d to remove the identified affirmative defense provisions from their SIPs until the state has had ti me to consider whether emission limitations in state regulations and in construc tion and operating permits need to be modified and to obtain any necessary EPA approval for the modified requirem ents. Commenters also argued that the EPA’s suggestion that states subject to a SIP call could simply remove an existing affirmative defense provision and rely on enforcement discretion to address “unavoidable” exceedances is wrong and that states adopt emission limitations under state ad ministrative rules that require the agency to provide a record to support the level of the emission limitation. Response: The EPA disagrees that it did not acknowl edge that correction of the deficient SIP provisions at issue in this action will take time and resources. For this reason, the EPA is providing states with the maximum 18 months pe rmitted by section 110(k)(5) to respond to this SIP call. In addition, the EPA is endeavoring to provide states with clear and comprehensive guidance concerning the proper treatment of excess emissions during SSM events in SIP provisions in order to make th is process more efficient. The EPA acknowledges that some states, in conjunction with removal of affirmative defense provisions, may elect to undertake a mo re comprehensive revision of affected SIP emission limitations. In so doing, the states may need to undertake a mo re resource intensive*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 76 of 539 approach than those states that merely elect to eliminate the affirmative defense provisions. In addition, the EPA also recognizes that states may eventually need to revise permits to reflect the elimination of affirmative defense provisions from underlying SIP provisions that may have been reflected in permits. The EPA discussed these issu es in the both the February 2013 proposal and

in the SNPR. Despite the potential burden on states, as the EPA explained in the February 2013 proposal and the SNPR, the Agency believes that it is obligated and authori zed to issue this SIP

call action to affected states to require the removal of affirmativ e defense provisions. The EPA is not in this action evaluating or determining whether SIP emission limitations should or should not be revised in light of the removal of affirm ative defenses and is not required to do so. The

states have discretion to determine how best to revise the deficient SIP provisions identified in this action, so long as they do so cons istent with the CAA requirements. Further, the EPA does not agree that enfor cement discretion cannot substitute for an affirmative defense for malfunctions. For example, the EPA has taken the position that the CAA does not require malfunction emissions to be factor ed into development of section 112 or section 111 standards and that case-by-case enforcemen t discretion provides sufficient flexibility. 50 Moreover, the EPA believes that Congress has alr eady provided for such flexibility in section 113, by providing the courts with ju risdiction to determine liability and to impose remedies. For example, in section 113(e), Congress provided specifi c criteria for courts to consider in imposing monetary penalties, includes consideration of such factors as justice may require.

50 See, e.g. , “Oil and Natural Gas Sector: Reconsider ation of Additional Provisions of New Source Performance Standards; Proposed ru le,” 79 FR 41752 at 41762–63 (July 17, 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 77 of 539 With respect to the potential need to ame nd permits, as explained in the February 2013 proposal, “the EPA does not intend its action on th e Petition to affect existing permit terms or conditions regarding excess emissi ons during SSM events that re flect previously approved SIP provisions....[A]ny needed revisions to existing permits will be accomplished in the ordinary course as the state issues new permits or reviews and revises existing permits. The EPA does not

intend the issuance of a SIP call to have auto matic impacts on the terms of any existing permit.” 51 Thus, these permit revisions that commente rs expressed concern about need not occur during the 18 month SIP development timeframe but may proceed thereafter according to normal permit revision requirements. Finally, the EPA notes the burdens associated with SIP revisions and permit revisions are burdens imposed by the CAA. The states have bo th the authority and the responsibility under the CAA to have SIPs and permit programs that meet CAA requirements. It is inherent in the

structure of the CAA that states thus have the bu rden to revise their SIPs and permits when that is necessary, whether because of changes in the C AA, changes in judicial interpretations of the CAA, changes in the NAAQS, or a host of other poten tial events that nece ssitate such revisions. Among those is the obligation to respond to a SIP call that identifies legal defi ciencies in specific provisions in a state’s SIP. 15. Comments that the EPA is being inconsis tent because rules promulgated by the EPA provide affirmative defense provi sions for malfunction events.

Comment: A number of commenters claimed that the EPA cannot interpret the CAA to prohibit affirmative defenses in SIP provisions b ecause the Agency itself has issued regulations

51 See February 2013 proposal, 78 FR 12459 at 12482 (February 22, 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 78 of 539 that include affirmative defenses for ex cess emissions during malfunction events. The commenters claim that the EPA is being inconsiste nt on this point and thus cannot require states

to remove affirmative defenses from SIPs. Other commenters alleged that the EPA is being inconsistent because it has not adequately explained the revers al of its “decades-old” policy interpreting the CAA to allow affirmative defenses in SIP pr ovision. The commenters cited to SIP provisions that the EPA previously approved in eight states between 2001 and 2010 that they believed would be affected by this SIP call. The commenters claimed that these prior actions were consistent with the EPA’s SSM policy memoranda. Additionally, the commenters cited to federal regulations that the EPA has previously promulgated that include a ffirmative defense provisions. The commenters claimed that these prior actions are “incons istent with EPA’s proposed disallowance of

affirmative defenses.” Response: The EPA has acknowledged that it has previously approved some SIP provisions with affirmative defenses that were c onsistent with its interpretation of the CAA in

the 1999 SSM Guidance at the time it acted on those SIP submissions. However, since that time,

two decisions from the D.C. Circuit have addr essed fundamental interp retations of the CAA related to the legally permissible approaches for addressing excess emissions during SSM events. In light of those decisions, as explained in detail in the February 2013 proposal, the SNPR and this notice, the EPA has concluded that certain aspects of its prio r interpretation of the CAA, as set forth in the SSM Policy, were not the best in terpretation of the CAA. As a result, certain SIP provisions that the EPA previously approved are also not consistent with the requirements of the CAA. In particular, this include s the EPA’s prior interpretation of the CAA to allow affirmative defense provisions in SIPs in the 1999 SSM Guidance.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 79 of 539 The EPA has also acknowledged that it has in the past taken a similar approach regarding affirmative defense provisions in federal regul ations addressing hazardous air pollution and in new source performance standards. Indeed, the EPA’s inclusion of an affirmative defense provision in a federal regulation re sulted in the court decision in NRDC v. EPA , in which the court rejected the Agency’s interpretation of the CAA to allow affirmative defenses that limit or eliminate the jurisdiction of the courts. Just as th e EPA is calling on states to revise their SIPs to remove affirmative defense provisions, the Ag ency is also taking action to correct such provisions in federal regulations. 52 The continued existence of such provisions in the EPA regulations that have not yet been corrected does not mean that such provisions are authorized either in state or federal regulations. As to the claim that the EPA has not explaine d the basis for changing its interpretation of the CAA regarding affirmative defenses in SIP pr ovisions, the Agency disagrees. The SNPR set

forth in detail the basis for the EPA’s revised interpretation of th e CAA, in light of the court’s

decision in NRDC v. EPA

. 53 The commenters failed to specify why this explanation was “inadequate.” 16. Comments that existing affirm ative defense provisions do not preclude parties from filing enforcement actions or hinder parties from seek ing injunctive relief for violations of SIP requirements.

Comment: One state commenter asserted that th e existing affirmative defense provisions in the state’s SIP do not prevent the state or the EPA from pursuing injunctive relief or mitigation of environmental impacts in the even t of violations. Thus, the commenter supported

52 See, e.g. , 79 FR 60893 (October 8, 2014); 79 FR 72914 (December 8, 2014). 53 79 FR 55919 at 55929–30.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 80 of 539 the EPA’s prior interpretation of the CAA to allow affirmative defense provisions, so long as courts can still award injunctive relief for viola tions. The commenter did not articulate how this prior statutory interpretation is consiste nt with the reasoni ng of the court in NRDC v. EPA concerning the same statutory provisions. By contrast, an environmenta l group commenter cited a citizen suit enforcement case in

Texas in which the commenter claimed that the a ffirmative defense provision in that state’s SIP operated as a de facto shield against any enforcement. The commenter stated that the EPA’s approval of the affirmative defense was premised upon its only applying to civil penalties and not to injunctive relief and that the Agency’s approval of the SIP provision was explicitly upheld on this basis by the Fifth Circuit. Nevertheless, the commenter asserted, the state agency has implemented this provision such that if the affi rmative defense criteria are met, there is “no violation” and thus no potent ial for injunctive relief. Response: The EPA agrees that some of the affirmative defense provisions at issue in this action are expressly limited to mone tary penalties and not to injunc tive relief. This approach was consistent with the EPA’s prior interpretati on of the CAA concerning affirmative defense provisions in SIPs but also consistent with the arguments that the D.C. Circuit rejected in the

NRDC v. EPA decision. Thus, the fact that some of th e affirmative defense provisions addressed in this action preserve the possibility for inj unctive relief, even if the court could award no monetary penalties, is no longer a deciding factor. The EPA also agrees that some agencies or courts may not apply the affirmative defense provisions in the manner intended at the time the EPA approved them into the SIP. Incorrect application of SIP affirmative de fense provisions by sources, regulat ors or courts is a matter of concern. At this juncture, however, even perfect implementation of a SI P affirmative defense*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 81 of 539 provision does not cure the underlying absence of a legal basis for such provisions. Again, the fact that a given affirmative de fense provision is being implemente d correctly or incorrectly is no longer a deciding factor for purpos es of this SIP call action. These issues are not pertinent to the EPA’s d ecision in this action to require states to remove the affirmative defense provisions fr om the previously approved SIPs. Rather, as explained in detail in the SNPR and this final action, the EPA is requiring the affected states to remove these SIP provisions because they are inconsistent with CAA requirements. As explained in the SNPR, the EPA has concluded that such affirmative defenses in SIP provisions are

inconsistent with section 113 and section 304, in light of th e reasoning of the court in NRDC v.

EPA

. 17. Comments that the EPA is changing its polic y on affirmative defenses, which is arbitrary and capricious and an impermissible basis for a SIP call.

Comment: Several commenters stated that the EP A’s action with respect to affirmative defense provisions marks a change in the EPA’ s approach to these pr ovisions. The commenters alleged that this SIP call action is not mandated by judicial pr ecedent, and therefore the SNPR simply reflected a “policy change” by the EPA. The commenters argued that, while the EPA is permitted to change its policy or interpretation of the law, this specific change is arbitrary and capricious and forces unreasonably difficult and burdensome requirements on states and sources.

The commenters asserted that the EPA failed to explain adequately this change in policy or to document reasons for the change in the administ rative record. Some commenters further alleged that the EPA does not have authority to impose its policy preferences on states. Response: The EPA disagrees that the basis for this SIP call action is a change of “policy” as alleged by the commenters. The EP A’s guidance to states concerning the proper*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 82 of 539 treatment of excess emissions during SSM events in SIP provisions is provided in the SSM Policy, but this guidance reflects the Agency’s interpretation of statut ory requirements. As explained in detail in the SNPR and in this doc ument, the EPA is changing its interpretation of the CAA with respect to affirmative defenses in SIP provisions based on the logic of the court in

NRDC v. EPA. Further, as acknowledged by commenters, the EPA is permitted to change its interpretation of the statute provided that it cl early explains the basis for the change. The EPA clearly explained the basis for the changed interpre tation in the SNPR based on its analysis of the legal rationale respecting s ections 113 and 304 in the NRDC v. EPA decision. 18. Comments that emissions during malfunction periods are not “excess” or “violations,” but rather are part of the esta blished SIP emission limitations.

Comment: Commenters cited the EPA’s brief filed in the Fifth Circuit Luminant

Generation v. EPA case in support of an argument that stat es are not required to attach a penalty or any certain amount of penalty to a violation of a SIP em ission limitation. The commenters noted that in the brief, the EPA stated that unde r section 110 of the CAA, states are authorized “to determine what constitutes a violation, and to distinguish both quantitatively and qualitatively between different types of violations.” Further, the commenter noted, the EPA argued in the brief that because the violation is defined by the state, an affirmative defense does not impinge of the court’s jurisdiction. The commenters cont ended that nothing has changed since the brief was filed to justify a change in interpretation of the CAA and that the EPA failed to explain why its prior interp retation is no longer correct.

Other commenters claimed that the EPA takes the position that affirmative defenses in SIP provisions conflict with the court’s jurisdicti on over enforcement actions and stated that this position is flawed because enforcement is limited to violations as defined in the context of the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 83 of 539 SIP. The commenters asserted th at section 304 does not apply when there is no SIP requirement being violated and that the state has the author ity to define what constitutes such a violation. Similarly, commenters argued that an affirmative defense provisi on may provide that emissions

will not be “violations” if criteria are met and ther efore do not interfere with a court’s ability to determine appropriate penalty amounts under 113. The commenters contended, because the state has the authority to define what constitutes a viol ation, SIP provisions that include an affirmative defense do not infringe on a court’s authority to penalize a source because the CAA does not provide a court with jurisdic tion to impose remedies in the absence of liability. Response: The EPA explained in detail the rationale for its change in interpretation of the CAA regarding affirmative defenses in th e SNPR. The EPA acknowledges that in the Luminant

Generation v. EPA case, the Agency argued that states are authorized to determine what

constitutes a violation and to distinguish between different ty pes of violations. As the EPA explained in the SNPR, the court in Luminant Generation v. EPA held that the Agency’s interpretation of the CAA to permit affirmative defenses applicable to malfunctions at that time was a “permissible interpretation of section [113], warranting defe rence.” The same court also upheld the EPA’s interpretation of the CAA to pr eclude affirmative defenses for planned events

on the same basis that it was a reasonable inte rpretation of the CAA. However, the EPA has reevaluated this interpretation of the CAA requirements in light of the more recent NRDC v. EPA decision, and the Agency now believes that its prio r interpretation of the C AA with respect to the approvability of affirmative de fense provisions in SIPs is no longer the best reading of the statute. Thus, the Agency’s view now is that a “violation” cannot be defined in a manner that interferes with the court’s role in assessing remedi es. It is irrelevant th at the EPA had argued for a different interpretation in the past as the Ag ency now believes that the court’s analysis in*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 84 of 539 NRDC v. EPA is the better reading of the provisions of the st atute concerning affirmative defenses. The EPA has authority to revise its prior interpretation of the CAA when further consideration indicates to the Agency that its pr ior interpretation of the statute is incorrect. The EPA fully explained the basis for this change in its interpretation of the CAA in the SNPR. The EPA agrees that in some cases, affirmativ e defense provisions at issue in this SIP call action are structured as a complete defense to any liability, not merely a defense to monetary penalties. The EPA has also determined that a ffirmative defense provisions of this type are substantially inadequate to m eet CAA requirements. Although such affirmative defenses may not present the same concerns as affirmative defenses applicable only to penalties, such affirmative defenses may create a different concern because they in effect provide a conditional exemption from otherwise applicable emission limitations. If there is no “violation”when the criteria of such an “affirmative defense” are met and no legitimate alternative emission limitation applies during that event, then such an affirmative defense in effect operates to create a conditional exemption from applicable emission limitations. This form of “affirmative defense” provision therefore runs afoul of different CAA requirements for SIP pr ovisions. Under section 302(k) of the CAA,

emissions standards or limitations must be continuous and cannot in clude SSM exemptions, automatic or otherwise. Regardless of whether the commenters believe that this form of “affirmative defense” should be allowed, the EPA believes that provisions of this form are

inconsistent with the decision of the court in Sierra Club v. Johnson . In that case, the court held

that emission limitations under the CAA must im pose continuous contro ls and cannot include exemptions for emissions during SSM events. Th e EPA concludes that making the exemptions

from emission limitations conditional does not alter the f act that once exercise d they are illegal exemptions.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 85 of 539 19. Comments that the definition of “emission limitation” in CAA section 302(k) does not support this SIP call action.

Comment: Several commenters noted that while the EPA depends on the definition of “emission limitation” in the CAA section 302(k) for this action, that CAA provision does not support this SIP call action, includ ing that the CAA does not require that SIPs contain continuous emissions standards in the form asserted by the EPA. The commenters alleged that the definition in the CAA and supporting materials interpre ting that definition do not support the EPA’s requiring one emission limitation to apply in all circumstances at all times. Some commenters further alleged that states subject to the EPA’ s SIP call action have implementation plans that provide emission limitations that apply cont inuously through a combination of numerical emission limitations, the general duty to minimize emissions and the affirmative defense criteria for excess emissions during malfunctions. Several commenters questioned why, even if the challenged affirmative defense provisions do not qualify as “emission limitations ” or “emissions standard s” under the first part of the definition, they are not approvable as “design, equipment, work practice or operational standards” promulgated under the second part of the definition. Some comme nters argued that, to the extent that affirmative defense provisions in SIPs do not satisfy th e definition of “emission limitation,” they would still be approvable elements of a SIP as “other control measures, means, or techniques” allowed under CAA section 110(a)(2). Further, some commenters believe that the legislative history cited in the EPA’s SNPR does not support the EPA’s position but rather is only intended to preclude the use of dispersion techniques, such as in termittent controls.

One commenter stated that the Portla nd Cement NESHAP, at issue in the NRDC v. EPA decision, was classified by statute as an “emissions standard,” a term defined by the CAA and*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 86 of 539 defined as applying “on a continuous basis.” The commenter stated that SIP provisions involve

more than “emissions standards” and need not be “emissions standards.” 54 Thus, according to the commenter, the NRDC v. EPA decision does not apply to SIP rules. Response: The commenters alleged that the EPA’s interpretation of the CAA section 302(k) definition of “emission limitation” in this action was inappropriate and that section 302(k) does not support this SIP call acti on. The EPA notes that it is not the Agency’s position that all emission limitations in SIP provisions must be se t at the same numerical level for all modes of source operation or even that they must be expressed numerically at all. To the contrary, the EPA intended to indicate in the proposal documents that states may elect to create emission limitations that include alternative emission limitations, incl uding specific technologi cal controls or work practices, that apply du ring certain modes of source operatio n such as startup and shutdown. However, this comment is not relevant to the issu e of affirmative defense pr ovisions in SIPs. It is not for the reason that affirmative defense provi sions do not meet the de finition of an “emission limitation” in section 302(k) that the EPA is promulgating this SIP call action for affirmative defense provisions. The EPA has concluded that a ffirmative defense provis ions are substantially inadequate to meet CAA requirements concerning enforcement, in particular the requirements of

section 113 and section 304. As to commenters’ argument that affirma tive defense provisions can be appropriately considered to be “design, equipment, work pr actice or operational standards” under CAA section 302(k), the critical aspect of an emission limitation in general is that it be a “requirement . . . which limits the quantity, rate, or concentration of emissions of air pollutants on a continuous

54 See CAA section 110(a)(2)(A).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 87 of 539 basis . . . .” These provisions operate to excuse sources from liability for emissions under certain conditions, not to limit the emissions in question. The affirm ative defense provisions at issue in this final action do not themselves, or in combination with other components of the emission limitation, limit the quantity, rate or concentration of air pollutants on a continuous basis. These affirmative defense provisions, therefore, do not themselves meet the statutory definition of an emission limitation under section 302(k).

The EPA notes that the defin ition of “emission limitation” in section 302(k) is relevant, however, with respect to those affirmative defens e provisions that commenters claim are merely

a means to define what constitutes a “violation” of an applicable SIP emission limitation. As previously explained, the EPA belie ves that an “affirmative defense” structured in such a fashion

is deficient because it in effect creates a conditional exemption from the SIP emission limitations. By creating such exemptions, conditional or otherwise, an affirmative defense of this type would render the emission limit ations less than continuous. The EPA disagrees with commenters’ remain ing points because th e EPA’s position on what appropriately qualifies as an emission limit ation is consistent with the CAA, relevant legislative history and case law. These issues are addressed in more detail in sections VII.A.3.i through 3.j of this document.

20. Comments that the EPA has failed to show st ate SIPs are substantia lly inadequate, as is required to promulgate a SIP call.

Comment: Several commenters noted that before the EPA can issue a SIP call under section 110(k)(5) with respect to affirmative defe nse provisions, the EPA must determine that a SIP provision is “substantially inadequate to at tain or maintain the relevant [NAAQS], to mitigate adequately the interstate pollutant transport described in section 7506a of this title or*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 88 of 539 section 7511c of this title, or to otherwise comp ly with any requirement of this chapter.” The commenters further stated that Congress employe d a high bar in the la nguage of CAA section 110(k)(5) in requiring the EPA to find “substantia l” inadequacies, as opposed to other CAA provisions that permit the Agency to act based on “discretion” or when it “may be appropriate.” The commenters alleged that the EPA has not de monstrated a “substantial inadequacy” with respect to the affirmative defense provisions at issue in the SNPR, as required to issue a SIP call.

Some commenters also ar gued that the EPA has failed in it s SNPR to define or interpret “substantially inadequate ” or provide any standards for asse ssing the adequacy of a SIP with respect to affirmative defense provisions. The commenters also alleged that, if the EPA is required to rely on data and evidence in evalua ting SIP revisions, it follo ws that the EPA should produce at least the same level of data and evidence, if not more, to support a SIP call that is based on the more stringent substantial inad equacy standard of section 110(k)(5). Response: The EPA disagrees with the commenters’ arguments that the Agency has

failed to establish that the affirmative de fense provisions identified in the SNPR are “substantially inadequate” as requ ired by section 110(k)(5). As e xplained in the SNPR and this action, the EPA has determined that affirmative defense provisions at i ssue in this action are substantially inadequate because th ey are inconsistent with applicable legal requirements of the CAA. The commenters raised similar arguments w ith respect to the EPA’s authority to issue a

SIP call to address other forms of deficient SIP provisions, such as automatic or discretionary exemptions from emission limitations. The EPA res ponds to these broader arguments in sections VIII.D.46 through D.48 of this document. 21. Comments that this action is not national in scope, and therefore the D.C. Circuit is not

the sole venue for review of this action.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 89 of 539 Comment: Several commenters claimed that the EPA is incorrect in stating that this SIP call action is a single nationally applicable ac tion and of nationwide scope or effect. The commenters alleged that review of all affected SIP provisions in a sing le action in the D.C. Circuit would inappropriately lim it the scope of review by obscu ring distinctions between the various states’ regulatory programs and practical concerns. The commenters asserted that none of the various state SIP provision s addressed in the SNPR were the same, and the EPA analyzed each separately and provided case-by-case just ification for its propos ed action as to each. Further, the commenters argued that although the EPA has packaged the SIP calls in one Federal Register notice, any final action that the EPA takes w ith respect to a single state’s affirmative defense provision is only locally applicable and therefore should be review ed in the individual circuits with jurisdiction over the affected stat e. One commenter further contended that, while the EPA’s revised SSM Policy may be of interest to states to which the SIP call does not directly apply, that does not make the ru le “nationally applicable.” The commenters acknowledged that the EPA cited Texas v. EPA in support of its assertion, but the commenters allege that the Fift h Circuit in that case ne ver reached the issue of nationwide scope and effect. 55 The commenters claimed that this SIP call action is distinct from

the rule at issue in Texas v. EPA because this final action turns on the particulars of the SIP call action’s impact on each individual state’s SIP. One commenter also claimed that the EPA has failed to provide authority or a legal basis to sup port its determination that this rulemaking is of “nationwide scope or effect.” Such failure , according to the commenter, violated the

55 See No. 10-60961, 2011 WL 710598 (5th Cir. Feb. 24, 2011).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 90 of 539 requirements of section 307(d)(3) and did not al low for full and meaningful comment on this

issue. One commenter alleged that the EPA has waived its challenge to venue for those circuits that have already weighed in re garding individual stat e SIP provisions at issue in this action, including Texas’s affirmative defense provi sions. Another commenter claimed that the discussion over appropriate venue in the February 2013 proposal and SNPR presupposes that the

EPA’s issuance of a revised SSM Po licy is a “final agency action” subject to judicial review under section 307(b)(1) but argued that the EPA has failed to de termine that its issuance of the SSM Policy, in and of itself, cons titutes “final agency action.” Response: The EPA disagrees with the commenters ’ theories concerning the scope of the Agency’s action. These comments on the SNPR questioning the EPA’s determination of “nationwide scope and effect” for this action la rgely repeat similar co mments on the February 2013 proposal. As with those prior comments , commenters on the SNPR made the basic argument that this action is not of nationwide scope and effect because the EPA is reviewing individual SIP provisions and dire cting states to correct their re spective deficient SIP provisions. The EPA disagrees with commenters because, as e xplained in more detail in its response in section V.D.6 of this document, this rulemaki ng action applies the same “process and standard” to numerous areas across the country. While it is correct that the SIP submissions that states make in response to this SIP call will be revi ewed separately by the EPA and subsequently subject to potential judicial revi ew in various circuits, the EPA’s legal interpretation of the CAA concerning permissible SIP provisi ons to address emissions during SSM events in this action is nationally applicable to all states subject to th e SIP call. The EPA provided a full explanation of*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 91 of 539 its basis for this determination of nationwide sc ope and effect in the February 2013 proposal and

the SNPR. The EPA also disagrees with the argument th at the Agency has waived venue regarding challenges to this SIP call action concerning the a ffirmative defense provisi ons in the Texas SIP. Evidently, the commenter believes that because a prior challenge to another EPA rulemaking concerning the affirmative defense provisions occurre d in the Fifth Circuit, it necessarily follows that any other rulemaking related to such provisi ons can only occur in the Fifth Circuit. The EPA believes that this interpretation of its authority under section 307( b)(1) is simply incorrect. Under section 307(b)(1), the EPA is e xplicitly authorized to make a determination that a specific rulemaking action is of “nationwide scope a nd effect.” The statute does not specify the

considerations that the EPA is to take into a ccount when making such a determination, let alone provide that the Agency cannot i nvoke this because some aspect of the rulemaking at issue might previously have been addressed in one or more other circuit courts. To the contrary, the EPA believes that section 307(b)(1) explicitly provides authority for the Agency to determine that a given rulemaking should be reviewed in the D.C. Ci rcuit in situations such as those presented in this action that affects important questions of statutory interpretati on that affect states

nationwide. The EPA likewise disagrees with the argument that its action, includ ing the issuance of the revised and updated SSM Policy of 2015, is not a final agency action. W ithin this action, the EPA is taking final agency action to respond to the Petition, updating its interpretations of the CAA in the SSM Policy and applying its interpretations of the CAA in the SSM Policy to specific SIP provisions in the SIPs of many st ates. The EPA is conducting this action through notice-and-comment rulemaking to assure fu ll consideration of the issues. The EPA’s*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 92 of 539 interpretations of the CAA requirements for SIP provisions applicable to emissions during SSM events are part of the final agency action and ar e subject to judicial re view. To the extent the commenters are arguing that the is suance of the updated SSM Policy in and of itself is not final agency action, the EPA notes that the commenters are at liberty to adopt this position and waive their opportunity to challenge th e SSM Policy because they do not consider it final agency

action. 22. Comments that the EPA should clarify that SIPs can include work practice standards or general-duty clauses to apply during malfuncti on periods in place of affirmative defense provisions.

Comment: Several commenters stated that the EPA should announce in this final action that in lieu of affirmative defenses, states may el ect to revise their SIP pr ovisions to include work practice standards or general-duty clauses that are modeled on existing affirmative defense provisions and that would apply during malfunctions. Most of th ese commenters advocated that the EPA’s previously recommended criteria for an “affirmative defense” for malfunctions should simply be changed into criteria for a “work practice” provision instead. One commenter made the same suggestion but also advocated that th e EPA eliminate six of the nine criteria and rephrase the remaining criteria, in order to “i mprove the standards, reduce uncertainty, and reduce wasteful litigation.” This commenter advocated that the EPA also redefine the term “malfunction” to much more broadly mean any “sudden and unavoidable breakdown of process or control equipment.” Speci fically, the commenter advocat ed, the EPA should no longer

recommend that a malfunction be defined as an event that: (i) was caused by a sudden, infrequent and unavoidable failure of air pollution cont rol equipment, process equipment or a process to operate in a normal or usual manne r; (ii) could not have been prevented through*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 93 of 539 careful planning, proper design or better operation and maintenance practices; (iii) did not stem from any activity or event that could have been foreseen and avoided or planned for; and (iv) was not part of a recurring patte rn indicative of inadequate design, operation or maintenance. By changing the “affirmative defense” provisions for malfunctions into “work practice” or “general duty” provisions for malfunctions, the commen ters argued, the revised provisions would be consistent with CAA requirements. Under th is approach, the commenters asserted that compliance with these new requirements would mean that any emissions during a malfunction

event could not be considered “excess” or result in any violation if the source had complied with the “work practice” criteria. Response: As an initial matter, the EPA has not established a regulatory definition of “malfunction” that is binding on states when devel oping SIPs. States have th e flexibility in their SIPs to define that term. Thus, the EPA is not addressing here the comments requesting EPA to

“redefine” the definiti on of malfunction. Regarding the more general concern of the commenters, that states be allowed to

establish an alternative emission limitation in the form of a work practice standard that applies during malfunctions, the EPA notes two points. Fi rst, the CAA does not pr eclude that emissions during malfunctions could be addressed by an a lternative emission limitation. The EPA’s general position in the context of standards under sec tions 111, 112 and 129 is tha t: (i) the applicable emission limitation applies at all times incl uding during malfunctions; (ii) the CAA does not require the EPA to take into account emissions that occur during peri ods of malfunction when setting such standards; and (iii ) accounting for malfunctions would be difficult, if not impossible, given the myriad types of malfunc tions that can occur across all sources in a source category and given the difficulties associated with predic ting or accounting for the frequency, degree and*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 94 of 539 duration of various malfunctions that might occu r. Although the EPA has not found it practicable to-date to develop emission standards that appl y during periods of malf unction in place of an otherwise applicable emission limitation, this does not preclude the possib ility that a state may

determine that it can do so for all or some set of malfunctions. Second, states are not bound to establish any specific definition of “malfunction” in their SIPs. Thus, it is difficult to judge at this time whether any particular alternativ e emission limitation in a SIP for malfunctions, including any specific work prac tice requirements in place of an otherwise applicable emission limitation, would be approvable. With regard to the specific comment that the affirmative defense criteria could be converted into a work practice re quirement to apply during malfuncti ons in place of an otherwise applicable emission limitation, the EPA is unsure at this time whether th e criteria previously recommended for an affirmative defense provisi on would meet the oblig ation to develop an appropriate alternative emission limitation. Existi ng affirmative defense criteria (which include, among other things, making repairs expeditious ly, taking all possible steps to minimize emissions and operating in a manner consistent with good practices for minimizing emissions) were developed in the context of helping to de termine whether a source should be excused from monetary penalties for violations of CAA requirements and were not developed in the context of establishing an enforceable alternative emissi on limitation under the Act. The EPA would need to consider this approach in the context of a specific SIP regulation for a specific type of source and emission control system. Finally, the EPA notes that any emission lim itation, including an alternative emission limitation, that applies during a malfunction must meet the applicable stringency requirements for that type of SIP provision ( e.g. , would need to meet RACT fo r sources subject to the RACT*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 95 of 539 requirement) and must be legally and practica lly enforceable. Thus, the SIP provision would need to: (i) clearly define wh en the alternative emission limita tion applied and the otherwise applicable emission limitation did not; (ii) clearly spell out the requirements of that standard; and (iii) include adequate monitori ng, recordkeeping and reporting requi rements in order to make it enforceable. In addition, the state would need to in clude emissions attributable to these foreseen events in emissions inventories, modeling dem onstrations and other re gulatory contexts as appropriate.

23. Comments that the EPA has failed to account adequately for the cost of this SIP call

action and is therefore in viol ation of the Regulatory Flexibi lity Act, the Unfunded Mandates Reform Act and Administration policy.

Comment: Two commenters argued that the SNPR l acks sufficient analysis of what this action will cost states, stationary sources and th e public. The commenters allege that this absence of economic impact analysis is contrary to the Regulatory Flexibility Act, the Unfunded Mandates Reform Act and Administration policy. One of the commenters also noted that imposing substantial “unfunded mandates” on state regulatory agencies an d forcing stationary

sources to absorb additional cost s should be evaluated carefully. Response: The EPA disagrees with the commenters ’ allegation that the EPA has failed to comply with relevant statutes and Administrati on policy in accounting for th e cost of the actions proposed in the SNPR. The EPA did in fact prope rly consider the costs imposed by this action.

These issues are addressed in more detail in section V.D.7 of this document.

24. Comments that states should not be required to eliminate affirmative defense provisions but rather should be allowed to revise them to be appropriate under CAA requirements.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 96 of 539 Comment: One state commenter claimed that it s hould be allowed to revise its existing affirmative defense provisions ra ther than remove them. The commenter asserted that the state should be allowed to revise the provision to make clear that it does not apply to private enforcement actions under CAA section 304(a), wh ich was the only issue specifically before the

court in NRDC v. EPA . Relying on the court’s decision, the commenter claimed that the state

should be allowed to revise the affirmative defe nse provisions to apply only in administrative enforcement proceedings. The commenter also argued that there may be other options for appropriately tailoring the stat e’s existing affirmative defense provisions rather than removing

them from the SIP. Response: The EPA agrees that the court in NRDC v. EPA did not directly address whether states have authority to create affirma tive defense provisions that apply exclusively to state personnel in the context of state admini strative enforcement actions. Statements by the court concerning the EPA’s own authority in the context of administrative enforcement, however, indicate that the court did not intend to foreclose the Agency from exercising its own enforcement discretion with respect to remedies in federal administrative enforcement actions. However, the EPA has reevaluated its interpretation of CAA requirements in light of the court’s

decision in NRDC v. EPA and the EPA now interprets the CAA to preclude state SIP provisions creating affirmative defenses that sources could a ssert in the context of judicial enforcement in federal court, whether initiated by states, the EP A, or other parties pursuant to section 304. The EPA agrees that states may elect to revi se their existing deficient affirmative defense provisions to make them “enforcement discretion” -type provisions that a pply only in the context of administrative enforcement by the state. Su ch revised provisions would need to be unequivocally clear that they do not provide an affirmative defens e that sources can raise in a*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 97 of 539 judicial enforcement context or against any party other than the state. Mo reover, such provisions

would have to make clear that the assertion of an affirmative defense by the source in a state

administrative enforcement context has no beari ng on the additional remedies that the EPA or other parties may seek for the same violation in federal administrative enforcement proceedings or judicial proceedings. In this action, the EPA is not determini ng whether any such revisions would meet applicable CAA requirements. The EPA would need to consider the precise wording of any such revised provisions in evaluating whether the state has adequate en forcement authority to meet the requirements of section 110(a)(2)(C) and also whether application of such a provision in a state administrative proceeding could interfere with th e ability of a citizen or the EPA to bring a

federal enforcement action.

25. Comments that states’ abili ty to use enforcement disc retion is not an adequate replacement for affirmative defense provisions.

Comment: Several commenters argued that exerci se of enforcement di scretion is not an adequate substitute for an affirmative defense, particularly where the emissions at issue resulted

from an inevitable and unavoidable malfunction. In any individual case, the commenters were

concerned that even if a state el ects not to enforce against a vi olation, the EPA or others might elect to bring an enforcement action. One commen ter contended that it is inappropriate for the EPA to encourage states to use enforcement disc retion instead of encouraging them to create

alternative emission limitations to replace affirmative defenses in SIP provisions. The commenters also alleged that reli ance on judicial discretion to de termine the appropriateness of penalties is similarly inadequate.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 98 of 539 The commenters contended that, although it is reasonable for a state to exercise

enforcement discretion under circumstances when an emission limitation cannot be met, it is not reasonable to adopt SIP provisi ons with emission limitations th at put some sources in the position of “repeated noncompliance.” Response: These comments addressing whether an enforcement discretion approach is

sufficient are similar to comments received on the February 2013 proposal to which the EPA responds in section VII.A.3.p of this document. Through this SIP call, the EPA is not requiring states to rely on enforcement discretion in pl ace of achievable SIP emission limitations. Rather, the EPA is requiring states to ensure that emission limitations are consistent with the definition

of that term in secti on 302(k), and specifically that emission standard s provide for continuous compliance. If emission limitations that appl y during routine operati ons cannot be met by a source during periods of startup or shutdown, states have author ity to establish alternative emission standards. The EPA disagrees that an affirmative defense for penalties for excess emissions for periods of malfunctions is an adequate substitute for an enforceable continuous

emission limitation and concludes that such an approach is inconsistent with the CAA as interpreted by the court in NRDC, as explained in the SNPR. The EPA also disagrees that affirmative defe nse provisions would have been appropriate to address the “repeated noncompliance” conc erns of the commenters. The EPA’s prior interpretation of the CAA was that states c ould create narrowly tailored affirmative defense provisions applicable to malfunctions. However to the extent th at there are malfunctions that put a source in the position of “rep eated noncompliance,” the form of affirmative defense that the EPA previously believed was consistent with the CAA would not have provided relief because

several of the criteria could not be met. Specifically, the EP A believes repeated noncompliance is*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 99 of 539 typically a result of inadequate de sign, is part of a “r ecurring pattern,” and thus likely could have been “foreseen and avoided.” In short, an affi rmative defense would not have been appropriate

for such a source.

26. Comments that the EPA should establish specific rules to gov ern how states set alternative limitations that apply in lieu of affirmative defense provisions.

Comment: Commenters urged the EPA to clarify in this final rule that states may establish alternative emission limitations applicab le to startup and shutdown only if the source meets all applicable CAA requirements, including but not limited to BACT/LAER, and the state also demonstrates through modeling that poten tial worst-case emissions from startup and

shutdown would not interfere with attainment and reasonable further progress. Other commenters stated that any changes to SIP emissi on limitations must be made as part of a SIP revision process, which would include a demonstr ation that higher levels of emissions during startup and/or shutdown would not lead to vi olations of the NAAQS or PSD increments. Commenters also argued that any such a lternative emission limitation should “sunset” each time the EPA promulgates a new NAAQS and that the Agency should require the state to demonstrate again that an alternative emissi on limitation applicable during startup and/or

shutdown does not interfere with attainment or ot her applicable requirements of the CAA for the revised NAAQS. In support of their arguments that the EPA should impose specific requirements of this type, the commenters indi cated that a state has issued pe rmits for sources that establish particulate matter (PM) emission limitations less stringent than existing permit terms and without requiring a BACT/LAER/ambient impacts analysis and has done so without public notice and comment. Commenters urged the EPA to require states to follow publ ic notice-and-comment*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 100 of 539 processes before issuing any permits for sources with alternative limitations less stringent than those imposed by the SIP and claimed such process is required under the CAA. In addition, some commenters stat ed that if the EPA allows st ates to set “new, higher, or alternate limits” appli cable during startup and shutdown, th e EPA should set clear parameters. According to commenters, the EPA at a minimu m should require, for emissions that have not previously been authorized or c onsidered part of a source’s potential to emit, that: (i) limitations must meet BACT/LAER; (ii) th ere should be clear, enforcea ble rules for when alternate limitations apply; (iii) there should be a demons tration that worst-case emissions will not cause or contribute to a violation of the NAAQS or PSD increments; and (iv) proposed limitations should be subject to public notice and comment a nd judicial review. The commenter pointed to a letter from the EPA to Texas in which, the comme nter claims, the Agency indicated that these parameters must be met. A commenter stated that the EPA should unequivoca lly state in this final rule that: (i) all potential to emit emissions, in cluding quantifiable emissions associated with startup and shutdown, must be included in federal applicab ility determinations and air quality permit reviews; (ii) authorization of these emissions must incl ude technology reviews and impacts analyses; and (iii) the above requi rements must be included in th e permit that authorizes routine emissions from the applicable units and must be subject to public notice, comment and judicial

review. A commenter recognized that there may be a variety of ways in which states can authorize higher limits during startup and s hutdown but argued that, no matter the method chosen, the emissions need to be fully accounted for by the state in the relevant SIP, including a*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 101 of 539 demonstration that the additional emissions au thorized during startup and shutdown will not violate any NAAQS. Response : The EPA understands the concerns ra ised by the commenters but does not agree that further regulatory action such as issuan ce of regulatory text is necessary at this time. Through this action, the EPA is providing comprehe nsive guidance to states concerning issues related to the proper treatment of emissions during SSM events in SIP provisions. For example, the EPA is addressing the concern raised by commenters that states will need to ensure that any SIP revisions in response to this SIP call will meet applicable CAA requirements. Under section 110(k)(3), the EPA has authority to approve SI P revisions only if they comply with CAA requirements. Moreover, under se ction 110(l), the EPA cannot appr ove SIP revisions if they would “interfere with any app licable requirement concerning a ttainment and reasonable further progress ... or any other applicab le requirement” of the CAA. Th e EPA believes that both states and the Agency can address these issues in SIP rulemakings without the need for any additional federal regulations as suggested by the commenters. The EPA agrees with the concerns raised by the commenters regarding instances where a state has issued source permits that impose less stringent emission limitations than otherwise established in the SIP. Using a permitting process to create exemptions from emission limitations in SIP emission limitations applicable to the s ource is tantamount to re vising the SIP without meeting the procedural and substantive require ments for a SIP revision. The Agency’s views on

this issue are described in more detail in section VII.C.3.e of this document. The EPA does not agree with the comment that suggests “worst-case modeling” would always be needed to show that a SIP revisi on establishing alternative emission limitations for startup and shutdown would not interfere with attainment or reasonable further progress. The*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 102 of 539 nature of the technical demonstr ation needed under section 110(l) to support approval of a SIP revision depends on the facts and circumstances of the SIP revision at issue. The EPA will

evaluate SIP submissions that cr eate alternative emission limitati ons applicable to certain modes of operation such as startup and shutdown carefully and will work with the states to assure that any such limitations are consistent with applicable CAA requirements. Under certain circumstances, there may be alternative emissi on limitations that nece ssitate a modeling of worst-case scenarios, but those will be determined on a case-by-case basis. The EPA also does not agree that existing SIP provisions with alternative emission limitations should automatically “sunset” upon promulgation of a new or revised NAAQS. Such a process could result in gaps in the state’s regulatory structure that could lead to backsliding. When the EPA promulgates new or revised NAAQS, it has historically issu ed rules or guidance to states concerning how to address the transiti on to the new NAAQS. In this process, the EPA typically addresses how states should reexamine existing SIP emission limitations to determine whether they should be revised. With respect to technology-based rules, the EPA has typically taken the position that states need not adopt new SIP emission limitations for sources where the

state can demonstrate that existi ng SIP provisions still meet the relevant statutory obligations. For example, the EPA believes that states can establish that existing SIP provisions still represent RACT for a specific source or source categ ory for a revised NAAQS. In making this determination, states would need to review the entire emission limitation, including any alternative numerical limitations, control technologi es or work practices that apply during modes of operation such as startup and shutdown, and ensure that all components of the SIP emission limitation meet all applicable CAA requirements.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 103 of 539 27. Comments that the EPA should closely monito r states’ SIP revisions in response to this

SIP call.

Comment: Commenters urged the EPA to monitor states’ efforts to revise SIPs in response to the SIP call closely in order to as sure that the revisions meet all applicable requirements. The commenters indicated concern that states and industry may weaken emission limitations through this process. The commenter a lleged that one state has issued permits for

sources with emission limitations applicable during SSM events th at are less stringent than the emission limitations approved in the SIP. Furthe rmore, the commenter alleged, the state issued these permits without public no tice and comment. As support for this contention, the commenter detailed the differences between the requireme nts of a permit issued for a source and the requirements in the SIP. The commenter also clai med that the state has issued permits for other

facilities similar to the one it descri bed in detail in the comments. Response: The EPA understands the concerns expressed by the commenter that SIP revisions made in response to this SIP call need to be consistent with CAA requirements. As explained in this document, the states and the EPA will work to assure that the SIP revisions will meet applicable legal requirements. The EPA will evaluate these SIP submissions consistent with its obligations under section 110(k)(3), section 110(l), section 193 and any other substantive provisions of the CAA applicable to specific SIP submissions.

To the extent that the commenters are con cerned about whether th e SIP revisions meet applicable requirements, they will have the opport unity to participate in the development of those

revisions. States must submit SIP revisions foll owing an opportunity for comment at the state level. Additionally, the EPA acts on SIP subm issions through its own notice-and-comment process. As part of these administrative processes, both the state and the EPA will need to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 104 of 539 evaluate whether the proposed revision to the SIP meets appli cable CAA requirements. In the context of those future rulemaking actions, the public will have a chance to review the substance of the specific SIP revisions in response to this SIP call, as well as the state’s and the EPA’s analysis of the SIP submissions for compliance with the CAA. 28. Comments that the EPA does not have authority to take this action without Congressional

authorization.

Comment: A commenter contended that the EPA doe s not have the authority to write law and that the EPA should be required to seek ch anges to the applicable law through Congress, before eliminating affirmative defense a nd due process provisions from SIPs. Response: Through this action the EPA is not atte mpting to rewrite the CAA. Rather, the EPA is requiring states to revise specific SIP provisions to comply with the existing requirements of the CAA, as interpreted by the courts. As expl ained in detail in the SN PR and this notice, the EPA has determined that affirmative defense provis ions at issue in this action are inconsistent with the existing require ments of the CAA. 29. Comments that affirmative defense provi sions are needed to ensure sources’ Constitutional right to due process in the event of violations.

Comment: A number of commenters argued that by requiring the removal of affirmative defense provisions from SIPs, the EPA is impinging on the Constitutional rights of sources that may have wanted to assert such affirmative defenses in an enforcement action. A commenter claimed that affirmative defense provisions ar e not “loop holes,” as alleged by the EPA, but instead are fundamental due pro cess provisions which should be re tained at all levels for the protection of the public. Another commenter cited State Farm Mut. Auto Ins. Co. v. Campbell , for the proposition that a monetary penalty that is “grossly exce ssive ... constitutes an arbitrary*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 105 of 539 deprivation of property.” 56 Other commenters claimed that excessive penalties constitute an arbitrary deprivation of property. The commenters asserted that a penalty is excessive where it applies severe punishment to an act that is unavoidable. Response: The commenters’ due process concerns suggest that without an affirmative defense provision, any penalty assesse d for violation of a SIP would be per se “excessive” or “arbitrary.” Though not expressly st ated, some of these comments appear to suggest that the existing CAA enforcement provisions are facial ly unconstitutional. The EPA disagrees. The CAA does not mandate that any penalty is auto matically assessed for a violation. Rather the CAA establishes a maximum civil penalty in se ction 113(b) but then expressly provides in section 113(e) the criteria that th e EPA or the courts (as appropriat e in administrative or judicial enforcement) “shall take into consideration (in addition to other factors as justice may require).” These criteria explicitly include consideration of “good faith efforts to comply.” Thus, the CAA on its face does not mandate the imposition of an y penalty automatically, much less one that is

per se excessive. Notably, the commenters do not elaborate on how or why they believe the statutory penalty provisions of the CAA are faci ally unconstitutional, instead making generalized

claims. To the extent that the commenters are raising an “as applied” claim of unconstitutionality, any such claim can be raised in the future in the context of a specific appli cation of the statute in

an enforcement action. Such was the case in the State Farm case cited by the commenters. In that case, a court had awarded punitive damages of $145 million in addition to $1 million compensatory damages in an automobile liability case. A statutory pena lty provision was not at

56 See 538 U.S. 408, 417 (2003).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 106 of 539 issue in that case and thus there were no statutor y criteria for the lower court to consider in determining the appropriate pe nalty amount. Rather, in its re view of whether the punitive damage award was excessive, and thus violated du e process, the Court looked at three factors it has instructed lower courts to consider in assessing punitive damages. Such would be the case with any claim that a CAA penalty violated due process, where a reviewi ng court would consider whether the court appropriately considered the re levant penalty factors in assessing a penalty claimed as unconstitutional “as applied.”

30. Comments that the EPA’s action eliminati ng affirmative defense provisions from SIPs violates the Eighth Amendment of the Constitution.

Comment: Several commenters asserted that rely ing on judicial discretion to determine the appropriateness of penalties is arguabl y unconstitutional under the Eighth Amendment’s prohibition on excessive fines and punishments by a llowing potentially signi ficant penalties that are disproportionate to the offense. The commenter stated that an affirmative defense provision “helps guard against infringement of the Ei ghth Amendment’s protections.” Other commenters argued that the U.S. Supreme Court has held that Eighth Amendment protections apply to government action in a civil context as well as in a criminal context. The commenters claimed that significant penalties are not proportional to an offense cause d by unavoidable events, such as excess emissions during malfunction events. Th e commenters concluded that unless the EPA

allows states to accommodate unavoidable emi ssions through changes to applicable emission

limitations before affirmative defenses are re moved, the EPA’s proposal would “run afoul of

Constitutional limitations.”

One commenter stated that an affirmative de fense is the “minimum protection EPA or the state must provide to avoid infringing constituti onal rights.” The commenter also argued that the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 107 of 539 EPA itself has relied on the existence of an affirm ative defense to defend against a challenge to the achievability of an emissi on limitation in a FIP. To support this argument, the commenter quoted from the court’s opinion in Montana Sulphur

. 57 Response: For the reasons provided above regardi ng commenters’ due process claims, the EPA also disagrees with their claims that elim inating affirmative defense provisions in SIPs would result in the penalty provisions of the CA A being facially in vi olation of the Eighth Amendment. Similarly, if a party believes that the penalties assessed in any civil enforcement action do violate the Eighth Amendment, they can raise a challenge that the specific SIP provision at issue “as applied” in that instance violates the U.S. Constitution. As with the commenters’ due process arguments, the EPA beli eves that Congress has already adequately addressed their concerns about poten tial unfair punishment for viola tions by authorizing courts to consider a range of factors in determining what remedies to impose for a particular violation, including the explicit factors for consideration in imposition of civil penalties as well as other factors as justice may require. The EPA acknowledges that is has previously relied on affirmative de fense provisions as a mechanism to mitigate penalties where a viol ation was beyond the control of the owner or operator. These actions , however, predated th e court’s decision in NRDC v. EPA and the EPA is now reevaluating its approach to affirmative defe nse provisions in its own rulemaking actions. In addition, the EPA believes that th e penalty criteria in section 113(e) provide a similar function and the commenters do not explain why they belie ve these explicit stat utory factors do not provide sufficient relief from th e imposition of an allegedly uncons titutionally excessive penalty.

57 See 666 F.3d at 1192–93 (“EPA acknowledges that viol ations are likely inevitable, but relies on the provision of an affirmative defense to compensate for infeasibility problems.”)*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 108 of 539 31. Comments that the EPA should impose a dead line of 12 months for states to respond to this SIP call with respect to affirmative defense provisions.

Comment: An environmental organization comme nted that the EPA should require affected states to make the required SIP revision s within 12 months, rather than the 18 months proposed in the February 2013 proposal and the SNPR. The commenter claimed that communities near large sources have been suffering for decades and individuals are suffering

adverse health effects because of the emissions from sources that are currently allowed by deficient SIP provisions. The commenter also st ated that the EPA has recognized that excess emissions allowed by the SIP provisions subject to the SIP call are continuing to interfere with attainment and maintenance of the NAAQS and that this justifies imposing a shorter schedule for states to respond to the SIP call. Response: The EPA understands the concerns expr essed by the commenters. However, as explained in the February 2013 proposal, the EPA be lieves that providing st ates with the full 18 months authorized by section 110(k )(5) is appropriate in this action. The EPA is taking into consideration that state rule development and the associated administrative processes can be complex and time-consuming. This is particularly tr ue where states might elect to consider more

substantial revision of a SIP emi ssion limitation, rather than merely removal of the impermissible automatic or discretionary exemption or the impermissible affirmative defense provision. In addition, the EPA believes that pr oviding states with the full 18 months will be more likely to result in timely SIP submissions that will m eet CAA requirements and provide the ultimate outcome that the commenters seek. Some states subj ect to the SIP call may be able to revise their deficient SIP provisions more quickly, and the EPA is committed to working with states to revise these provisions consistent w ith CAA requirements in a timely fashion. For these reasons, the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 109 of 539 EPA does not agree that it would be reasonabl e to provide less than the 18-month maximum period allowed under the CAA for states to submit SIP revisions in response to the SIP call. 32. Comments that the EPA should encourage states to add report ing and notification provisions into their SIPs.

Comment: A commenter urged the EPA to encourag e states to make information about excess emissions events easily and quickly accessi ble to the public. The commenter claimed that it is unacceptable to make it difficult for member s of the public to obtain information about potential harmful exposure to pollutants and that state “open-reco rd” request laws are inadequate, particularly when the public is not informed that an event occurred. The commenter also asserted that reporting provisions enhance compliance an d cited to the Toxic Release Inventory program’s success in driving pollu tion reduction. The commenter argued that contemporaneous reporting of the conditions surr ounding a violation, the cau se and the measures taken to limit or prevent emissions ensure that stakeholders can respond in real time and also target enforcement efforts to violations where further action is warranted. As support for this approach, the commenter pointed to Jefferson C ounty, Kentucky, as a loca l air quality control area that has already corrected pr oblematic regulations in advance of this SIP call and also noted that the County included notifica tion and reporting requirements, recognizing that they would reduce the burden on the government in trying to cal culate the level of excess emissions and also help in responding to citizen i nquiries about su ch events. Response: The EPA agrees with the commenter th at reporting and notification provisions can ease the burden on government agencies by placi ng the burden on the entity that is in the best position to calculate the level of exce ss emissions and also provide other relevant information regarding such even ts. In addition, making this info rmation available to the public*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 110 of 539 quickly allows for a timely res ponse if there is any health concern. An increased level of communication between industry and residents also serves to build a better community relationship and partnership. The EPA also supports such requirements as components of SIP emission limitations because they facilitate e ffective compliance assurance. However, the EPA does not believe that the Agency should create a separate federal requirement addressing this issue beyond general CAA requi rements at this time.

33. Comments that this SIP ca ll action concerning affirmative defense provisions is being taken pursuant to sue-and-settle tactics.

Comment: One commenter alleged that the acti on proposed in the EPA’s SNPR has an “impermissible sue-and-settle genesis” and that th e EPA is attempting to grant as much of Sierra Club’s petition as it can “regar dless of the wisdom or perm issibility of doing so.” Response: The EPA disagrees with the commente r’s allegation that the EPA’s proposed action in the SNPR is inappropriate because it is the result of “sue-and-settle” actions. This is a rulemaking in which the EPA is taking action to respond to a petition for rulemaking, and it has undergone a full notice-and-comment rulemaking pro cess as provided for in the CAA. This issue

is addressed in more detail in s ection V.D.1 of this document. 34. Comments that affirmative defense provision s do not alter or e liminate federal court jurisdiction and theref ore do not violate CAA sections 113 or 304.

Comment: Two commenters argued that SIP affirmative defense provisions do not in fact interfere with the rights of litigants to pursue en forcement consistent with their rights under the citizen suit provision of CAA section 304 because plai ntiffs have the right to bring a citizen suit despite the existence of affirmative defense provisions. One commenter cited at least four instances in the last few years in which envir onmental groups filed enfo rcement actions against*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 111 of 539 sources in federal district c ourt based on alleged emissions events for which the companies

asserted affirmative defenses. The commenters stat ed that courts applied the affirmative defense provision criteria and the criter ia of section 113(e) to dete rmine whether penalties were appropriate for alleged violations and did not dismiss plaintiffs’ claims for lack of jurisdiction. According to the commenters, affirmative de fense provisions place additional burden on the sources, not plaintiffs, to demonstrate that the criteria of an affirmative defense are met. Response: The commenters argued that affirmative defense provisions are not

inconsistent with the statutor y requirements of section 304 because citizen groups still bring enforcement actions for events where companies may raise an affirmative defense. Even if this were so, the EPA disagrees with the commenters that this establishes that affirmative defense provisions are consistent with CAA requirements. The mere existence of enforcement actions does not negate the fact that affirmative defens e provisions interfere with effective enforcement of SIP emission limitations according to CAA section 304. More to the point, affirmative defense provisions purport to alter or elim inate the statutory jurisdiction of courts to determine liability or to impose remedies for violations, which makes the provisions inconsiste nt with the grant of authority in sections 113 a nd 304. The courts’ decision in NRDC v. EPA was not based on the question of whether or not plainti ffs could still try to bring an en forcement case for violations of the EPA regulation at issue; the case was decide d on the grounds that the EPA has no authority to limit or eliminate the jurisdiction of the courts . As explained in the SNPR and this notice, the EPA believes that the same principle a pplies to states in SIP provisions. 35. Comments that this action may increase the chance of catastrophic fa ilure at facilities.

Comment: One commenter expressed a concern that eliminating affirmative defense provisions applicable to emi ssions during SSM events coul d increase the potential for*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 112 of 539 environmental harm caused by catastrophic failure by outlawing and penalizing the emissions during SSM events that have pr eviously been allowed or shie lded from liability through affirmative defense provisions. As an example, the commenter argued th at refineries and gas plants must be allowed to vent VOCs to the at mosphere on the rare occasion that there is an equipment malfunction that could otherwise cause an explosion that might destroy the plant and surrounding neighborhood. The commenter speculated that the threat of costly new fines

inherent with the removal of affirmative defe nse provisions could cloud plant operators’ thinking when they make safety decisions. The commenter contended that allowing ra re, safely controlled releases of emissions would invariably be be tter for both the natura l and human environment than the damage from a catastrophic explosion. Response: Although the comment refers to SSM events generally, the only specific concern raised by the commenter concerning affirma tive defense provisions is that if they are not allowed in SIPs, this may lead to an increase in malfunction-related catastrophic events. The EPA does not agree with the commenter’s view th at removal of affirmative defense provisions may increase environmental harm related to cat astrophic events. The EPA believes that it is unlikely the availability or unavailability of an affirmative defense will affect a responsible and competent source operator’s response to a risk of explosion. First, an explosion presents much more serious and more certain adverse economic consequences for the source than does the specter of a potential enforcement action for a CAA violation, especially because enforcement agencies and courts are likely to exercise leni ency if the violation was the result of an unpreventable malfunction. Second, even if an affirmative defense were available, it is only used after initiation of an enforcement proceeding and successful assertion of such a defense in an enforcement proceeding depends on meeting all affirmative defense criteria and is not*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 113 of 539 guaranteed. The EPA does not belie ve that a responsible and comp etent source operator’s actions in an emergency situation would be influenced by speculation that if the source is subject to an enforcement action in the future, there may be a defense to penalties available. Moreover, as explained in deta il in the SNPR and this not ice, the court’s decision in

NRDC v. EPA held that section 113 and s ection 304 preclude EPA author ity to create affirmative defense provisions in the Agency’s own regula tions imposing emission limitations on sources, because such provisions purport to alter the jurisdiction of federal courts to assess liability and impose penalties for violations of those limits in private civil enforcement cases. The EPA believes that the reasoning of the court in that decision indicates that th e states, like the EPA, have no authority in SIP provision s to alter the jurisdiction of federal courts to assess penalties for violations of CAA requirements through affi rmative defense provisions. If states lack authority under the CAA to alter the jurisdiction of the federal courts through affirmative defense provisions in SIPs, then the EPA lacks authority to approve any such provision in a SIP. The

EPA notes that the court in NRDC v. EPA did not indicate that the st atutory provisions should be interpreted differently based on speculation th at a given source operator might allow a catastrophic explosion becau se of the absence of an affirmative defense.

36. Comments that the SNPR did not meet th e procedural requirements of section 307(d) because the EPA failed to provide its legal interpre tations or explain the data relied upon in this rulemaking.

Comment: Commenters claimed that the EPA violat ed the procedural requirements of the

CAA in the SNPR. The commenters asserted that the EPA designated this rulemaking a section 307(d) rule, and the commenters claimed that the EPA did not follow the procedures required in section 307(d). The commenters claimed that the EPA failed to provide a statement of basis and*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 114 of 539 purpose that includes “the major legal interpre tations and policy consideration underlying the proposed rule.” In particular, the commenters argued that th e EPA did not provide required information with regard to its proposed SIP call concerning the affirmative de fense provisions in the Texas

SIP. Commenters claimed that the SNPR is de ficient because it does no t address: (i) why the

Fifth Circuit decision in Luminant Generation v. EPA does not control the present action; (ii) on

what basis the EPA believes it may disregard the judgment in Luminant Generation v. EPA ; (iii) why the D.C. Circuit decision, which does not ad dress the Texas SIP, should take precedence

over the Luminant Generation v. EPA decision; (iv) on what basis the EPA believes that the D.C. Circuit may reach a different result than the Fift h Circuit as to the affirmative defenses in the Texas SIP; and (v) the grounds for “acquiescing” to the D.C. Circuit decision in NRDC v. EPA , which specifically states that it does not apply to SIP revisions, and ignoring the relevant holding

in the Fifth Circuit. Commenters cited several cases claiming that the D.C. Circuit has held that,

unlike under the Administrative Procedure Act (APA), under CAA section 307(d) the EPA is required to give a detailed explanation of its reasoning and that commenters should not be required to “divine the agency’s unspoken thoughts.” Response: The EPA disagrees with the commenters’ premise. The EPA did discuss the

Luminant Generation v. EPA decision in the SNPR and also e xplained in detail why it believes that the logic of the D.C. Circuit’s decision in NRDC v. EPA supports this SIP call action for affirmative defense provisions. Specifically, th e EPA recognized that both the Fifth Circuit and the D.C. Circuit were evaluating the same fundamental question—whe ther section 113 and section 304 preclude the creation of affirmative defense provisions that alter or eliminate the jurisdiction of federal courts to determine liabi lity and impose remedies for violations of CAA*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 115 of 539 requirements in judicial enforcement actions. The EPA explained that, after reviewing the NRDC

v. EPA decision and the Luminant Generation v. EPA decision, the Agency determined that its prior interpretation of the CAA, as advanced in both courts, is not the best reading of the statute. Indeed, it is significant that the Luminant court upheld the EPA’s approval of affirmative defense provisions for unplanned events ( i.e. , malfunctions) and the disapprova l of affirmative defenses for planned events ( i.e. , startup, shutdown and maintenance) specifically because the court deferred to the Agency’s reasonable interpretatio n of ambiguous statutory provisions in the case at hand. In the SNPR, the EPA expl ained point by point why it now believes that the decision of

the D.C. Circuit in NRDC v. EPA reflected the better r eading of section 1 13 and section 304 and thus that the Agency no longer interprets th e CAA to permit affirmative defenses in SIP provisions. Therefore, the EPA believes the Fifth Circuit could also take a different view of the

reasonableness of the EPA’s resolution of am biguous provisions after reviewing the EPA’s current interpretation of the statute. 37. Comments that the EPA has recently a pproved affirmative defense provisions through

various SIP actions and therefor e, these provisions are proper under the EPA’s interpretation of

the CAA.

Comment: One commenter noted that the EPA has never taken issue with the affirmative defense provisions in states’ SIPs across the many instances where the EPA has reviewed the

states’ later SIP submissions. Th e implication of the commenters’ argument is that if the EPA has previously approved a SIP submission and dir ectly or indirectly reapproved an affirmative defense provision in the past, this means that the affirmative defense provision still meets CAA requirements.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 116 of 539 Response: The EPA disagrees with this comment. As explained in the EPA’s response in section VIII.D.18 of this document, when the EP A takes final action on a state’s SIP submission, this does not necessarily entail reexamination a nd reapproval of every pr ovision in the SIP. The EPA often only examines the specific SIP pr ovision the state seeks to revise in the SIP submission, which may not include any affirmativ e defense provisions. To the extent the EPA did review and approve any affirm ative defense provision consistent with its prior interpretation of the CAA that narrowly tailored affirmative defenses were appropriate, the EPA has fully explained why it is now revising that interpretation such that past action based on the earlier interpretation would no longer provide precedent fo r the EPA’s actions. Since the issuance of the court’s opinion in NRDC v. EPA , the EPA has been taking actions to address affirmative defense provisions in its own regulations an d is doing so with respect to those in state SIPs in this action. The EPA acknowledges that it will take time for states and the Agency to revise existing regulations to eliminate affirma tive defense provisions that were previously believed to be permissible. 38. Comments that affirmative defense provision s function as structured state “enforcement discretion” and are an importa nt tool for states to prio ritize enforcement activities.

Comment: A state commenter characterized the affirmative defense contained in the

state’s SIP as an “enforcement discretion” tool that supports the stat e’s regulation of excess emissions during malfunction events and promot es preventive measures, proper monitoring and reporting by sources. The state asserted that re moval of the affirmative defense provision from the SIP would require it to address and track viola tions that are not a high priority to the state agency. The state argued that the affirmative defense provision provi des certainty to the regulated community by providing structure to how the state will exercise its enforcement*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 117 of 539 discretion. The state expressed concern that wi thout the affirmative defense, there will be uncertainty for the regulated community and le ss incentive for sources to make repairs and submit excess emissions reports promptly. The commenter explained th at state law requires reporting of emission events that exceed an established “reportable” quantity and that this prompt reporting allows the state agency to evaluate each event reported quickly. In investigating reports of emission events, the state claims that it “exercises enforcement discretion only in cases

in which it determines that each affirmative defens e criteria is met” and claimed that elimination of the affirmative defense provi sion would result in an increase of unavoidable emissions being treated as violations. In general, the state objected to the elimination of the affirmative defense provision because it would st rain the state agency’s enforcement resources. Response: These comments concerning the state’s us e of affirmative defense criteria in structuring the exercise of its enforcement discretion ( e.g. , determining whether to bring an enforcement action or to further investigate an emissions events) appe ar to be based on a misunderstanding of the EPA’s SNPR. This SIP call action directing states to remove affirmative defense provisions from SIPs would not prevent the state from applying such criteria in the

exercise of its own enforcement discretion. For exam ple, the state is free to consider factors such as a facility’s efforts to comply, compliance hist ory and other factors in determining whether to investigate an excess emissions event or whethe r to issue a notice of violation or otherwise pursue enforcement. Application of such criteria may well be useful and a ppropriate to the state in determining the best way to allocate its own en forcement resources. So long as a state does not use the criteria in such a way that the state fails to have a valid enfor cement program as required by section 110(a)(2)(C), the state is free to use cr iteria like those of an af firmative defense as a way to “structure” its exercise of its own enforcement discretion.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 118 of 539 However, as explained in the SNPR, the EPA’s view is that SIPs cannot include affirmative defense provisions that alter the jurisd iction of the federal court to assess penalties in judicial enforcement proceeding for violati on of CAA requirements. In addition, the EPA interprets the CAA to bar “enforcement discretion” provisions in SIPs that operate to impose the enforcement discretion decisions of the state upon the EPA or any other parties who may seek to enforce pursuant to section 304. The EPA has determ ined that the specific affirmative defense provisions at issue in the SIP of the state commenter are inconsistent with CAA requirements for SIP provisions. In addition, the EPA interpre ts the CAA to bar “enforcement discretion” provisions in SIPs that operate to impose the enforcement discretion decisions of the state upon the EPA or any other parties who may seek to enforce pursuant to sect ion 304. Pursuant to the requirements of sections 110(k), 110(l) and 193, the EPA has both th e authority and the responsibility to evaluate SIP subm issions to assure that they meet the requirements of the CAA. Pursuant to section 110(k)(5), the EPA has aut hority and discretion to take action to require states to revise previously a pproved SIP provisions if they do not meet CAA requirements. 39. Comments that requiring states to adopt emissions standards that are not achievable at all times and then expecting courts to render those standards lawful by employing discretion in the assessment of penalties is c ontradictory to CAA section 307(b)(2), which mandates preenforcement review.

Comment: Commenters claimed that courts have c onsistently held that regulators cannot rely on enforcement discretion to establish the achievabilit y of emission limitations. The

commenters referred to a 1973 cas e addressing New Source Perfor mance Standards (NSPS) in which they claimed the court remanded the standa rd to the EPA to support an “at all times”

standard.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 119 of 539 Commenters further asserted that reliance on the discretion of judges to decide whether and to what extent penalties are appropriate is also not lawful. The commenters claimed that if a

state establishes an emission limitation on the basis that it is achievable, then the standard must be achievable under all circumstances to which they apply. The commenters argued that if a state adopts an emission limitation that is not achie vable under all conditions, then the state must explain how the standard can be reasonably enforced. The commenters concluded that a

numerical emission limitation that cannot be achieved by sources at all times is not enforceable because no amount of penalty can deter the violat ing conduct. The commenters recognized that it

is reasonable for states to exercise enforcem ent discretion under circ umstances an emission limitation cannot be met but argued that it is not r easonable to adopt a SIP th at puts sources in a state of repeated noncompliance.

Commenters further claimed that the decision in NRDC v. EPA , while allowing sources to argue unjust punishment should not be impos ed, conflicts with the CAA’s requirements for pre-enforcement review. The commenters stated th at emission limitations that could have been challenged at the time of promulgation are not su bject to judicial review in an enforcement proceeding. Thus, the commenters claimed that a ny challenges to the achievability of a SIP

emission limitation must be made at the time th e emission limitation is promulgated and that judges will not consider such arguments in the context of an enforcement action. The commenters argued that forcing states to adopt unachievable standards and then prohibiting them from including an affirmative defense for pe nalties for unavoidable exceedances creates a dilemma Congress sought to avoid. Response: It appears that a number of the argumen ts that the commenters are raising go beyond the scope of the affirmative defense issues in the SNPR. In the SNPR, the EPA revised*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 120 of 539 its prior proposal with respect to issues relate d exclusively to affirma tive defense provisions in SIPs. These comments are similar to an argum ent that any period during which an emission

limitation cannot be met must be deemed not to be a violation of the standard. The EPA is addressing these types of comments, to the extent that they were raised, in its response to comments on the February 2013 proposal. The EPA does note, however, that the Agency is not requiring states to adopt standards that cannot be met and then providing that states rely only on enforcement discretion to address periods of noncompliance. As the EPA has already noted, states may choose to adopt standards that are di fferent from the underlying standards for periods where the underlying standards cannot otherwise be met. The EPA also disagrees with th e comments that the holding in NRDC v. EPA is inconsistent with section 307(b)(2) that provides that regulations th at could have been challenged at promulgation cannot later be challenged in an enforcement action. Nothing in section 307(b) limits the ability of the court to consider the criteria of sectio n 113(e), such as good faith efforts of a source to comply in assessing penalties. Neither the decision in NRDC v. EPA nor this SIP call action requires states to adopt standards that cannot be met. Moreover, the public, including regulated sources, will be ab le to comment on the revised emission limitations developed by states in response to th is SIP call. If an inte rested party believes that the state has adopted unachievable emission limitations, they can challe nge such standards at the time of adoption.

40. Comments that the EPA should announce that it no longer recognizes existing affirmative defense provisions, effective immediately.

Comment: Commenters claimed that because the court held in NRDC v. EPA that the EPA was without authority to interpret the CAA to allow affirmative defenses, the EPA should explicitly state that it no longer recognizes such provisi ons immediately. The commenters argued*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 121 of 539 that by proceeding under its authority under sect ion 110(k)(5), the EPA is providing states 18 months to remove the affirmative defense provi sions and that thereafter the EPA will take additional time to act upon those SIP revisions under section 110(k). The commenters argued

that this in effect allows sources to continue relying on affirmative de fense provisions that are not consistent with CAA requirements for a period of years into the future. Because the EPA did not have authority to approve the affirmative defense provisions in the first instance, the commenters contended that the Agency should s imply declare that the affirmative defense provisions are now null and void. Response: The EPA understands the concerns ra ised by the commenters but does not agree that it is inappropriate fo r the Agency to proceed under s ection 110(k)(5). The affirmative defense provisions at issue in this action are part of the EPA-approved SIPs for the affected states. The EPA, as well as states, cannot unila terally change provisions of the approved SIP without following appropriate notice-and-comment procedures. To the extent that the commenters were advocating that the EPA should have proceeded under its authority to do error

corrections under section 110(k)(6) rather than a SIP call unde r section 110(k)(5), the Agency has explained in detail in the February 2013 proposal and this no tice why it is more appropriate to proceed via SIP call instead. Under the SIP ca ll process, the EPA cannot declare approved SIP provisions null and void prior to state submission and Agency approval of revised SIP provisions. 41. Comments that instead of acting through a nationwide SIP call action, the EPA should have worked individually with states to correct any deficien t SIP provisions.

Comment: One commenter stated that rather than using a SIP call to address SSM issues in existing SIPs, the EPA should work with each state’s air agency individually to identify and*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 122 of 539 address SIP deficiencies and work through the normal rulema king and SIP revision processes to correct any identified problems. Response: The CAA provides a mechanism specifical ly for the correction of flawed SIPs. Section 110(k)(5) provides: “Whenever the Ad ministrator finds that the applicable implementation plan for any area is substantially inadequate to ... comply with any requirement of [the Act], the Administrator sh all require the State to revise th e plan as necessary to correct such inadequacies.” This type of action is commonl y referred to as a “SIP call.” The EPA, in this action, is using a SIP call to notify states of flawed provisions in SIPs and initiate a process for correction of those provisions. The EPA, largely through its Regional O ffices, has individually reviewed each state provision subject to the SIP call. The EPA will work closely with each state, during future rulemaking actions taken by states to adopt SIP revisions and then subsequent actions by the EPA, to determine whether these adopted SIP revi sions meet the mandate of the SIP call and are consistent with CAA requirements. As part of these actions, each indivi dual state will work closely with the EPA to address the SIP deficiencies identified in this action.

42. Comments that the EPA should not cons ider the comments on the February 2013 proposal concerning affirmative defense provisi ons in SIPs to no longer be relevant.

Comment: One commenter disagreed with th e EPA’s decision not to respond to comments submitted on the February 2013 proposal to the extent the comments applied to issues related to affirmative defense provisions in SIPs generally, or to issu es related to specific affirmative defense provisions identified by the Petitioner because those comments will no longer be relevant if the EPA fi nalizes its action as proposed in the SNPR. The commenter stated that the EPA’s interpretation of the CAA has not changed so as to exclude the previous SSM*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 123 of 539 provisions in the proposed rule, and this al one shows that the comments submitted on the February 2013 proposal are still relevant. Response: The EPA’s proposed action on the Peti tion in the SNPR superseded the February 2013 proposal with respect to the issues related to affirmative defense provisions in SIPs. As explained in detail in the SNPR, after the February 2013 proposal, a federal court ruled that the CAA precludes authority of the EPA to create affirmative defens e provisions applicable to private civil suits in its ow n regulations. As a result, the EPA issued the SNPR to propose applying a revised interpretation of the CAA to affirmative defense provisions in SIPs consistent with the reasoning of court’s decision in NRDC v. EPA . The EPA supplemented and revised its proposed response to the i ssues raised in the Pe tition to the extent they concern affirmative defenses in SIPs, and the EPA solicited commen t on its revised proposed response. Because the EPA’s interpretation of the CAA with respect to the legal basis for affirmative defense provisions in SIPs changed from the time of th e February 2013 proposal to the SNPR, comments on the February 2013 proposal are no longer releva nt to the EPA’s revised proposed action. For example, previous comments arguing that the EP A was wrong to interpret the CAA to allow affirmative defense provisions for malfunction even ts but not for startup or shutdown events are not relevant if the Agency’s interpretation of the CAA is that no such affirmative defense provisions are valid. Similarly, comments that th e criteria that the EPA previously recommended for valid affirmative defense provisions were too many, too few, too stringent or too lax simply have no relevance when the EPA does not interp ret the CAA to allow any such affirmative defense provisions regardless of th e number, nature or stringency of the criteria for qualifying for

the affirmative defense. The EPA believes that it is reasonable for the Agency to determine that comments that have no bearing on the proposed action concerning affirmative defense provisions*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 124 of 539 in the SNPR are not relevant. Because the EP A is finalizing the action on the Petition as proposed in the SNPR concerning affirmative de fense provisions in SI Ps, it did so based on

evaluation of the comments that were relevant to the SNPR. V. Generally Applicable Aspects of the Fina l Action in Response to Request for the EPA’s Review of Specific Existi ng SIP Provisions for Consiste ncy with CAA Re quirements A. What the Petitioner Requested The Petitioner’s second request was for the EPA to find as a general matter that SIPs “containing an SSM exemption or a provision that could be interpre ted to affect EPA or citizen enforcement are substantially inadequate to co mply with the requireme nts of the Clean Air

Act.” 58 In addition, the Petitioner requested that if the EPA finds such defects in existing SIPs,

the EPA “issue a call for each of the states with such a SIP to revise it in conformity with the requirements or otherwise remedy these defective SIPs.” 59 The Petitioner argued that many SIPs currently contain provisions th at are inconsistent with the requirements of the CAA. According to the Petitioner, these provisions fall into two general categories: (1) exempti ons for excess emissions by which such emissions are not treated as violations; and (2) enforcement discretion provis ions that may be worded in such a way that a decision by the state not to enforce against a viol ation could be construed by a federal court to bar enforcement by the EPA under CAA section 113, or by citizens under CAA section 304. First, the Petitioner expressed concern that many SIPs have either automatic or discretionary exemptions for excess emissions that occur during periods of SSM. Automatic exemptions are those that, on the face of the SIP provision, provide that any excess emissions

58 Petition at 14. 59 Id.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 125 of 539 during such events are not violations even t hough the source exceeds the otherwise applicable emission limitations. These provisions preclude enforcement by the state, the EPA or citizens, because by definition these excess emissions ar e defined as not violations. Discretionary exemptions or, more correctly, exemptions that may arise as a result of the exercise of “director’s discretion” by state officials, are exemptions fr om an otherwise appli cable emission limitation that a state may grant on a case-by-case basis with or without any public process or approval by the EPA, but that do have the effect of ba rring enforcement by the EPA or citizens. The Petitioner argued that “[e]xempti ons that may be granted by the state do not comply with the

enforcement scheme of title I of the Act b ecause they undermine enforcement by the EPA under section 113 of the Act or by citizens under section 304.” The Petitioner explained that all such exemptions are funda mentally at odds with the requirements of the CAA and with the EPA’s longstanding interpretation of the CAA with respect to excess emissions in SIPs. SIPs are re quired to include emission limitations designed to provide for the attainment and maintenan ce of the NAAQS and for protection of PSD increments. The Petitioner emphasized that the C AA requires that such emission limitations be “continuous” and that they be es tablished at levels th at achieve sufficient emissions control to meet the required CAA objectives when adhered to by sources. Instead, the Petitioner contended, exemptions for excess emissions through “loopholes” in SIP provisions often result in real-world emissions that are far higher than the level of emissions envisioned and planned for in the SIP. Second, the Petitioner expressed concern that many SIPs have provisions that may have been intended to govern only the exercise of en forcement discretion by the state’s own personnel but are worded in a way that could be construe d to preclude enforcement by the EPA or citizens if the state elects not to enforce against the violation. The Petitioner contended that “any SIP*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 126 of 539 provision that purports to vest th e determination of whether or not a violation of the SIP has occurred with the state enforcement authority is inconsistent with the enforcement provisions of

the Act.” After articulating these overarching concerns with existing SIP provisions, the Petitioner requested that the EPA evaluate specific SIP prov isions identified in the separate section of the Petition titled, “Analysis of Indi vidual States’ SSM Provisions.” 60 In that section, the Petitioner identified specific provisions in the SIPs of 39 states that the Pe titioner believed to be inconsistent with the requirements of the CAA and explained in detail the ba sis for that belief. In the conclusion section of the Petition, the Petitione r listed the SIP provisions in each state for which it seeks a specific remedy. A more detailed explanation of the Petitioner’s arguments appears in the 2013 February proposal. 61 B. What the EPA Proposed In its February 2013 proposal, the EPA proposed to deny in part and to grant in part the Petition with respect to this two-part request. The EPA explained its long standing interpretations of the CAA with respect to SIP provisions that apply to excess emissions during SSM events. The EPA also agreed that automatic exempti ons, discretionary exemptions via director’s discretion, ambiguous enforcement di scretion provisions that may be read to preclude EPA or citizen enforcement and affirmative defense pr ovisions can interfere with the overarching objectives of the CAA, such as attaini ng and maintaining the NAAQS, protecting PSD increments and improving visibility. Such provi sions in SIPs can interfere with effective enforcement by air agencies, the EPA and the public to assure that sources comply with CAA

60 Petition at 17. 61 See February 2013 proposal, 78 FR 12459 at 12473–74 (February 22, 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 127 of 539 requirements, and such interference is contra ry to the fundamental enforcement structure provided in CAA sections 113 and 304. Accordingly, the EPA evaluated each of the specific SIP provisions that the Petitioner

identified to determine whether it is consistent with CAA requirements for SIP provisions. The

EPA conducted this evaluation in light of its interpretations of the CAA reflected in the SSM Policy and recent court decisions pertaining to rele vant issues. In section IX of the February 2013 proposal, the EPA provided its pr oposed view with respect to each of these SIP provisions. The EPA solicited comment on its proposed grant or denial of the Petition for each of the specific SIP provisions and its rationale for the proposed acti on. Through consideration of the overarching issues raised by the Petition, and informed by the evaluation of the specific SIP provisions identified in the Petiti on as a group, the EPA also determined that it was necessary to reiterate, clarify and amend its SSM Policy. The EPA thus took comment on its interpre tations of the CAA set forth in the SSM Policy in order to assure that it provi des comprehensive and updated guidance to states concerning SIP provi sions applicable to emissions from sources during SSM events. C. What Is Being Finalized In This Action The EPA is taking final action to deny in part an d to grant in part the Petition with respect to the request to find specific SIP provisions inconsistent with the CAA as interpreted by the Agency in the SSM Policy. The EPA is also ta king final action to grant the Petition on the request to make a finding of substantial inade quacy and to issue a SIP call for specific existing SIP provisions. The basis for the SIP call is that these provisions include an automatic exemption, a discretionary exemption, an ina ppropriate enforcement discretion provision, an affirmative defense provision, or other form of provision that is in consistent with CAA*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 128 of 539 requirements for SIP provisions. For those SIP pr ovisions that the EPA has determined to be consistent with CAA requirements, however, th e Agency is taking final action to deny the Petition and taking no further action with respect to those provisi ons. The specific SIP provisions

at issue are discussed in detail in section IX of this document.

As a result of its review of the issues rais ed by the Petition, the EP A is also through this action clarifying, reiterating and updating its SSM Policy to make certain that it provides comprehensive and up-to-date guidance to air agencies concerning SIP provisions to address emissions during SSM events, consistent with CAA requirements. With respect to automatic exemptions from emission limitations in SIPs, the EPA’s longstanding interpretation of the CAA is that such exemptions are impermissible becau se they are inconsistent with the fundamental requirements of the CAA. The EPA has reiterated this point in numerous guidance documents and rulemaking actions and is reconfirming that in terpretation in this final action. By exempting

emissions that would otherwise c onstitute violations of the app licable emission limitations, such exemptions interfere with the primar y air quality objectives of the CAA ( e.g. , attainment and maintenance of the NAAQS), undermine the enforcement structure of the CAA ( e.g. , the requirement that all SIP provisions be legally an d practically enforceabl e by states, the EPA and parties with standing under the citizen suit pr ovision), and eliminate the incentive for emission sources to comply at all times, not solely during normal operation ( e.g. , incentives to be properly designed, maintained and operated so as to mini mize emissions of air po llutants during startup and shutdown or to take prompt steps to rectify malfunctions).

The court’s decision in Sierra Club v. EPA concerning exemptions for SSM events in the EPA’s own regulations has reem phasized the fact that emission limitations under the CAA are required to be continuous. The court held that this statutory requir ement precludes emission*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 129 of 539 limitations that would allow pe riods during which emissions are exempt. Moreover, from a policy perspective, the EPA notes that the existence of impermissible exemptions in SIP provisions has the potential to lessen the incentiv e for development of control strategies that are effective at reducing emissions during certain mo des of source operation such as startup and shutdown, even while such strategies could beco me increasingly helpful for various purposes, including attaining and maintaining the NAAQS. The issue of automatic exemptions for SSM events in SIP provisions is discussed in more detail in section VII.A of this document. With respect to discretionary exemptions from emission limitations in SIPs, the EPA also has a longstanding interpretation of the CAA that prohibits “direc tor’s discretion” provisions in SIPs if they provide unbounded discretion to allow what would amount to a case-specific revision of the SIP without meeting the statutor y requirements of the CA A for SIP revisions. In particular, the EPA interprets the CAA to pr eclude SIP provisions that provide director’s discretion authority to create di scretionary exemptions for viol ations when the CAA would not allow such exemptions in the first instance. As with automatic exemptions for excess emissions during SSM events, discretionary exemptions for such emissions interfere with the primary air quality objectives of the CAA, undermine the en forcement structure of the CAA and eliminate

the incentive for emission sources to minimize emissi ons of air pollutants at all times, not solely during normal operations. Through this action, the EPA is reiterating its interpretation of the provisions of the CAA that preclude unbounded dire ctor’s discretion provisions in SIPs. The EPA is also explaining two ways in which air agencies may elect to correct a director’s discretion deficiency. The issue of director’s discretion in SIP provisi ons applicable to SSM

events is discussed in more detail in section VII.C of this document.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 130 of 539 With respect to enforcement discretion provisions in SIPs, the EPA also has a longstanding interpretati on of the CAA that SIPs may contain such provisions concerning the exercise of discretion by the air agency’s own personnel, but such provisions cannot bar enforcement by the EPA or by othe r parties through a citizen suit. 62 In the event such a SIP provision could be construed by a court to preclude EPA or citi zen enforcement, that provision

would be at odds with fundament al requirements of the CAA pertaining to enforcement. Such provisions in SIPs can interfere with effective enforcement by the EPA and the public to assure that sources comply with CAA requirements, and th is interference is contra ry to the fundamental enforcement structure provided in CAA sec tions 113 and 304. The issue of enforcement discretion in SIP provisions appli cable to SSM events is discussed in more detail in section

VII.D of this notice. The EPA has evaluated the concerns expressed by the Petitioner with respect to each of the identified SIP provisions and has considered the specific remedy sought by the Petitioner. Through evaluation of comments on the Februa ry 2013 proposal and the SNPR, the EPA has taken into account the perspectiv e of other stakeholders concerni ng the proper application of the CAA and the Agency’s preliminary evaluation of the specific SIP provisions identified in the Petition. In many instances, the EPA has concluded that the Petitioner’s an alysis is correct and that the provision in question is inconsistent with CAA requirements for SIPs. For those SIP provisions, the EPA is granting the Petition and is simultaneously making a finding of substantial inadequacy and issuing a SIP call to the affected state to rectif y the specific SIP inadequacy. In other instances, however, the EPA disagrees with the Petitioner’s analysis of the provision. For

62 See, e.g. , 1983 SSM Guidance at Attachment p. 2.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 131 of 539 those provisions, the EPA is therefore denying the Petition and taking no further action. In summary, the EPA is granting the Petition in part, and denying the Petition in part, with respect to each of the specific existing SIP provisions for which the Petitioner requested a remedy. The EPA’s evaluation of each of the pr ovisions identified in the Petit ion and the basis for the final action with respect to each provisi on is explained in detail in se ction IX of this document. D. Response to Comments Concerning the CAA Requirements for SIP Provisions Applicable

to SSM Events The EPA received numerous comments, both supportive and adverse, concerning the Agency’s decision to propose acti on on the Petition with respect to the overarching issues raised by the Petitioner. A number of these comments rais ed important issues co ncerning the rights of citizens to petition their government , the process by which the EPA ev aluated the issues raised in

the Petition and the relative author ities and responsibilities of st ates and the EPA under the CAA. Many commenters raised the same conceptual issues and arguments concerning the EPA’s approach. For clarity and ease of discussi on, the EPA is responding to these overarching comments, grouped by topic, in this section of this notice. The responses to more specific substantive issues raised by commenters on the EPA’s interpretation of the CAA in the SSM Policy appear in other sections of this notice th at focus on particular as pects of this action.

1. Comments that the EPA should not have res ponded to the petition for rulemaking or that the EPA was wrong to do so.

Comment: Some commenters opposed the EPA’s proposed action on the Petition in the February 2013 proposal entirely a nd alleged that it is “sue and se ttle rulemaking” or “regulationby-litigation.” Commenters stated that the “proposed rule and corresponding aggressive deadline

schedule stem from” a settlement of litigation brought by Sierra Club to res pond to the Petition.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 132 of 539 The commenters expressed concern that the EPA’s proposed action was made in response to a settlement agreement, which the comment ers alleged did not permit any opportunity for participation by affected parties. The commenters argued that consent decree deadlines “often do not allow EPA enough time to write quality regu lations” or would not allow “opportunity to properly research and investigate the effect of Stat e SSM provisions or the State’s ability to meet the NAAQS, or to determine whether the SSM pr ovisions are somehow inconsistent with the CAA.” Commenters further alleged that because the EPA’s proposed action was taken to fulfill a consent decree obligation, the process “bypasses the traditio nal rulemaking concepts of transparency and effective public participation” and “sidesteps the pr oper rulemaking channels and undercuts meaningful opportunities for those a ffected by the proposed rule to develop and present evidence that would support a compe ting and fully informed viewpoint on the substantive issues during the rulemaking process.” Response: The EPA believes that these comments reflect fundamental misunderstandings about this action. This is a rulemaking in which the EPA is taking action to respond to a petition for rulemaking, and it has undergone a full notice- and-comment rulemaking process as provided for in the CAA. In the February 2013 proposal, the EPA proposed to take action on the Petition. Under the CAA, the APA and the U.S. Constitu tion, citizens have the right to petition the government for redress. For example, the APA provides that “[e]ach agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule.” 63 When citizens file a petition for rulema king, they are entitled to a re sponse to such petition—whether

63 5 U.S.C. 553(e).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 133 of 539 that response is to grant the petition, to deny the petition, or to partially grant and partially deny the petition as has occurred in this rulemaking action. Some of these commenters expressed concer n that the EPA’s action on the Petition was the result of the Agency’s obligations under a consent decree or settlement agreement and that this fact in some way invalidat es the substantive action. First, the EPA notes that the action was undertaken in response not to a consent decree, but rather in response to a settlement agreement. Second, the EPA notes that this settlement agreement was entered into by the Agency and the Sierra Club in order to resolve allegations that the EPA was not correct ly evaluating and acting upon SIP submissions from states. In particular, the Sierra Cl ub claimed that the EPA was illegally ignoring existing deficiencies in the SIPs of many states, incl uding existing allegedly deficient provisions concerni ng the treatment of excess emi ssions during SSM events, when acting on certain SIP submissions. As a result, the Sierra Club alleged, the EPA was acting in contravention of its obligations under the CAA and various cons ent decrees and thus should be held in contempt for failure to address these issu es. In order to resolve these allegations, the EPA agreed only to take action on a petition for rulemaking and to take the action that it deemed appropriate after evaluation of the allegations in the petition. The terms of the settlement agreement underwent public commen t and are a matter of public reco rd and are in the docket for this rulemaking. 64

64 See Settlement Agreement executed November 30, 2011, in the rulemaking docket at EPAHQ-OAR-2012-0322-0039.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 134 of 539 The EPA does not enter into settlement agr eements lightly, nor does the EPA enter into settlement agreements without following the fu ll public process requir ed by CAA section 113(g), which the Agency followed in this case. 65 The EPA solicited comment on the draft settlement agreement as required by section 113(g). In no case does the EPA enter into a settlement agreement that has not been officially revi ewed not only by the Agency but also by the Department of Justice. The commenters’ implicati ons are that this rulema king is the result of an inappropriate settlement agreement that did not undergo public comment or that was not legitimate. Those implications are in error. In acting on the Petition the EPA has follo wed all steps of a notice-and-comment rulemaking, as governed by applicable statutes, regulations and executive orders, including a robust process for public partic ipation. When the EPA initially proposed to take action on the Petition, it simultaneously solicited public comment on its proposed response to all of the issues in the Petition and in particular on its proposed action with respect to each of the specific existing SIP provisions identified by the Petitioner as inconsistent with the requirements of the CAA. In response to requests, the EPA extended the public comment period for this proposal to May 13, 2013, which is 80 days from the date the proposed rulemaking was published in the Federal Register and 89 days from the da te the proposed rulemaking was posted on the EPA’s

website. 66 The EPA deemed this extension appropriate because of the issu es raised in the February 2013 proposal. The EPA also held a pu blic hearing on March 12, 2013. In response to

65 See “Proposed Settlement Agreement, Clean Air Act Citizen Suit” (notice of proposed settlement agreement; request for public comment), 76 FR 54465 (September 1, 2011). 66 See “State Implementation Plans: Response to Petition for Rulemaking; Findings of Substantial Inadequacy; and SIP Calls To Am end Provisions Applying to Excess Emissions During Periods of Startup, Shutdown, and Malfunc tion; Extension of Comment Period,” 78 FR 20855 (April 8, 2013), in the rulemaki ng docket at EPA-HQ-OAR-2012-0322-0126.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 135 of 539 this proposed action, the EPA received approxi mately 69,000 public comments, including over 50 comment letters from state and local governme nts, over 150 comment letters from industry commenters, over 25 comment letters from pub lic interest groups and many thousands of comments from individual commenters. Many of these comment letters were substantial and

covered numerous issues. Similarly, when the EPA ascertained that it was necessary to revise its proposed action on the Petition with respect to affirmative defenses in SIP provision, the Agency issued the SNPR. In that supplemental proposal, the EPA fully e xplained the issues and took comment on the questions related to whether affirmative de fense provisions are consistent with CAA requirements concerning the jurisdiction of courts in enforcement actions, and thus whether such provisions are consistent with fundamental CAA requirements for SIP provisions. The EPA provided a public comment period ending November 6, 2014, which is 50 days from the date the SNPR was published in the Federal Register and 62 days from the date the SNPR was posted on

the EPA’s website. The EPA believes that the comment period was sufficient given that the subject of the SNPR was limited to the narrow is sue of whether affirmative defense provisions are consistent with CAA requirements. The EP A also held a public hearing on the SNPR on October 7, 2014 on the specific topic of the legitim acy of affirmative defense provisions in SIPs. In response to the SNPR, the EPA received ove r 20,000 public comments, including at least 9 comment letters from states and local govern ments, over 40 comment letters from industry commenters, at least 6 comment letters from public interest groups, and many thousands of

comments from individual commenters.

2. Comments that EPA’s action on the Petit ion violates “cooperative federalism.”*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 136 of 539 Comment: Many commenters asserted that the EP A’s proposed action on the Petition and the issuance of this SIP call violate principl es of cooperative federalism because they impermissibly substitute the EPA’ s judgment for that of the stat es in the development of SIPs. This argument was raised by both air agency and industry commenters. These commenters described the relationship be tween states and the EPA with respect to SIPs in general. The commenters stated th at Congress designed the CAA as a regulatory partnership between the EPA and the states, i.e. , a relationship based on “cooperative federalism.” Under cooperative federalism, the commenters noted, the EPA has the primary responsibility to identify air pollutants that endanger the pub lic health and welfare and to set national standards for those polluta nts. By contrast, the states have primary responsibility to

determine how to achieve those national standard s by developing federally enforceable measures through SIPs. According to these commenters, how ever, once a state has made a SIP submission, the EPA’s role is relegated exclusively to the ministerial function of reviewing whether the SIP submission will result in compliance with the NAAQS. Similarly, the commenters claim that when EPA is evaluating in the context of a SIP call whether a state’s existing SIP continues to meet applicable CAA requirements, the only relevant question is whether the existing SIP will result in compliance with the NAAQS. Thus, the commenters claimed that by finding certain existing SIP provisions substantiall y inadequate because they are legally deficient to meet CAA requirements for SIP provisions, the EPA is us urping state authority under the cooperativefederalism structure of the CAA.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 137 of 539 To support this view, many commenters cited to the “ Train

- Virginia line of cases,” named for the U.S. Supreme Court case Train v. Natural Resour ces Defense Council, Inc. , 67 and

the D.C. Circuit case Commonwealth of Virginia v. EPA

. 68 The D.C. Circuit has described these cases as defining a “federalism bar” that cons trains the EPA’s authority with respect to

evaluation of state SIPs under section 110. 69 Many commenters asserted that this federalism bar limits the EPA’s oversight of state SIPs exclusiv ely to whether a SIP will result in compliance with NAAQS. The commenters evidently construe “compliance with the NAAQS” very narrowly to mean whether the SIP will factually result in attainment of the NAAQS, regardless of whether the SIP provisions in fact meet all applicable CAA requirements ( e.g. , the requirement that the SIP emission limitations be continuous and enforcea ble). Accordingly, most of these commenters selectively quoted or cited a passage in Train , 70 and similar passages in circuit court opinions following Train , for the proposition that th e EPA cannot issue a SIP call addressing the SIP provisions at i ssue in this SIP call action. Some of these commenters asserted that if the EPA were to finalize this action, the states would have “nothing left” of their discretion in SIP development and implementation in the future. Response: The EPA agrees that the CAA establishes a framework for state-federal partnership based on cooperati ve federalism. The EPA does not, however, agree with the

67 421 U.S. 60 (1975). 68 108 F.3d 1397 (D.C. Cir. 1997). 69 See, e.g. , Michigan v. EPA , 213 F.3d 663, 687 (D.C. Cir. 2000). 70 See 421 U.S. at 79.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 138 of 539 commenters’ characterization of that relati onship. The EPA explained its view of the cooperative-federalism structure in the February 2013 proposal, especially th e fact that under this principle both states and the EPA have aut horities and responsibilit ies with respect to implementing the requirements of the CAA. 71 The EPA believes that the commenters fundamentally misunderstand or inaccurately descri be this action, as well as the “‘division of responsibilities’ be tween the states and the federal governme nt” in section 110 th at is described

in the Train-Virginia line of cases. 72 In section 110(a)(1) Congress imposed the duty upon all states to have a SIP that provides for “the implementation, maintenance, and enforcement” of the NAAQS. In section 110(a)(2), Congress clearly set forth the basic SIP requirements that “[e]ach such plan shall ” satisfy. 73 By using the mandatory “shall” in secti on 110(a)(2), Congress es tablished a framework of mandatory requirements within which states may exercise their otherwise considerable discretion to design SIPs to provi de for attainment and maintenance of the NAAQS and to meet other CAA requirements. In other sections of the Act, Congress also imposed additional, more specific SIP requirements ( e.g. , the requirement in section 189 that states impose RACM-level

emission limitations on sources located in PM 2.5 nonattainment areas). In particular, this SIP call action concerns whether SIP provisions satisfy section 110(a)(2)(A), which requires that each SIP “shall”: include enforceable emission limitations and other control measures, means, or techniques (including economic incentives such as fees, marketable permits, and

71 See 78 FR 12459 at 12468; Background Memorandum at 1–3. 72 See Virginia v. EPA , 108 F.3d 1397, 1407 (D.C. Cir. 1997) (quoting Train , 421 U.S. at 79). 73 Section 110(a)(2) (emphasis added); see EPA v. EME Homer City Generation, L.P. , 134 S. Ct. 1584, 1600 (2014) (holding that section 110(a)(2) “sp eaks without reservati on” regarding what “components” a SIP “‘shall’ include”) H. Rept. 101-490, at 217 (calling the pr ovisions of section 110(a)(2)(A) through (M) “the basi c requirements of SIPs”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 139 of 539 auctions of emissions rights), as well as schedules and timetables for compliance, as may be necessary or appr opriate to meet the appli cable requirements of this chapter[.] As explained in the February 2013 proposal, the automatic and discretionary exemptions for emissions from sources during SSM ev ents at issue in this action fail to meet this most basic SIP requirement and are also inconsis tent with the enforcement requirements of the CAA. Similarly, the enforcement discretion provisions at issue in this action that have the effect of barring enforcement by EPA or citizens fail to meet this requirement for enforceable emission limitations by interfering with the enforcement st ructure of the CAA as established by Congress. The affirmative defense provisions at issue are similarly inconsistent with the requirement that SIPs provide for enforcement of the NAAQS and also contravene the statutory jurisdiction of courts to determine liability and to impose remedi es for violations of SIP requirements. Each of these types of deficient SIP provi sions is thus inconsistent with legal requirements of the CAA for SIP provisions. Contrary to the claims of many commenters, the EPA has authority and responsibility to assure that a state’s SIP provi sions in fact comply with fundamental legal requirements of the CAA as part of the oblig ation to ensure that SIPs protect the NAAQS. 74

74 The EPA notes that many of the specific SIP elements required in section 110(a)(2) are not themselves stated in terms of attainment and maintenance of the NAAQS. Instead, these requirements are part of the SIP structure that Congress deemed necessary to support implementation, maintenance and enforcement of the NAAQS, as well as to meet other objectives such as protection of PSD increments and visibility.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 140 of 539 The Train-Virginia line of cases affirms the plain langua ge of the Act—that in addition to providing generally for attainment and maintenan ce of the NAAQS, all state SIPs must satisfy the specific elements outlined in sect ion 110(a)(2). Even setting aside that Train predated substantive revisions to the CAA that strengthen ed section 110(a)(2)(A) in ways relevant here, 75

the Train Court clearly stated that section 110(a)(2) imposes additional requirements for state submissions to be accepted, independent of th e general obligation to meet the NAAQS. Many commenters on the February 2013 proposal selectiv ely quoted or cited only portions of the following excerpt from Train , omitting or ignoring the portions emphasized here: The Agency is plainly charged by the Act with the responsibility for setting the national ambient air standards. Just as pl ainly, 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 wh ich are necessary if the national standards it has set are to be met. Unde r § 110(a)(2), the Agency is required to approve a state plan which provides for the timely attainment and subsequent maintenance of ambient air standards, and which also satisfies that section’s other general requirements . The Act gives the Agency no authority to question the wisdom of a State’s choices of emission limitations if they are part of a plan

75 For example, to the extent the Train Court was construing sec tion 110(a)(2)’s emission limitation provision, it is important to note that while that statutory section before the Train Court required approvable SIPs to include certain controls “necessa ry to insure compliance with [the] primary or secondary standards” ( i.e. , the NAAQS), see CAA of 1970, Pub. L. 91-604, § 4(a), 84 Stat. 1676, 1680 (December 31, 1970), that sec tion now more broadly speaks of controls “necessary or appropriate to meet the applicable requi rements of this chapter ” ( i.e. , the CAA). Section 110(a)(2)(A) (emphasis added). Among th e other relevant text ual changes are the qualification that emission limitations and other controls be “enforceable,” id. ; a statutory definition of “emission limitation” that adds requirements not contemplated by Train , compare Section 302(k), with Train , 421 U.S. at 78; as well as a rechar acterization of s ection 110(a)(2)’s emission limitation requirement from one bearing on whether “[t]he Administrator shall approve such plan,” see Pub. L. 91-604, § 4(a), 84 Stat. at 1680, to a requirement expressly directed at what “[e]ach plan shall” include.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 141 of 539 which satisfies the stand ards of § 110(a)(2)

. . . . Thus [ i.e. , provided the state plan satisfies the basic requirements of § 110(a)(2)], so long as the ultimate effect of a State’s choice of emission limitations is compliance with the national standards for ambient air, the State is at liber ty to adopt whatever mix of emission limitations it deems best suited to its particular situation. 76 When read in its entirety, without om itting the portions italicized above, Train clearly does not stand for the proposition that SIPs must be judged exclusively on the basis of whether they will ensure attainment and maintenance of the NAAQS. To the contrary, the Court made clear that approvable SIP submissions must not only provide for attainment and maintenance of the NAAQS but must also satisfy section 110(a)(2)’s “ other general requirements . . . .” 77 Furthermore, while states have great latitude to select emission limitations, Train explained that those emission limitations must nevertheless be “par t of a plan which satisf ies the standards of § 110(a)(2) . . . .” 78 Finally, the EPA notes that many co mmenters quoting the final sentence excerpted above typically excluded the word “T hus,” which references the preceding sentence stating that SIPs must “satisfy [secti on 110(a)(2)]’s other general requirements.” 79 By omitting the word “thus,” and the passages concerning the obligation of states to comply with section 110(a)(2) and other ob ligations of the CAA, the commenters disregard the critical point that the

76 421 U.S. at 79 (emphasis added) (footnotes omitted). 77 See id. (emphasis added). 78 See id. The EPA notes that section 110( a)(2) and other sections releva nt to SIPs in fact contain numerous procedural and substantive requirements that air agencies must meet. Section 110(a) is not composed of a single sentence that directs st ates merely to attain the NAAQS; it is replete with legal requirements applicable to SIPs that he lp to assure that a SIP will successfully meet that objective. 79 See id.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 142 of 539 EPA has the statutory responsibilit y to assure that state SIPs m eet the specific requirements of the CAA, not merely that they provide for atta inment of the NAAQS regardless of whether they meet other mandatory legal requirements. 80 In short, the Train Court did not hold that SIPs must merely provide for attainment of the NAAQS ev en under the 1970 Act, much less the text of the CAA applicable today. To the contrary, the U.S. Supreme Court indicated that approvable state plans were also required to meet other legal spec ifications of the CAA for SIPs such as those in section 110(a)(2) and that the EP A’s responsibility is to dete rmine whether they do so. The EPA’s own obligations with resp ect to evaluating SIPs under sect ions 110(k)(3), 110(l) and 193 continue to provide this authority and responsibility today.

After Train , one of the cases most frequently ci ted by commenters for its discussion of cooperative federalism was the D.C. Circuit’s decision in EME Homer City Generation, L.P. v.

EPA , a case since overturned by the U.S. Supreme Court. 81 In that case arising under section 110(a)(2), the D.C. Circuit vaca ted the EPA’s Cross-State Air Pollution Rule for two reasons, one being related to statutory in terpretation of section 110(a)(2)(D )(i), the other being “a second, entirely independent problem” based on the EPA’s purported overstep of the federalism bar

80 As a related point, the EPA notes that commen ters claiming that the proposed SIP call was a violation of cooperative federa lism likewise typically did not address the existence or significance of sections 110(k), 110(l) and 193. All of these provisi ons indicate that the EPA has statutory authority and respons ibility to approve or disapprove SIP submissions, based upon whether they meet applicable requirements of the CAA. The EPA fully explained its views concerning its authority and responsibility under th ese provisions in the February 2013 proposal. See 78 FR 12459 at 12471, 12477–78, 12483–89; Background Memorandum at 2–3. 81 696 F.3d 7, 29 (D.C. Cir. 2012) rev’d , 134 S. Ct. 1584 (2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 143 of 539 identified in the Train-Virginia line of cases. 82 After recounting a list of decisions that recognize the cooperative-federalism struct ure of the CAA, the D.C. Circ uit concluded that even though states have the “primary responsibility” for im plementing the NAAQS, in this case they had no responsibility to address interstate transport until the EPA firs t quantified the ob ligations of the states. The dissent described the majority’s application of the Train-Virginia cases as “a redesign of Congress’s vision of cooperative federa lism in implementing the CAA . . . .” 83 The commenters approvingly cite d to the D.C. Circuit’s EME Homer City decision, evidently to illustrate the importance of states’ role under section 110. That states are given the first opportunity to develop a SIP that complies with section 110 is not in dispute. What is in dispute are the authority and the responsibi lity of the EPA to take action when states fail to comply with all of the requirements for SIP provisions under th e CAA, whether that requirement is to address interstate transport or to meet other specific legal requirements of the Act applicable to SIP provisions. The U.S. Supreme Court reversed the EME Homer City decision in June 2014, 84 rendering suspect the D.C. Circ uit’s interpretation of the Train-Virginia line of cases, as well as rendering suspect the commenters’ even broader characterizati on of that interpretation as per se authorizing the states to create provisions such as the SSM exemptions and affirmative defenses

82 Id. at 28. 83 Id. at 38 (Rogers, J., dissenting). 84 See EPA v. EME Homer City Generation, L.P. , 134 S. Ct. 1584 (2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 144 of 539 at issue in this SIP call. The U.S. Supreme C ourt held that the touchs tone for identifying the division of responsibility between the EPA and the states is the text of section 110(a)(2) itself. 85 Although this SIP call involves different requiremen ts of section 110(a)(2) than the one at issue

in EME Homer City— there, the interstate tr ansport obligations of 110( a)(2)(D)(i)(I)—the Court expressly held that “[n]othing in the Act di fferentiates the Good Neighbor Provision from the

several other matters a State must address in its SIP.” 86 After the U.S. Supreme Court’s ruling, the EPA’s role under section 110’s cooperative -federalism framework—as the agency charged with reasonably interpreting the fundamental re quirements of section 110(a)(2), and applying those reasonably interp reted requirements to state SIPs —cannot reasonably be in doubt. 87 The touchstone of the cooperative-f ederalism concept outlined in the Train-Virginia line of cases is that, under the aut hority of section 110, the EPA may not legally or functionally

85 Id. at 1600–01. 86 Id. at 1601 (citing, inter alia , section 110(a)(2)). 87 See id. at 1593 (citing Chevron , 467 U.S. 837 (1984)). See, e.g., Oklahoma v. EPA , 723 F.3d 1201, 1208 (10th Cir. 2013) cert. denied , 134 S. Ct. 2662 (2014) (applying Chevron to uphold EPA’s disapproval of a SIP for noncompliance with regional haze requirements in section 110(a)(2)(J)); North Dakota v. EPA , 730 F.3d 750 (8th Cir. 2013) cert. denied , 134 S. Ct. 2662 (2014) (applying Chevron to uphold EPA’s disapproval of a SIP for noncompliance with interstate visibility requirements in section 110(a)(2)(D)(i)(II)); Luminant Generation Co. LLC, v. EPA , 714 F.3d 841, 856 (5th Cir. 2013) cert. denied , 134 S. Ct. 387 (2013); Mont. Sulphur & Chem. Co. v. United States EPA , 666 F.3d 1174, 1180, 1189 (9th Cir. 2012), cert denied 133 S. Ct. 409 (2012) (“The Clean Air Act gives the EPA significant national over sight over air quality standards, to be exercised pursu ant to statutory specifications, and provides EPA with regulatory discretion in key respects releva nt to SIP calls and determinati ons about the attainment of the NAAQS”); Mich. Dep’t of Envtl. Quality v. Browner , 230 F.3d 181, 184–85 (6th Cir. 2000) (“Although states are given broad authority to design programs, the EPA has the final authority to determine whether a SIP meets the requirements of the CAA.”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 145 of 539 require a state to adopt a specific control m easure in its SIP in response to a SIP call. 88 On this point, the D.C. Circuit’s opinion in EME Homer City was largely in line with Train , Virginia , and other D.C. Circuit cases. In th at decision, the court described the Train-Virginia federalism bar as prohibiting the EPA “from using the SIP process to adopt specific control measures.” 89

The EME Homer court did not more broadly hold that section 110(a)(2) imposes no independent limits on state discretion by requiring them to meet legal requirements for SIP provisions, or that the EPA is prohibited from either interpreting 110(a)(2)’s basic requireme nts or reviewing state SIPs for compliance with those requirements. Accordingly, the EPA believes that to the extent

that the D.C. Circuit’s EME Homer City decision is relevant to th is action, the decision in fact supports the basic principle that the EPA has aut hority and responsibility to assure that states comply with legal requirements of the CAA applicable to SIP provisions. This view of what cooperative fede ralism prohibits is consistent with Train , where the U.S. Supreme Court stated that the EPA “is relega ted by the [1970] Act to a secondary role in the process of determining and enforcing the specific, source-by-source emission limitations which are necessary if the national sta ndards it has set are to be met.” 90 It is also consistent with the Virginia decision, where the D.C. Circuit held that the EPA cannot under section 110 functionally require states to “a dopt[] particular control measur es” in a SIP but must rather

88 78 FR 12459 at 12489 & nn.89–90. 89 See EME Homer City Generation, L.P., v. EPA , 696 F.3d at 29 (citing Michigan , 213 F.3d at 687; Virginia , 108 F.3d at 1410) (emphasis added). 90 421 U.S. at 79 (emphasis added).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 146 of 539 ensure that states have a mean ingful choice among alternatives. 91 Moreover, it is consistent with

the court’s view in Michigan v. EPA , 92 a case involving a SIP call, in which the D.C. Circuit interpreted and applie d those precedents:

Given the Train and Virginia precedent, the validity of the NOx budget program underlying the SIP call depends in part on whether the program in effect constitutes an EPA-imposed control meas ure or emission limitation triggering the Train-Virginia federalism bar: in other words, on whether the program constitutes an impermissible source-specific means rather than a permissible end goal. However, the program’s validity also depends on whether EPA’s budgets allow the covered states real choice with regard to the control measure options available to them to meet the budget requirements. 93 Clearly, in this SIP call the EPA is leaving the states the freedom to correct the inappropriate provisions in any manner they wish as long as they comply with the constraints of section 110(a)(2). Finally, this view is consistent with Appalachian Power Co. v. EPA , where the D.C.

Circuit reiterated that Virginia “ disapproved the EPA’s plan to reject SIPs that did not incorporate particular limits upon emissions from new cars.” 94 The specific controls discussed in

91 Commonwealth of Virginia v. EPA , 108 F.3d 1397, 1415 (D.C. Cir. 1997) (holding that functionally, in that case, “EPA’s alte rnative is no alte rnative at all”); see also Appalachian Power Co. v. EPA , 249 F.3d 1032, 1047 (D.C. Cir. 2001) (citing Virginia , 108 F.3d at 1406, 1410) (“We did not suggest [in Virginia ] that under § 110 states may develop their plans free of extrinsic legal constraints. Indeed, SIP deve lopment . . . commonly involves decisionmaking subject to various le gal constraints.”). 92 213 F.3d 663 (D.C. Cir. 2000). 93 Id. at 687 (emphasis added). 94 249 F.3d 1032, 1047 (D.C. Cir. 2001) (citing Virginia , 108 F.3d at 1410) (emphasis added).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 147 of 539 these cases are quite different as both a legal a nd functional matter from th e statutory constraints

on the states’ exercise of discretion that the EP A is interpreting and applying in this action. 95 As explained in the February 2013 proposal, in this action the EPA is not requiring states to adopt any particular emission limitation or to impose a specific control measure in a SIP provision; the EPA is merely dire ctly the states to address the fundamental requirements that all SIP provisions must meet. 96 This SIP call outlines the principles and framework for how states can revise the existing deficient SIP provisions to meet a permissible end goal 97 —compliance with the Act. In so doing, the EPA is merely acting pursuant to its supe rvisory role under the CAA’s cooperative-federalism framework, to ensure that SIPs satisfy those broad requirements that section 110(a)(2) mandates st ate SIPs “shall” satisfy. With respect to section 110(a)(2)(A),

this means that a SIP must at least contain le gitimate, enforceable emission limitations to the extent they are necessary or appropriate “to meet the applicable requirements” of the Act. SIPs

cannot contain unbounded director’s discretion provisions that functionally subvert the requirements of the CAA for approval and revisi on of SIP provisions. Likewise, SIPs cannot have enforcement discretion provisions or affi rmative defense provisions that contravene the fundamental requirements concerning the enforcem ent of SIP provisions. Accordingly, the EPA believes that this SIP call fully accords with the federal-state partnership outlined in section 110,

95 See id. 96 78 FR 12459 at 12489. 97 See, e.g., Michigan , 213 F.3d at 687.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 148 of 539 by providing the states meaningful latitude when developing a SIP submission, while “‘nonetheless subject[ing] the States to strict minimum compliances requi rements’ and giv[ing] EPA the authority to determine a state’ s compliance with those requirements.” 98 The EPA emphasizes that this action also allo ws states “real choice” concerning their SIP provisions, so long as the provisi ons are consistent with applicab le requirements. For example, this SIP call does not establish any specific, so urce-by-source limitations. To the contrary, as described in section VII.A of this document, em ission limitations meeting the requirements of section 110(a)(2)(A) may take a variety of form s. States are free under section 110(a)(2)(A) to

include in their SIPs whatever emission limita tions they wish, provide d they comply with applicable legal requirements. Among those requirements are that an emission limitation in a SIP

must be an “emission limitation” as defined in section 302(k) and that all controls—emission limitations and otherwise—must be sufficiently “enforceable” to ensure compliance with applicable CAA requirements. The SSM provisions at issue in this SIP call subvert both of these legal requirements. 3. Comments that the EPA should expand th e rulemaking to include additional SIP provisions that the commenters consider deficient with respect to SSM issues.

Comment: Some commenters request ed that the EPA expand its February 2013 proposed rulemaking to include additional SIP provisions th at the commenters consider deficient with

98 Michigan v. EPA , 213 F.3d 663, 687 (D.C. Cir. 2000) (quoting Union Elec. Co. v. EPA , 427 U.S. 246, 256–57 (1976)); see Mont. Sulphur & Chem. Co. v. United States EPA , 666 F.3d 1174, 1181 (9th Cir. 2012), cert. denied 133 S. Ct. 409 (2012) (“The Clean Air Act gives the EPA significant national oversight power over air quality standards, to be exercised pursuant to statutory specifications, and provi des the EPA with regulatory discre tion in key respects relevant to SIP calls and determinations a bout the attainment of NAAQS.”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 149 of 539 respect to SSM issues. Specifically, commenters id entified SIP provisions in Wisconsin and New Hampshire. One commenter argued that “[i]t would substa ntially ease the administrative burden on EPA as well on public commenters” and “ensure that companies in all states are treated equally”

if the EPA were to include “all SIPs with fau lty SSM provisions in [a] consolidated SIP call.”

Another commenter noted that “t he interests of regulatory effi ciency will be served” by adding additional SIP provisions to the SIP call because “all changes required by the policy underlying this rulemaking” to state SIPs would then be made at once. Response: The EPA acknowledges the requests ma de by the commenters concerning additional SIP provisions that may be inconsistent with CAA requirements. The EPA also agrees with the points made by the commenters con cerning the potential benefits of expanding the rulemaking to include evaluation of additiona l provisions. However, in the February 2013 proposal the EPA elected to review the specific SIP provisions iden tified by the Petitioner in the SIPs of 39 states to determine whether they are consistent with the CAA as interpreted in the EPA’s SSM Policy as requested in the Petition. 99 Although there may be additional SIP provisions that are deficient, the EPA determined that it would first focus its review on those

identified in the Petition in order to use EPA and state resources most efficiently. With respect to the specific additional SIP provisions identified by the commenters on the February 2013 proposal, the EPA also notes that it cannot take final action on any additional SSM-related SIP provisions wit hout first providing an opport unity for public notice and comment with respect to those additional SIP pr ovisions. The EPA agrees that an important

99 February 2013 proposal, 78 FR 12459 (February 22, 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 150 of 539 objective of its action on the Pe tition is to provide complete , comprehensive and up-to-date guidance to all air agencies concerning SIP provisions that apply to emissions during SSM events. The EPA is endeavoring to do this by responding to the Petition fully and by updating its interpretation of the CAA in the SSM Policy to reflect the relevant st atutory requirements and

recent court decisions. All states should feel free to apply this revised guidance in reviewing their own SIP provisions and revising them as appropriate. The EPA may address other SSM-related provisions that may be inconsistent with EPA’ s SSM Policy and the CAA in a later separate notice-and-comment action(s). The EPA has author ity to address those provisions separately. 100 The EPA notes that with respect to the issue of affirmative defenses in SIP provisions, the Agency determined that it was necessary to amend its February 2013 proposal to take into consideration a recent court decision concerning the legal basis for such provisions. Thus, the EPA issued the SNPR to address this developmen t in the law. Because of recent EPA actions and court decisions on this subject, th e Agency determined that it was important to address not only the affirmative defense provisions identified in the Petition but also affirmative defense provisions that the EPA independently identified in six states’ SIPs. The SNPR was explicitly

limited to the narrow concern of affirmative de fense provisions. The EPA included these six states’ affirmative defense provisions in order to provide comprehensive guidance to all states concerning affirmative defense prov isions in SIPs and to avoid c onfusion that may arise due to recent rulemakings and court decisions rele vant to such provisions under the CAA.

100 The EPA notes that it has received a separate petition for rulemaking re questing it to evaluate SIP provisions in the State of Wisconsin. The EPA is not taking action on that separate petition as part of this action but will take acti on on that petition in a future rulemaking.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 151 of 539 The SIP call promulgated by the EPA in this action applies only to the particular SIP provisions identified in this notice, and the scope of the SIP call for each state is limited to those provisions. However, if states of their own accord wish to revise SIP provisions, beyond those identified in this SIP call, that they believe are inconsistent with the SSM Policy and the CAA, the EPA will review and act on those SIP revisions in accordance with CAA sections 110(k), 110(l) and 193. 4. Comments that the EPA should create regulat ory text in 40 CFR part 51 to forbid SSM exemptions in SIP provisions if the CAA precludes them.

Comment: Commenters argued that the EPA, before issuing a SIP call requiring states to revise SIP provisions containing exemptions for emissions during SSM events, should first have promulgated specific regulations articulating that such exemptions are precluded by the CAA. According to commenters, taking this approach would have given states more certainty and clarity and provided states with more time to develop SIP revisions co nsistent with those regulatory requirements. Commente rs also asserted that it is not appropriate for the EPA to proceed with a SIP call to states without prio r rulemaking to create regulatory provisions explicitly prohibiting SSM exemptions in SIPs, given that the Agency has previously approved the SIP provisions at issue. Response: The EPA disagrees with the commenters’ argument that the Agency must first promulgate regulations to make clear that exem ptions for emissions during SSM events are not permissible in SIPs, prior to issuing this SIP call. The EPA likewis e disagrees with the implication that its authority to promulgate a SIP call is restricted only to those issues for which there is specifically applicable regulatory text, as opposed to re quirements related to statutory provisions, court decisions or othe r legal or factual bases for a determination that an existing SIP*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 152 of 539 provision is substantially inade quate to meet CAA requirements. The EPA disagrees with the

commenters for several reasons. First, the CAA does not impose a general obligation upon the Agency to promulgate regulations applicable to all SIP requiremen ts. Although the EPA has elected to promulgate regulations to address a broad vari ety of issues relevant to SIPs, 101 the Agency is not obligated to promulgate regulations unless there is a sp ecific statutory manda te that it do so. 102 In addition, the EPA has authority under secti on 301 to promulgate such regulat ions as it deems necessary to implement the CAA ( e.g. , to fill statutory gaps left by Congres s for the EPA to fill or to clarify ambiguous statutory language). With respect to SIP requirements, however, the EPA has elected to promulgate regulations or to issue guidance to states to ad dress different requirements, as appropriate. 103 In short, there is no specific statutor y requirement for the EPA to promulgate regulations with respect to the t ypes of deficiencies in SIP provisi ons at issue in this action, prior to issuing a SIP call. Second, the EPA has historically elected to addr ess the key issues rele vant to this SIP call action in guidance. Through a series of guidance documents , issued in 1982, 1983, 1999 and

101 See, generally , 40 CFR part 51 (including regulations applicable to many aspects of SIPs. 102 See, e.g., CAA section 169A(a)(4) (requiring the EPA to promulgate regulations governing the requirements relevant to SIP requirement s for purposes of regional haze reduction). 103 See, e.g ., “State Implementation Plans; General Pream ble for the Implementation of Title I of the Clear Air Act Amendments of 1990,” 57 FR 13498 (April 16, 1992) (the “General Preamble” that continues to provide guida nce recommendations to states for certain attainment plan requirements for various NAAQS); 40 CFR part 51, subpart Z (imposing regulatory requirements for certain attainment plan requirements for the 1997 PM 2.5 NAAQS).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 153 of 539 2001, the EPA has previously explained its interp retations of the CAA with respect to SIP provisions that contain automatic SSM exemptions, discretionary SSM exemptions, the exercise

of enforcement discretion for SSM events and af firmative defenses for SSM events. Starting in the 1982 SSM Guidance, the EPA explicitly acknowledged that it had previously approved some SIP provisions related to emissions during SSM events that it should not have, because the provisions were inconsistent with requirements for SIPs. In add ition, the EPA has in rulemakings applied its interpretation of the CAA with respec t to issues such as exemptions for emissions during SSM events and these actions have been approved by courts. 104 Under these circumstances, the EPA does not agree that promul gation of generally app licable regulations was necessary to put states on notice of the Agency’s interpretation of the CAA with respect to these issues, prior to issuance of a SIP call. Finally, the EPA’s authority under secti on 110(k)(5) is not limited, expressly or otherwise, solely to inadequacies related to regulatory requirements. To the contrary, section 110(k)(5) refers broadly to attainment and main tenance of the NAAQS, adequate mitigation of interstate transport and compliance with “any requirement of” the CAA. In addition, section 110(k)(5) specifically cont emplates situations such as this one, “whenever” the EPA finds previously approved SIP provisions to be defici ent. Nothing in the CAA requires the EPA to conduct a separate rulemaking clarifying its interpre tation of the CAA prior to issuance of this SIP call. For the types of deficiencies at issue in this action, the EPA beli eves that the statutory

104 See, e.g. , Michigan v. EPA , 213 F.3d 663 (D.C. Cir. 2000) (upholding the “NOx SIP Call” to states requiring revisions to prev iously approved SIPs with respect to ozone transport and section 110(a)(2)(D)(i)(I)); “Fin ding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Re vision,” 74 FR 21639 (April 18, 2011) (the EPA issued a SIP call to rectify SIP provisions dating back to 1980).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 154 of 539 requirements of the CAA itself and recent court decisions concerning those statutory provisions provide sufficient basis for this SIP call. For the foregoing reasons, the EPA disagrees that before requiring stat es to revise SIPs that contain provisions with SSM exemptions, the EPA first must promulgate regulations explicitly stating that such exemptions are impermissible under the CAA. In addition, the EPA notes that although it is not promulgating generally applicable regulations in this action, it is nonetheless revising its guidance in the SSM Policy through ru lemaking and thereby providing states and other parties the opportunity to comm ent on the Agency’s inte rpretation of the CAA with respect to this issue. 5. Comments that the EPA did not provid e a sufficiently long comment period on the proposal in general or as contem plated in Executive Order 13563.

Comment: A number of commenters argued that the comment period provided by the EPA for the February 2013 proposal was “at odds with Executive Order 13,563.” The commenters alleged that the comment period was “ unconscionably short,” even so short as to be “arbitrary and capricious” because, in order to provide comments, “impacted States and industries must perform the data collection and an alysis necessary to eval uate the need for the proposed rule and its impacts.” Further, the comm enters alleged, the “EPA’s failure and refusal to perform any technical analyses of the feasibi lity of source operations af ter the elimination of SSM provisions or the likely capital and operating costs of additional control equipment required

to meet numeric standards duri ng all operational periods has deni ed the States, the affected parties, and the public a mean ingful opportunity to evaluate and comment upon the proposed rule.” Finally, one commenter asserted that Executive Order 13563 requires that “[b]efore issuing a notice of proposed rulemaking, each agenc y, where feasible and appropriate, shall seek*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 155 of 539 the views of those who are likely to be affected.” 105 The commenter claimed that because the EPA allegedly “failed to seek th e views of those who are likely to be affected and those who are potentially subject to such rulemaking, EPA’s act ions ignore the requirements of the Executive

Order.” Response: The EPA disagrees that it has not prov ided sufficiently long comment periods to address the specific issues relevant to this action. The EPA has followed all steps of a noticeand-comment rulemaking, as governed by statutes, regulations and executive orders, including a robust process for public particip ation. When the EPA proposed to take action on the Petition, it solicited public comment on all aspects of its proposed response to the issues in the Petition and in particular on its proposed action with respec t to each of the specific existing SIP provisions

identified in the Petition as in consistent with the requirement s of the CAA. In response to requests, the EPA extended the public comment period for this proposal to May 13, 2013, which is 80 days from the date the proposed rulemaking was published in the Federal Register and 89 days from the date the proposed rule making was posted on the EPA’s website. 106 The EPA also held a public hearing concerning the proposed rule on March 12, 2013. Executive Order 13563 provides that each agency should “afford the public a meaningful opportunity to comment through th e Internet on any proposed regul ation, with a comment period that should generally be at least 60 days.” 107 The length of the Agency’s comment period for the original proposed rulemaking well-exceeded this standard. The EPA also facilitated comment on

105 See E.O. 13563 section 2(c). 106 See “State Implementation Plans: Response to Petition for Rulemaking; Findings of Substantial Inadequacy; and SIP Calls To Am end Provisions Applying to Excess Emissions During Periods of Startup, Shutdown, and Malfunc tion; Extension of Comment Period,” 78 FR 20855 (April 8, 2013), in the rulema king docket at EPA-HQ-OAR-2012-0322-0126. 107 See E.O. 13563 section 2(b) (emphasis added).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 156 of 539 the action by providing a full and detailed evaluati on of the relevant issues in the February 2013 proposal, the background memorandum s upporting the proposal and the SNPR. When considering whether an agency has pr ovided for adequate public input, reviewing courts are generally most concerned with the ove rall adequacy of the opportunity to comment. This, in turn, typically depends on steps the agency took to notify the public of information that is important to this action. Commen t period length is only one factor that courts consider in this analysis, and courts have regularly found that comment periods of signi ficantly shorter length than the 80 days provided here on the Februa ry 2013 proposal were r easonable in various

circumstances. 108 Given the nature of the issues raised by the Petition, the EP A believes that the comment period was appropriate and sufficient to allow for full analysis of the issues and preparation of comments. The number of comment s received on the February 2013 proposal, and

the breadth of issues and level of detail provided by the commenters, both supportive and adverse, serve to support the EPA’s view on this point. The EPA also disagrees with respect to th e claims of commenters that the comment period was insufficient because the EPA should pr ovide time for commenters to evaluate and analyze fully the possible ultimate impacts of th e SIP call upon particular sources, to determine what type of SIP revision by a stat e is appropriate in response to a SIP call, or to ascertain what specific new emission limitation or control measure requirement states should impose upon

108 See, e.g., Omnipoint Corp. v. Fed. Commc’ns Comm’n , 78 F.3d 620, 629 (D.C. Cir. 1996) (approving a 7-day comment period); Florida Power & Light Co. v. United States , 846 F.2d 765, 772 (D.C. Cir. 1988) (holding a 15-day commen t period to not be unreasonable under the governing circumstances); Conn. Light & Power Co. v. NRC , 673 F.2d 525, 534 (D.C. Cir. 1982) (holding 30 days not unreasonable in the particular situation); Am. Farm Bureau Fedn v. United States EPA , 984 F.Supp.2d 289, 333 (M.D. Pa. 2013) (holding that a 45-day comment period was adequate despite “technical complexities of the regulations a nd issues raised”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 157 of 539 sources in such a future SIP revision. The EPA’s action on the Petiti on concerning specific existing SIP provisions is focused upon whether those existing provision s meet fundamental legal requirements of the CAA for SIP provisi ons. The EPA is not required to provide a comment period for this action that allows states actually to determine which of the potential forms of SIP revision they may wish to undertake, or to complete those SIP revisions, as part of this rulemaking. The state and EPA rulemaking proce sses on the SIP revisions in response to this SIP call will provide time for further evalua tion of the issues raised by commenters. As explained in the February 2013 proposal, the EPA does not interp ret section 110(k)(5) to require it to “prove causa tion” concerning what precise im pacts illegal SIP provisions are having on CAA requirements, such as attain ment and maintenance of the NAAQS and enforcement of SIP requirements. 109 Nor is the EPA directing stat es to adopt a specific control measure in response to the SIP call; the decision as to how to revise the affected SIP provisions in response to the SIP call is left to the stat es. The state’s response to the SIP call will be developed in future rulemaking ac tions at both the state and federa l level which will similarly be subject to full notice-and-comment proceedings. In electing to proceed by SIP call under section 110(k)(5), rather than by error correction under section 110(k)(6), the EPA is providing affected states with the maximum time permitted by statut e to determine how best to revise their SIP provisions, consistent with C AA requirements. During this proc ess, the commenters and other stakeholders will have the opportunity to partic ipate in the development of the SIP revision, including decisions such as how the state elec ts to revise the defi cient SIP provisions ( e.g. ,

109 This issue is addressed in more detail in section VIII.A.1 of this notice.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 158 of 539 merely to eliminate an exemption for SSM events or to impose an alternative emission limitation applicable to star tup and shutdown). The questions posed by the commenters about what specific emissi on limitations should apply during startup and shutdown events, what control measures will meet applicable CAA legal requirements, what control measures will be effective and cost-effective to meet applicable legal standards and other similar questions are exactly the sorts of issues that states will evaluate in the process of revising affected SIP provi sions. Moreover, these are the same sorts of questions that the EPA will be evaluating when it reviews state SIP submissions made in response to the SIP call. The EPA is not requ ired, by Executive Order 13563 or otherwise, to provide a comment period that w ould allow for all future actions in response to the SIP call to occur before issuing the SIP call. The EPA antic ipates that the commenters will be able to participate actively in the actions that will happen in due course in response to this SIP call.

6. Comments that this action is not “nationally applicable” for pu rposes of judicial review.

Comment: Commenters alleged that the SSM SIP call is not “nationally applicable” for purposes of judicial review. One state commenter cited ATK Launch Systems , for the proposition that the specific language of the regulation being challenged indicates whether an action is nationally or locally/regionally ap plicable. Because a SIP provision subject to this SIP call is state-specific, the commenter argued, it is of con cern only for that state a nd thus the SIP call is a locally applicable action. 110 Response: The EPA disagrees with the commenter that the SIP call is not a nationally applicable action. In this rulemaking, the EPA is responding to a Petition that requires the

110 See 651 F.3d 1194 (10th Cir. 2011).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 159 of 539 Agency to reevaluate its interpretations of the CAA in the SSM Policy that apply to SIP provisions for all states across th e nation. In so doing, the EPA is reiterating its interpretations with respect to some issues ( e.g. , that SIP provisions cannot include exemptions for emissions during SSM events) and revising its interp retations with respect to others ( e.g. , so that SIP provisions cannot include affirmative defenses fo r emissions during SSM ev ents). In addition to reiterating and updating its interpretations with respect to SIP provisions in general, the EPA is also applying it interpretations to specific ex isting provisions in the SI Ps of 41 states. Through this action the EPA is establishing a national polic y that it is applying to states across the nation. As with many nationally applicable rulemakings, it is true that this action also has local or regional effects in the sense that EPA is requiring 37 individual states to submit revisions to their SIPs. However, through this rulemaking the EPA is applying the same legal and policy interpretation to each of these states. Thus, the underlying basis for the SIP call has “nationwide scope and effect” within the meaning of sec tion 307(b)(1) as explai ned by the EPA in the February 2013 proposal. A key purpose of the CAA in channeling to the D.C. Circuit challenges to EPA rulemakings that have nationwide scope and effect is to minimize instances where the same legal and policy basis for decisions may be challenged in multiple courts of appeals, which instances would potentially lead to inconsistent judici al holdings and a patchwork application of the CAA across the country. We note that in the ATK Launch case cited by commenters, the U.S. Court of Appeals for the Tenth Ci rcuit (Tenth Circuit) in fact transferred to the D.C. Circuit challenges to the designation of two areas in Utah that were part of a national rulemaking designating areas across the U.S. for the PM 2.5 NAAQS. In transferring the challenges to the D.C. Circuit, the Tenth Circui t noted that the designations ru lemaking “reached areas coast to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 160 of 539 coast and beyond” and that the EPA had a pplied a uniform process and standard. 111 Significantly, in support of its decision to transf er the challenges to the D.C. Ci rcuit, the Tenth Circuit stated: “The challenge here is more ak in to challenges to so-called ‘S IP Calls,’ which the Fourth and

Fifth Circuits have transferred to the D.C. Circuit ... Although each of the SIP Call petitions challenged the revision requirement as to a partic ular state, the SIP Call on its face applied the same standard to every state and mandated revisi ons based on that standard to states with nonconforming SIPs in multiple regions of the country.” 112 7. Comments that the EPA was obligated to a ddress and justify the pot ential costs of the action and failed to do so correctly.

Comment: Several commenters alleged that the EPA has failed to address the costs associated with this rulemaking action appropriately and consistent with legal requirements. In particular, commenters alleged that the EPA is required to address costs of various impacts of this SIP call, including the costs that may be involved in changes to emissions controls or operation at sources and the costs to states to revise permits and re vise SIPs in response to the

SIP call. Commenters also alleged that the EPA has failed to comply with Executive Order 12291, Executive Order 12866, Executive Order 13211, the Regulatory Flexibility Act and the

Unfunded Mandates Reform Act. One commenter supported the EPA’s approach with respect to cost. Response: The EPA disagrees with commenters concerning its compliance with the Executive Orders and statutes applicable to ag ency rulemaking in general. The commenters are

111 Id ., 651 F.3d at 1197. 112 Id ., 651 F.3d at 1199.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 161 of 539 simply in error that the EPA did not properly c onsider the costs imposed by this SIP call action, as required by law. As explained in the Februa ry 2013 proposal, to the extent that the EPA is issuing a SIP call to a state under section 110(k)(5), the Agency is only requiring a state to revise its SIP to comply with existing requirements of the CAA. The EPA’s action, therefore, would

leave to states the choice of how to revise th e SIP provision in question to make it consistent with CAA requirements and of determining, am ong other things, whic h of several lawful approaches to the treatment of excess emissions during SSM events will be applied to particular sources. Therefore, the EPA considers the only dir ect costs of this rulema king action to be those to states associated with preparation and subm ission of a SIP revision by those states for which the EPA issues a SIP call. Examples of such co sts could include development of a state rule, conducting notice and public hear ing and other costs incurred in connection with a SIP

submission. The commenters also incorrectly claim that the EPA failed to comply with Executive Order 12291. That Executive Order was expl icitly revoked by Executive Order 12866, which was signed by President Clinton on September 30, 1993.

The commenters are likewise incorrect that the EPA did not comply with Executive Order 12866. This action was not deemed “signifi cant” due to the cost it will impose as the

commenters claimed. This action is a “significant regulat ory action” as that term is defined in Executive Order 12866, because it ra ises novel legal or policy issues. Accordingly, the EPA submitted the February 2013 proposal, the SNPR and the final action to the Office of Management and Budget (OMB) for review. Cha nges made in response to OMB review are

documented in the docket for this action. The EP A believes it has fully complied with Executive

Order 12866.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 162 of 539 As stated in the February 2013 proposal, the EPA does not beli eve this is a “significant energy action” as defined in Executive Order 13211, because it is not likely to have a significant adverse effect on the supply, di stribution or use of energy. As described earlier, this action merely requires that states revise their SIPs to comply with existing requirements of the CAA.

States have the choice of how to revise the defici ent SIP provisions that are the subject of this action; there are a variety of different ways that states may treat the issue of excess emissions during SSM events consistent with CAA requireme nts for SIPs. This action merely prescribes the EPA’s action for states regarding their obligati ons for SIPs under the CAA, and therefore it is not a “significant energy action” under Executive Order 13211. With respect to the Regulatory Flexibility Act (RFA), as the EPA explained in the February 2013 proposal, courts ha ve interpreted the RFA to requi re a regulatory flexibility analysis only when small entities will be subject to the requirements of the rule. 113 This action will not impose any requirements on small entit ies. Instead, it merely reiterates the EPA’s interpretation of the statutory re quirements of the CAA. To the extent that the EPA is issuing a

SIP call to a state under section 110 (k)(5), the EPA is only requiring th e state to revise its SIP to comply with existing requirements of the CAA. In turn, the state will determine whether and how to regulate specific sources, including any small entities, through the process of deciding how to revise a deficient SIP provision. The EP A’s action itself will no t have a significant economic impact on a substantial number of small entities. As the EPA explained in the February 2013 pr oposal, this action is not subject to the requirements of the Unfunded Mandates Reform Act (UMRA) because it does not contain a

113 See, e.g., Michigan v. EPA , 213 F.3d 663 (D.C. Cir. 2000); Mid-Tex Elec. Co-op, Inc. v. FERC , 773 F.2d 327 (D.C. Cir. 1985).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 163 of 539 federal mandate that may result in expenditures of $100 million or more for state, local and tribal governments, in the aggregate, or the private sect or in any one year. With respect to the impacts on sources, the EPA’s action in this rulemaking is not directly imposing costs on any sources. The EPA’s action is merely direct ing states to revise their SIPs in order to bring them into compliance with the legal requir ements of the CAA for SIP provisions. In response to the SIP call, the states will determine how best to revise their deficient SIP provisions in order to meet CAA requirements. It is thus the states that will make the decisions concerning how best to revise their SIP provisions and will determine what impacts will ultimately apply to sources as a

result of those revisions.

8. Comments that the EPA’s action violates procedural requirements of the CAA or the APA, because the EPA is acting on the Peti tion, updating its SSM Policy and applying its interpretation of the CAA to speci fic SIP provisions in one action.

Comment: Commenters argued that the EPA’s proposed action on the Petition, which includes simultaneous updating of its interpretations of the CAA in the SSM Policy and application of those revised interpretations to existing SIP provisions, is in violation of procedural requirements of the CAA and the APA. According to the commenters, the EPA’s combination of actions is a “subterfuge” to av oid notice and comment on the proposed actions in the February 2013 proposal. The commenters claimed that the EPA could only take these actions through two or more separate rulemaking actions. By proposing to update its interpretation of the CAA in the SSM Policy through notice-and-comm ent rulemaking and proposing to apply its interpretation of the CAA through notice-and-co mment rulemaking to existing SIP provisions, the commenters claimed, the EPA has prejudged the outcome of this action.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 164 of 539 Response: The EPA does not agree that is required to take this action in multiple separate rulemakings as claimed by the commenters. First, the EPA notes that the commenters allege that the Agency is failing to proceed by notice and comment in a comment letter submitted on the February 2013 proposal. The fact that the commen ters level this allega tion in comments on the proposal belies their overarching procedural argument that the EPA is failing to subject its interpretations of the CAA to notice-and-co mment rulemaking. Second, although the EPA could

elect to undertake two or more se parate notice-and-comment rulema kings in order to answer the Petition, to revise its interpre tations of the CAA in the SSM Policy and to evaluate existing provisions in state SIPs agains t the requirements of the CAA, there is no requirement for the Agency to do so. To the contrary, the EPA believes that it is preferable to take these interrelated actions in a combined rulemaking process. This combined approach allows the EPA to explain its actions comprehensively and in their larg er context. The combined approach allows commenters to participate more meaningfully by considering together the proposed action on the Petition, the proposed interpre tations of the CAA in the SSM Policy and the proposed application of the EPA’s interpretation to specif ic SIP provisions. By addr essing the interrelated actions together and comprehensively, the EPA is striving to be efficient with the resources of both regulators and regulated parties. Most im portantly, by combining these actions the EPA is being responsive to the need for prompt eval uation of the SIP provisions at issue and for correction of those found to be legally deficien t in a timely fashion. Far from “prejudging” the issues, the EPA explicitly sought comment on all aspects of the February 2013 proposal and sought additional comment on issues related to affirmative defense provisions in the SNPR. Naturally, the EPA’s proposal and supplemental proposal reflected its best judgments on the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 165 of 539 proper interpretations of the CAA and application of those interpre tations to the issues raised by the Petition, as of the time of the February 2013 proposal and the SNPR. VI. Final Action in Response to Request that the EPA Limit SIP Appr oval to the Text of State Regulations and Not Rely upon Addition al Interpretive Letters from the State A. What the Petitioner Requested The Petitioner’s third request was that when the EPA evaluates SIP revisions submitted by a state, the EPA should require “all terms, co nditions, limitations and interpretations of the various SSM provisions to be reflected in th e unambiguous language of the SIPs themselves.” 114 The Petitioner expressed concern that the EPA has previously approved SIP submissions with provisions that “by their plain te rms” do not appear to comply w ith the EPA’s interpretation of CAA requirements embodied in the SSM Policy and has approved those SIP submissions in reliance on separate “letters of in terpretation” from the state that construe the prov isions of the SIP submission itself to be consistent with the SSM Policy. 115 Because of this reliance on interpretive letters, the Petitioner argued that “such constructions are no t necessarily apparent from the text of the provisi ons and their enforceability ma y be difficult and unnecessarily complex and inefficient.” 116 The Petitioner cited various past rulemaking actions to illustrate how EPA approval of ambiguous SI P provisions can inject uninte nded confusion for regulated

114 Petition at 16. 115 Petition at 14. 116 Petition at 15.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 166 of 539 entities, regulators, and the public in the future, especially in th e context of future enforcement actions. Accordingly, the Petitioner request ed that the EPA discontinue reliance upon interpretive letters when approving state SIP subm issions, regardless of the circumstances. A more detailed explanation of the Petitione r’s arguments appears in the 2013 February proposal. 117 B. What the EPA Proposed In the February 2013 proposal, the EPA proposed to deny the Petition wi th respect to this issue. The EPA explained the basis for this propo sed disapproval in detail , including a discussion of the statutory provisions that the Agency interp rets to permit this approach, an explanation of why this approach makes sense from both a practi cal and an efficiency perspective under some circumstances, and a careful explanation of the process by which EPA intends to rely on interpretive letters in order to assure that the c oncerns of the Petitioner wi th respect to potential future disputes about the meaning of SIP provisions should be alleviated. C. What Is Being Finalized In This Action The EPA is taking final action to deny the Pe tition on this request. The EPA believes that it has statutory authority to rely on interpretive letters to resolve ambiguity in a SIP submission under appropriate circumstances and so long as the state and the EPA follow an appropriate process to assure that the rulemaking record properly reflects this re liance. To avoid any misunderstanding about the reasons for this de nial or any misunderstandings about the circumstances under which, or the proper process by which, the EPA intends to rely interpretive letters, the Agency is repeating its vi ews in this final action in detail.

117 See February 2013 proposal, 78 FR 12459 at 12474 (February 22, 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 167 of 539 As stated in the February 2013 proposal, th e EPA agrees with the core principle advocated by the Petitioner, i.e., that the language of regulations in SIPs that pertain to SSM events should be clear and unambiguous. This is necessary as a legal matter but also as a matter of fairness to all parties, includ ing the regulated entities, the re gulators, and the public. In some cases, the lack of clarity may be so significan t that amending the state’s regulation may be warranted to eliminate the potential for confus ion or misunderstanding about applicable legal requirements that could interfere with complian ce or enforcement. Indeed, as noted by the Petitioner, the EPA has requested that states cl arify ambiguous SIP provisions when the EPA has subsequently determined that to be necessary. 118 However, the EPA believes that the use of in terpretive letters to clarify ambiguity or perceived ambiguity in the provisions in a SI P submission is a permissible, and sometimes necessary, approach under the CAA. Used correct ly, and with adequate documentation in the Federal Register and the docket for the underlying rule making action, reliance on interpretive letters can serve a useful purpose and still meet th e enforceability concerns of the Petitioner. So long as the interpretive letters and the EPA’ s reliance on them is properly explained and documented, regulated entities, regulators, and the public can readily ascertain the existence of interpretive letters reli ed upon in the EPA’s approval that would be useful to resolve any perceived ambiguity. By virtue of being part of the stated basis for the EPA’s approval of that provision in a SIP submission, the interpretive letters necessarily establish the correct interpretation of any arguably ambiguous SIP pr ovision. In other words, the rulemaking record

should reflect the shared state and EPA understandi ng of the meaning of a provision at issue at

118 See, e.g. , “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision,” 76 FR 21639 at 21648 (April 18, 2011).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 168 of 539 the time of the approval, which can then be referenced should any question about the provision

arise in a future enforcement action. In addition, reliance on interpretive letters to address concerns about perceived ambiguity can often be the most efficient and timely way to resolve concerns about the correct meaning of regulatory provisions. Both air agencies and the EPA are required to follow time- and resourceintensive administrative processes in order to develop and evaluate SIP submissions. It is

reasonable for the EPA to exercise its discretion to use interpretive letters to clarify concerns about the meaning of regulatory provisions, rather than to require air ag encies to reinitiate a complete administrative process merely to reso lve perceived ambiguity in a provision in a SIP

submission. 119 In particular, the EPA considers this an appropriate appro ach where reliance on such an interpretive letter allows the air agency and the EPA to put into place SIP provisions that are necessary to meet important CAA objectives and for which unnecessary delay would be counterproductive. For example, where an ai r agency is adopting emission limitations for purposes of attaining the NAAQS in an area, a time ly letter from the air agency clarifying that an enforcement discretion provision is applicable only to air agency enforcement personnel and has no bearing on enforcement by the EPA or the public could help to assure that the provision is approved into the SIP promptly and thus allow th e area to reach attainment more expeditiously than requiring the air agency to undertake a time-consuming admi nistrative process to make a minor clarifying change in the regulatory text.

119 CAA section 110(k) directs the EPA to act on SI P submissions and to approve those that meet statutory and regulatory requirements. Implicit in this authority is the discretion, through appropriate notice-and-comment rulemaking, to determine whethe r or not a given SIP provision meets such requirements, in reliance on the information that the EPA considers relevant for this purpose.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 169 of 539 There are multiple reasons why the EPA does not agree with the Petitioner with respect to the alleged inadequacy of using interpretive letters to clarify specific ambiguities in a SIP submission and the SIP provisions that may ulti mately result from approval of such a submission, provided this process is done correctl y. First, under section 107(a), the CAA gives air agencies both the authority and the primary responsibility to develop SIPs that meet applicable statutory and regulat ory requirements. However, the CAA generally does not specify exactly how air agencies are to meet the requi rements substantively, nor does the CAA specify that air agencies must use sp ecific regulatory terminology, phrase ology, or format, in provisions submitted in a SIP submission. Air agencies each ha ve their own requirements and practices with respect to rulemaking, making flexibility respec ting terminology on the EPA’s part appropriate, so long as CAA requirements are met. As a prime example relevant to the SSM i ssue, CAA section 110(a )(2)(A) requires that a

state’s SIP shall include “enforceable emission lim itations 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 tim etables for compliance as may be necessary or appropriate to meet the applicable requirements of” the CAA. Section 302( k) of the CAA further defines the term “emission limitation” in importa nt respects but neverthe less leaves room for variations of approach: ...a requirement established by the State or Administrator which limits the quantity, rate, or concentration of emi ssions of air polluta nts on a continuous basis, including any requir ement relating to the operat ion or maintenance of a source to assure continuous emission re duction, and any design, equipment, work practice or operational standard promulgated under [the CAA]. Even this most basic requirement of SIPs, the inclusion of enforceable “emission limitations,” allows air agencies discretion in ho w to structure or word the emission limitations,*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 170 of 539 so long as the provisions meet fundame ntal legal requirements of the CAA. 120 Thus, by the explicit terms of the statute and by design, air agen cies generally have cons iderable discretion in how they elect to structure or word their state regulations submitted to meet CAA requirements

in a SIP. Second, under CAA section 110(k), the EPA has both the authority a nd the responsibility to assess whether a SIP submission meets app licable CAA and regulatory requirements. Given that air agencies have authority and discretion to struct ure or word SIP provisions as they think most appropriate, so long as the SIP provisi ons meet CAA and regulatory requirements, the EPA’s role is to evaluate whether those provi sions in fact meet t hose legal requirements. 121 Necessarily, this process entails the exercise of judgment concerning the specific text of regulations, with regard both to content and to clarity. Because actions on SIP submissions are subject to notice-and-comment ru lemaking, there is also the oppor tunity for other parties to identify SIP provisions that they consider problematic and to br ing to the EPA’s attention any concerns about ambiguity in the meani ng of the SIP provisi ons under evaluation. Third, careful review of regulatory provision s in a SIP submission can reveal areas of potential ambiguity. It is essentia l, however, that regulations are sufficiently clear that regulated entities, regulators and the public can all understand the SIP requirements. Where the EPA

120 The EPA notes that notwithstanding discreti on in wording in regul atory provisions, many words have specific recognized legal meani ng whether by statute, regulation, case law, dictionary definition, or common usage. For ex ample, the term “conti nuous” has a specific meaning that must be complied with substantiv ely, however the state may elect to word its regulatory provisions. 121 See, e.g. , Luminant Generation Co. v. EPA , 699 F.3d 427 (5th Cir. 2012) (upholding the EPA’s disapproval in part of affirmative de fense provision with uncle ar regulatory text); US Magnesium, LLC v. EPA , 690 F.3d 1157, 1170 (10th Cir. 2012) (upholding the EPA’s issuance of a SIP call to clarify a provisi on that could be interpreted in a way inconsistent with CAA requirements).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 171 of 539 perceives ambiguity in draft SIP submissions, it endeavors to resolve those ambiguities through

interactions with the relevant air agency even in advance of the SIP submission. On occasion, however, there may still remain areas of regulatory ambiguity in a SIP submission’s provisions that the EPA identifies, either independently or as a result of public comments on a proposed action, for which resolution is both appropriate a nd necessary as part of the rulemaking action. In such circumstances, the ambiguity may be so significant as to require the air agency to revise the regulatory text in its SIP submission in order to reso lve the concern. At other times, however, the EPA may determine that with adequate explanation from the state, the provision is sufficiently clear and complies with applicable CAA and associated regulatory requirements. In some instances, the air agency may supply the ex planation necessary to resolve any potential ambiguity in a SIP submission by sending an offici al letter from the appropriate authority. When the EPA bases its approval of a SIP submissi on in reliance on the air agency’s official interpretation of the provision, that reading is explicitly incorporat ed into the EPA’s action and is memorialized as the proper intended reading of the provision. In other words, the state and the EPA will have a shared understanding of the pr oper interpretation of the provision, and that interpretation will provide the basis for the approval of that provision into the SIP. The interpretation will also be clea rly identified and presented for th e public and regulated entities in

the Federal Register notice approving the SIP submission. For example, in the Knoxville redesignati on action that the Petitioner noted in the Petition, the EPA took careful steps to ensure th at the perceived ambigu ity raised by commenters was substantively resolved and fully reflected in the rulemaking record, i.e., through inclusion of the interpretive letters in the rulemaking docket, quoting relevant passages from the letters in the Federal Register , and carefully evaluating the areas of pot ential ambiguity in response to public*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 172 of 539 comments on a provision-by-provision basis. By discussing the resolution of the perceived ambiguity explicitly in the rulemaking record, the EPA assured that the correct meaning of that provision should be evident from the record, shou ld any question concerning its meaning arise in a future dispute. Finally, the EPA notes that while it is possible to reflect interpretive letters in the Code of Federal Regulations (CFR) or incorporate them into the regulatory text of the CFR in appropriate circumstances, there is no requirement to do so in all actions, and there are other ways for the public to have a clear understand ing of the content of the SIP. First, for each SIP, the CFR

contains a list or table of ac tions that reflects the various components of the approved SIP, including information concerni ng the submission of, and the EPA’s action approving, each component. With this information, interest ed parties can readil y locate the actual Federal Register document in which the EPA will have explai ned the basis for its approval in detail, including any interpretiv e letters that may have been re lied upon to resolve any potential ambiguity in the SIP provisions. With this info rmation, the interested party can also locate the docket for the underlying rulemaking and obtain a c opy of the interpretive le tter itself. Thus, if there is any debate about the corr ect reading of the SIP provision, either at the time of the EPA’s approval or in the future, it will be possible to ascertain the mutual understanding of the air agency and the EPA of the correct reading of the provision in questi on at the time the EPA approved it into the SIP. Most importantly, regardless of whether the content of the interpretive

letter is reflected in the CF R or simply described in the Federal Register preamble accompanying the EPA’s approval of the SIP submission, this mutual understanding of the correct reading of that provision upon which th e EPA relied will be the reading that governs,

should that later become an issue.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 173 of 539 The EPA notes that the existence of, or content of, an interpreti ve letter that is part of the basis for the EPA’s approval of a SIP submission is in reality analogous to many other things related to that approval . Not everything that may be part of the basis for the SIP approval in the docket—including the proposal or final preambles, the technical support documents, responses to comments, technical analyses, modeling results, or docket memoranda—will be restated

verbatim , incorporated into, or referenced in the CFR. These background materials remain part of the basis for the SIP approval and remain availabl e should they be needed in the future for any purpose. To the extent that there is any questi on about the correct interpretation of an ambiguous provision in the future, an intere sted party will be able to access the docket to verify the correct meaning of SIP provisions. With regard to the Petitioner’s concern that either actual or allege d ambiguity in a SIP provision could impede an effective enforcement action, the EPA believes th at its current process for evaluating SIP submissions and resolving potential ambiguities, including the reliance on interpretive letters in appropriate circumstances with correct documentation in the rulemaking action, minimizes the possibility for any such ambigu ity in the first instance. To the extent that there remains any perceived ambiguity, the EPA conc ludes that regulated entities, regulators, the public, and ultimately the courts, have recourse to use the administrative record to shed light on and resolve any such ambiguity as ex plained earlier in this document. The EPA emphasizes that it is already th e Agency’s practice to assure that any interpretive letters are correctly and adequately reflected in the Federal Register and are included in the rulemaking docket for a SIP approval. Sh ould the Petitioner or any other party have concerns about any ambiguity in a provision in a SIP submission, the EPA strongly encourages that they bring this ambiguity to the Agency’s attention during the rulemaking action on the SIP*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 174 of 539 submission so that it can be addressed in the ru lemaking process and properly reflected in the administrative record. Should an ambiguity come to light later, the EPA encourages the Petitioner or any other party to bring that ambigu ity to the attention of the relevant EPA Regional Office. If the Agency agrees that there is ambigu ity in a SIP provision that requires clarification subsequent to final action on the SIP submission, then the EPA can work with the relevant air agency to resolve that am biguity by various means. D. Response to Comments Concerning Reliance on Interpretive Letters in SIP Revisions The EPA received relatively few comments, both supportive and adverse, concerning the Agency’s overarching decision to deny the Petition w ith respect to this issue. For clarity and ease of discussion, the EPA is responding to th ese comments, grouped by whether they were supportive or adverse. 1. Comments that supported the EPA’s interp retation of the CAA to allow reliance on interpretive letters to clarify ambi guities in state SIP submissions.

Comment: A number of state and industry commenters agreed with the EPA that the use of interpretive letters to clarif y perceived ambiguity in the provisi ons in a SIP is a permissible, and sometimes necessary, approach to approv ing SIP submissions under the CAA when done correctly. Those commenters who supported the EPA’s proposed action on the Petition did not elaborate upon their reasoning, but ge nerally supported it as an effi cient and reasonable approach to resolve ambiguities. Response: The EPA agrees with the commenters who expressed support of the proposal based on practical considerations such as effi ciency. These commenters did not, however, base their support for the proposed action on the EPA’ s interpretation of the CAA in the February 2013 proposal, nor did they acknowledge the para meters that the EPA itself articulated*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 175 of 539 concerning the appropriate situations for such re liance and the process by which such reliance is appropriate. Thus, the EPA reiterate s that reliance on interpretive le tters to resolve ambiguities or perceived ambiguities in SIP submissions must be weighed by the Agency on a case-by-case basis, and such evaluation is dependent upon the specific facts and circumstances present in a specific SIP action and would follow the process described in the proposal. 2. Comments that opposed the EPA’s interp retation of the CAA to allow reliance on interpretive letters to clarify ambi guities in state SIP submissions.

Comment: Other commenters disagreed with the EPA’s proposed response to the Petition on this issue. One commenter opposed the Agency ’s reliance on in terpretive letters under any circumstances and did not draw any factual or pr ocedural distinctions between situations in which this approach might or might not be appr opriate or correctly pr ocessed. This commenter argued that citizens should not be required “to sift through a large and complex rulemaking docket in order to figure out the meaning and op eration of state regula tions.” The commenter asserted that simply as a matter of “good govern ment,” all state regulations approved as SIP provisions should be clear and unambiguous on their face. This commenter also expressed

concern that courts could not or would not accord legal weight to interpretive letters created after state regulations were adopted and submitted to th e EPA, or after the EPA’s approval of the SIP submission occurred, and would view such letters as post hoc interpretations of no probative

value. Another commenter added its view that re liance on interpretive lette rs is appropriate only when affected parties have the right to comme nt on the interpretive letters and the EPA’s proposed use of them during the rulemaking in wh ich the EPA relies on such letters to resolve ambiguities and before the Agency finally approves the SIP revision.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 176 of 539 Response: As a general matter, the commenter opposing the EPA’s reliance on interpretive letters in any circumstances because citizens would be required “to sift through” the docket did not provide specific arguments regardi ng the EPA’s interpretation of the statute as stated in the February 2013 propos al. Consistent with the EPA’s interpretation of the CAA, and as explained earlier in this notice, the EPA agrees with the core principl e that the language of regulations in SIPs that pertain to SSM even ts should be clear and unambiguous. A commenter argued that “a fundamental principle of good govern ment is making sure that all people know what the applicable law is. Having the applicable law manifest in a letter sitting in a filing cabinet in one office clearly does not qualify as good government.” The EPA generally agrees on this point as well. As explained earlier in this notice, the EPA allows the use of interpretive letters to clarify perceived ambiguity in the provisions of a SIP submission only when used correctly, with adequate documentation in both the Federal Register and the docket for the underlying rulemaking action. Section VI.B of this notice explains how interested parties can use the list or table of actions that appears in the CFR and that reflects the va rious components of the approved SIP, to identify the Federal Register document wherein the EPA has explained the basis for its decision on any i ndividual SIP provision. As suc h, the EPA does not envision a scenario whereby a citizen or a court would be unable to determine how the air agency and the EPA interpreted a specific SIP provision at the tim e of its approval into the SIP. Assuming there is any ambiguity in the provision, the mutual und erstanding of the state and the EPA as to the proper interpretation of that provi sion would be clear at the ti me of the approval of the SIP revision, as reflected in the Federal Register document for the fina l rule and the docket supporting that rule, which should answer any qu estion about the correct interpretation of the

term.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 177 of 539 The same commenter also questioned whether “courts can or will give any legal weight to interpretative letters created after state regulations are adopte d or SIP approvals occurred, in the face of industry defendant arguments that the SIP provisions do not accord with those post hoc interpretive letters.” This commenter asserted that by not requiring all interpretations of the SSM provisions in the “unambiguous language of the SIPs,” the EPA is accepting “great legal uncertainty” as to whether judges will consider in terpretive letters in enforcement actions. As a preliminary matter, as explained earlier in this notice, this acti on does not apply to “ post hoc ” interpretive letters, i.e., to situations where a state would s ubmit an interpretive letter after the EPA’s approval of the SIP. Through this action th e EPA is confirming its view that it may use interpretive letters to clarify ambiguous SIP provis ions only when those letters were submitted to the EPA during the evaluation of the SIP subm ission and before final approval of the SIP

revision and were included in the final rule making docket and explicitly discussed in the Federal Register document announcing such final action. In addition, as explained earli er in this notice, once the EPA approves a SIP revision, it becomes part of the state’s SIP identified in the CFR and thus becomes a federally enforceable regulation. In cases where the substa nce of the interpretive letter is provided in the CFR itself, either by copying the interpretation verbatim into the regulatory text or by incorporating the letter by reference, courts need not look furt her for the state and the Agency’s agreed upon interpretation. The EPA’s interpretation will be clearly reflected in the CFR. The EPA recognizes that actual or percei ved regulatory ambiguity may become an issue in instances where the interpretive letter is reflected in the preambl e to the final rulemaking but is not copied or incorporated by reference in the CFR text itself. It is important to note, however, that once included in the preamble to the fi nal rule, the air agency’s interp retation of the SIP provision, as*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 178 of 539 reflected in the interpretive letter, becomes th e EPA’s promulgated interpretation as well. While the EPA recognizes that an agency’s preambl e guidance generally does not have the binding force of an agency’s regulations, courts do view it as informative in understanding an agency’s interpretation of its own regulation, 122 and courts accord an agency ’s interpretati on of its own regulations a “‘high level of deference,’ accepting it ‘unless it is plainly wrong.’” 123 When reviewing a purportedly ambiguous agency regulation, courts ha ve found that the agency’s interpretation of its own regulati on is “controlling unless ‘plainly erroneous or inconsistent with the regulation.’” 124 Based on these settled legal principles, the EPA would expect a court in an enforcement action to look not only to the text of the regulation at issue but also to the preamble to the final rule. The preamble would contain an explanation of any interpretive letter from the state upon which the EPA relied in order to interpret any ambi guous SIP provisions. 125 As such, the EPA disagrees that it is “accepting an unreas onable amount of legal uncertainty” in future enforcement actions by allowing the use of interp retive letters to clarify SIP provisions where such letters are specifically di scussed in the final rulemaking. Th e EPA reiterates that reliance on such interpretive letters is not appropriate in a ll circumstances, such as instances in which the

122 See, e.g., Howmet Corp. v. EPA , 614 F.3d 544, 552 (D.C. Cir. 2010) (using preamble guidance to interpret an am biguous regulatory provision); Wyo. Outdoor Council v. U.S. Forest Serv. , 165 F.3d 43, 53 (D.C. Cir. 1999) (“Although th e preamble does not ‘control’ the meaning of the regulation, it may serve as a source of evidence concerning contemporaneous agency intent.”). 123 Howmet at 549 (quoting Gen Elec. Co. v. EPA , 53 F.3d 1324, 1327 (D.C. Cir. 1990)). 124 Auer v. Robbins , 519 U.S. 452, 461 (1997) (quoting Robertson v. Methow Valley Citizens Council , 490 U.S. 332, 359 (1989)). 125 Indeed, the APA requires agenci es to “incorporate in the ru les adopted a concise general statement of their basis and purpose,” 5 U.S.C. 553(c), often referred to as the regulatory preamble. It would not make sense for a court to attempt to interpret the text of a regulation independently from its statutorily manda ted statement of basis and purpose.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 179 of 539 state’s SIP submission is so significantly ambiguous that it is necessary to request that the state revise the regulatory text before the EPA can approve it into the SIP. Finally, a commenter stated it s view that reliance on in terpretive letters may be appropriate, but only when affected parties have the right to comm ent on the letter and the EPA’s reliance on it during the rulemaking in which th e letter is relied upon. The EPA has explained earlier in this notice the proper circumstances under which such reliance may be appropriate and the proper process to be followed when reliance upon such letters is a ppropriate, but the EPA also notes that the process does not require that the letters alwa ys be made available for public comment. As explained earlier in this notice, the EPA makes every attempt to identify ambiguities in state-submitted SIPs and requests st ates to submit interpretive letters to explain any ambiguities, before putting the proposed acti on on the SIP submission out for public notice and comment. On occasion, however, ambiguous pr ovisions may inadvertently remain and are not identified until the notice and comment period ha s begun. As explained earlier in this notice, sometimes these ambiguities are so significant that the EPA requires the state to resubmit its SIP submission altogether, which would entail a nother notice-and-comment period. When the EPA does not deem the ambiguity to be so significant as to warrant a revision to the state’s regulatory text in the SIP submission, the Agency believes that resolution of th e ambiguity through the submission of an interpretive letter, which then is incorporated into the EPA’s action, reflected in

the administrative record and memorialized as the proper intended read ing of the provision, is appropriate. This approach comports with well-establi shed principles applicable to notice-andcomment rulemaking generally. One purpose of giving interested parties the opportunity to comment is to provide these parties the opportunity to bring areas of potential ambiguity in the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 180 of 539 proposal to an agency’s attention so that the concerns may be a ddressed before the agency takes

final action. If the APA did not a llow the agency to consider comm ents and provide clarification when issuing its final action as necessary, this pu rpose would be defeated. Courts have held that so long as a final rule is a “logical outgrowth” of the proposed rule, adequate notice has been provided. 126 It is the EPA’s practice to neither requ ire a state to resubmit a SIP submission nor repropose action on the submission, so long as the cl arification provided in the interpretive letter is a logical outgrowth of the proposed SIP provision. If an interested party believes that the EPA is incorrect in not requiring the state to revise its SIP s ubmission or that the EPA should repropose action on a submission, incl uding the clarification provided by the interpreti ve letter in the plain language of the SIP submission itself, that party does have recourse. The APA gives that party the opportunity to petition the EPA fo r rulemaking to reconsider the decision under 5 U.S.C. 553(e). For these reasons, the EPA believes that its process for using interpretive letters to clarify SIP provisions, as articulated in this rulemaking, is appropriate. VII. Clarifications, Reiterations and Revisions to the EPA’s SSM Policy A. Applicability of Emission Li mitations During Periods of SSM 1. What the EPA Proposed In the February 2013 proposal, the EPA reitera ted its longstanding in terpretation of the CAA that SIP provisions cannot include exem ptions from emission limitations for excess emissions during SSM events. This has been the EPA’s explicitly stated interpretation of the CAA with respect to SIP provisions since the 1982 SSM Guidance, and the Agency has reiterated this important poi nt in the 1983 SSM Guidance, the 1999 SSM Guidance and the 2001

126 See, e.g., Shell Oil Co. , 950 F.2d 741; NRDC v. Thomas , 838 F.2d 1224 (D.C. Cir. 1988); South Terminal Corp. v. EPA , 504 F.2d 646.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 181 of 539 SSM Guidance. In accordance with CAA section 302(k), SIPs must contain emission limitations that “limit the quantity, rate, or concentration of emissions of air po llutants on a continuous

basis.” Court decisions confirm that this re quirement for continuous compliance prohibits exemptions for excess emissions during SSM events. 127 2. What is Being Finalized in This Action For the reasons explained in the Fe bruary 2013 proposal, in the background memorandum supporting that proposa l and in the EPA’s responses to comments in this notice, the EPA interprets the CAA to prohibit exemptio ns for excess emissions during SSM events in SIP provisions. This interpretation has long been reflected in the SSM Policy. The EPA acknowledges, however, that both states and the Agency have failed to adhere to the CAA consistently with respect to this issue in some instances in the past , and thus the need for this SIP call action to correct the existing de ficiencies in SIPs. In order to be clear about this important point on a going-forward basis, the EPA is reiter ating that emission limitations in SIP provisions cannot contain exemptions for emissions during SSM events.

As summarized in the comme nt-by-comment responses that follow, many commenters wrongly asserted that the EPA declared in the February 2013 proposal that all emission

limitations in SIPs must be established as numer ical limitations, or must be set at the same

numerical level at all times. Th e EPA did not take this position. In the case of section 110(a)(2)(A), the statute does not include an explicit requirement that all SIP emission

127 See, e.g., Sierra Club v. EPA , 551 F.3d 1019, 1021 (D.C. Cir. 2008) (interpreting the definition of emission limitation in section 302(k) and section 112); Mich. Dep’t of Envtl. Quality v. Browner , 230 F.3d 181 (6th Cir. 2000) (upholdi ng disapproval of SIP provisions because they contained exemptions applicable to SSM events); US Magnesium, LLC v. EPA , 690 F.3d 1157, 1170 (10th Cir. 2012) (uphol ding the EPA’s issuance of a SI P call to a state to correct SSM-related deficiencies).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 182 of 539 limitations must be expressed numerically. In practice, it may be that numerical emission limitations are the most appropriate from a regulatory perspective ( e.g. , to be legally and practically enforceable) and thus th e limitation would need to be established in this form to meet CAA requirements. The EPA did not, however, adopt the absolutist posit ion ascribed to it by

commenters, i.e. , that SIP emission limitations must al ways be expressed only numerically and must always be set at the same numerical level during all mode s of source operation. The EPA notes that some provisions of th e CAA that govern standard-setting limit the EPA’s own ability to se t non-numerical standards. 128 Section 110(a)(2)(A) does not contain comparable explicit limits on non-numerical form s of emission limitation. Presumably, however, some commenters misunderstood the explicit statut ory requirement for emission limitations to be “continuous” as a requirement that states must literally establish SIP emission limitations that would apply the same precise numerical level at all times. Evidently these commenters did not consider the explicit recommendations that the EPA made in the February 2013 proposal concerning creation of alte rnative emission limitations in SIP pr ovisions that states may elect to apply to sources during startup, shutdown or other specifically defined modes of source operation. 129 As many of the commenters acknowledged, the EPA itself has recently promulgated emission limitations in NSPS and NESHAP regulations that impose different numerical levels during different modes of source operation or impose emission limitations that are composed of a combination of a numerical limitation during some mo des of operation and a

128 See, e.g. , CAA section 112(h)(1) (aut horizing design, equipment, work practice, or other operational emission limitations under certain c onditions); 40 CFR 51.308(e )(1)(iii) (regulations applicable to regional haze plans). 129 See February 2013 proposal, 78 FR 12459 at 12478 (February 22, 2013) (the recommended criteria for consideration in creation of SIP pr ovisions that apply during startup and shutdown).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 183 of 539 specific technological control requi rement or work practice requi rement during other modes of operation. In light of the court’s decision in Sierra Club v. Johnson , the EPA has been taking steps to assure that its own regulations impos e emission limitations that apply continuously, including during startup a nd shutdown, as required. Regardless of the reason for the commenters’ apparent misunderstanding on this point, many of the commenters used this incorrect premise as a basis to argue that “continuous” SIP emission limitations may contain total exemptions for all emissions during SSM events. Therefore, in this final action the EPA wishes to be very clear on this important point, which is that SIP emission limitations: (i) do not need to be numerical in fo rmat; (ii) do not have to apply the same limitation ( e.g. , numerical level) at all times; and (iii) may be composed of a combination of numerical limitations, specific te chnological control requi rements and/or work practice requirements, with each component of the emission limitation applicable during a defined mode of source operation. It is important to emphasize, however, that regardless of how the air agency structures or expresses a SI P emission limitation—whether solely as one numerical limitation, as a combina tion of different numerical limitations or as a combination of numerical limitations, specific technological control requirements and/or work practice requirements that apply during ce rtain modes of operation such as startup and shutdown—the

emission limitation as a whole must be conti nuous, must meet appl icable CAA stringency requirements and must be legally and practically enforceable. 130

130 The EPA notes that CAA section 123 explicitly prohibits certain inte rmittent or supplemental controls on sources. In a situation where an emission limitation is continuous, by virtue of the fact that it has components applicable during all modes of source opera tion, the EPA would not interpret the components th at applied only during certain modes of operation, e.g. , startup and shutdown, to be prohibited intermitte nt or supplemental controls.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 184 of 539 Another apparent common misconception of co mmenters was that SIP provisions may contain exemptions for emissions during SSM even ts, so long as there is some other generic regulatory requirement of some kind somewhere else in the SIP that coincidentally applies during those exempt periods. The other generic re gulatory requirements most frequently referred to by commenters are “general dut y” type requirements, such as a general duty to minimize emissions at all times, a general duty to use good engineering judgment at all times, or a general duty not to cause a violation of the NAAQS at any time. To the extent that such other generalduty requirement is properly established and lega lly and practically enforceable, the EPA would agree that it may be an appropr iate separate requirement to impose upon sources in addition to the (continuous) emission limitation. The EPA itself imposes separate genera l duties of this type in appropriate circumstances. 131 The existence of these generi c provisions does not, however, legitimize exemptions for emissions during SSM events in a SIP provision that imposes an

emission limitation. In accordance with the definition of section 302(k), SIP emission limitations must be continuous and apply at all tim es. SIP provisions may be composed of a combination of numerical limitations, specific technological control requirements and/or work practice requirements, but those must be components of a continuously applicable SIP emission limitation. In addition, the SIP emission limitation mu st meet applicable st ringency requirements during all modes of source operation ( e.g. , be RACT for stationary sources located in a nonattainment area) and be legally and practically enforceable. General-duty requirements that

131 See, e.g., “Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutant s Reviews; Final rule ,” 77 FR 49489 at 49570, 49586 (August 16, 2012) (added general standa rds to apply at all times).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 185 of 539 are not clearly part of or exp licitly cross-referenced in a SIP emission limitation cannot be viewed as a component of a contin uous emission limitation. Even if clearly part of or explicitly cross-referenced in the SIP emission limitation, however, a given general- duty requirement may not be consistent with the appl icable stringency requirements for that type of SIP provision during startup and shutdown. The EPA’s recommendations for developing appropriate alternative emission limitations applicable during certain modes of source operation are

discussed in section VII.B.2 of this notice. In general, the EPA believes that a legally and practically enforceable alternative emission limitation applicab le during startup and shutdown should be expressed as a numeri cal limitation, a specific technologi cal control requi rement or a specific work practice requirement applicable to affected sources duri ng specifically defined periods or modes of operation. 3. Response to Comments The EPA received a substantial number of comments, both supportive and adverse, concerning the issue of exemptions in SIP pr ovisions for excess emissions during SSM events. Many of these comments raised the same core issues, albeit using sli ght variations on the arguments or variations on the combination and sequence of arguments. For clarity and ease of discussion, the EPA is responding to these comments grouped by issue. a. Comments that the EPA’s proposed ac tion on the Petition is incorrect because some of the Agency’s own regulations contain exemptions for emissions during SSM events.

Comment: Many commenters argued that the EP A is misinterpreting the CAA to preclude SIP provisions with exemptions for emissions during SSM events because some of the Agency’s own existing NSPS and NESHAP rules contain such exemptions. Some commenters provided a list of existing N SPS or NESHAP standards that th ey claimed currently contain*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 186 of 539 exemptions for emissions during SSM events. Co mmenters also noted that the NSPS general provisions at 40 CFR 60.11(d) excuse noncompliance with many NSPS during periods of startup

and shutdown. Other commenters as serted that the EPA’s interp retations in the February 2013 proposal are inconsistent with its longstanding interpretation of the Act because the EPA itself has a long history of adopting exceptions to num erical emission limitations for emissions during SSM events, citing to the NSPS general provis ions at 40 CFR 60.8, the NSPS for Fossil-FuelFired Steam Generators and for Electric Utility Steam Generating Units (40 CFR part 60, respectively subparts D and Da) and the NSPS for Industrial-Commercial-Institutional Steam Generating Units and for Small Industrial-Commer cial-Institutional Steam Generating Units (40 CFR part 60, respectively subparts Db and Dc). Co mmenters claimed that recent revisions to 40 CFR subpart Da excluded periods of startup and shutdown fr om new PM standards. The commenters pointed to these facts or alleged fact s as evidence that the EPA is interpreting the

term “emission limitation” or othe r provisions of the statute inc onsistently to preclude SSM exemptions in SIP provisions. Response: Commenters are correct that many of the EPA’s existing NSPS and NESHAP standards still contain exemptions from em ission limitations during periods of SSM. The exemptions in these EPA regulations, however, predated the 2008 issuance of the D.C. Circuit

decision in Sierra Club v. Johnson , in which the court held that emission limitations must be continuous and thus cannot contain exemptions for emissions during SSM events. Likewise, the NSPS general provisions in 40 CFR 60.8 that comment ers identified as inconsistent also predate that 2008 court decision. Although these other EPA regulations th at include exemptions for emissions during SSM events were not before the court in the Sierra Club case, the EPA’s view*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 187 of 539 is that the legal reasoning of the Sierra Club decision applies equally to these exemptions and that the exemptions are thus inconsistent with the CAA. Consequently, since the Sierra Club decision, the EPA has eliminated exemptions in many existing federal emission limitations as these standards are revised or reviewed pursuant to CAA requirements, such as CAA section 112(d)(6) and (f)(2). 132 Similarly, the EPA has established emission standards that apply at all times, including during SSM events, when promulgating new NSPS and NESHAP sta ndards to be consistent with the Sierra Club

decision. 133 The EPA recognizes that the NSPS genera l provisions regulations also include exemptions for emissions during SSM events , but in promulgating new NSPS since the Sierra

Club decision, the EPA has established emission li mitations in the new NSPS that apply at all times thereby superseding thos e general provisions. Therefor e, the EPA’s action in this rulemaking is consistent with other ac tions that the EPA has taken since the Sierra Club decision concerning the issue of SSM exemptions. The fact that the EPA has not completed th e process of updating its own regulations to bring them into compliance with respect to C AA requirements concerning proper treatment of emissions during SSM events does not render this SIP call action arbitrar y or capricious. The existence of a deficiency in an existing EPA re gulation that has not yet been corrected does not alter the legal requirements imposed by the C AA upon states with resp ect to SIP provisions.

132 See, e.g. , “New Source Performance Standards Review for Nitric Acid Plants; Final rule,” 77 FR 48433 (August 14, 2012) (example of NSPS em ission limitation that no longer includes exemption for periods of startup or shutdown). 133 See, e.g. , “Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews; Final rule,” 77 FR 49489 (August 16, 2012) (consistent with Sierra Club v. EPA , the EPA has established st andards in both rules that apply at all times).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 188 of 539 Thus, for example, the EPA does not agree with commenters that the continued existence of SSM exemptions in the general pr ovisions applicable to the emission limitations in the Agency’s

own NSPS for Fossil-Fuel-Fired Steam Generators in 40 CFR part 60, subpart D, is evidence that exemptions for emissions during SSM events are permitted by the CAA. The EPA acknowledges that corre ction of longstanding regulato ry deficiencies by proper rulemaking procedures requires time and resources, not only for the EPA but also for states and affected sources. Hence, the EPA has elected to proceed via its author ity under section 110(k)(5) and to provide states with the full 18 months a llowed by statute for compliance with this action. This SIP call is intended to help assure that st ate SIP provisions are broug ht into line with CAA requirements for emission limitations, just as the EPA is undertaking a process to update its own regulations. The EPA also specifically disagrees with the commenters’ implication that 40 CFR 60.11(d) completely excuses noncompliance during pe riods of startup and shutdown. Rather, that provision imposes a separate affirm ative obligation to maintain and operate the affected facility, including associated air polluti on control equipment, in a ma nner consistent with good air pollution control practices at all times. The existe nce of this separate duty to minimize emissions, however, does not justify or excuse the existenc e of an exemption for emissions during SSM

events from the emission limitations of an EPA NSPS. It is a separate obligation that sources

must also meet at all times. The EPA also disagrees with the commenters who argued that the Agency has recently created new exemptions for PM emissions during startup and shutdown events in the NSPS for Electric Utility Steam Generating Units in 40 CF R part 60, subpart Da. The EPA has not created new exemptions for emissions during startup an d shutdown. To the contrary, the EPA has taken*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 189 of 539 steps to assure that these regul ations are consistent with the statutory definition of emission limitation and with the logic of the Sierra Club decision on a going-forward basis. In accordance with that decision, the revised emission limitation s in subpart Da NSPS apply continuously. In revising subpart Da to establish requirements for sources on which construction, modification or reconstruction commenced after May 3, 2011, the EP A determined that it was appropriate to provide that the exemptions for emissions durin g SSM events in the General Provisions do not apply. 134 Although the Sierra Club v Johnson decision specifically addres sed the validity of SSM exemptions in NESHAP regulations, the EPA conc luded that the court’s focus on the definition

of “emission limitation” in secti on 302(k) applied equally to a ny such SSM exemptions in NSPS regulations. Thus, for affected sources on whic h construction, modifica tion or reconstruction starts after May 3, 2011, the Genera l Provisions do not provide an exemption to compliance with the applicable emission limitations during SSM events. For such sources, the emission limitation for PM in 40 CFR 60.42Da(a) imposes a

numerical level of 0.03 lb/MMBtu that applies at all times ex cept during startup and shutdown and specific work practices that apply during startup and shutdown. 135 The related emission limitation for opacity from such sources in 40 CF R 60.42Da(b) is 20 percent opacity at all times, except for one 6-minute period per hour of not more than 27 percent, and it applies at all times except during periods of start up and shutdown when the work practices for PM limit opacity.

134 See 40 CFR 60.48Da(a). For affected facilities for which construction, modification, or reconstruction commenced afte r May 3, 2011, the applicable SO 2 emissions limit under § 60.43Da, NOx emissions limit under § 60.44Da, and NOx plus CO emissions limit under § 60.45Da apply at all times. 135 The EPA notes that the emission standards for SO 2 in 40 CFR 60.43Da and for NOx in 40 CFR 60.44Da, applicable to sources on which construction, modificati on or reconstruction commenced after May 3, 2011, also apply continu ously and contain no exemptions for emissions during SSM events.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 190 of 539 Commenters alleged that the EPA created an “e xemption” from the PM emission limitations in subpart Da applicable to post-May 3, 2011, affect ed sources. That is simply incorrect. The revised regulations in subpart Da impose a numeric al emission limitation that applies at all times except during startup and shutdown and impose sp ecific work practice requirements that apply during startup and shutdown as a component of the emission limitation. Specifically, 40 CFR 60.42Da(e)(2) explicitly requires post-May 3, 2011, affected sources to comply with specific work practice standards in part 63, subpart UUUUU. The numerical emission limitation and the work practice requirement together comprise a continuous emission lim itation and there is no exemption for emissions during startup and shutdown. The fact that the EPA has established different requirements for different periods of operation does not cons titute creation of an exemption. These emission limitations have numerical limitations that apply during most periods and specific technological control requirements or work practice requirements that apply during startup and shutdown, but all peri ods of operation are subject to controls and no periods of operation are exempt from regulation. States are similarly able to alte r their regulations, in response to this SIP call, to provide for emissi on limitations with different types of controls applicable during different modes of source operation, so lo ng as those controls apply at all times and no periods are exempt from controls. As expl ained in section VII.A of this notice, the EPA interprets section 110(a)(2)(A) to permit SIP provisions that are composed of a combination of numerical limitations, specific technological control requirements and/or work practice requirements, so long as the resulting emission limitations are continuous, meet applicable stringency requirements ( e.g. , are RACT for sources in nonattain ment areas) and are legally and practically enforceable.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 191 of 539 The EPA also notes that th e provisions of 40 CFR 60.42D a(b)(1) do not provide an “exemption” from the opacity standard. That sect ion merely provides that the affected sources do not need to meet the opacity standard of the NSPS (at any time), if they have installed a PM continuous emission monitoring system (PM CE MS) to measure PM emissions continuously instead of relying on periodic st ack tests to assure compliance with the PM emission limitation. One reason for the imposition of opac ity standards on sources is to provide an effective means of monitoring for purposes of assuring source comp liance with PM emission limitations and proper operation of PM emission controls on a continuous basis. If a source is subject to a sufficiently stringent PM limitation and has opted to install, calibrate, maintain and operate a PM CEMS to measure PM emissions, then it is reasonable for the EPA to conclude that an opacity emission limitation is not needed for that particular sour ce for those purposes. The direct measurement of PM, in conjunction with an appropriately st ringent PM emission limitation that applies continuously, is an appropriate means to assu re adequate control of PM emissions on a

continuous basis. States evalua ting how best to replace impermissible SSM exemptions from opacity standards may wish to consider a similar approach, conditioned upon the use of PM CEMS and a sufficiently stringent PM emission limitation. Finally, the EPA emphasizes that what is at issue in this ac tion is the question of whether emission limitations in SIP provi sions can include exemptions for emissions during SSM events. The EPA is reiterating its longsta nding interpretation of the CAA w ith respect to this question, in the process of responding to the Petition, updating its SSM Policy and applying its current interpretations of the CAA to the specific SIP provisions at issue in this SIP call action. To the extent that commenters intend to point out th at the EPA needs to address exemptions for*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 192 of 539 emissions during SSM events in its own existing re gulations, the Agency is already aware of that need due to recent judicial decisi ons and is proceeding to correct th ose regulations in due course. b. Comments that the EPA’s proposed action on the Petition is in correct because the Agency has previously allowed the inclusion of exemptions for emissions during SSM events through approval of NSPS or NESHAP requirements into SIPs.

Comment: Commenters asserted that the EPA is being inconsistent because it has previously approved SIP submissions that rely on NSPS rules, including the SSM exemptions in those existing rules. The commenters argued that the EPA’s current interpretation of the CAA to preclude SSM exemptions in SIP provisions is thus at odds with past guidance and practice. Response: The EPA disagrees with the argument th at past approval of SIP submissions that relied upon an NSPS or NESHAP with an SSM exemption is evidence that such exemptions are now permissible in SIP pr ovisions. In the 1999 SSM Guidance, the EPA addressed the

related issue of whether states could create affirmative defenses in SIP provisions that would alter or add to the requirements of an existing EPA NSPS or NESHAP. 136 At that time, the EPA clearly stated that it would be inappropriate for a state to seek to “deviate” from the specific requirements of an NSPS or NESHAP when adop ting that standard as a SIP provision, stating that “[b]ecause EPA set these standards taking into account technologica l limitations, additional exemptions would be inappropriate.” Thus, so long as a state did not alter the requirements of the existing NSPS or NESHAP by including additional a ffirmative defenses or exemptions, the EPA indicated that it would approve a SIP submi ssion that included an NSPS or NESHAP.

136 See 1999 SSM Guidance at Attachment p. 3.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 193 of 539 The commenters’ argument has brought to the EPA’s attention that past guidance on this

issue is in fact inconsistent with more recen t legal developments. At the time of the 1999 SSM Guidance, the EPA was still of the belief that its own NSPS and NESHAP regulations could legitimately include exemptions for emissions during SSM events. In that light, recommending to states that they could rely on an EPA NSPS or NESHAP as an emission limitation in a SIP provision so long as they did not alter the NSPS or NESHAP in any fashion was logical. At that time, the reasoning was that NSPS and NESHAP standards were technology-based standards that, although neither designed nor intended to m eet the separate legal requirements for SIP provisions, could be used to provide emission reductions credita ble in SIPs. Since the 2008 D.C.

Circuit decision in Sierra Club v. Johnson , however, it is now clear that NSPS and NESHAP

standards themselves cannot contain such exem ptions. The reasoning of the court was that exemptions for SSM events are impermissible be cause they contradict the requirement that

emission limitations be “continuous” in accordance with the definition of that term in section 302(k). Although the court evaluated this issue in the context of EPA regulations under section 112, the EPA believes that this same logic exte nds to SIP provisions under section 110, which similarly must contain emission limitations as de fined in the CAA. Section 110(a)(2)(A) requires

states to have emission limitations in their SIPs to meet other CAA requirements, and any such emission limitations would similarly be subject to the definition of that term in section 302(k). Accordingly, the EPA conclude s that a state should not subm it an NSPS or NESHAP for

inclusion into its SIP as an emission limitation (whether through incorporation by reference or otherwise), unless that NSPS or NESHAP does not include an exemption for SSM events or

unless the state otherwise takes action to exclude the SSM exemption from the standard as part of the SIP submission. Because SIP provisions must apply continuously, including during SSM*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 194 of 539 events, the EPA can no longer approve SIP submi ssions that include any emission limitations with such exemptions, even if those emission lim itations are NSPS or NESHAP regulations that the EPA has not yet revised to make consistent with CAA requirements. Alternatively, states may elect to adopt an existing NSPS or NESHAP as a SIP provision, so long as the state provision excludes the SSM exemption. 137 States may also wish to replace the SSM exemption with appropriately developed alternative emi ssion limitations that apply during startup and shutdown in lieu of the SSM exemption. Otherwise, the EPA’s approval of the deficient SSM exemption provisions into the SIP would contra vene CAA requirements for SIP provisions and would potentially result in misi nterpretation or misapplication of the standards by regulators, regulated entities, courts and members of the public. The EPA emphasizes that the inclusion of

an NSPS or NESHAP as an emission limitation in a state’s SIP is differe nt and distinct from reliance on such standards indirectly, such as s ources of emission reductions that may be taken into account for SIP planning purposes in emissions inventories or attainment demonstrations. For these uses, states may continue to rely on EPA NSPS and NESHAP regulations, even those that have not yet been revised to remove inappropriate exemp tions, in accordance with the requirements applicable to t hose SIP planning functions. c. Comments that the EPA is misinterpreting the Sierra Club case because it applies only to MACT regulations a nd not to SIP provisions.

137 Under CAA section 116, states ha ve the explicit general authority to regulate more stringently than the EPA. Indeed, under section 116 states ca n regulate sources subject to EPA regulations promulgated under section 111 or section 112 so long as they do not regulate them less stringently. According, the EPA believes that st ates may elect to adopt EPA regulations under section 111 or section 112 as SIP provisions and expressly eliminate the exemptions for emissions during SSM events.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 195 of 539 Comment: Many commenters claimed that the EPA incorrectly applies the holding in the

Sierra Club decision to preclude exemptions for emi ssions during SSM events in SIP provisions

and that the Sierra Club decision does not apply in this cont ext. The commenters argued that the

Sierra Club decision was directly dependent on the st ructure of CAA sec tion 112 and cannot be extended to the different regul atory structure that governs SIPs under CAA section 110.

The commenters further contende d that in the SIP context, the underlying air quality pollution control requirement for SIPs is to atta in NAAQS and no specific level of stringency is required, unlike section 112, and Congress gave st ates broad discretion in the design of their

SIPs. Commenters asserted that the Sierra Club decision held only that the general-duty requirement in the section 112 regulations did not meet the stringency requirements of CAA section 112 and that this holding does not apply in the SIP contex t because in the SIP context no specific level of string ency is required. Commenters also asserted that a general-duty requirement is an appropriate alternative

standard for SSM events in the SIP context be cause CAA sections 302(k) and 110(a)(2)(A) give states broad authority to devel op the mix of controls necessary and appropriate to implement the NAAQS. Other commenters contended that the Sierra Club decision does not preclude states from constructing a compliance regime that uses multiple methods to limit emissions as long as the overall compliance regime to mi nimize emissions is enforceable. Commenters also suggested that the decision in Kamp v. Hernandez relied upon in the

Sierra Club case affirmed EPA’s approval of a state em ission limitation in a SIP that specifically allowed and even expected a certain number of annual exceedances of the emission limit. 138

138 752 F.2d 1444 (9th Cir. 1985).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 196 of 539 Some commenters argued that the Sierra Club decision should not be read to impose a “continuous emissions limitation” requirement and that to the extent it does, it was incorrectly

decided. Response: The EPA disagrees that the court’s decision in Sierra Club v. Johnson has no

relevance to this action. Of cour se that decision specifically addr essed the validity of exemptions for emissions during SSM events in the Agency ’s own regulations promulgated under section 112. Naturally, that decision turned, in part, on the specific provisions of section 112 and the specific arguments that each of the litigants raised in that case. However, the decision also turned in large part on the explicit st atutory definition of the term “emission limitation” in section 302(k), which requires such limita tions to be “continuous.” In that litigation, the EPA itself had argued that the exemptions from the otherwise applicable MACT standards during SSM events we re consistent with CAA requirements because the MACT standards and the separate “general duty” requirements “together form an uninterrupted, i.e. , continuous” emission limitation, because either the numerical limitation or the general duty applied at all times. 139 The Sierra Club court rejected this argu ment, in part because the general duty that EPA required sources to meet during SSM events was not itself consistent with section 112(d) and the EPA did not purpor t to act under section 112(h). Thus, the EPA agrees that the court in Sierra Club explicitly found that the SSM exemption in EPA’s NESHAP general provision rules violated the CAA because the general duty to minimize emissions was not a section 112(d)-compliant standard and ha d not been justified by the EPA as a 112(h)- compliant standard. The court reasoned that wh en sections 112 and 302(k) are read together,

139 S e e 551 F.3d 1019, 1026 (D.C. Cir. 2008).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 197 of 539 there must be a continuous section 112-compliant standard. It is important to note that if the otherwise applicable numerical MA CT standards had themselves ap plied at all times consistent with section 302(k), then there would have been no question that they were in fact continuous.

The EPA has concluded th at the reasoning of the Sierra Club decision is correct and further supports the Agency’s in terpretations of the CAA with respect to SIP provisions. As explained in the February 2013 proposal, the EP A’s longstanding SSM guidance has interpreted the CAA to prohibit exemptions for emissions during SSM events since at least 1982. The EPA has long explained that exemptions for emissions during SSM events are not permissible in SIP provisions, because they interfer e with attainment and maintena nce of the NAAQS, protection of PSD increments and improvement of visibility, and because they are inconsistent with the

enforcement structure of the CAA. The EPA also noted that the definition of emission limitation in section 302(k) was part of the basis fo r its interpretation co ncerning SIP provisions. 140 In the February 2013 proposal, the EPA explained that the Sierra Club court’s emphasis on the

definition of the term emission limitation in section 302(k) furthe r bolsters the Agency’s basis for interpreting the CAA to preclude such exemp tions in SIP provisions. In other words, under the CAA and the court’s decision, emission limitati ons in SIP provisions as well as in NSPS and NESHAP regulations must be continuous, although they can impose different levels or forms of control during different m odes of source operation. The EPA also disagrees with the argument that the Sierra Club decision does not apply because section 110, unlike section 112, does not im pose any specific level of “stringency” for SIP provisions. That is incorrect. In accordance w ith section 110(a)(1), states are required to

140 See 1999 SSM Guidance at 2, footnote 1 (citing the section 302(k) definition of emission limitations and emission standards).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 198 of 539 have SIPs that provide for attainment, maintena nce and enforcement of the NAAQS in general. Pursuant to section 110(a)(2), st ates are required to ha ve SIP provisions that meet many specific procedural and substantive requirements, includi ng but not limited to, the explicit requirements of section 110(a)(2)(A) for em ission limitations necessary to meet other substantive CAA requirements. In addition, however, states must ha ve SIP provisions that collectively meet a host of other statutory requirements that also impose more specific stringency requirements. Merely by way of example, section 110(a) (2)(I) requires states with nonattainment areas to have SIP provisions that collectively meet part D requirements. 141 In turn, the different subparts of part D applicable to each NAAQS impose many requirement s that require emission limitations in SIPs that meet various levels of stringency. Agai n, merely by way of example, states with nonattainment areas for PM under part D subpart 4 must have SIPs that include emission

limitations that meet either the RACM and RACT level of stringency (if the nonattainment area is classified Moderate) or meet the BACM and BA CT level of stringency (i f the area is classified Serious). 142 There are similar requirements for states to impose emission limitations that must meet various levels of stringency for each of the NAAQS. Likewise, stat es must impose SIP

emission limitations that meet BART and reasonabl e progress levels of st ringency for regional haze program purposes 143 and must ensure that emission limitations meet BACT or LAER levels of stringency for nonattainment NSR or PSD permitting program purposes. 144 The EPA agrees that states have broad discretion to devise SIP provisions under section 110, but states

141 Sections 171–193 of CAA title I comprise part D. 142 See CAA section 172(c)(2) (generally applicab le attainment plan requirements including RACM and RACT); CAA section 18 9(a)(1) (requirements for areas classified Moderate); section 189(b) (requirements for areas classified Serious). 143 See CAA section 169A(b)(2)(A). 144 See CAA section 165(a)(4) and CAA section 173(a)(2).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 199 of 539 nevertheless are required to devi se SIP provisions that meet applicable statutory stringency requirements. In short, the argument that the Sierra Club decision is not germane because there are no comparable “stringency” requirements app licable to SIP provisions is simply in error. While it is true that SIP provisions do not need to meet section 112 levels of stringency, they

must still be continuous under se ction 302(k) and meet applicab le NAAQS, PSD and visibility requirements and stringency levels. In short, they cannot contain exemptions for emissions during SSM events. Finally, the EPA does not agree with the comme nters’ view of the significance of the

reference to the Kamp v. Hernandez decision by the court in the Sierra Club decision. The Kamp decision upheld the EPA’s approval of a SIP provision that imposed an SO 2 emission limitation on a specific stationary source. 145 To the extent that the commenters believe that the Kamp decision stands for the principl e that SIP emission limitations can be “continuous” even if they

do not restrict emissions to the same numerical limitation at all times, this point is not in dispute. As explained in section VII.A of this document, the EPA agrees with this principle. If, however,

the commenters believe that the Kamp decision instead indicates th at SIP emission limitations may contain exemptions, such that no emission standard applies during some mode of source operation, then that is simply incorrect. Th e EPA-approved SIP provi sion at issue in Kamp did

not itself allow for a certain number of “exceedan ces” of the emission limitation each year. The

state emission limitation rule in that case was deve loped to ensure attainment and maintenance of the then applicable SO 2 NAAQS and the approved emission limitation for the source fluctuated but was continuous. It was the specifications of the SO 2 NAAQS standard that allowed for a

145 753 F.3d 1444, 1452–53 (9th Cir. 1985).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 200 of 539 certain number of “exceedances ” each year. The NAAQS themselves are not “emission limitations” governed by section 302 (k) and commonly have a statistic al “form” that authorizes a

set number of “exceedances” of the numerical leve l of the NAAQS before there is a “violation” of the NAAQS. 146 Thus, the EPA believes that the court in the Sierra Club decision properly

cited the Kamp case as support for the fundamental propos ition that emission limitations must be “continuous.” Moreover, the EPA not es that commenters did not a ddress other reported decisions in which courts have upheld the Agency’s disapproval of SIP subm issions containing SSM exemptions. 147 d. Comments that the EPA’s proposed acti on contradicts a 2009 guidance document concerning the effect of the Sierra Club decision on SSM exemptions in existing standards. Comment: A number of commenters suggested that the EPA’s February 2013 proposal is inconsistent with a memorandum (in fact a publ ic letter) issued by the Agency following the

Sierra Club decision in which the D.C. Circuit vacated two EPA provisions that exempt sources from section 112(d) emission standards during periods of SSM (Kushner letter). 148 The commenters noted that the Kushner letter expl ained that many MACT standards have SSM exemptions that were not affected by the Sierra Club decision. They argued that the Kushner

letter should be read to mean that no emission limitations other than the ones explicitly discussed

146 See, e.g. , 40 CFR 50.18 (24-hour PM 2.5 NAAQS met when 98th-percentile monitored value is less than or equal to 35 ug/m 3 ). 147 See, e.g. , Mich. Dep’t of Envtl. Quality v. Browner , 230 F.3d 181 (6th Cir. 2000) (upholding disapproval of SIP provisions because they contai ned exemptions applicable to SSM events); US Magnesium, LLC v. EPA , 690 F.3d 1157, 1170 (10th Cir. 2012) (upholding the EPA’s issuance of a SIP call to a state to corre ct SSM-related deficiencies). 148 See Letter from A. Kushner, Director, Office of Civil Enforcement, EPA/OECA, regarding

“ Vacatur of Startup, Shutdown, and Malfunction ( SSM) Exemption (40 C.F.R. §§ 63.6(f)(1) and 63.6(h)(1)),” July 22, 2009, in the rulemaking docket.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 201 of 539 within that letter would be a ffected by the court’s holding that emission limitations under the

CAA must be continuous. Response: The EPA disagrees with these commen ts for several reasons. First, the commenters misinterpret the Kushne r letter. The purpose of the Ku shner letter was to explain the direct and immediate impact of the Sierra Club decision, which vacated the SSM exemption in EPA’s NESHAP general provisions regulations. The Kushner lette r explained that the vacatur would “immediately and directly” affect only the subset of NE SHAP source category standards that incorporated the general provisions’ exem ption by reference, and that contain no other regulatory text exempting or excusing, in any way, compliance during SSM events, because only the general provisions’ exemption was ch allenged and before the court in the Sierra Club case. However, the Kushner letter clearly stated th at the legality of all NESHAP SSM exemption provisions was in question and th at EPA would examine such provi sions in light of the court’s decision. Therefore, the commenters’ suggesti on that the Kushner le tter supports a limited reading of the legal reasoning of the Sierra Club case is incorrect. Second, the Kushner letter did not explicitly or implicitly address the issue of whether the CAA allows exemptions for emissions during SS M events in SIP provisions. That fact is unsurprising, in that at the time of the Kushne r letter the EPA already had guidance in the SSM Policy (issued and reiterated in 1982, 1983, 1999 and 2001) that clearly stated the Agency’s view that such exemptions are not permissible in SIP provisions, consistent wi th CAA requirements. It would also have been unnecessary for the Kushner letter discussi ng the impact of the Sierra Club

decision on NESHAP standards to have mentione d that the statutory definition of emission limitation also precludes exemptions for SSM pr ovisions in SIPs. The EPA had already made this point explicitly in the 1999 SSM Guidance, when it explained the reasons why such*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 202 of 539 provisions would be contrary to CAA requirements for SIPs. 149 Thus, the EPA’s guidance for SIP provisions concerning emissi ons during SSM events had alrea dy explicitly articulated that provisions with exemptions for SSM events co uld not be approved pursuant to CAA section 110(l), because that would in terfere with a fundamental requirement of the CAA, i.e. , the definition of “emission limitation” in section 302(k). Finally, the EPA disagrees that the Kushner le tter could override the applicability of the logic of the Sierra Club decision to SIP pr ovisions, even if the Agency had any such intentions.

The D.C. Circuit’s evaluation of the issue w ith respect to the EPA’ s own regulations was premised not solely upon the particular requireme nts of section 112 but also more broadly on the meaning and specific definition of the term “em ission limitation” under the CAA. That definition applies to SIP provisions as well as to the EP A’s own regulations. Because the SSM Policy in

effect at the time of the Sierra Club decision and the time of the Kushner letter already stated that EPA interpreted the CAA to prohibit SIP provisions that exempt emissions during SSM events, there would have been no need for th e Kushner letter to speak to this issue. 150 e. Comments that the EPA’s proposed acti on on the Petition is in correct because the Agency’s recent MATS rule and Area Source Bo iler rule regulations contain exemptions for emissions during SSM events.

149 See 1999 SSM Guidance at 2, footnote 1. 150 See, e.g. , 1999 SSM Guidance, Attachment at 1 (“a ny provision that allows for an automatic exemption for excess emissions is prohibited”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 203 of 539 Comment: Many commenters asserted that th e EPA’s February 2013 proposed action to find SIP provisions with exemptions for emissi ons during SSM events to be substantially inadequate is arbitrary and capricious because recent Agency NESHAP regulations under section 112 contain similar exemptions. Co mmenters pointed to recently pr omulgated rules such as the

MATS rule 151 and the Area Source Boiler rule 152 as examples of NESHAP regulations that they claim contain similar exemptions. According to commenters, the emission limitations in EPA’s own MATS rule “allow excess emissions during SSM events,” suggesting that the Agency created exemptions for such emissions. 153 Other commenters similarly argued that the EPA

created emission limitations in the Area Source Boiler rule that do not apply “continuously”

because the numerical limitations do not apply during startup and shutdown. 154 In short, these commenters argued that the EPA is being arbitrar y and capricious because it is holding emission

limitations in SIPs to a differe nt and higher standard than em ission limitations under its own NSPS and NESHAP regulations.

151 The mercury and air toxics standards (MATS) ru le for power plants regulates emissions from new and existing coal- and oil-fi red electric utility steam ge nerating units (EGUs) under 40 CFR part 63, subpart UUUUU. 152 The Area Source Boiler rule regulates industrial, commercial and institu tional boilers at area sources under 40 CFR part 63, subpart JJJJJJ. 153 See MATS rule, requirements during startup, shutdown and malfunction, 77 FR 9304 at 9370 (February 16, 2012). 154 See Area Source Boiler rule, noti ce of final action on reconsider ation, periods of startup and shutdown, 78 FR 7487 at 7496 (February 1, 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 204 of 539 Response: The EPA disagrees with these comm enters. The recent EPA rulemaking

efforts that commenters claim ar e at odds with EPA’s SIP call are completely consistent with the Agency’s action today. First, as explained in the February 2013 proposal, the EPA has not taken the position that sources must be subject to SI P emission limitations that are set at the same numerical level at all times, or that are expressed as numerical limitations at all times. As the EPA stated, “[i]f justified, the state can develop special emission limitations or control measures that apply during startup or shutdown if the source cannot meet the otherwise applicable

emission limitation in the SIP.” 155 The EPA’s 1999 SSM Guidance articulated that SIP provisions may include alternativ e emission limitations applicab le during startup and shutdown as part of a continuously applicable emission limitation when properly developed and otherwise consistent with CAA requirements. Moreover, the EPA recommended specific criteria relevant

to the creation of such alternative emission limit ations. The EPA reiterated that guidance in the February 2013 proposal and is prov iding a clarified version of the guidance in this final action.

This issue is addressed in more detail in section VII.B.2 of this document. The EPA also disagrees with the assertion that it is holding state SIP provisions to a

different standard than its own NSPS and NESHAP regulations. The EPA notes that SIP

emission limitations and NSPS and NESHAP emissi on limitations are, of course, designed for different purposes ( e.g. , to meet the NAAQS versus to redu ce HAP emissions) and have to meet some different statutory requirements ( e.g. , to be RACM versus be standards that are compliant with section 112). However, the EPA understands th e commenters’ claim to be more specifically that the Agency is applying a different interpre tation of the term “emission limitation” and taking

155 See February 2013 proposal, 78 FR 12459 at 12488 (February 22, 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 205 of 539 a different approach to the treatment of emi ssions during SSM events in its own regulations, even in recent regulations developed subsequent to the Sierra Club decision. The EPA believes that this argument reflects a misunderstandi ng of both the February 2013 proposal and what the Agency’s own new regulations contain.

The MATS rule and the Area Sour ce Boiler rule in fact illust rate how the EPA is creating emission limitations that apply continuously, w ith numerical limitations or combinations of

numerical limitations and other specific technological control requirements or work practice requirements applicable during startup and shut down, depending upon what is appropriate for the source category and the pollutants at issue. For example, in the MATS rule the EPA has promulgated regulations that impose emission limita tions on various subcategories of sources to address HAP emissions. To do so, the EPA de veloped emission limitations to address the relevant pollutants using a combination of nu merical emission limitations and work practices. The work practice requirements specifically appl y to sources during star tup and shutdown and are thus components of the continuous ly applicable emission limitations. 156 Similarly, in the Area Source Boiler rule 157 the EPA has imposed emission limitations on affected sources for PM, mercury and CO. The specific emission limitations that apply vary depending upon the subcategory of boiler. The em ission limitations include a combination of

numerical emission limitations a nd work practice requirements th at together apply during all

156 The EPA took final action on a petition for reco nsideration concerning the MATS rule and the Utility NSPS that made certain revisions relate d to the emission limitations and work practices applicable during startup and shutdown. Thos e revisions did not, however, alter the basic structure of the emission limitations as numerical limitations, or numerical limitations with work practice components during startup and shutdo wn, depending upon the source category and the pollutants at issue. See 79 FR 68777 (November 19, 2014). 157 78 FR 7487 (February 1, 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 206 of 539 modes of source operation. For some subcategories, the standards that apply during startup and shutdown differ from the standards that apply du ring other periods of ope ration. This illustrates what the EPA considers the correct approach to creating emission limitations: (i) the emission limitation contains no exemption for emissions during SSM events; (ii) the component of the emission limitation that applies dur ing startup and shutdown is clearly stated and obviously is an emission limitation that applies to the source; (i ii) the component of the emission limitation that applies during startup and shutdow n meets the applicable stringe ncy level for this type of emission limitation (in this case section 112) ; and (iv) the emission limitation contains requirements to make it legally and practically en forceable. In short, the Area Source Boiler rule established emission limitations that apply con tinuously, in accordance with the requirements of the CAA, and consistent with the court’s decision in the Sierra Club decision. States with SIP provisions that are deficient because they cont ain automatic or discretionary exemptions for emissions during SSM events may wish to cons ider the Agency’s own approach when they develop SIP revisions in re sponse to this SIP call.

f. Comments that section 1 10(a)(2)(A) authorizes states to have SIP provisions with exemptions for emissions during SSM events be cause they are not “emission limitations” and are not subject to the requirement to be “continuous.”

Comment: Section 110(a)(2)(A) requires states to have SIPs that include emission limitations for purposes of imposing restrictions on sources of emissions in order to attain and maintain the NAAQS and to meet other CAA re quirements. Some comme nters noted that, in addition to “emission limitations,” section 110(a)(2)( A) also explicitly refers to “other control measures, means, or techniques.” Unlike the te rm “emission limitation,” which is defined in section 302(k), commenters contended that thes e “other control[s]” need not be continuous.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 207 of 539 Accordingly, these commenters argued that emi ssion controls in SIP pr ovisions that either contain, or are subject to, SSM ex emptions can be viewed merely as examples of these “other control measures, means, or techniques” that are va lidly included in SIPs and that do not have to

limit emissions from sources on a continuous basis. Specifically, these co mmenters asserted that the plain text of section 110(a)(2 )(A) does not require SIPs to in clude only emission limitations but rather requires that SIPs in clude “emission limitations,” “other control measures, means, or techniques,” or a mixture thereof. Furthermore, according to some of these commenters, an interpretation of section 110( a)(2)(A) that requires all SI P provisions to be “emission limitations,” and thus subject to the requirement that they be continuous, would render the “other control” language in th e statute superfluous. Response: The EPA agrees with the commenters th at SIPs do not have to be composed solely of numerical emission limitations, that SIPs can contain other forms of controls in addition

to emission limitations and that certain forms of controls other than emission limitations may not need to apply to sources continuously. Howeve r, the EPA disagrees with the commenters’ conclusion that the mere act of labeling certain SIP provisions as “control measures, means, or techniques” rather than as “emission limitations” can be a means to circumvent the requirement that emission limitations must regulate sources continuously. To the extent that there is any ambiguity in the requirements of section 110(a)(2), it is not reasonable to interpret the statute to allow the explicit requirement that emission limitati ons must be continuous to be negated in this

fashion. As an initial matter, the SIP provisions that contain automatic or discretionary exemptions during SSM events at issue in this SIP call excuse compliance with requirements that presumably were submitted to the EPA as emission limitations, were intended to limit emissions*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 208 of 539 on a continuous basis or were otherwise included to ensure th at the SIP contained continuous emission limitations. All of the SIP provisions at issue in this action provide automatic or discretionary exemptions from emission limitation s that are formulated as restrictions on the “quantity, rate, or concentration” of emissions from affected s ources, just as section 302(k) describes the purpose of an emission limitation. Longstanding EPA regulations applicable to SIPs require that states have a control strategy to provide for attainment and maintenance of the NAAQS. 158 The required “control strategy” is define d to be the combination of measures including, but not limited to, “emission limitations,” “emission control measures applicable to in use motor vehicles” and “transportation c ontrol measures” listed in section 108(f). 159 The regulatory definition of “emission limitation” applicable to SIP provisions tracks the statutory definition of section 302(k) and notably also does not define the term to allow exemptions for emissions during SSM events. 160 To the EPA’s knowledge, none of the specific SIP provisions that contain or that are subject to the automatic or discretionary exemptions at issue in this SIP call action were developed by the states with the intention or expectation that absent the exemption they would not apply at all ti mes when the source is in operation; i.e. , they impose

restrictions on emissions that were intended to apply continuously when the source is emitting pollutants. Logically, the states intended the emission limitations to impose limits that apply continuously at all times when the affected s ources are emitting pollutants or else there would have been no impetus to include any exem ptions for emissions during SSM events.

158 See, e.g. , 40 CFR 51.100. 159 See, e.g. , 40 CFR 51.100(n). 160 See 40 CFR 51.100(z).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 209 of 539 However, even if the EPA were to accept the commenters’ premise arguendo —that inclusion of an SSM exemption in a given SIP provision turns “emission limitations” into “other control measures, means, or techniques,” th is would not be a reasonable reading of the requirements of section 110(a)(2)(A) and section 302( k) for several reasons. To the extent that either section 110(a)(2)(A) or section 302(k) is ambiguous with respect to this point, the EPA does not interpret the CAA to allow exempti ons for emissions during SSM events in SIP provisions in the way advocated by the commenters. First, section 110(a)(2)(A) exp licitly requires that SIPs mu st contain emission limitations as necessary to meet various CAA requirement s. Section 302(k) requires that such emission limitations must limit “the quantity, rate, or conc entrations of emissions of air pollutants on a

continuous basis.” Moreover, section 302(k) reiterates that th e term “continuous emission limitation” also specifically includes “any requirement relating to the operation or maintenance

of a source to assure continuous emission reduction.” Lest th ere be doubt, section 302(m) provides a definition for the related term “m eans of emission limitation” as “a system of continuous emissions reduction (inc luding the use of sp ecific technology or fuels with specified pollution characteristics).” In the Sierra Club v. Johnson decision, the D.C. Circuit concluded that the statutory definition of “emission limitati on” in section 302(k) precludes exemptions for emissions during SSM events because such exemptions are inconsistent with the requirement for

continuous controls. 161 Given the emphasis that the statute places on the requirement that sources be subject to continuous emission controls, and given the emphasis th at courts have placed on the requirement that sources be subject to continuous controls on their emissions, the EPA believes

161 See Sierra Club v. EPA , 551 F.3d 1019, 1027–28 (citing CAA secti ons 112(d)(2), 302(k)).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 210 of 539 that it is illogical that the statutory requirement for continuous controls on sources could be subverted merely by the act of la beling a given SIP provision a “c ontrol measure” rather than an “emission limitation.” The commenters’ argument that if a given SIP provision contains an SSM exemption, it is merely a “control measure[], mean[], or technique[]” reduces the explicit requirement for continuous controls on emissions to a semantic exercise. Second, the EPA believes that the commenters’ reading of the statute to permit SIP provisions to contain an SSM exem ption by virtue of what it is labeled is obviously incorrect if taken to its logical extreme. The commenters’ interpretation of section 110( a)(2)(A) would theoretically allow a SIP to contain no emission limitations whatsoever, merely a collection of requirements labeled “control measures” so that sources can be excused from having to limit

emissions on a continuous basis. This result is contrary to judicially approved EPA interpretations of prior versions of the CAA as requiring all SIPs to include continuously applicable emission limitations and only requiring “other” additional controls “as may be necessary” to satisfy the NAAQS. 162 Additionally, this result is cont rary to legislative history of the 1990 Clean Air Act Amendments, which indicates that in slightly revising this portion of section 110(a)(2)(A), Congress intended to merely “combine and streamline” previously existing

162 See, e.g. , Kennecott Copper Corp. v. Train , 526 F.2d 1149, 1153 (9th Cir. 1975). The current version of section 110(a)(2)(A) is admittedly wo rded differently than the 1970 version. However, for purposes of these commenters the critical distinction is not that Congress changed the location of the word “necessary” but rather that Congress changed the su bject that “necessary” modifies—and thus the entire scope of 110(a)(2 )(A)—from satisfying the NAAQS to meeting “applicable requirements” of the entire CAA.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 211 of 539 SIP requirements into a single provision, not to vitiate statutory requirements concerning

emission limitations. 163 Finally, the EPA’s interpretation of the requ irements of section 110(a)(2) does not render the “other control” language in the statute superfluous as clai med by the commenters. In addition to emission limitations, the EPA interprets that section to allow other “control measures, means or techniques” as contemplated by the statute. For example, th e EPA’s regulations implementing SIP requirements explicitly enumerate nine separate types of measures that states may include in

SIPs. 164 This list of nine different forms of poten tial SIP provisions to reduce emissions varies broadly, from measures that “impose emission char ges or taxes or other economic incentives or disincentives” to “changes in sc hedules or methods of operation of commercial or industrial facilities” to “any transportation control measure including those transpor tation measures listed in section 108(f).” The EPA made clear that this list is not all-in clusive. In addition, the EPA has, when appropriate, approved SIP pr ovisions that impose various form s of emissions controls that are not, by definition, emission limitations. 165 Thus, the commenters are in error in their belief that the EPA’s reading of the statute to require that SIPs contain emission limitations that apply continuously ignores the other form s of potential measures that se ction 110(a)(2)(A ) authorizes.

163 See, e.g. , S. Rept. 101-228, at 20 (noti ng that the structure of s ection 110(a)(2)(A) as it appears today reflects congression al intent to “combine and str eamline” previously existing SIP requirements into a single provision). 164 See 40 CFR 51.100(n). 165 See, e.g. , 71 FR. 7683 (February 14, 2006) (approving as BACM the use of “conservation management practices” to control fugitive dust em issions from agricultural sources, including techniques that limit emissions only duri ng certain activities or times); 68 FR 56181 (September 30, 2003) (approving as BACM an “e pisodic wood burning curtailment” program that restricts the use of wood-burning st oves based on predicted particulate matter concentrations).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 212 of 539 Section 110(a)(2) requires SIPs to include enforceable emission limitations and other controls “as necessary or appropriate to meet the applicable requirements” of the CAA. Regardless of whether commenters’ semantic labe ling arguments are valid in the abstract, they are not correct with respect to the fundamental CAA requirements for SIPs relating to continuous emission limitations. The automatic or discretionary exemptions for emissions during SSM events in the SIP provisions at issue in this SIP call authorize exemptions from statutorily required emission limitations. To the extent th at such a SIP provision would functionally or legally exempt sources from regulation during SSM events, the SIP provision fails to be a continuously applicable enforceable emission lim itation as required by the CAA. The fact that a SIP may also contain “other co ntrol[s]” as advocated by the co mmenters does not negate the statutory requirement that emission li mitations must apply continuously. g. Comments that the definition of “emissi on limitation” in section 302(k) does not require that all forms of emission li mitations must apply continuously.

Comment: Section 110(a)(2)(A) requires that SIPs must contain emission limitations, and section 302(k) defines the term “emission limitation” to mean a limit on emissions from a source that applies continuously. A number of commenters disagreed that section 302(k) requires that

all “emission limitations” have to be “continuous. ” The commenters argue d that section 302(k) establishes two distinct categor ies of emission limitations: (1) requirements that “limit[] the quantity, rate, or concentration of emissions of air pollutants on a contin uous basis, including any requirement relating to the opera tion or maintenance of a source to assure continuous emission reduction,” and (2) requirements constituting a “des ign, equipment, work practice or operational standard promulgated under this chapter.” Th ese commenters claimed that only the first purported category is emission limita tions that must be continuous and that the second purported*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 213 of 539 category is emission limitations that do not n eed to apply continuously. Accordingly, these

commenters asserted that SIP provisions that are rendered noncontinuous by inclusion of exemptions for emissions during SSM events are still legally valid “emission limitations” because they fall within the second category. Othe r commenters separately contended that under section 302(k), SIP provisions im posing requirements “relating to the operation or maintenance of sources” do not need to be continuous, unlike those imposing requirements that limit “the quantity, rate, or concentration of emissions or air pollutants.” Response: The EPA disagrees with the commenters’ view that section 302(k) establishes two discrete categories of emission limitations , only one of which must reduce continuous

emissions on a continuous basis. The EPA acknow ledges that the text of section 302(k) is ambiguous with respect to this point, but the Agency does not agree with the commenters’ interpretation of the statute. Th e statutory text of section 302(k) begins with a catch-all definition of the term “emission limitation” as “a requiremen t established by the State or the Administrator which limits the quantity, rate, or concentration of emissions of air pollutants on a continuous

basis . . . .” 166 The EPA believes that the rest of the first sentence in section 302(k), beginning with the word “including,” is best read as a list of examples of types of me asures that satisfy this general definition. In other words, the remainder of the sentence provide examples of types of SIP provisions that could be used to limit emissions on a conti nuous basis, including any design standard, equipment standard, wo rk practice standard or operati onal standard promulgated under the CAA, as well as “any requirement relating to the operation or main tenance of a source to assure continuous emission reduction.” However, each of these forms of emission limitation

166 CAA section 302(k).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 214 of 539 would be required to appl y at all times, or be required to a pply in combination at all times, in order to meet the fundamental requirement that the emission limitation serves to limit emissions from the affected sources continuously. Thus, th e EPA interprets the term “emission limitation” to permit emission limitations that are composed of a combination of numerical limitations, technological control requirements and/or work practice requirements, so long as they are components of an emission limitatio n that applies continuously. This interpretation accords with statutory context, 167 the legislative histor y regarding the definiti on of “emission limitation,” 168 judicial interpretations of section 302(k) 169 and the EPA’s definition of “emission limitation” in its SIP regulations. 170 Accordingly, the EPA’s interpretation of section 302(k) is reasonable. The EPA also disagrees with the commenters who contended that the third clause of section 302(k) authorizes exemptions for emissi ons during SSM events in emission limitations. The commenters argued that require ments “relating to the operati on or maintenance of sources”

do not have to be continuous. The EP A believes that this reading of th e statute is simply in error, because section 302(k) on its face provides that these requirements must “assure continuous

emission reduction.” 171

167 See, e.g. , CAA section 302(m) (defining “means of emission limitation” as a “system of continuous emission reduction”). 168 See e.g. , H.R. Rep. 95-294, at 92 (1977) (explai ning that the definition of “emission limitation,” like the definition of “standard of performance,” was intended to “ma[ke] clear that constant or continuous means of reducing emissions must be used to meet th[ose] requirements”); S. Rep. 95-127, at 94 (explaining that the defin ition of “emission limitation” was intended to “clarify the committee’s view that th e only acceptable basic st rategy is one based on continuous emission control,” rather than “unacce ptable” “[i]ntermittent controls or dispersion techniques . . . .”). 169 See, e.g. , Sierra Club v. EPA , 551 F.3d 1019, 1027–28 (D.C. Cir. 2008). 170 See 40 CFR 51.100(n) (defining “emission limitation” as a requirement that limits emissions on a continuous basis). 171 See CAA section 302(k).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 215 of 539 h. Comments that exemptions or affirma tive defenses are not only not prohibited, but are actually required by the C AA because they are necessary to make an emission limitation “reasonable” or “achievable” for sources that cannot comply during SSM events.

Comment: Commenters argued that some emission limitations currently in SIPs are only “reasonable” or technologi cally “achievable” because they in clude exemptions or affirmative defenses applicable to emissi ons during SSM events. According to these commenters, without exemptions or affirmative defenses to excuse sources from compliance with the limits during SSM events, these emission limitations would not be reasonable or achievable as required by law. To support these contentions, commenters cite d case law from the early 1970s to argue that

the CAA requires emission limitations in SIP provisions to include exemptions or affirmative

defenses for SSM events. Response: The EPA agrees that SIP provisions sh ould impose emission limitations that are reasonable and achievable by sources, so long as they are also consistent with the applicable legal requirements for that type of provision. The EPA acknowledges that that in some cases, emission limitations may need to include alte rnative numerical limitations, technological controls or work practices dur ing some modes of operation, such as startup and shutdown. As explained in detail in the Febr uary 2013 proposal and in this ac tion, the EPA interprets the CAA to allow SIP provisions to include different numer ical limitations or othe r control requirements as components of a continuously applicable em ission limitation, so long as the SIP provision meets all other applicable requirements. Howeve r, the EPA disagrees with these commenters’

conclusions that the need for “reasonable” and “a chievable” emission limitations provides a legal justification for exemptions or affirmative de fenses for excess emissions during SSM events.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 216 of 539 First, many of the commenters erroneously presupposed that an emission limitation must continuously control emissions at the same rate, quantity, or concentr ation at all times. For sources or source categories that cannot comply with otherwise applicable emission limitations during certain modes of operation, such as startup and shutdown, the state may elect to develop alternative emission limitations applicable duri ng those events as a component of the SIP provision. The EPA has provided re commended criteria for stat es to use in developing appropriate alternative emission limitations. A ppropriate alternative em ission limitations would ensure the existence of requirements that limit th e quantity, rate or conc entration of pollutants

from the affected sources on a continuous ba sis, while also provi ding differing limitations tailored specifically to limit emissions during specified modes of source operation. As long as those differing limitations are components of a c ontinuously applicable emission limitation that meets other applicable substantive requirements ( e.g. , is RACT for stationary sources in nonattainment areas) and that is legally and practically enforc eable, then such alternative

emission limitations are valid. States are not required to create such alternative emission limitations, but to do so is an acceptable approach. Second, these commenters pointed to no pr ovision of the CAA requiring or allowing exemptions or affirmative defenses for SSM ev ents. Instead, they contend that D.C. Circuit opinions in Portland Cement Association v. Ruckelshaus 172 and Essex Chemical Corp. v.

Ruckelshaus 173 require SIPs to include exemptions fo r emissions during SSM events. As an initial matter, these cases pred ate amendments to the CAA that expressly defined “emission limitation” as a requirement that continuously limits emissions. Furthermore, even accepting

172 486 F.2d 375 (D.C. Cir. 1973). 173 486 F.2d 427 (D.C. Cir. 1973).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 217 of 539 these commenters’ interpretations of those cases (which as explained below, EPA does not), any purported holdings to that effect have been furt her eroded by more recent case law from the D.C. Circuit and other courts. Most importantly, the Sierra Club v. EPA decision has reiterated that emission limitations must apply continuously in order to comply with section 302(k), and the logic of NRDC v. EPA decision indicates that affirmative defense provisions are not appropriate because they purport to alter th e jurisdiction of the courts. 174 In addition to these more recent legal de velopments, however, the two earlier D.C. Circuit cases highlighted by commenters simply did not hold what commente rs claim that they held. With respect to the Portland Cement Association decision, commenters selectively quoted from the case for the proposition that the D.C. Circuit had “acknow ledged” that malfunctions are an inescapable aspect of industr ial life and that EPA must make allowances for malfunctions when promulgating standards. The full sentence from the opinion, however, makes clear that the D.C. Circuit was merely summarizing the “con cern of manufacturers,” no t stating the court’s own position. 175 To the contrary, the EPA believes that Portland Cement stands for the broader proposition that a system incorporating flexibilit y is reasonable and consistent with the overall intent of the CAA, and the EPA merely “may” take such flex ibility into account. 176 As relevant to this action, the flexibility provided states to ensure continuous controls by developing

174 See Sierra Club v. EPA , 551 F.3d 1019 (D.C. Cir. 2008); NRDC v. EPA , 749 F.3d 1055 (D.C. Cir. 2014). 175 Portland Cement Ass’n , 486 F.2d at 398. 176 Id. at 399.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 218 of 539 alternative emission limitations is fully consistent with that view of the CAA. SIP provisions that

include alternative emission limita tions provide the sort of “lim ited safety valve” contemplated by the courts that can serve to make SIP emission limitations more achievable without authorizing complete exemptions for emissions during SSM events in violation of statutory requirements. 177

Commenters also cited Essex Chemical Corp. for the proposition that SSM exemptions are necessary to ensure that standards are reason able. This court decisio n, however, also did not hold that emission limitations must provide exem ptions or affirmative defenses for excess emissions during SSM events. To the contrary, the petitioners’ complaint in Essex Chemical Corp. was that EPA had “fail[ed] to provide that lesser standards , or no standards at all, should apply when the stationary source is experienci ng startup, shutdown, or mechanical malfunctions through no fault of the manufacturer.” 178 It was these variant provisions that, in the court’s opinion, “appear[ed] necessary” to ensure that the standards before it were reasonable. 179 Again,

the EPA believes that emission limitations in SIP provisions may include alternative emission limitations that can provide those “lesser sta ndards” that apply during startup and shutdown events consistent with the court’s opinion but al so ensure that emissions are continuously limited as required by the 1977 CAA Amendmen ts defining “emission limitation.” As a legal matter, the court in Essex Chemical was reviewing a specific “never to be

exceeded” standard for new and modified source s and addressed only whether the EPA’s failure to provide some form of flexibility du ring SSM events was supported by the record; 180 the court

177 Id. (citing International Harvester , 478 F.2d 615, 641 (D.C. Cir. 1973)). 178 Essex Chem. Corp v. Ruckelshaus , 486 F.2d at 433 (emphasis added). 179 See id. 180 Id. (“the record does not support the ‘never to be exceeded’ standard currently in force”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 219 of 539 was not interpreting whether the CAA inherent ly required such exem ptions (rather than alternative limits) rega rdless of future developments in technology. Accordingly, the D.C. Circuit ultimately remanded the challenged stan dards to the EPA for reconsideration, not because SSM exemptions are mandatory but rather because of comments made by the EPA Acting Administrator and deficiencies identified in the administrative record with respect to

“never to be exceeded” limits for thos e specific standards. In short, the Essex Chemical court did not hold that the CAA “requires” emission lim itations to include exemptions for emissions during SSM events as su ggested by commenters. Furthermore, the EPA notes that th e most salient legal holding of Essex Chemical with respect to achievability is not what the court sa id about the circumstances peculiar to the EPA’s development of those specific standards but rath er is the court’s holdi ng that standards of performance can be “achievable” even if there is no facility “currently in operation which can at

all times and under all circumstances meet the standards . . . .” 181 Thus, the decision supports the EPA’s conclusion that the CAA requires appropri ately drawn emission limitations that apply on a continuous basis. As explained in section IV of this notice, SIP provisions also cannot include the affirmative defenses advocated by commenter s, because those are inconsistent with CAA provisions concerning the juri sdiction of the courts. i. Comments that the EPA is requiring th at all SIP emission limitations must be

“numerical” at all times and set at th e same numerical level at all times.

Comment: Many commenters on the February 2013 proposal evidently believed that the EPA was proposing an interpretation of the term “emission limitation” under section 302(k) that

181 Essex Chem. Corp v. Ruckelshaus , 486 F.2d 427, 433 (D.C. Cir. 1973).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 220 of 539 would requires all SIP provisions to impose numerical emission limits, and that such limits must

be set at the same numerical level at all times . These commenters argued that numerical emission limitations are not required by the text of sec tion 302(k). For example, commenters pointed to section 302(k)’s use of “work pract ice or operational standard[s]” as evidence that an emission limitation may be composed of more than mere ly numerical criteria. These commenters also reiterated their view that section 302(k) allows fo r or requires alternative limits during periods of SSM, including non-numerical altern ative limits such as work pract ice or operational standards. Response: At the outset, the EPA notes that it di d not intend to imply that all emission limitations in SIP provisions must be expressed numerically, or that they must be set at the same

numerical level for all modes of source operation. To the contrary, the EPA intended to indicate that states may elect to create emission limitations that include alternative emission limitations that apply during certain modes of source operation, such as startup and shutdown. This was the

reason for inclusion of the recommended criteria for states to develop appropriate alternative emission limitations applicable during startup and shutdown in se ction VII.A of the February 2013 proposal. The EPA has provided similar recomme nded criteria in this final action. The EPA agrees that neither section 110(a )(2)(A) nor section 302(k) inherent ly requires that SIP emission limitations must be expressed numerically. Furthe rmore, section 302(k) doe s not itself require imposition of numerical limitations or foreclos e the use of higher numerical levels, specific technological controls or work practic es during certain modes of operation. Although some CAA programs may require or impose a presumption that emission limitations be expressed numerically, the text of section 110(a)(2)(A) and section 302(k) does*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 221 of 539 not expressly state a preference for emission limitat ions that are in all cases numerical in form. 182 Rather, as many commenters pointed out, the critic al aspect of an emi ssion limitation in general is that it be a “requirement . . . which limits th e quantity, rate, or concen tration of emissions of air pollutants on a cont inuous basis . . . .” 183 Accordingly, although other regulatory requirements may also apply, a non-numerical design standard, equipment standar d, work practice standard or operational standard could theoretically meet th e definition of “emission limitation” for purposes of section 302(k) if it continuously limited the quantity, rate or concentration of air pollutants. 184 By contrast, if a non-numerical requirement doe s not itself (or in combination with other components of the emission limitation) limit the quant ity, rate or concentrat ion of air pollutants on a continuous basis, then the non-numerical standard (or overarchi ng requirement) does not meet the statutory definition of an emission limitation under section 302(k). Finally, the EPA does not believe that secti on 110(a)(2)(A) or sect ion 302(k) mandates that an emission limitation be composed of a si ngle, uniformly applicable numerical emission limitation. As the EPA stated in the February 2013 proposal, “[i]f sources in fact cannot meet the otherwise applicable emission limitations during planned events such as startup and shutdown, then an air agency can develop specific altern ative requirements that apply during such periods, so long as they meet other applicable CAA requirements.” 185 As explained in the EPA’s response

in section VII.A.3 of this notic e regarding the meaning of the st atutory term “continuous,” the

182 Numerical requirements or pref erences for some emission limita tions flow from substantive requirements of specific CAA programs, which are incorporated into section 110(a)(2)(A) by the requirement that SIPs “include enforceable emission limitations . . . as may be necessary or appropriate to meet the applicable require ments of” the CAA. CAA section 110(a)(2)(A). 183 See, e.g. , id., section 112(h)(4). 184 For example, emission limitations must m eet the requirements of various substantive provisions of the CAA and must be le gally and practically enforceable. 185 78 FR 12459 at 12471.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 222 of 539 critical aspect for purposes of section 302(k) is not whether the emission limitation is expressed

as a static versus variable nu merical limitation but rather whet her as a whole it constitutes a requirement that limits emissions on a continuou s basis. Furthermore, any emission limitation must also meet all other applicable CAA require ments concerning stringency and enforceability. j. Comments that an emission limitation can be “continuous” even if it has different numerical limitations applicable during some modes of source ope ration or has a combination of

numerical emission limitations a nd specific control technologies or work practices applicable during other modes of operation.

Comment: Several commenters argued that an emission limitation can be “continuous” under section 302(k) even if it pr ovides different substantive requirements applicable during

SSM events. One commenter illustrated this position with a hypothetical: [W]hile Section 302 requires “emission lim its” to be “continu ous,” it does not specify . . . that the same “emission limit” must apply at all times. That is, if a state chooses to require sources to comply with a 40% opacity limit during steady-state operations, the Act does not then require the state to apply that 40% limit at all times, including startup, shutdown and malfunction events. Commenters pointed to a number of sources as justificati on for this position, including the text of section 302(k), rele vant case law, legislative hi story of the 1977 CAA Amendments, prior EPA interpretations, and practical concerns. Response: The EPA agrees with these commen ters’ conclusion that an “emission limitation” under section 302(k) does not need to be expressed as a static, inflexible limit on emissions. Rather, a SIP provision qualifying as an “emission limitatio n” consistent with section 302(k) must merely limit “the quantity, rate, or co ncentration” of emissions, and must do so “on a continuous basis.” The critical aspect for purpos es of section 302(k) is that the SIP provision impose limits on emissions on a continuous basis, regardless of whether the emission limitation*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 223 of 539 as a whole is expressed numeri cally or as a combination of numerical limitations, specific control technology requirements and/or work pr actice requirements, and regardless of whether

the emission limitation is static or variable. For example, so long as the SIP provision meets other applicable requirements, it may impose di fferent numerical limitations for startup and

shutdown. The EPA also agrees that the text of sec tion 302(k) does not requi re states to impose emission limitations that include a static, inflexible standard. Rather, the term “emission limitation” is merely defined 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 . . . .” The continuous limits imposed by em ission limitations are a fundamental distinction between emission limitations and the other control measures, means or techniques that may also

limit emissions. 186 The text of section 302(k), however, doe s not distinguish between a variable or static “requirement” that c ontinuously limits emissions—all that is required is that the

emissions are limited on a continuous basis. This interpretation is consistent with prior EPA interpretations of section 302(k), as well

as relevant case law. In Kamp v. Hernandez , the U.S. Court of Appeals for the Ninth Circuit (Ninth Circuit) upheld the EPA’ s interpretation of “continuous” in section 302(k), as requiring that “some limitation on emissions, although not n ecessarily the same limitation, is always

186 See CAA section 110(a)(2)(A).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 224 of 539 imposed” on the source. 187 More recently, the D.C. Circuit favorably cited Kamp when holding that section 302(k) requires em ission standards to limit emi ssions on a continuous basis and precludes exemptions for emissions during SSM events. 188 Legislative history confirms th at Congress was primarily concer ned that there be constant or continuous means of reducing emissions—not that the nature of those controls could not be different during different modes of operation. 189 For example, legislative history from the 1977 CAA Amendments states that Congress adde d section 302(k)’s defi nition of “emission

limitation” to: ...ma[ke] clear that constant or contin uous means of reducing emissions must be used to meet these requirements. By the same token, intermittent or supplemental controls or other temporary, periodic, or limited systems of control [are] not be permitted as a final means of compliance. 190

187 Kamp v. Hernandez , 752 F.2d 1444, 1452–53 (9th Cir. 1985) (citing Chevron, U.S.A., Inc. v. Natural Res. Def. Council , 467 U.S. 837 (1984)) (upholding EPA’s “broader definition of ‘continuous’” under section 302(k)). 188 Sierra Club v. EPA , 551 F.3d 1019, 1027–28 (D.C. Cir. 2008) (quoting Kamp , 752 F.2d at 1452). 189 See, e.g. , H.R. Rep. 95-294, at 92 (1977) (explai ning that the definition of “emission limitation,” like the definition of “standard of performance,” was intended to “ma[ke] clear that constant or continuous means of reducing emissions must be used to meet th[ose] requirements”); S. Rep. 95-127, at 94 (explaining that the defin ition of “emission limitation” was intended to “clarify the committee’s view that th e only acceptable basic st rategy is one based on continuous emission control,” rather than “unacce ptable” “[i]ntermittent controls or dispersion techniques . . . .”). 190 Sierra Club v. EPA , 551 F.3d at 1027 (quoting H.R. Rep. 95-294, at 92 (1977), as reprinted in 1977 U.S.C.C.A.N. 1077, 1170); Kamp v. Hernandez , 752 F.2d at 1453–54 (same).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 225 of 539 Although this legislative histor y demonstrates congressional intent that any “emission limitation” would require limits on emissions at all times, this history does not necessarily

indicate that the emission limitation must c onsist of a single static numerical limitation. Accordingly, this legislative hi story is consistent with the EPA’s view that section 302(k) requires continuous limits on emissions and that variable (albeit st ill continuous) limits on emissions can qualify as an emission limita tion for purposes of section 302(k). Finally, although the EPA agrees with thes e commenters’ conclusion, the EPA does not agree with these commenters’ view that practical concerns require states in all cases to establish alternative emission limitations for modes of ope ration such as startup and shutdown within any continuously applicable emission limitation. Princi ples of cooperative federalism incorporated into section 110 allow states gr eat leeway in developing SIP em ission limitations, provided those limitations comply with applicable legal requirements. 191 States are thus not required to establish alternative emission limitations for any sources during startup and shutdo wn, but they may elect

to do so. Neither the definition of “emission limitat ion” in section 302(k) nor the requirements of section 110(a)(2)(A) explicitly require states to develop emission limitations that include alternative emission limitations for periods of SSM, just as they do not explicitly preclude states from doing so.

k. Comments that an emission limitation can be “continuous” ev en if it includes periods of exemptions from the emission limitation.

191 As discussed above and elsewhere in this notice, those requir ements include satisfying the definition of “emission limitation” under CAA section 302(k), and being “enforceable” in accordance with section 110(a)(2)(A).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 226 of 539 Comment: Commenters asserted that a requirement limiting emissions can be “continuous” even if a SIP provision includes peri ods of exemption from that limit. For example, some commenters contended that SSM exemp tions only excuse compliance with emission limitations for a “short duration,” or “brief” period of time, and that th ese purportedly ephemeral interruptions should not be viewed as rendering the requirement noncontinuous. Other

commenters contended that the EP A misinterpreted portions of th e D.C. Circuit’s opinion in

Sierra Club v. EPA , 192 interpreting section 302(k). Speci fically, this group of commenters claimed that because the holding of that case wa s based on a combined reading of sections 112 and 302(k), the court’s interpretation of the word “continuous” in section 302(k) does not extendoutside the context of section 112. This included one commenter who hypothesized, in a onesentence footnote, that “[i]n the cooperative-federalism context”—presumably of section 110— “the standard of flexibility that Congress gave the States with resp ect to selecting the elements of their SIPs is not necessarily the same standard Congress set to govern EPA’s responsibility to establish the NAAQS or section 112 standards.” Still other commen ters further argued that the EPA mischaracterized legislativ e history discussing “continuous ” in section 302(k). According to these commenters, the context of legislative history on section 302(k) indicates that Congress did not intend for the word “continuous” to be gi ven its plain meaning but rather intended to use “continuous” in relation only to specif ic types of intermittent controls.

192 551 F.3d 1019 (D.C. Cir. 2008).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 227 of 539 Response: The EPA disagrees with these commente rs. First, commenters’ interpretation would contravene the plain meaning of “continuous.” Section 302(k) defines “emission limitation” as a requirement that “limits the quant ity, rate, or concentration of emissions of air pollutants on a continuous basis . . . .” 193 Although the word “continuous” is not separately defined in the Act, its plain and unambiguous meaning is “uninterrupted.” 194 Accordingly, to the extent that a SIP provisi on provides for any period of time when a source is not subject to any requirement that limits emissions, the requireme nts limiting the source’s emissions by definition

cannot do so “on a continuous basis.” Such a source would not be subject to an “emission limitation,” as that term is de fined under section 302(k). The sa me principle applies even for “brief” exemptions from limits on emissions, b ecause such exemptions nevertheless render the

emission limitation noncontinuous. Second, the EPA disagrees with commenters’ in terpretation of the D.C. Circuit’s opinion

in Sierra Club . While the court’s ultimate decision was based on “sections 112 and 302(k) . . . read together,” 195 the court’s analysis of what make s a standard “continuous” was based on section 302(k) alone. 196 Although the precise components of an emission limitation or standard

193 CAA section 302(k). 194 See Webster’s Third New In ternational Dictionary 493–94 (Phillip Babcock Gove ed., Merriam-Webster 1993) (defining “continuous”). 195 Sierra Club , 551 F.3d at 1027. 196 See id. (quoting H.R. Rep. 95–294, at 92 (1977), as reprinted in 1977 U.S.C.C.A.N. 1077, 1170); see also Kamp v. Hernandez , 752 F.2d at 1453–54 (quoting the same and coming to the same conclusion).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 228 of 539 may expand depending on which other provision s of the CAA are applicable, the bedrock

definition for what it means to be an “emissi on limitation” under section 302(k) does not. Congress appeared to share the EPA’s view that section 302(k) provides a bedrock definition of “emission limitation” applicable “to all emission limitations under the act, not just to limitations under sections 110, 111, or 112 of the act.” 197 Accordingly, the D.C. Ci rcuit’s interpretation of section 302(k) applies equally in the context of SIP provisions developed by states as in the context of MACT standards developed by the EP A, even if additional requirements may be

different. 198 Finally, the EPA rejects comment ers’ contention that section 302(k)’s legislative history

indicates that use of the word “continuous” in the definition of “emission limitation” was merely intended to prevent the use of intermittent c ontrols or, even more narrowly, only dispersion techniques. While legislative hi story of the 1977 Amendments discusses at length the concerns associated with these types of controls, secti on 302(k) was not intended to merely prevent the narrow problem of intermittent controls. To th e contrary, the House Report states that under

197 See H.R. 95-294, at 92 (1977); see also section 302 (stating that the definitions appearing therein apply “[w]hen used in this chapter”). 198 The fact that CAA section 110 incorporates pr inciples of cooperative federalism does not inevitably mean that the definition of “emi ssion limitation” under section 302(k) changes depending on whether it is applied in the contex t of section 110 versus section 112. Accordingly, in the context of judicial interp retation of a statute, the U.S. S upreme Court has held that judges cannot “give the same statutory text di fferent meanings in different cases.” Clark v. Martinez , 543 U.S. 371, 386 (2005). The EPA believes that the text and legislative history of section 302(k) evince congressional intent to consistent ly apply the definition of “emission limitation” under section 302(k) rather than to develop an inconsistent interp retation peculiar to section 110.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 229 of 539 section 302(k)’s definition of emission limitatio n, “intermittent or supplemental controls or other temporary, periodic, or lim ited systems of control would not be permitted as a final means of compliance.” 199 In explaining congressional intent behind adopting a statutory definition of “emission limitation,” the House Report articulated a rationale broader than would apply if Congress had merely intended to prohibit the tall stacks and dispersion techniques that commenters claim were targeted: “Each source’s prescribed emission limit ation is the fundamental tool for assuring that

ambient standards are attained and maintain ed. Without an enforceable emission limitation

which will be complied with at all times , there can be no assurance that ambient standards will be

attained and maintained.” 200 By contrast, Congress criticized li mitations structured in ways that could not “provide assurances that the emission limitation will be met at all times,” or that would sometimes allow the “emission limitation [to] be exceeded, perhaps by a wide margin . . . .” 201 Such flaws “would defeat the remedy provision provided by section 304 of the act which allows

199 H.R. 95-294, at 92 (emphasis added). 200 Id. (emphasis added). The Senate Report expressed a similar sentiment. See S. Rep. No. 95- 127, at 94–95 (1977) (explaining that the defini tion of “emission limitation” was intended “to clarify the committee’s view that the only acceptable basic strategy [for emission limitations in SIPs] is one based on conti nuous emission control”). 201 See H.R. 95-294, at 92

.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 230 of 539 citizens to assure compliance with emission lim itations and other requirements of the act.” 202 Exemptions for emissions during SSM events have the same effects. 203 In adopting section 302(k)’s de finition of “emission limitatio n,” Congress did not merely intend to prohibit the use of intermittent cont rols as final compliance strategies—much less intermittent controls as narrowly defined by commenters to mean only dispersion techniques and certain “tall stacks.” Rather, Congr ess intended to elim inate the fundamental problems that were illustrated by use of those controls. 204 SSM exemptions and affirmative defenses raise many of the same problems, and addressing those problem s through this action fully accords with section 302(k)’s legislative history. l. Comments that the “as may be necessa ry or appropriate” language in section 110(a)(2)(A) per se authorizes states to create exemptions in SIP emission limitations.

Comment: Some commenters contended that sect ion 110(a)(2)(A) merely requires states

to include emission limitations and other control m easures in their SIPs “as may be necessary or appropriate.” These commenters interpreted that language as a broad delegation of discretion to states, to develop SIP provisions th at are necessary or appropriate to satisfy the particular needs

202 See id. 203 See, e.g. , NRDC v. EPA , 749 F.3d 1055, 1064 (D.C. Cir. 2014) ( holding that an affirmative defense for excess emissions during malfunctions contradicts the requirement that an emission limitation be “continuous”). 204 See, e.g. , H.R. 95-294, at 94 (noting that the provis ion was intended to overcome “objections” to such measures, not merely the measures themselves); id. at 92 (indicating that the problems arise from “temporary, periodic, or limited systems of control” ge nerally, not merely dispersion techniques or tall stacks).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 231 of 539 of a state, as judged solely by that state. So me of the commenters argued that the EPA’s interpretation of “as may be necessary or appr opriate” would, in all circumstances, improperly substitute the EPA’s judgment for that of th e state concerning what emission limitations are necessary or appropriate. One commenter highlig hted the EPA’s proposal to deny the Petition with respect to a specific SIP provision of the S outh Carolina SIP that entirely exempts a source category from regulation. 205 According to this commenter, if the “as may be necessary or appropriate” language grants states the authority to exempt a source category from regulation entirely, then it must allow states to exem pt sources selectively during SSM events. Some commenters further argue d that regardless of what the terms “emission limitations” or “other control measures, means, or tech niques” mean, section 110(a)(2)(A) only requires

states to include such emission controls in SIPs “as may be necessary or appropriate” to meet the NAAQS, or some requirement germane to a ttainment of the NAAQS , such as various technology-based standards or general principles of enforceability. Commenters also disagreed with the EPA’s purported interpretation that th e statutory phrase “as may be necessary” only qualifies what “other control[s]” are require d, rather than also qualifying what emission limitations are required. According to these comment ers, that interpretation is a vestige of the 1970 CAA and was foreclosed by textual ch anges in the 1977 CAA Amendments or, alternatively, the 1990 CAA Amendments. Response: The EPA disagrees with the commenters ’ interpretation of the “as may be necessary or appropriate” language of section 110(a)(2)(A). As an initial matter, those commenters contending that secti on 110(a)(2)(A) is only concerned with what is “necessary or

205 See 78 FR 12459 at 12512 (citing S.C. Code Ann. Regs. 61–62.5 St 5.2(I)(b)(14)).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 232 of 539 appropriate” to attain and ma intain the NAAQS (or some requirement germane to the NAAQS) ignore the plain language of sec tion 110(a)(2)(A). While the predecessor provisions to section 110(a)(2)(A) prior to the 1990 CAA Amendments did indeed speak in terms of emissions controls “necessary to insure attain ment and maintenance of [the NAAQS],” 206 the statute in effect today requires controls “necessary or appropriate to meet the applicabl e requirements of this chapter, ” 207

— i.e. , to meet the requirements of the CAA as a whole. Thus, at a minimum, the EPA interprets the phrase “as may be necessary or appropriate” to include what is necessary or appropriate to meet legal requirements of the CAA, including the requirement that emission limitations must apply on a continuous basis. Regardless of whether all SIPs must always contain emission limitati ons, the text of the CAA is clear that the EPA is at a minimum tasked with determining whether SIPs include all emission limitations that are “necessary” ( i.e. , required) “to meet the a pplicable requirements of” that CAA. Broadly speaking, this requires that the EPA determ ine whether the SIP meets the basic legal requirements a pplicable to all SIPs ( e.g. , the requirements of section 110(a)(2)(A) through (M)), whether the SIP contains emissi on limitations necessary to meet substantive requirements of the Act ( e.g. , RACT-level controls in nonatta inment areas) and whether all emission limitations and other controls, as well as the schedules and timetables for compliance, are legally and functionally enforceable. In every state subject to this SIP call, the EPA has previously conc luded in approving the existing SIP provisions that the emission limita tions are necessary to comply with legal

206 See, e.g. , Clean Air Act of 1970, Pub. L. 91-604, § 4(a), 84 Stat. 1676, 1680 (December 31, 1970). 207 Section 110(a)(2)(A).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 233 of 539 requirements of the CAA. The states in questio n would not have developed and submitted them, and the EPA would not have approved them, unless the state and the EPA considered those emission limitations fulfilled a CAA requirement in the first instance. However, the automatic and discretionary exemptions for emissions during SSM events in the SIP provisions at issue in this action render those necessary emission limit ations noncontinuous, and thus not meeting the statutory definition of “emission limitations” as defined in secti on 302(k). Accordingly, regardless of whether all SIPs must always in clude emission limitations, these specific SIP provisions fail to meet a fundamental requirem ent of the CAA because they do not impose the continuous emission limitations required by the Act. The EPA also disagrees with the argument ra ised by commenters that its denial of the Petition with respect to a South Carolina SIP pr ovision supports the validity of SSM exemptions

in SIP emission limitations. 208 In that situation, the state dete rmined that regulating the source category at issue was not a necessary or appropr iate means of meeting the requirements of the CAA. The EPA’s approval of that provision in dicates that the Agency agreed with that

determination. This factual scenario is not the same as one in which the state has determined that regulation of the source category is necessary or appropriate to meet CAA requirements. Once

the determination is made that the source cate gory must or should be regulated, then the SIP provisions developed by the state to regulate the source must meet applicable requirements. These include that any limits on emissions must be consistent with CAA requirements, including the requirement that any emission limitation lim it emissions on a continuous basis. The EPA agrees that a state can validly de termine that regulation of a sour ce category is not necessary, so

208 See 78 FR 12459 at 12512 (citing S.C. Code Ann. Regs. 61–62.5 St 5.2(I)(b)(14)).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 234 of 539 long as this is consistent with CAA requirements. This is not th e same as allowing impermissible exemptions for emissions from a sour ce category that must be regulated. Finally, the EPA does not agree with comment ers’ allegations that that the EPA’s interpretation of secti on 110(a)(2)(A) eliminates th e states’ discretion to ta ke local concerns into account when developing their SIP provisions. Rather , for reasons discussed in more detail in the EPA’s response in section V.D.2 of this docum ent regarding cooperative federalism, the EPA’s interpretation is fully consistent with the principles of coopera tive federalism codified in the CAA. As courts have concluded, although Congress provided states with “considerable latitude in fashioning SIPs, the CAA ‘ nonetheless subjects the States to strict minimum compliance requirements’ and gives EPA the authority to determine a state’s compliance with the requirements.” 209 This interpretation is also consistent with congressi onal intent that the EPA exercise supervisory responsibility to ensure that, inter alia , SIPs satisfy the broad requirements that section 110(a)(2) mandates that SIPs “shall” satisfy. 210 Where the EPA determines that a SIP provision does not satisfy legal requirements, the EPA is not substituting its judgment for that of the state but rather is determining whether the state’s judgment falls within the wide boundaries

of the CAA. m. Comments that a “general duty” pr ovision—or comparable generic provisions that require sources to “exercis e good engineering judgment,” to “minimize emissions” or to “not

209 Michigan v. EPA , 213 F.3d 663, 687 (D.C. Cir. 2000) (quoting Union Elec. Co. v. EPA , 427 U.S. 246, 256–57 (1976)). 210 With respect to section 110(a)(2 )(A), this means that a SIP must at least contain legitimate, enforceable emission limitations to the extent th ey are necessary or appropriate “to meet the applicable requirements” of the Act. Likewi se, SIPs cannot have enforcement discretion provisions or affirmative defense provisions that contravene the f undamental requirements concerning the enforcement of SIP provisions.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 235 of 539 cause a violation of the NAAQS”— inoculate or make up for exem ptions in specific emission limitations that apply to the source.

Comment: Numerous commenters argued that even if some of the SIP provisions with SSM exemptions identified in this SIP call are not themselves emission limitations, they are

nevertheless components of valid emission limitations. Acco rding to these commenters, some SIPs contain separate “general duty” provisions that are not affected by SSM exemptions and thus have the effect of limiting emissions from sources during SSM events that are explicitly exempted from the emission limitations in the SI P. These general-duty provisions vary, but most of them: (1) instruct sources to “minimize emi ssions” consistent with good air pollution control practices, (2) prohibit so urces from emitting pollutants that ca use a violation of the NAAQS, or (3) prohibit source operators from “improperly operating or maintaining” their facilities. Commenters contended that these general- duty provisions are requirements that—either

alone or in combination with other requirements—have the eff ect of limiting emissions on a continuous basis. In other words, the commente r asserted that these general-duty provisions impose limits on emissions during SSM events, when the otherwise applicable controls no longer apply. According to these commenters, SSM exemp tions that excuse noncompliance with typical controls do not interrupt the c ontinuous application of an “em ission limitation,” because these general-duty provisions elsewhere in the SIP or in a separate permit are part of the emission limitation and apply even during SSM events. Some commenters further argue d that some SSM exemptions themselves demonstrate that sources remain subject to general- duty provisions during SSM events. These SSM exemptions require sources seeking to qualif y for the exemption to demonstrate that, inter alia , they were at the time complying with certain general duties. Accord ingly, these commenters*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 236 of 539 contended that the SSM exemption itself dem onstrates that sources remain subject to requirements that limit their emissions during SS M events, even when the source is excused from complying with other components of the overarching emission limitation. Finally, as evidence that these general-duty cl auses must be permissible under the CAA, some commenters pointed to similar federal requirements established by the EPA under the NSPS and NESHAP programs. 211 These commenters argued that the D.C. Circuit’s decision in

Sierra Club v. Johnson 212 was limited to circumstances unique to section 112 and does not support a per se prohibition on general-duty clauses operating as “emission limitations.” Response: The EPA disagrees with these comments . As described elsewhere in this response to comments, all “emission limitations” must limit emissions of air pollutants on a

continuous basis. 213 The specific requirements of a SIP em ission limitation must be discernible on the face of the provision, must meet the applicable substantive and stringency requirements of the CAA and must be legally and practically en forceable. The general-duty clauses identified by these commenters are not part of the putative emission limitations contained in these SIP provisions. To the contrary, thes e general-duty clauses are often located in different parts of the

SIP and are often not cross-refere nced or otherwise identified as part of the putative continuously applicable emission limitation. Furthermore, the fact that a SIP provision in cludes prerequisites to qualifying for an SSM exemption does not mean those prerequisites are themselves an “alternative emission limitation” applicable during SSM events. The text and context of the SIP provisions at issue in this SIP call

211 See, e.g. , 40 CFR 63.6(e)(3). 212 551 F.3d 1019, 1027–28 (D.C. Cir. 2008). 213 CAA section 302(k).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 237 of 539 action make clear that the conditions under whic h sources qualify for an SSM exemption are not themselves components of an overarching emission limitation— i.e. , a requirement that limits emissions of air pollutants from the affected source on a continuous basis. Rather, these provisions merely identify the circumstances when sources are exempt from emission

limitations. Reviewing an example of the SIP provisions cited by commenters is illustrative of this point. For example, several commenters pointed to provisions in Alabama’s SIP that excuse a source from complying with an otherwise applic able emission limitation only when the permittee “took all reasonable steps to minimize emissions” and the “permitted facility was at the time being properly operated.” According to commenters , the general duties in this provision—to take reasonable steps to minimize emissions, and to properly operate the facility—ensure that even during SSM events, the permittee remains subj ect to requirements limiting emissions. However, a review of the provisions them selves in context—not selectively quoted— reveals that these general-duty provisions were included in the SIP not as components of an

emission limitation but rath er as components of an exception to that emission limitation. In order to qualify, the SIP requires the permittee to have taken “all reasonable st eps to minimize levels

of emissions that exceeded the emission standard ” 214 —an acknowledgement that the emissions to be “minimize[d]” are those that “exceed[]” ( i.e. , go beyond) the required limits of “the

214 Ala. Admin. Code Rule 335-3-14-.0 3(h)(2)(ii)(III) (emphasis added).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 238 of 539 emission standard.” In case there were any doubt that the general-duty provisions identified are elements of an exemption from an emission limit ation, rather than comp onents of the emission limitation itself, the provisions apply during what the Alabama SIP calls “[e]xceedances of

emission limitations ” 215 and are found within a broader se ction addressing “Exceptions to violations of emission limitations. ” 216 By exempting sources from compliance with “the emission standard,” these SSM exemptions render the SI P emission limitation noncontinuous, contrary to section 302(k). 217 The consequences for failing to satisfy the pr econditions for an exemption further bolster the conclusion that these precondi tions are not themselves part of an emission limitation. Failure to meet the “general duty” preconditions for an SSM exemption means that the source remains subject to the otherwise applicable emission lim itation during the SSM event and is thus liable for violating the emission limitation. If those general duties were independent parts of an emission limitation (rather than merely preconditi ons for an exemption), then one would expect that periods of time could exist when the sour ce was liable for viola ting those general duties

rather than the default emission limitation. The general-duty provisions that apply as part of the SSM exemption are not alternative emission limitations; they merely define an unlaw ful exemption to an emission limitation. States

have discretion to fix this issue in a number of ways, including by removing the exceptions entirely, by replacing these excep tions with alternative emission limitations including specific

215 Id. at 335-3-14-.03(h)(2)(ii) (emphasis added). 216 Id. at 335-3-14-.03(h) (e mphasis added). 217 See CAA section 302(k) (defining “emission lim itation” and “emission standard”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 239 of 539 control technologies or work pr actices that do ensure continu ous limits on emissions or by reformulating the entire emission limitation. In addition to the EPA’s fundamental disagr eement with commenters that these generalduty provisions are actually components of emission limitations, the EPA has additional concerns about whether many of these provisi ons could operate as stand-alone emission limitations even if they were properly identified as portions of the overall emissions limitations

in the SIP. 218 Furthermore, some of these general-du ty provisions do not meet the level of stringency required to be an “em ission limitation” compliant with specific substantive provisions of the CAA applicable to SIP provisions. 219 Accordingly, while states ar e free to include generalduty provisions in their SIPs as separate additional requirements , for example, to ensure that owners and operators act consis tent with reasonable standa rds of care, the EPA does not recommend using these background standards to br idge unlawful interrup tions in an emission

limitation. 220

The NSPS and NESHAP emission standards an d limitations that the EPA has issued

since Sierra Club demonstrate the distinct roles played by emission limitations and general-duty provisions. The emission limitations themselv es are clear and lega lly and functionally enforceable, and they are composed of obviously integrated requirements that limit emissions on

218 See Sierra Club , 551 F.3d at 1026 (discussing the EPA’s prior determinations that “compliance with the general duty on its own was insufficient to prevent the SSM exemption from becoming a ‘blank et’ exemption”). 219 See, e.g. , Sierra Club v. EPA , 551 F.3d at 1027–28 (so holding with respect to section 112). 220 For example, the EPA has concerns the some of these general-duty provi sions, if at any point relied upon as the sole requirement purportedl y limiting emissions, could undermine the ability to ensure compliance with SIP emission limitati ons relied on to achieve the NAAQS and other relevant CAA requirements at all times. See section 110(a)(2)(A), (C); US Magnesium, LLC v. EPA , 690 F.3d 1157, 1161–62 (10th Cir. 2012).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 240 of 539 a continuous basis during all modes of source ope ration. Crucially, the gene ral-duty provisions in these post- Sierra Club regulations merely supplement the in tegrated emission limitation; they do not supplant the emission limitation, which independently requires continuous limits on

emissions. As discussed elsewhere in this document, the fact that the EPA is in the process of updating its own regulations to comply with CAA requirements does not alter the legal requirements applicable to SIPs.

n. Comments that EPA’s action on the petition is a “change of policy.”

Comment: A number of commenters claimed that the EPA’s action on the Petition is illegitimate because it is base d upon a “change of policy.” Some commenters claimed that the

EPA’s reliance on the definition of “emission lim itation” in section 302(k) and the requirements for SIP provisions in section 110(a)(2) as barr ing automatic exemptions are “new.” These commenters claimed that the EPA has historically relied on the fact that NAAQS are ambientstandard-based and that the EPA has relied also on the fact that SSM exemptions had potential adverse air quality impacts as the basis for in terpreting the CAA to preclude exemptions. The commenters argued that this basi s for the SSM Policy is evidenced by the fact that EPA itself historically included SSM exemptions in NSPS and NESHAP rules, which establish emission limitations that should be governed by section 302(k) as well.

Other commenters claimed that the EPA is ch anging its SSM Policy by seeking to revoke “enforcement discretion” exercised on the part of states, which the EPA specifically recognized as an acceptable approach in the 1983 SSM Guidance. A commenter asserted that “fairness principles” mean that the EPA cannot require a state to modify its SIP without substantial justification. The commenter further contended that the EPA’s claim that it has a longstanding interpretation of the CAA that automatic exemptions are not allowed in SIP provisions is false;*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 241 of 539 otherwise, the commenter argued, the EPA would not have approved some of the provisions at issue in the SIP call long after 1982. As evidence for this argu ment, the commenter pointed to the West Virginia regulations that provide an automatic exemption. Finally, other commenters argued that the EPA’s changed interpretation of the CAA requires an acknowledgement that the SSM Policy is being changed and a rational explanation for such change. These commenters noted that th e EPA previously argued in a brief for the type of exemption provisions that it is now claiming are deficient, citing Sierra Club v. EPA , No. 02- 1135 (D.C. Cir. March 14, 2008). The commenters claimed that the EPA has provided no rational basis for its change in interpretation of the CAA concerning exemptions for emissions during SSM events. Response: The EPA’s longstanding position, at l east since issuance of the 1982 SSM Guidance, is that SIP provisions providing an exemption from emission limitations for emissions during SSM events are prohibited by the CAA. The EPA’s guidance documents issued in 1982 and 1983 expressly recognized that in place of ex emptions, states should exercise enforcement discretion in determining whether to pursue a violation of an emission limitation. In the 1983 SSM Guidance, the EPA made recommendations for states that elected to adopt specific SIP provisions affecting their own exer cise of enforcement discretion, so long as those provisions do not apply to enforcement discretion of the EPA or other parties under the c itizen suit provision of the CAA. More than 15 years ago, in th e 1999 SSM Guidance, the EPA reiterated its longstanding position that it is inappropriate for SIPs to exempt SSM emissions from compliance with emission limitations and repeated that inst ead of incorporating exemptions, enforcement

discretion could be an a ppropriate tool. In addi tion, EPA clarified at that time that a narrowly tailored affirmative defense might also be an ap propriate tool for addre ssing excess emissions in*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 242 of 539 a SIP provision. However, in response to recent cour t decisions, and as discussed in detail in section IV of this document, th e EPA no longer interprets the C AA to permit affirmative defense provisions in SIPs. Although the EPA did not expressly rely on th e definition of “emission limitation” in section 302(k) as the basis for its SSM Policy in each of these guidance documents, it did rely on the purpose of the NAAQS program and the underly ing statutory provisi ons (including section 110) governing that program. In the 1999 SSM Guid ance, however, the EPA indicated that the

definition of emission limitation in section 302 (k) was part of the basis for its position concerning SIP provisions. 221 After the EPA issued the 1999 SSM Guidance, the D.C. Circuit issued a decision holding that the definition of emission limitati on in section 302(k) does not allow for periods when sources are not subject to emissions standards. 222 While the court’s decision concerned the section 112 program a ddressing hazardous air pollutants, the EPA believes that the court’s ruling concerning section 302(k) applies equally in the context of SIP provisions because the definition of emission lim itation also applies to SIP requirements. That court’s decision is consistent with and provi des support for the EPA’s longstanding position in the SSM Policy that exemptions from comp liance with SIP emission limitations are not appropriate under the CAA. Commenters claimed that by interpreting the CAA to prohibit exemptions for emissions during SSM events the EPA is revoking “enforcement discretion” exercised by the state. This is simply not true. As part of state programs gove rning enforcement, states can include regulatory

221 See 1999 SSM Guidance at 2, footnote 1. The EPA included section 302(k) among the statutory provisions that formed the basis for its interpretations of the CAA in that document. 222 Sierra Club , 551 F.3d 1019 (D.C. Cir. 2008).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 243 of 539 provisions or may adopt policies setting forth crite ria for how they plan to exercise their own enforcement authority. Under secti on 110(a)(2), states must have adequate authority to enforce provisions adopted into the SIP, but states can estab lish criteria for how they plan to exercise that authority. Such enforcement discretion provisions cannot, however, impinge upon the enforcement authority of the EPA or of others pursuant to the citizen su it provision of the CAA. The EPA notes that the requirement for ade quate enforcement authority to enforce CAA requirements is likewise a bar to automatic ex emptions from compliance during SSM events.

Commenters confused the EPA’s evolution in describing the basis for its longstanding SSM Policy as a change in the SSM Policy itself . The EPA’s interpretation of the CAA in the SSM Policy has not changed with respect to ex emptions for emissions during SSM events. The

EPA’s discussion of the basis fo r its longstanding inte rpretation has evolved and become more robust over time as the EPA has responded to comme nts in rulemakings and in response to court decisions. In support of its interp retation of the CAA that exemptions for periods of SSM are not acceptable in SIPs, the EPA has l ong relied on its view that NAAQS are health-based standards and that exemptions undermine the ability of SIPs to attain and maintain the NAAQS, to protect PSD increments, to improve visibility and to meet other CAA requirements. By contrast, the EPA historically took the position that SSM ex emptions were acceptable for certain technologybased standards, such as NSPS and NESHAP standards, and argued that position in the Sierra

Club case cited by commenters. However, in that case, the court explicitly ruled against the EPA’s interpretation, holding that exemptions for emissions during SSM events are precluded by

the definition of “emission limitatio n” in CAA section 302(k). The Sierra Club court’s rationale thus provided additional support for the EPA’ s longstanding position with respect to SSM exemptions in SIP provisions, and in more r ecent actions the EPA has relied on the reasoning*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 244 of 539 from the court’s decision as further support fo r its current SSM Policy. Thus, even if the EPA were proceeding under a “change of policy” he re as the commenters claimed, the EPA has adequately explained the basis for its current SSM Policy, including the basis for any actual “change” in that guidance (e.g. , the actual change in the SSM Po licy with respect to affirmative defense provisions in SIPs). Cour ts have upheld an agency’s author ity to revise its interpretation of a statute, so long as that cha nge of interpretation is explained. 223 o. Comments that the EPA’s proposed acti on on the petition is based on a “changed interpretation” of the defini tion of “emission limitation.”

Comment : Commenters claimed that the EPA’ s action on the Petition is based on a changed interpretation of the term “emission limit ation” and that the Agency cannot apply that changed interpretation “retroactively.” One comm enter cited several cases for the proposition that retroactivity is disfavored and that the EP A is applying this new in terpretation retroactively to existing SIP provisions. The commenter claimed that the EPA approved the existing SIP provisions with full knowledge of what those provisions were and “consistent with the provisions EPA itself adopted and courts requi red.” The commenter characterized the SIP provisions for which the EPA is issuing a SIP ca ll as “enforcement discretion” provisions and “affirmative defense” provisions for startup a nd shutdown. The commenter contended that the EPA does not have authority to is sue a SIP call on the premise that the CAA is less flexible than the Agency previously thought. The commenter concluded that “[t]he factors of repose, reasonable reliance, and settled expectations fa vor not imposing EPA’s new interpretations.”

223 The EPA emphasized this important point in the SNPR. See 79 FR 55919 at 55931.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 245 of 539 Response: The EPA disagrees that this SIP cal l action has “retroactive” effect. As recognized by the commenter, this SIP call action does not automatically change the terms of the existing SIP or of any existing SIP provision, nor does it mean that affected sources could be held liable in an enforcement case for past emissions that occurred when the deficient SIP provisions still applied. Rather, the EPA is exercisi ng its clear statutory authority to call for the affected states to revise specific deficient SIP provisions so that the SIP provisions will comply with the requirements of the CAA prospectively and so that affect ed sources will be required to comply with the revised SI P provisions prospectively. To the extent that a SIP provision complied with previous EPA interpretations of the CAA that the Agency has since determined are flaw ed, or to the extent that the EPA erroneously approved a SIP provision that wa s inconsistent with the terms of the CAA, the EPA disagrees that it is precluded from requiring the state to modify its SIP now so that it is consistent with the Act. In fact, that is precisely the type of situation that the SIP call provision of the CAA is designed to address. Specifical ly, section 110(k)(5) begins, “[w]henever” the EPA determines that an applicable implementati on plan is inadequate to attain or maintain the NAAQS, to mitigate adequately interstate pollutant transport, or “to otherwise comply with any requirement” of the Act, the EPA must call for the SIP to be revised. The commenter does not question that sections 110(a)(2) and 302(k) ar e requirements of the Act. Thus, the EPA has authority under section 110(k)(5) to call on states to revise thei r SIP provisions to be consistent with those requirements. The EPA disagrees that the doctrines of “r epose,” “reasonable reliance” and “settled expectations” preclude such an action. The CAA is clear that “whenever” the EPA determines that a SIP provision is inconsistent with the statute, “the Administrator sh all” notify the state of*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 246 of 539 the inadequacies and establish a schedule for correction. This language does not provide the Agency with discretion to cons ider the factors cited by the co mmenter in deciding whether to

call for a SIP revision once it is determined to be flawed. Here, the EPA has determined that the SIP provisions at issue are flawed and thus th e Agency was required to notify the states to correct the inadequacies. p. Comments that the EPA should not enc ourage states to rely on enforcement

discretion because this will inevit ably lead to states’ creating emission limitations that some

sources cannot meet. Comment: Commenters claimed that it is not appropriate for the EPA to encourage states

to exercise enforcement discretion rather than to encourage them either to define periods when

numerical emission limitations do not apply or to develop alte rnative emission limitations or

other control measures. The commenters contended that inclusion of an enforcement discretion provision in a SIP is superfluous. The commenter cited to Portland Cement , where the D.C. Circuit court stated that “an excessively broad theory of enforcement discretion might endanger securing compliance with promulgated standards.” 224 The commenter also cited the Marathon

Oil case in the Ninth Circuit in which the court rejected an approach that relied heavily on

enforcement discretion. The commenter then asserted that sources are liab le for violations and that “[s]ources should not be re quired to litigate remedy for violations they cannot avoid.” 225 The

commenter concluded that it is “unreasonable for EPA to subject itself to claims that it must exercise its federal enforcement authority in th e event a state refuses to enforce unachievable standards, or for states to put source owners and operators in jeopa rdy of criminal prosecution for

224 486 F.2d at 399 n.91. 225 Marathon Oil Co. v. Envir onmental Protection Agency , 564 F.2d 1253 (9th Cir. 1977).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 247 of 539 starting up a source with knowledge that a numeri cal emission limitation might be exceeded. In summary, the commenter appeared to argue that the EPA should require states to establish

alternative numerical emission limitations or ot her control requirements during SSM events, rather than merely eliminating SSM exemptions and relying on enforcemen t discretion to address

SSM emissions. Response: The EPA disagrees with the commen ter’s suggestion that the EPA should discourage states from relying on enforcement di scretion. Enforcement discretion is a valid state prerogative, long recognized by courts. However, th e EPA agrees with the commenter that states should not adopt overly broad enforcement discre tion provisions for incl usion in their SIPs. Section 110(a)(2) requires states to have adequate enforcement authority, and overly broad enforcement discretion provisions would run afoul of this requirement if they have the effect of precluding adequate state authority to enforce SIP requirements. Th e EPA also agrees that states may elect to include alternative emission lim itations, whether expressed numerically or otherwise, for certain periods of normal operations, including st artup and shutdown. It is unclear precisely what the commenters are advocating when they suggest that sources should not be subject to litigating a remedy for violati ons they cannot avoid. The likely interpretation is that the commenters believe that excess emissions during unavoidable events should be automatically exempted ( i.e. , not considered a violation). This approach was rejected by the court in Sierra Club v. Johnson , because it was not consistent with the definition of

emission limitation in section 302 (k). As previously explained in the February 2013 proposal and in this notice, the EPA believes that de finition, and thus the court’s holding in Sierra Club , is equally relevant for the SIP program.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 248 of 539 With respect to a commenter’s concerns about criminal enforcement, the EPA disagrees that sources will be unable to start operations because they will automatically be subject to criminal prosecution if an emission limitati on is exceeded during a malfunction. Under CAA section 113(c), criminal enforcement for violatio n of a SIP can occur when a person knowingly violates a requirement or prohibi tion of an implementation plan “during any period of federally assumed enforcement or more than 30 days af ter having been notified” under the provisions governing notification that the person is violatin g that specific requirement of the SIP. The EPA is unaware of any jurisdictions where federally assumed enforcement is in force, and the EPA does not anticipate that this si tuation would arise often. Thus, in almost every case, criminal

enforcement would not occur in the absence of a pending notification of a civil enforcement case and could then apply only for repeated violation of the activity at issu e in that civil action. Moreover, the concern raised by the commenter is one that would exist if there is any requirement that applies duri ng a period of malfunction beyo nd the owner’s control. The commenter’s preferred way to address this conc ern would be to exempt these periods from compliance with any requirements, an approach rejected by the Sierra Club court as inconsistent

with the definition of “emission limitation” and an approach that the EPA’s longstanding SSM Policy has explained is inconsiste nt with the purpose of the NAAQS program, which is to ensure public health is protected through attainment a nd maintenance of the NAAQS, protection of PSD increments, improvement of visibility and comp liance with other requirements of the CAA. Finally, to the extent that the commenter was advocating that the EPA should require states to develop SIP provisi ons that impose alternative em ission limitations during certain modes of source operation such as startup and shutdown to replace SSM exemptions, the EPA notes that to require states to do so would not be consistent with the principles of cooperative*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 249 of 539 federalism and could be misconstrued as the Ag ency’s imposing a specific control requirement

in contravention of the Virginia decision. 226 As the commenter elsewhere itself argued, states have broad discretion to develop SIP provisions to meet the objectives of the CAA, so long as those provisions also meet the legal requirements of the CAA. To the extent that a state would prefer to have emission limitations that apply continuously, without higher numerical levels or specific technological controls or work practice standards appli cable during mode s of operation such as startup and shutdown, that is the prer ogative of the state, so long as the revised SIP provision otherwise meets CAA requirements. If a state determines that it is reasonable to require a source to meet a specific emission limit ation on a continuous basis and also decides to rely on its own enforcement discretion to determ ine whether a violation of that emission limit should be subject to enforcement, then the EPA be lieves that to do so is within the discretion of

the state. q. Comments that the EPA’s action on the Pet ition is inconsistent with the Credible

Evidence Rule.

Comment: A number of commenters raised concerns based upon how the EPA’s statements in the February 2013 pr oposal relate to the Credible Evidence Rule issued in 1997. 227 For example, one commenter argued that thr oughout the February 2013 proposal, when the EPA stated that excess emissions during SSM events should be treated as “violations” of the

226 See Virginia, et al. v. EPA , 108 F.3d 1397 (D.C. Cir. 1997) (S IP call remanded and vacated because, inter alia , the EPA had issued a SIP call that require d states to adopt a particular control measure for mobile sources). 227 See “Credible Evidence Revisions, Final Rule,” 62 FR 8314 (February 24, 1997). For clarity, the EPA emphasizes that it is in no way reopeni ng, revising or otherwise amending the Credible Evidence Rule in this action. The EPA is mere ly responding to commenters who characterized the relationship between Agency st atements in that rulemaking ac tion and this SIP call action.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 250 of 539 applicable SIP emission limitations, the Agency was contradicting the Credible Evidence Rule and other provisions of law. The commenter em phasized that the determination of whether excess emissions during an SSM event are in fact a “violation” of the applicable SIP provisions must be made using the appropriate reference test method. In addition, the commenter asserted that whether any other form of information may be used as “credible evidence” of a violation must be evaluated by the trier of fact in a spec ific enforcement action. Another commenter raised a different argument based on the Credible Evidence Rule, claiming that the EPA’s statements in the preamble to that rulemaking contradict the EPA’s statements in the February 2013 proposal and support the need for exemptions for emissi ons during SSM events. The implication of the commenter is that any such EPA statements in connection with the Credible Evidence Rule would negate the Agency’s interpretation of th e statutory requirements for SIP provisions as interpreted in the SSM Policy since at le ast 1982, the decision of the court in the Sierra Club case or any other actions such as the recent issuance of EPA regulations with no such SSM exemptions. Response: The EPA agrees, in part, with the co mmenters who expressed concern that the Agency’s statements in the February 2013 pr oposal could be misconstrued as a definitive determination that the excess emissions during any and all SSM events are automatically a violation of the applicable emission limitation, without factual proof of that violation, and without the existence and scope of that violation being decided by the appropriate trier of fact. The EPA of course agrees that the alleged violation of the applicable SI P emission limitation, if not conceded by the source, must be establishe d by the party bearing th e burden of proof in a legal proceeding. The degree to which evidence of an alleged violation may derive from a specific reference method or any other credible evidence must be determined based upon the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 251 of 539 facts and circumstances of the exceedan ce of the emission limitations at issue. 228 The EPA presumed that this most basic principle of enforcement actions under the CAA was a given but wishes to make this point clea rly in this final action to avoi d any unintended confusion between the legal standard creating the enforceable oblig ation and the evidentiary standard for proving a violations of that obligation. The EPA’s general statements in the Februa ry 2013 proposal, the SNPR and this final

action about treatment of SSM emissions as a vi olation pertain to another basic principle, i.e. , that SIP provisions cannot treat emissions dur ing SSM events as exempt, because this is inconsistent with CAA requirements. Thus, when the EPA explains that these emissions must be

treated as “violations” in SIP provisions, this is meant in the sense that states with SSM exemptions need to remove them, replace them w ith alternative emission limitations that apply during startup and shutdown or eliminate them by revising the emission limitation as a whole. Once impermissible SSM exemptions are removed from the SIP, then any excess emissions during such events may be the subject of an enforcement action, in which the parties may use any appropriate evidence to prove or disprove the existence and scope of the alleged violation and the appropriate remedy for an established violat ion. To be clear, the fact that these emissions are currently exempt through inappropriate SIP provisions is a deficien cy that the EPA is addressing in this action. Thus, the EPA disagr ees with the commenters’ suggestion that these

emissions are never to be treated as violations simply because a deficient SIP provision currently

228 For example, the degree to which data from continuous opacity monitoring systems (COMS) is evidence of violations of SIP opacity or PM mass emission limitations is a factual question that must be resolved on the facts and circum stances in the context of an enforcement action. See, e.g. , Sierra Club v. Pub. Serv. Co. of Colorado, Inc. , 894 F. Supp. 1455 (D. Colo. 1995) (allowing use of COMS data to pr ove opacity limit violations).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 252 of 539 includes an SSM exemption. Once the SIP provisions are corrected, the excess emissions may be addressed through the legal structure for establis hing an enforceable violation, which then may be proven using appropriate evidence, including test method evidence or other credible evidence. This means that excess emissions that occur during an SSM event will be treated for enforcement purposes in exactly the same manner as excess em issions that occur outside of SSM events. The EPA acknowledges that the limitation that app lies during a startup or shutdown event might ultimately be different (whether higher or lower) than the limitation that applies at other times, if the state elects to replace the SSM exemption w ith an appropriate alternative emission limitation in response to this SIP call action. The EPA also disagrees with commenters who claimed that statements by the Agency in

the Credible Evidence Rule fina l rule preamble support the incl usion of exemptions for SSM events in SIP provisions. The commenter is correct that at that time, the EPA held the view that

emission limitations in its own NSPS could be c onsidered “continuous,” not withstanding the fact that they contained “specifically excused periods of noncompliance” ( i.e. , exemptions from emission limitations during SSM events). 229 Similarly, at that time the EPA relied on a number of reported court decisions discussed in the preamble for the Credible Evidence Rule for determining at that time that NSPS could contain such exemptions in order to make the emission limitations “reasonable.” However, after the court’s decision in the Sierra Club case interpreting

the definition of emission limitation in section 302(k), these statements are no longer accurate and thus do not apply to EPA’s SI P call action in this notice.

229 Id. , 62 FR 8314, 8323–24.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 253 of 539 First, the EPA notes that these prior statemen ts related to the Credible Evidence Rule specifically addressed not SIP provisions but rather the provi sions of the Agency’s own technologically based NSPS. The statements in the notice make no reference to SIP provisions, which is unsurprising given that EPA’s SSM Po licy at the time indicated that no such SSM exemptions are appropriate in SIP provisions. Second, the EPA’s justification for exemptions from emission limitations during SSM events in NSPS was obviously made prior to the 2008

decision of the court in the Sierra Club case. The EPA’s interpretati on of the statut e and the case law to justify exemptions for emissions duri ng SSM events in that 1997 notice is no longer correct. Finally, the EPA in its own new NES HAP and NSPS regulations is now providing no exemptions for emissions during SSM events an d is imposing specific numerical limitations or other control requirements on sour ces that apply to affected sour ces at all times, including during

SSM events. 230 Thus, the statements in the 1997 Cred ible Evidence Rule preamble relied upon by commenters do not render the EPA’s interpre tation of the CAA with respect to SSM exemptions in SIP provisions in this action incorrect. r. Comments that exemptions in opacity standards should be permissible because opacity is not a NAAQS pollutant.

Comment: Many state and industry commenters argue d that the EPA should interpret the CAA to allow SIP provisions that impose opacity emission limitations to contain exemptions for SSM events or for other modes of source ope ration. The reasons given by commenters ranged broadly, but they included asser tions that opacity is not a cr iteria pollutant, that opacity

230 See, e.g. , 40 CFR 60.42Da, where paragraph (e)( 1) applies a numerical PM emission limitation at all times except during periods of startup and shutdown, and paragraph (e)(2) applies work practice standards duri ng periods of startup and shutdown.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 254 of 539 limitations serve no purpose other than as a tool to monitor PM control de vice performance, that there is no reliable correlation between opacity a nd PM mass, that there are circumstances during which sources may not be capable of meeting the otherwise applicable SI P opacity standards and that opacity is not an “air pollutant.” Commenters also argued that becau se SIP opacity standards were originally established when the NAAQS ap plied to “total suspe nded particles” (TSP),

rather than the current PM 10 and PM 2.5 , this alone should be a reas on to allow SSM exemptions now that the NAAQS have been revised and the indicator species changed. Some of the commenters acknowledged that th eir underlying concern is that requirements for COMS on

certain sources have rendered it much easier to monitor exceedances of SIP opacity limits and to bring enforcement actions for alleged violations. Response: The EPA agrees with many of the point s made by commenters but not with the conclusion that the commenters drew from these points, i.e. , that exemptions for SSM events are appropriate in SIP provi sions that impose opacity emission limitations. First, although the EPA agrees that opacity itsel f is not a criteria po llutant and that there is thus no NAAQS for opacity, that does not mean that SIP opacity limitations are not “emission limitations” subject to the requi rements of section 110(a)(2)(A) and do not need to be continuous. As the commenters often conceded, opacity is a surrogate for PM emissions for which there are NAAQS, and opacity has served this purpose since th e beginning of the SIP program in the 1970s. SIP provisions that impose op acity emission limitations often date back to the earliest phases of the SIP program. From th e outset, such opacity limitations have provided an important regulatory tool for implementi ng the PM NAAQS and for limiting PM emissions from sources. To this day, states continue to use opacity limitations in SIP provisions and the EPA continues to use opacity limitations in its own NSPS and NESHAP regulations, as*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 255 of 539 necessary, for specific source categories. 231 EPA regulations applicable to SIPs explicitly define the term “emission limitation” to include opacity limits. 232 It is also important to note that these SIP provisions impose opacity emission limitation s that sources must meet independently; i.e. , opacity limitations are independent “emission li mitations” under section 110(a)(2)(A) that must, consistent with section 302(k), “limit[] the quant ity, rate, or concentration of emissions of air pollutants on a continuous basis.” These opacity emission limitations in SIP provisions are not stated conditionally as opacity limits that sources do not need to meet if they are otherwise in compliance with PM mass emission limitations or with any other CAA requirements. Thus, the fact that opacity is not itself a criteria pollutant is irrelevant. Second, although the EPA agrees that SIP opac ity limitations also provide an important means of monitoring control devi ce performance and thus indirec tly provide a means to monitor compliance with PM emission limitations as well, this does not mean that opacity limits do not need to meet the statutory requirements for SIP emission limitations. Historically, opacity limits have been an important tool for implementati on of the PM NAAQS, and in particular for the implementation and enforcement of PM mass limitat ions on sources to help attain and maintain the PM NAAQS. The EPA agrees that opacity is a useful tool to indicate overall operation and

maintenance of a source and its emission control de vices such as electrostatic precipitators or baghouses. SIP opacity limitations provided this t ool even before modern instruments that

231 See, e.g. , 40 CFR 60.42Da(b). The EPA’s revised NSPS for this category imposes an opacity limit of 20 percent at all times, except for one 6-minute period per hour when the opacity may rise to 27 percent. Notably, as an option, sources may elect to install PM CEMS and be subject only to the revised particulat e matter emission limitation. 232 See 40 CFR 51.100(z) (defining the term “emission lim itation” as limits on “the quantity, rate, or concentration of emissions of air pollutants on a continuous basis, including any requirements which limit the level of opacity”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 256 of 539 measure PM emissions on a direct, continuous ba sis existed. At a minimum, elevated opacity indicates potential prob lems with source design, operation or maintenance, or potential problems with incorrect operation of pollution control devices , especially at the el evated levels of many existing opacity standards. Well-run sources shou ld be in compliance with the typical opacity limits of 20 percent with set amounts of time per hour allowed at somewhat higher opacity limits. Higher opacity can be indicative of problem s that justify further investigation by sources and regulators, such as conducti ng a stack test to determine co mpliance with PM mass emission

limitations. Not all sources have or will have PM CEMS, or have PM CEMS at all emission points, to monitor PM emissions directly, nor do PM CEMS necessarily obviate the need for opacity standards to regulate condensables, a nd thus there is a continued need for opacity

emission limitations in SIPs. The continued need for SIP opacity limitations for this and other purposes contradicts the commenter s’ arguments concerning the va lidity of SSM exemptions. Third, the EPA agrees that the precise correlation between opacity and PM mass emissions is not always known for a specific source under all operating conditions, unless there is parallel testing and measurement of the op acity and the PM emissions to determine the correlation at that particular source. Similarly, parametric monitoring can be used to establish such a correlation. Nevertheless, there is co mmonly a positive correlation between PM and opacity and thus elevated opacity is often indicative of additional PM emissions from a source. Even in those instances where a precise correlati on is not available, howev er, the use of opacity

as a means to assure the reduction of PM emissi ons and to monitor source compliance remains a valid approach to regulation of PM from sour ces. In any event, the absence of a precise correlation between opacity and PM does not justif y the complete exemptions from SIP opacity limitations during SSM events that the commenters advocate and instead suggests that it may be*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 257 of 539 appropriate to replace such exemptions with valid and enforceable alternative numerical limitations or other control requirements as a component of the SIP opacity emission limitation that applies during star tup and shutdown. Opacity emission li mitations in SIPs must meet the statutory requirements for emission limitations. Fourth, the EPA agrees with commenters that for some sources some PM controls cannot operate, or operate at full effectiveness and ideal efficiency, duri ng startup and shutdown. Accordingly, as the commenters implicitly recogn ized, the resulting increases in PM emissions can result in elevated opacity and thus exceed ances of the applicable SIP opacity emission

limitations. In those situations where it is true th at no additional emissions controls are available or would function more effectively to reduce PM emissions, and hence to reduce opacity, it may be appropriate for states to consider impos ing an alternative opacity emission limitation applicable during startup and shutdown. As discu ssed in section VII.B.2 of this document, the EPA provides recommendations to states concerning how to develop such alternative emission

limitations. To the extent that sources believe th at a SIP provision with a higher opacity level for startup and shutdown may be justif ied, they may seek these alternative limitations from the state and they can presumably advocate for opacity sta ndards that are tailored to reflect the correlation between PM mass and opacity at a specific so urce. Significantly, how ever, even if it is appropriate to impose a somewhat higher opacity limitation for some sources during specifically defined modes of operation such as startup and shutdown, that does not justify the total exemptions from SIP opacity emission limitatio ns during SSM events that the commenters advocated. To provide total exemptions from SIP opacity emission limitations during SSM events does not provide any incentiv e for sources to be better de signed, operated, maintained and controlled to reduce emissions, nor does it comply with the most basic requirement that SIP*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 258 of 539 emission limitations be continuous in accordance with section 302(k). As explained in section X.B of this document, the SIP revisions in response to this SIP call action will need to be consistent with the requirements of sections 110(k)(3), 110(l) and 193 as well as any other applicable requirements. Fifth, the EPA notes that fe w commenters seriously argue d that SIP provisions for opacity do not fit within the plain language of section 110(a)(2)(A) or the definition of “emission limitation” in section 302(k) or in EPA regulat ions applicable to SIP provisions. Section 110(a)(2)(A) requires SIPs to contain such enforceable emission limitations “as may be necessary and appropriate to meet the applicable requirements of” the CAA. Opacity limitations in SIP provisions are necessary and appropriate for a variety of reasons already described, including as a means to reduce PM emissions, as a means to monitor source compliance and to provide for more effective enforcement. Opacity limitations in SIP provisions also easily fit within the concept of a limit on th e “quantity, rate or concentration of air pollutants” that relates to the “operation or maintenance of a source to assure continuous emission reduction and any design, equipment, work practice or operational st andard” under the CAA, as provided in section 302(k). The term “air pollutant” is defined broadl y in section 302(g) to mean “any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive ...

substance or matter which is emitted into or otherw ise enters the ambient air.” Even if opacity is not itself an air pollutant, it is clearly a means of monitoring and limiting emissions of PM from sources and is thus encompassed within the definition of “emission limitation” in section*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 259 of 539 302(k). 233 Significantly, existing EPA regulations applicable to SIP provisions already explicitly define the term “emission limitation” to include opacity limitations. 234 Finally, the EPA does not agree with comment ers who argued that because SIP opacity limitations were often originally imposed wh en the PM NAAQS was for TSP, it is legally acceptable to have exemptions for emissions dur ing SSM events now that the PM NAAQS use

PM 10 and PM 2.5 as the indicator species. On a factual le vel, it is obvious that SIP provisions for opacity limitations are expressed in terms of pe rcentage “opacity” unrelated to the size of the particles. Opacity represents the degree to wh ich emissions reduce the transmission of light and obscures the view of an object in the background. In general, the more particles which scatter or absorb light that passes thr ough an emissions point, the more light will be blocked, thus increasing the opacity percentage of the emissions plume. The EPA agrees that variables such as the size, number and composition of the particles in the emissions can result in variations in the percentage of opacity. Notwithstanding the chan ges in the NAAQS, however, both states and the EPA have continued to rely on opacity limitation s because they serve the same purposes for the

current PM 10 and PM 2.5 NAAQS (and other purposes such as the regulation of HAPs under section 112) that they previously did for the TSP NAAQS. Indeed, as the PM NAAQS have been revised to provide better prot ection of public health, the need for such opacity limitations

continues unless there is a better means to m onitor source compliance, such as PM CEMS. As with other SIP emission limitations, the EPA interp rets the CAA to preclude SSM exemptions in opacity standards.

233 See Sierra Club v. TVA , 430 F.3d 1337, 1340 (11th Cir. 2005). 234 See 40 CFR 51.100(z).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 260 of 539 s. Comments that exemptions from SIP opacity limitations for excess emissions during SSM events should be allowed because su ch emissions are difficult to monitor or to

control.

Comment: Several commenters argued that th e EPA’s proposal of a SIP call for SIP opacity emission limitations that include an SSM exemption is arbitrary and capricious because it is difficult or impossible to monitor or m easure opacity during SSM events. According to commenters, there is no compliance methodology to determine whether opacity limitations are met during SSM events and this is the reason that the EPA’s own general provisions for NSPS and NESHAP exclude emissions during SSM events as “not representativ e” of source operation. In the absence of a specific methodology to demo nstrate compliance, the commenters argued that expecting sources to comply with any opacity emission limitations during SSM events is arbitrary and capricious. The commenters asserted that in light of this, the EPA must interpret the CAA to allow exemptions for SSM ev ents in SIP opacity provisions. A number of commenters also argued that because emission controls for PM do not function, or do not function as effectively or efficiently, dur ing certain modes of source operation, the EPA should interpret the CAA to pe rmit exemptions for SSM events in opacity emission limitations. Many commenters explained that certain types of emission controls at certain types of sources only operate at specif ic temperatures or under specific conditions. For example, many commenters stated that existing po llution control devices on certain categories of stationary sources do not operate, or do not operate as effectivel y or efficiently, during startup and shutdown. Based upon this assertion, the comme nters argued that the EPA should interpret the CAA to allow total exemptions from SIP opacity emission limitations during such periods.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 261 of 539 Commenters also characterized the EPA’s February 2013 proposal as “particularly unreasonable” with respect to SSM exemptions in SIP opacity limitations, because those limitations should be allowed to exclude elevated opacity during periods when PM emissions controls devices are “not expected to operate correctly.” According to commenters, treating the higher opacity during SSM events “as a violation simply because it is indicating something that is expected is ridiculous.” As an example, the commenters specifically mentioned occurrences such as when a source’s electrostatic precipita tor (ESP) is not functioni ng or is not functioning properly as periods during whic h there should be an exemption from SIP opacity emission

limitations. Response: The EPA agrees with some of the points made by commenters but does not agree with the conclusions that the commenters drew from these points, i.e. , that alleged difficulties in monitoring, measuring or cont rolling opacity during some modes of source operation in general justify complete exemptions from opacity emission limitations during SSM

events. First, the EPA does not agree with th e argument that there is no “compliance methodology” available for purposes of verifying compliance with SIP opacity limitations. Since the earliest phases of the SIP program, Refere nce Method 9 has been available as a means of verifying a source’s compliance with applicable SIP opacity emission limitations. Whatever quibbles the commenters may have with this test method, it is a valid method and it continues to be used as a means of verifying source complia nce with opacity limitations and a source of*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 262 of 539 evidence for determining whether there are violations of such emission limitations. 235 Sources routinely monitor and certify to their compliance with SI P opacity limitations based upon Method 9. In addition, COMS have been available, and in some cases are required, as another means of monitoring emissions and verifying compliance with opacity emission limitations. With respect to COMS, commenters expressed con cerns that they are not always accurate, are not always properly calibrated or are not always the referen ce test method for SIP opacity emission limitations, and other similar arguments. In this rulemaking, the EPA is not addressing these allegations concerning COMS but merely noting that COMS are an available means of monitoring opacity from sources and in appropriate circumstances can provide data meeting the

EPA’s criteria as credible evidence to be used to determine compliance with emission

limitations. Second, the EPA does not agree that the fact th at its regulations concerning performance tests in 40 CFR 63.7(e) for NESHAP and in 40 CFR 60.8(c) for NSPS exclude SSM emissions for purposes of evaluation of emissions under normal operating conditions provides a justification for SSM exemptions from opacity emission limitations in SIP provisions. The D.C.

Circuit decision in Sierra Club has already indicated that such ex emptions are not permissible in emission limitations and vacated the general provi sions applicable to NESHAP. In the case of the exemption language in 40 CFR 60.8(c) releva nt to NSPS, the EPA acknowledges that it has

235 The EPA notes that one commenter characterized SIP opacity limits as “archaic” and suggested that the Agency should issue a SIP call requiring their removal from SIPs entirely. Unless and until regulators and sources have a be tter means of monitoring compliance with PM emission limitations on a conti nuous basis, such as through inst allation of PM CEMS, the EPA believes that opacity limits will continue to be a necessary part of emission limitations. There will continue to be sources of emissions for which it will not be cost-effective or technologically viable to require the installation of PM CEMS or for which opacity standards will be needed as a means of regulating condensables.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 263 of 539 not yet taken action to revise the language to eliminate that exemption. However, in promulgating new NSPS regula tions subsequent to the Sierra Club decision, the EPA is including emission limitations for newly construc ted, reconstructed and modified sources that apply continuously and including provisions expre ssly stating that the SSM exemptions in the General Provisions do not apply. The EPA notes that the commenter is also in error because the performance tests are intended to be a means of evaluating emissions from sources during periods that are representa tive of source operation. Third, the EPA does not agree with the premise that because certain forms or types of emission controls do not work, or do not work as effectively or efficien tly, during certain modes of operation at some sources, it necessarily follo ws that sources should be totally exempt from emission limitations during such periods. The EP A interprets the CAA to require that SIP emission limitations be continuous. As explaine d in section VII.A of this notice, emission limitations do not necessarily need to be expres sed numerically, can have higher numerical levels during certain modes of operati on, and may be composed of a combination of numerical limitations, specific technological control requirements and/or wo rk practice requirements during certain modes of operation, so long as these emission limitations meet applicable CAA stringency requirements and are lega lly and practically enforceable. If it is factually accurate that a given source category requires a higher opacity limit during periods such as startup and shutdown, then the state may elect to develop one consistent w ith other CAA requirements. The EPA has provided guidance to states with criteria to consider in revising th eir SIP provisions to replace exemptions with an appropriate altern ative emission limitation for such purposes. The EPA emphasizes that even if it is the case that existing contro l measures cannot operate, or cannot operate as effectively or efficiently, during startup and s hutdown at a particular source,*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 264 of 539 this does not legally justify a complete exempti on from SIP emission limitations and may merely

indicate that additional emission controls or work practices are necessary when the existing

control measures are insufficient to meet the applicable SIP emission limitation. The EPA is taking this approach with its own recent NSPS and NESHAP regulations, when appropriate, in

order to ensure that its own emission limitati ons are consistent with CAA requirements. Finally, the EPA also disagrees with the lo gic of commenters that argued in favor of exemptions from SIP opacity limitations during pe riods when a source is most likely to violate them, e.g. , when the source’s control devices are not functioning. Even if exemptions from SIP opacity emission limitations were legally perm issible under the CAA, which they are not, it would be illogical to excuse compliance with the standards during the precise periods when opacity standards are most need ed to monitor sources and assu re compliance with SIP emission limitations; i.e. , it would be illogical to require no emi ssion controls when the sources are most likely to be emitting the most air pollutants. In clusion of exemptions for exceedances of SIP opacity limitations during such periods would re move incentives to design, maintain and operate the source correctly in order to assure that it meets the applicable SIP emission limitations. By exempting excess emissions during such events, the provision would undermine the enforcement

structure of the CAA in section 113 and secti on 304, through which the ai r agency, the EPA and

citizens are authorized to assure th at sources meet their obligations. t. Comments that exemptions in SIP opac ity limitations should be permissible for “maintenance,” “soot-blowing” or othe r normal modes of source operation.

Comment: A number of industry co mmenters argued that the EPA should interpret the CAA to allow exemptions from SIP opacity limitations for “maintenance.” The commenters stated that during maintenance, sources must s hut down operations and co ntrol devices while the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 265 of 539 source is cleaned or repaired. During such pe riods, the commenters explained, a ventilation system operated to protect workers at the sour ce could result in monitored exceedances of a SIP opacity limitation. Commenters specifically ar gued that although COMS data may suggest violations of opacity standards during such period s, the fact that the s ource is not combusting fuel during maintenance should mean that the op acity emission limitation doe s not apply at such times. According to commenters, opacity limitations are only intended to reflect the performance of pollution control equipment wh ile the source is operating and thus have no relevance during periods of maintenance. Other commenters made comparable arguments with respect to sootblowing, asserting that the high opacity levels dur ing this activity are “indicative of normal ESP operation, not poor performance.” In other wo rds, the commenters argued that opacity limitations should contain complete exemptions for opacity emitted during soot-blowing on the theory that the elevated emissions during this mode of operation show th at the control measure on a source is functioning prope rly. The commenters further argue d that considering emissions during soot-blowing for purposes of PM limitations is appropriate, but not for purposes of opacity limitations, because of the way in which regulators de veloped the respective emission

limitations. Response: The EPA does not agree that exempti ons from SIP opacity limitations are appropriate for any mode of source operation, whether during SSM events or during other normal, predictable modes of source operation. To the extent that there are legitimate technological reasons why sources are able to meet only a hi gher opacity limitation during certain modes of operation, it does not follow that this constraint justifies complete exemption from any standard or any alternative technological control or work practice in order to reduce opacity during such periods. Providing a complete exemption for opacity during these modes of*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 266 of 539 source operation, and no specific alternative emission limitation during such periods, removes incentives for sources to be properly designed, maintained and operated to reduce emissions during such periods. With respect to maintenance, the EPA does not agree with commenters that total exemptions from opacity emission limitations du ring such activities are consistent with CAA requirements for SIP provisions. As the EPA has st ated repeatedly in its interpretation of the CAA in the SSM Policy, maintenance activities are predictable and planned activities during which sources should be expected to comp ly with applicable emission limitations. 236 The premise of the commenters advocating for such exemptions for all emissions during maintenance is evidently that nothing can be done to limit PM emissions and thus limit opacity during maintenance activities, and the EPA disagrees with that general premise. To the extent appropriate, however, states may elect to create alternative emission limitations applicable to opacity during maintenance periods, so long as th ey are consistent with CAA requirements. The EPA provides recommendations for alternative emi ssion limitations in section VII.B.2 of this

document. With respect to soot-blowing, the EPA likewise does not agree that total exemptions from opacity limitations during such periods are consistent with CAA requirements. As with maintenance in general, soot-blowing is an inten tional, predictable event within the control of the source. The commenters’ implication is that not hing whatsoever could be done to limit opacity

236 See 1982 SSM Guidance at Attachment p. 2; 1983 SSM Guidance at Attachment p. 3. The EPA notes that it also did not interpret the CAA to permit affirmative defense provisions for planned events under its prior 1999 SSM Guidan ce on the grounds that sources should be expected to operate in accord ance with applicable SIP emission limitations during maintenance. This interpretation was upheld in Luminant Generation Co. LLC v. EPA , 714 F,3d 841 (5th Cir. 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 267 of 539 during such activities, and the EPA believes that th is is both inaccurate and not a justification for sources’ being subject to no st andards whatsoever during soot-blowing. In addition, the EPA disagrees with the commenters’ claim that exem ptions from opacity emission limitations during soot-blowing are legally permissible because this allegedly shows that the control devices for opacity and PM are in fact pe rforming correctly. This argument incorrectly presupposes that the sole reason for SIP opacity emission limitations is as a means of better evaluating control measure performance. This is but one reason for SIP opacity limitations. Moreover, the EPA notes, excusing opacity during soot-blowing has th e diametrically opposite effect of the actual purpose of the control devices and can result in much higher emissions as opposed to encouraging limiting these emission w ith other forms of controls. Finally, the EPA notes, the commenters’ ar gument that whether opacity limitations should apply during soot-blowing depends upon wh ether the emissions were or were not accounted for in the applicable PM emissions is also based upon an incorrect premise. Even if the PM emission limitation applicable to a source was developed to include the emissions during soot-blowing specifically, it does not follow that sources should be completely exempted from opacity limitations during such periods. As the commenters themselves frequently acknowledged, when compared to other enforcemen t tools, SIP opacity pr ovisions often provide

a much more effective and continuous means of determining source co mpliance with SIP PM

limitations and control measure performance. A typical SIP opacity provision imposes an emission limitation such as 20 percent opacity at all times, except for 6 minutes per hour when those emissions may rise to 40 percent opacit y. Well-maintained and well-operated sources should be able to meet such SIP opacity limita tions. Given that properly designed, maintained and operated sources should typically have opacity substantially below these levels, elevated*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 268 of 539 opacity at a source is a good i ndication that the source may not be in compliance with its applicable PM limitations. u. Comments that elimination of exempti ons from SIP opacity emission limitations during SSM events will compel stat es to alter the averaging period of opacity limitations so as to allow sources to have elevated emissions during SSM events.

Comment: Commenters argued that if exemp tions for excess emissions during SSM events are not legally permissible in SIP opacity emission limitations, then states will have no option but to alter the existing opacity limitati ons. The commenters argued that if the SSM exemptions are removed, then the averagi ng time should be “greatly extended” and the

numerical limits “should be significantly increased.” Response: The EPA agrees that SIP provisions fo r opacity that contain exemptions for

SSM events at issue in this action must be revi sed to eliminate the exemptions. States may elect to do this by merely removing the exemptions, by replacing the exemptions with appropriate

alternative emission limitations that apply in place of the exemptions or by a total overhaul of the emission limitation as the commenters evidently advocate. The EPA disagrees, however, with

the commenters’ contentions that removal of th e SSM exemptions must necessarily result in extensions of the averaging time or increases of the numerical levels in the existing SIP opacity emission limitations. In some cases, extension of the averaging period and elevation of the numerical limitations may in f act be appropriate. In other cas es, however, it may instead be appropriate to reduce the existi ng numerical opacity limitations, given improvements in control technology since the original imposition of the li mits and the need for additional PM emission

reductions from the affected sources due to more recent revisions to the PM NAAQS. Thus, the EPA notes, a total revision of some of the SIP opacity limitations at issue in this action may*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 269 of 539 indeed be the proper course for states to c onsider. The implications of the commenters’ argument, however, are that existing opacity limitati ons will automatically n eed to be revised in

order to allow sources to con tinue to emit as usual and that states and sources may ignore improvements that have been made in source design, operation, maintenance or controls to reduce emissions. The EPA emphasizes that the removal of impermissible SSM exemptions should not be perceived as an opportunity to provide new de facto exemptions for these emissions by manipulation of the averaging time and the numerical level of existing opacity

emission limitations. In any event, the EPA is not deciding in th is final action how stat es must revise SIP opacity emission limitations but is merely issuin g a SIP call directing th e affected states to eliminate existing automatic and discretionary exemptions for excess emissions during SSM

events. The affected states will elect how best to respond to th is SIP call, whether by simply removing the exemptions, by replacing the exemp tions with appropriate alternative emission limitations applicable to start up and shutdown or other normal modes of operation or by a complete overhaul of the SIP provision in question. In particular, where the affected sources are located in designated nonattainment areas, there may be a need to evaluate additional controls that are needed for attainment planning purposes that were not necessary when the emission limitation was first adopted. Whichever approach a state determines to be most appropriate, the resulting SIP submission to revise the existing de ficient provisions will be subject to review by the EPA pursuant to sections 110(k)(3), 110(l) and 193. Considerations relevant to this issue are

discussed in section X.B of this document.

B. Alternative Emission Limitations During Periods of Startup and Shutdown 1. What the EPA Proposed*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 270 of 539 In the February 2013 proposal, the EPA reitera ted its longstanding in terpretation of the CAA that SIP provisions cannot include exemp tions from emission limitations for emissions during SSM events but may include different requirements that a pply to affected sources during startup and shutdown. Since the 1982 SSM Guidance, the EPA has clearly stated that startup and shutdown are part of the normal operation of a so urce and should be accounted for in the design and operation of the source. Thus, the EPA has l ong concluded that sources should be required to meet the applicable SIP emission limitations dur ing normal modes of opera tion including startup

and shutdown. 237 In the 1983 SSM Guidance, the EPA expl ained that it may be appropriate to

exercise enforcement discretion for violations that occur during st artup and shutdown under proper circumstances. In the 1999 SSM Guidance, the EPA further explained th at it interprets the CAA to permit SIP emission limitations that incl ude alternative emission limitations specifically applicable during startup and shutdown. In the context of making recommendations to states for how to address emissions during startup and shutdown, the EPA provided seven criteria for states to evaluate in establishing appropriate alternative emission limitations. The specific purpose for these recommendations was to take in to account technological limitations that might prevent compliance with the otherw ise applicable emission limitations. As explained in detail in the February 2013 proposal, the EPA did not intend these criteria to be the basis for the creation

237 Some commenters on the February 2013 proposal focused great attent ion on whether startup and shutdown are modes of “normal” source operation. The EPA assumes that every source is designed, maintained and operated with the expecta tion that the source will at least occasionally start up and shut down, and thus these modes of ope ration are “normal” in the sense that they are to be expected. The EPA used this term in the or dinary sense of the word to distinguish between such predictable modes of source operation and ge nuine “malfunctions,” which are by definition supposed to be unpredictable and unforeseen even ts that could not have been precluded by proper source design, maintenance and operation.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 271 of 539 of exemptions from SIP emission limitations during startup and shutdow n, because the Agency interprets the CAA to pr ohibit such exemptions. In the February 2013 proposal, the EPA also repeated its guidance concerning

establishment of alternative emission limitati ons that apply to sour ces during startup and shutdown, in those situations where the source s cannot meet the othe rwise applicable SIP emission limitations. As explained in secti on VII.A of the February 2013 proposal, the EPA interprets the CAA to require that SIP emission limitations must be continuous and thus to prohibit exemptions for emissions during startu p and shutdown. This does not, however, mean that every SIP emission limitation must be expr essed as a numerical limitation or that it must impose the same limitations during all modes of source operation. The EP A’s interpretation of the CAA with respect to SIP provisions is that SIP emission limitations: (i) do not need to be numerical in format; (ii) do not ha ve to apply the same limitation ( e.g. , numerical level) at all times; and (iii) may be composed of a comb ination of numerical limitations, specific technological control requirements and/or work practice requirements, with each component of

the emission limitation a pplicable during a defined mode of source operation. Regardless of how an air agency elects to express the emission limitation, however, the emission limitation must

limit emissions from the affected sources on a co ntinuous basis. Thus, if there are different

numerical limitations or other co ntrol requirements that apply dur ing startup and shutdown, those must be clearly stated component s of the emission limitation, must meet the applicable level of control required for the type of SIP provision ( e.g. , be RACT for sources located in nonattainment areas) and must be legally and practicably enforceable. 2. What is Being Finalized in This Action*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 272 of 539 The EPA is reiterating its interpretation of the CAA to allow SIP emission limitations to include components that apply dur ing specific modes of source operation, such as startup and shutdown, so long as those components together create a continuously applicable emission limitation that meets the relevant substantive requirements and requisite le vel of stringency for the type of SIP provision at issue and is legally and practically enforceabl e. In addition, the EPA is updating the specific recommendations to stat es for developing such alternative emission limitations described in the February 2013 proposal , by providing in this notice some additional explanation and revisions to th e text of its recommended criteri a regarding alternative emission

limitations. The EPA’s longstanding position is that th e CAA does not allow SIP provisions that include exemptions from emissi on limitations for excess emissions that occur dur ing startup and shutdown. The EPA reiterates that exemptions from SIP emission limitations are also not permissible for excess emissions that occur du ring other periods of normal source operation. A number of SIP provisions identified in the Petitio n create automatic or discretionary exemptions from otherwise applicable emission limitations during periods such as “maintenance,” “load change,” “soot-blowing,” “on- line operating changes” or other similar normal modes of operation. Like startup and shutdown, the EPA cons iders all of these to be modes of normal operation at a source, for which the source can be designed, operated and maintained in order to meet the applicable emission limitations and dur ing which the source should be expected to control and minimize emissions. Accordingly, exem ptions for emissions during these periods of normal source operation are not consistent with CAA requirements. Excess emissions that occur during planned and predicted periods should be treated as violati ons of any applicable emission

limitations.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 273 of 539 However, the EPA interprets the CAA to allow SIPs to include alternative emission limitations for modes of operation during which an otherwise applicable emission limitation cannot be met, such as may be the case duri ng startup or shutdown. Th e alternative emission limitation, whether a numerical limitation, technol ogical control requirement or work practice requirement, would apply during a specific mo de of operation as a component of the continuously applicable emission limitation. For exam ple, an air agency might elect to create an emission limitation with different levels of control applicable during specifically defined periods of startup and shutdown than during other norma l modes of operation. All components of the resulting emission limitation must meet the substa ntive requirements applicable to the type of SIP provision at issue, must meet the applicable level of stringency fo r that type of emission limitation and must be legally and practically enforceable. The EPA will evaluate a SIP

submission that establishes a SIP emission li mitation that includes alternative emission limitations applicable to sources during startup and shutdown cons istent with its authority and responsibility pursuant to sect ions 110(k)(3), 110(l) and 193 and any other CAA provision substantively germane to the SIP revision. Abse nt a properly establishe d alternative emission limitation for these modes of operation, a source shoul d be required to comply with the otherwise applicable emission limitation. In addition, the EPA is providing in this notice some additional explanation and

clarifications to its recomme nded criteria for developing alternative emission limitations applicable during startup and shutdown. The EPA continues to recommend that, in order to be approvable ( i.e., meet CAA requirements), alternative re quirements applicable to the source during startup and shutdown should be narrowly tailored and take into account considerations such as the technological limitati ons of the specific source ca tegory and the control technology*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 274 of 539 that is feasible during start up and shutdown. Accordingly, the EPA continues to recommend the seven specific criteria en umerated in section III.A of the Attachment to the 1999 SSM Guidance as appropriate considerations for SIP provisions that establish alternative emission limitations that apply to startup and shutdown. The EPA re peated those criteria in the February 2013 proposal as guidance to states for developing components of emi ssion limitations that apply to sources during startup, shutdown or other spec ific modes of source operation to meet CAA requirements for SIP provisions.

Comments received on the Fe bruary 2013 proposal suggested that the purpose of the recommended criteria may have been misunde rstood by some commenters. The criteria were phrased in such a way that commenters may have mi sinterpreted them to be criteria to be applied by a state retrospectively ( i.e. , after the fact) to an individual instance of emissions from a source during an SSM period, in order to establish wh ether the source had exceeded the applicable emission limitation. This was not the intended purpose of the recommended cr iteria at the time of the 1999 SSM Guidance, nor is it the intended purpose now.

The EPA seeks to make clear in this notice th at the recommended criteria are intended as guidance to states developing SIP provisions that include emissi on limitations with alternative emission limitations applicable to specifically de fined modes of source operation such as startup and shutdown. A state may choose to consider thes e criteria in developi ng such a SIP provision.

The EPA will use these criteria when evaluatin g whether a particular alternative emission limitation component of an emission limitation m eets CAA requirements for SIP provisions. Any SIP revision establishing an alternative em ission limitation that appl ies during startup and shutdown would be subject to the same procedur al and substantive review requirements as any

other SIP submission.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 275 of 539 Based on comment on the February 2013 propos al, the EPA is updating the criteria to make clear that they are recommendations releva nt for development of appropriate alternative emission limitations in SIP provisi ons. Thus, in this notice, the EPA is providing a restatement of

its recommended criteria that re flects clarifying but not substantiv e changes to the text of those criteria. One clarifying change is removal of the word “must” from the criteria, to better convey

that these are recommendations to states con cerning how to develop an approvable SIP provision with alternative requirements applicable to star tup and shutdown and to make clear that other approaches might also be consistent with the CAA in particular circumstances. The clarified criteria for developing and evaluating alternative emission limitations applicable during startup and shutdown are as follows: (1) The revision is limited to specific, narro wly defined source cate gories using specific control strategies ( e.g. , cogeneration facilities burning natural gas and using selective catalytic reduction); (2) Use of the control strate gy for this source category is technically infeasible during startup or shutdown periods; (3) The alternative emission limitation requi res that the frequency and duration of operation in startup or shutdown mode are mini mized to the greatest extent practicable; (4) As part of its justification of the SIP revision, the state analy zes the potential worstcase emissions that could occur during startup an d shutdown based on the applicable alternative emission limitation; (5) The alternative emission limitation requi res that all possible steps are taken to minimize the impact of emissions during star tup and shutdown on ambient air quality;*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 276 of 539 (6) The alternative emission limitation requires th at, at all times, the facility is operated in a manner consistent with good practice for minimizi ng emissions and the source uses best efforts regarding planning, design, and operating procedures; and (7) The alternative emission limitation requi res that the owner or operator’s actions during startup and shutdown periods are doc umented by properly signed, contemporaneous operating logs or other relevant evidence. It may be appropriate for an air agency to establish alternative emission limitations that apply during modes of source operation other th an during startup and shutdown, but any such

alternative emission limitations should be deve loped using the same criteria that the EPA recommends for those applicable during startup and shutdown. 3. Response to Comments The EPA received a number of comments, both supportive and adverse, concerning the issue of how air agencies may replace existing ex emptions for emissions during SSM events with alternative emission limitations that apply dur ing startup, shutdown or other normal modes of source operation. The majority of these comments were critical of the EPA’s position but did not base this criticism on an interpretation of specific CAA provisions. Fo r clarity and ease of discussion, the EPA is responding to these comments grouped by issue.

a. Comments that as a technical matter s ources cannot meet emission limitations (or cannot be accurately monitored) during startup and shutdown.

Comment: Several commenters claimed that as a technical matter, SIP emission limitations cannot be met or that monitoring to ensure compliance with emission limitations cannot occur during startup and shutdown. Commente rs raised “practical concerns” with the EPA’s proposal as it applies to emissions durin g SSM at electric generating units (EGUs). The*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 277 of 539 commenters claimed that it is incorrect to treat periods of startup and shutdown as part of “normal source operation” and claimed that it is fundamentally incorrect to characterize all periods of startup and shutdown as planned ev ents. The commenters claimed that many air pollution control devices (APCDs) ar e subject to technical, operationa l or safety constraints that prevent use or optimization during startup and shutdown periods. The commenters requested the EPA to continue the practice of allowing states to provide “protection” from enforcement for excess emissions during startup and shutdown. The commenters claimed that the EPA’s premise for this action is that startup a nd shutdown events are planned and sources should be able to meet limits applicable during these normal operations. The commenters asserted that the proposal does not recognize technical and ope rational limits and that it conflicts with the EPA’s own acknowledgement in the proposal that there are sometimes technical, operational and safety limits that may prevent compliance with emissi on limitations during startup and shutdown. The commenters also noted that the type of equipment that a control devi ce is attached to may affect

the time it takes for a control device to reach optimization. Further, the commenters identified control technologies that cannot achieve reductions until specific temperat ures are reached and other technologies that cannot be used during startup and/or shutdown because of technical limitations or safety concerns. Finally, the co mmenters noted that the geographical location and/or weather can have an effect on the operation of a source and control devices during startup

and shutdown. Commenters raised specific concerns re garding pollution controls for EGUs. The

commenters claimed that start up and shutdown events are unavoidable at EGUs even though they may be planned. The commenters also attach ed appendices providing an explanation of why emissions are higher for startup and shutdown for certain types of EGUs. The commenters*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 278 of 539 claimed that the “EPA’s proposal to eliminate the States’ SSM provisions, and prohibit them from adopting any provisions for startups and sh utdowns, could force sources to comply with emission limitations during periods when they we re never meant to appl y, thus rendering those

emissions limitations unachievable.” The comment ers also noted that the permits for their sources all require that the sources minimize the magnitude and duration of emissions during SSM. The implication of this latter comment is that a general duty to minimize emissions is sufficient to justify the exemp tion of all emissions during SS M events in the underlying SIP provisions. Response: Although intended as criticism of th e EPA’s proposed action, these comments in fact support the Agency’s pos ition that states should consider startup and shutdown events as they promulgate standards for specific industrie s or even for specific sources. The commenters seem to suggest that because some equipment or sources cannot duri ng startup and shutdown meet the emission limits that apply during “regul ar” operation, no limit or standards should apply during startup and shutdown. The EPA disagrees. As the court in Sierra Club held, emission limitations must apply at “all times.” That is not to say that the emission limitation must impose the same numerical limitation or impose the same other control requirement at all times. As explained at length in section V II.A of this document, the EPA interprets the CAA to allow SIP emission limitations that may be a combination of numerical limitations, technological control measures and/or work practice requirements, so long as the resulting emission limitations are properly developed to meet CAA requirements a nd are legally and practically enforceable. As the commenters noted, the EPA does recognize that some control equipment cannot be operated

at all or in the same manner duri ng every mode of normal operations.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 279 of 539 In its 1999 SSM Guidance, the EPA expressly re cognized that an appropriate way to for a state to address such technological limitations is to set alternative emission limitations that apply during periods of startup and shutdown as part of the SIP emission limitation. 238 In these cases the state should consider how the control equipm ent works in determining what standards should apply during startup and shutdow n. In addition, as noted by commenters, such standards may vary based on location ( e.g. , standards in a hot and humid area may differ from those adopted for a cool and dry area). Some equipment during st artup and shutdown may be unable to meet the same emission limitation that applies during steady- state operations and so alternative limitations for startup and shutdown may be appropriate. 239 However, for many sources, it should be

feasible to meet the same emission limitation th at applies during steady-state operations also during startup and shutdown. 240 These are issues for the state to consider in developing specific regulations as they revise th e deficient SIP provisions identified in this action. The EPA emphasizes that the state has discretion to de termine the best means by which to revise a deficient provision to eliminate an automatic or discretionary SSM exemp tion, so long as that revision is consistent with CAA requirements. The EPA will work with the states as they consider possible revisions to deficient provisions.

238 See 1999 SSM Guidance, Attachment at 4–5. 239 The EPA notes that it has taken this approach in its own recent acti ons establishing emission limitations for sources. See, e.g. , “National Emission Standards fo r Hazardous Air Pollutants for Major Sources: Industrial, Commer cial, and Institutional Boilers a nd Process Heaters; Final rule; notice of final action on reconsideration,” 78 FR 7137 (January 31, 2013) (example of work practice requirement for startup as a compone nt of a continuous emission limitation). 240 The EPA notes that it has taken this approach in its own recent acti ons establishing emission limitations for sources. See, e.g. , “National Emission Standards for Hazardous Air Pollutants Residual Risk and Technology Review for Flexible Polyurethane Foam Production; Final rule,” 79 FR 48073 (August 15, 2014) (example of NESHAP emission limitation that is continuous and does not include a different component fo r periods of startup or shutdown).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 280 of 539 The EPA recognizes that a malfunction may cau se a source to shut down in a manner different than in a planned shutdown, and in th at case, such a shutdow n would typically be considered part of the malfunction event. However, as part of the normal operation of a facility, sources typically will also have periodic or otherwise scheduled st artup and shutdown of equipment, and steps to limit emissions during this type of event are or can be planned for. The EPA disagrees with the suggestion of commenters that because some startup or shutdown events may be unplanned, all startup and shutdown events should be exempt from compliance with any requirements. For those events that are planned, the state should be able to establish requirements to regulate emissions, such as a numerical li mitation, technological control measure or work practice standard that will a pply as a part of the revised emission limitation. For unplanned events that are part of a malfunctions, they shoul d be treated the same as a malfunction; however, as with malfunctions, startup and shutdown even ts cannot be exempted from compliance with SIP requirements. Questions of liability and reme dy for violations that result from malfunctions

are to be resolved in the context of an en forcement action, if such an action occurs. b. Comments that it is impossible, unreasona ble or impractical fo r states to develop emission limitations that apply during startup and shutdown instead of existing exemptions.

Comment: A number of commenters suggested that it will be difficult for states to develop emission limits that apply during star tup and shutdown. One st ate commenter reasoned

that alternative emission limits are applied to facilities in that state through individual permits on a case-by-case basis and claimed that there ar e 500 permitted facilities in the state. The commenter contended that “non-steady-state” limits would need to be set for startup and shutdown for all 500 permitted facili ties and that such an effort would be “time, resource, and

data intensive.” The state commenter further cont ended that it would be unreasonable to require*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 281 of 539 the state to include such limits “for every s ource” in the SIP because “permit modifications would need to occur every time there is a new emi ssion source, a source ceases to operate, or an emission-related regulation is changed.” A local government commenter stated that establishing limits for startup and shutdown while still demonstrating compliance with the NSR regulations (includi ng protection of theNAAQS and PSD increments and maintenance of BACT or LAER) would be a difficult, timeconsuming task that was mostly impractical. An industry commenter claimed that the EPA is encouraging states to adopt a numerical alternative emission limit that would appl y during startup and shutdown. The commenter claimed that adequate and accurate emissions data are necessary to do so and that such information is not generally available for existing equipment or, in many cases, for new equipment. Furthermore, the commenter asserted, even if an emission limit could be established for startup and shutdown, there are no current approved test m easures to verify compliance during such modes of operation. Ev en where data are available, the commenter alleged, the data may not be representative of actual conditions because of limitations related to low-load

conditions. If a state lacks information to conclu de that a limit can be met, the commenter argued, the state should not be required to es tablish numerical limits but should instead be allowed “to specify that numeri cal standards do not apply to t hose conditions or that those conditions are exempt, or should be allowed to establish work practice standards.” Response: The comments of the state commenter seem to be based on the premise that all

sources will be unable to meet otherwise applicable SIP emission limitations during periods of startup and shutdown. The EPA anticipates that many types of sources should be able during startup and shutdown to meet the same emissi on limitation that applies during full operation.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 282 of 539 Additionally, even where a specifi c type of operation may not duri ng startup and/or shutdown be able to meet an emission limitation that applies during full operation, the st ate should be able to develop appropriate limitations that would apply to those types of operations at all similar types

of facilities. The EPA believes that there will be limited, if any, cases where it may be necessary to develop source-specific emission requirements for startup and/or shutdown. In any event, this is a question that is best addressed by each st ate in the context of the revisions to the SIP provisions at issue in this action. To the extent th at there are appropriate reasons to establish an

emission limitation with alternative numerical , technological control and/or work practice requirements during startup or shutdown for certain categories of sources, this SIP call action provides the state with the opportunity to do so.

As to the commenter’s concern that such alternative emission limitations should not be included in a state’s SIP, the EP A disagrees. The SIP needs to refl ect the control obligations of sources, and any revision or modification of t hose obligations should not be occurring through a separate process, such as a permit process, wh ich would not ensure that “alternative” compliance options do not weaken the SIP. The SIP is a comb ination of state statutes , regulations and other requirements that the EPA approves for demons trating attainment and maintenance of the NAAQS, protection of PSD increments, improvement of visibility and compliance with other CAA requirements. As discussed in section X.B of this document, any revisions to obligations in the SIP need to occur through the SIP revision pro cess and must comply with sections 110(k)(3), 110(l) and 193 and any other applicable substantive requireme nts of the CAA.

As to concerns that a SIP re vision will be necessary every time a new source comes into existence, an existing source is permanently reti red or a new regulation is promulgated, the EPA does not see these as significant concerns. Un less the startup or shutdown process for an*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 283 of 539 individual source is truly unique to that source, then existing SI P provisions for sources within the same industrial category should be able to apply to any new source. Moreover, assuming any new source is subject to permitting obligations, then any applicable startup and shutdown issues should already be resolved in developing the permit for such s ource. The state could choose to incorporate that permit by reference into the SIP at the time it next modifies its SIP. Further, assuming that there is a source-spec ific regulation for a source in the SIP (a circumstance that the EPA believes would occur only rarely ), the state is not obligated to remove such provision when the source is retired. Rather, the state could leav e the provision in its rules or remove such a provision the next time it submits another SIP re vision or when it choose s to do a “cleanup” of the SIP, an activity that numerous states have taken from time to time. Finally, whenever a new regulation is promulgated is prec isely the time that a state shoul d be considering the appropriate provisions that would apply during startup and shutdown, as that is the time when the state is considering what is necessary to comply with the CAA and what is necessary to meet attainment, maintenance or other requirements of the CAA. The local government commenter contended that establishing limits for startup and

shutdown while still demonstrat ing compliance with the NSR re gulations (including protection of the NAAQS and PSD increments and imposition of BACT or LAER level controls) would be a difficult, time-consuming task that was imprac tical. The commenter does not explain why this is so. The implication is that a SIP provision that provides an exemption or an affirmative defense for emissions during startup and shutdo wn would be compliant with the statutory requirements and NSR regulations (including attainment of the NAAQ S and protecting PSD increments) while it would be difficult to formulat e a SIP provision that regulated such emissions that would be compliant. The suggestion that a SIP provision that does not regulate emissions*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 284 of 539 during startup and shutdown would be more likel y to address NAAQS attainment and to protect PSD increments than would a SIP provision that doe s regulate such emissions is simply illogical. The EPA further notes that the Agency’s interpretation of the CAA, explicitly set forth in a 1993 guidance document, has been that periods of startup and shutdown must be addressed in any new source permit. 241 Moreover, the EPA explained in the Fe bruary 2013 proposal, in the SNPR and in the background memorandum accompanying the Fe bruary 2013 proposal concerning the legal basis for this action why exemptions and affirm ative defenses applicable to emissions during

SSM events are not consistent with CAA requirements for SIP provisions.

c. Comments that the EPA should “author ize” states to replace SSM exemptions with “work practice” standard s developed by the EPA in its own recent NESHAP and NSPS

rules.

Comment: Commenters suggested that the EPA should allow states to use work practice standards to address emissions during star tup and shutdown. The NESHAP rules cited by

commenters included the I ndustrial Boiler MACT rule 242 and the MATS rule, and the NSPS rules cited by the commenters included the NSPS for Electric Utility Steam Generating Units (40 CFR part 60, subpart Da) and the gas turbine NSPS as examples of where the EPA itself has established work practice standa rds rather than numerical emi ssion limitations for periods of startup and shutdown. The commenters suggested that where these work practice standards are already in place, states should be able to rely on the work practice standards rather than having to create new SIP provisions.

241 See Memorandum from John B. Rasnic, EPA/OAQPS, January 28, 1993, in the rulemaking docket at EPA-HQ-OAR-2012-0322-0022. 242 The Industrial Boiler MACT rule regulates industrial, commercial and institutional boilers and process heaters at major sources under 40 CFR part 63, subpart DDDDD.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 285 of 539 Response: The EPA agrees that states are not precluded from adopting work practice standards to address periods of startup and shutdown as a component of a SIP emission limitation that applies continuous ly. Such work practice standa rds must meet the otherwise applicable CAA requirements ( e.g. , be a RACT-level control fo r the source as part of an attainment plan requirement) a nd the necessary parameters to make it legally and practically enforceable ( e.g. , have adequate recordk eeping, reporting and/or m onitoring requirements to assure compliance). However, it cannot automa tically be assumed that emission limitation requirements in recent NESHAP and NSPS are appr opriate for all sources regulated by SIPs. The universe of sources regulated under the federal NSPS and NESHAP programs is not identical to the universe of sources regulated by states for purposes of the NAAQS. Moreover, the pollutants regulated under the NESHAP ( i.e. , hazardous air pollutants) are in many cases different than those that would be regulated for purposes of attaining and maintaining the NAAQS, protecting PSD increments, improving visibility and meeting other CAA requirements. 243 Thus, the EPA cannot say as a matter of law that those fede ral regulations establis h appropriate emission limitation requirements for all of th e sources that states are regulat ing in their SIPs or for the purpose for which they are being regulated. Th e EPA believes, however, that those federal regulations and the technical materi als in the public record for t hose rules may provide assistance for states as they develop and consider regulations for sources in their states and may be appropriate for adoption by the state in certain ci rcumstances. In particular, the NSPS regulations should provide very relevant information for sources of the same type, size and control

243 While some hazardous pollutants are also VOC s or particulate matter, many HAP are not. Moreover, there are many VOCs and types of part iculate matter that are not HAP and thus are not regulated under the MACT sta ndards. MACT standards also do not address other criteria pollutants or pollutant precursors from sources that may be relevant for SIP purposes.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 286 of 539 equipment type, even if the sources were not cons tructed or modified within a date range that would make them subject to the NSPS. The EPA therefore encourages st ates to explore these approaches, as well as any othe r relevant information available, in determining what is appropriate for revise d SIP provisions.

d. Comments that if states remove existi ng SSM exemptions and replace them with alternative emission limitations that apply dur ing startup and shutdow n events, this would automatically be consistent with the requirements of CAA section 193.

Comment: Commenters stated that section 193 was included in the CAA to prohibit states from modifying regulations in place prior to November 15, 1990, unless the modification ensures equivalent or greater reductions of the pollutant. The commenters asserted that to the extent a state replaces “general excess emissions exclusio ns and/or affirmative defense provisions” such

amendments would per se be more stringent than the provis ions they replace. The commenters also contended that any replacement SIP provision that spells out more clearly how a source will operate ensures equivalent or greater emissi on reductions. The commenters urged the EPA to clarify that any revisions pursuan t to a final SIP call would not be considered “backsliding.” Response: The EPA agrees with the commenters that any SIP submission made by a state in response to this SIP call action will need to comply with the requirements of section 193 of the CAA, if that section applies to the SIP provisi on at issue. In addition, such SIP provision will also need to comply with section 110(l), which requires that SIP revisions do not interfere with attainment, reasonable progress or any other appli cable requirement of the CAA. However, it is premature to draw the conclusion that any SIP re vision made by a state in response to this SIP call will automatically meet the requirements of section 110(l) and section 193. Such a conclusion could only be made in the context of reviewing the actual SIP revision. The EPA will*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 287 of 539 address this issue, for each SIP revision in res ponse to this SIP call action, at the time that it proposes and finalizes action on th e SIP revision, and any comments on this issue can be raised during those individual rulema king actions. The EPA provides a dditional guidance to states on the analysis needed to comply w ith section 110(l) and section 193 in section X.B of this notice.

C. Director’s Discretion Provisio ns Pertaining to SSM Events 1. What the EPA Proposed In the February 2013 proposal, the EPA stated and explained in detail the reasons for its belief that the CAA prohibits unbounded director’s discretion provi sions in SIPs, including those provisions that purport to author ize unilateral revisions to, or exemptions from, SIP emission limitations for emissions during SSM events. 244 2. What is Being Finalized in This Action The EPA is reiterating its in terpretation of the CAA with respect to unbounded director’s discretion provisions applicable to emissions during SSM events, which is that SIP provisions

cannot contain director’s discre tion to alter SIP requirements, including those that allow for variances or outright exemptions for emissions during SSM events. This interpretation has been clear with respect to emissions during SSM events in the SSM Po licy since at least 1999. In the 1999 SSM Guidance, the EPA stated that it would not approve SIP revisions “that would enable

a State director’s decision to bar EPA’s or citizens’ ability to enforce applicable requirements.” 245 Director’s discretion provi sions operate to allow air agency personnel to make just such unilateral decisions on an ad hoc basis, up to and including the granting of complete exemptions for emissions during SSM events, th ereby negating any possibility of enforcement

244 See February 2013 proposal, 78 FR 12459 at 12485–86. 245 See 1999 SSM Guidance at 3.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 288 of 539 for what would be violations of the otherwise applicable emission limita tion. Given that the EPA interprets the CAA to bar exemptions from SI P emission limitations for emissions during SSM events in the first instance, the fact that direct or’s discretion provisions ope rate to authorize these exemptions on an ad hoc basis compounds the problem. The EPA acknowledges, however, that both states and the Agency have, in some instance s, failed to adhere to the requirements of the CAA with respect to this issue consistently in the past, and thus the n eed for this SIP call to correct existing deficiencies in SIPs. 246 In order to be clear about its interpretation of the CAA with respect to this point on a goi ng-forward basis, the EPA is reiterating in this action that SIP provisions cannot contain unbounded director’s discretion provisions, including those that operate to allow for variances or outright exem ptions from SIP emission limitations for excess emissions during SSM events. Many commenters on the February 2013 propos al opposed the EPA’s interpretation of the CAA with respect to director’s discretion pr ovisions simply on the grounds that states are per

se entitled to have unfettered di scretion with respect to the cont ent of their SIP provisions. Other commenters argued that any director ’s discretion provision is mere ly a manifestation of an air agency’s general “enforcement discretion.” Some commenters simply asserted that recent court decisions by the Fifth Circuit definitively establ ish that the CAA does not prohibit SIP provisions

246 In this action, the EPA is addressing the spec ific SIP provisions with director’s discretion provisions that the Petitioner listed in the Pe tition. In the event that there are other such impermissible director’s discretion provisions in existing SIPs, the EPA will address those provisions in a later action.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 289 of 539 that include director’s discreti on, regardless of whether those pr ovisions contain any limitations

whatsoever on the exercise of that discretion. 247 The commenters did not, however, address the specific statutory interpretations that the EPA set forth in the Fe bruary 2013 proposal to explain why SIP provisions that aut horize unlimited director’s di scretion are prohibited by CAA provisions applicable to SIP revisions. As explained in detail in the February 2013 proposal and in s ection VII.C of this notice, the EPA interprets the CAA to prohibit SIP pr ovisions that include unlimited director’s

discretion to alter the SIP emission limitations a pplicable to sources, incl uding those that operate to allow exemptions for emissions from sources during SSM events. The EPA believes that such provisions that operate to authorize total exemptions from emission limitations on an ad hoc basis are especially problematic. Given that the EPA interprets section 110(a)(2)(A) and section 302(k) to preclude exemptions for emissions dur ing SSM events in emission limitations in the first instance, it is also impermissible for states to have SIP provisions that authorize such exemptions on an ad hoc basis. These provisions functionally allow the air agency to impose its

own enforcement discretion decisions on the EPA and other parties by gr anting exemptions for

emissions that should be treate d as violations of the applicable SIP emission limitations. Provisions that functionally allow such exemptions are also inconsistent with requirements of the CAA related to enforcement including: (i) the general requirements of section 110(a)(1) that SIPs provide for enforcement; (ii) the section 11 0(a)(2)(A) requirement that the specific emission

247 For example, commenters on the February 2013 proposal cited two d ecisions of the Fifth Circuit within which the court cited a prior EP A approval of a SIP revi sion in Georgia that contained director’s discretion pr ovisions supposedly comparable to those at issu e in the Fifth Circuit cases. These provisions were not included in the Petition and the EPA is not reexamining those provisions as pa rt of this action.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 290 of 539 limitations and other contents of SIPs be en forceable; and (iii) the section 110(a)(2)(C) requirement that SIPs contain a program to provi de for enforcement. Moreover, these provisions operate to interfere with the enforcement stru cture of the CAA provided in section 113 and section 304, through which the EPA and other partie s have authority to seek enforcement for violations of CAA requirements, including SIP emission limitations. There are two ways in which such a provision can be consistent with CAA requirements: (1) when the exercise of director’s discretion by the state agency to alter or eliminate the SIP emission limitation can have no effect for purpo ses of federal law unless and until the EPA

ratifies that state action with a SIP revision; or (2) when the di rector’s discretion authority is adequately bounded such that the EPA can ascertain in advance, at the time of approving the SIP provision, how the exercise of that discretion to alter the SIP emission limitations for a source could affect compliance with other CAA require ments. If the provision includes director’s

discretion that could re sult in violation of any other CAA requirement for SIPs, then the EPA cannot approve the provision cons istent with the requirements of section 110(k)(3) and section 110(l). For example, a director’s discretion provision that author izes state personnel to excuse source compliance with SIP emission limitations during SSM events could not be approved because the provision would run afoul of the requ irement that sources be subject to emission limitations that apply continuously, consistent with section 302(k). 3. Response to Comments The EPA received a number of comments, both supportive and adverse, concerning the issue of director’s discretion prov isions in SIPs. The majority of these comments were critical of the EPA’s position but did not base this crit icism on an interpretation of specific CAA*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 291 of 539 provisions. For clarity and ease of discussion, the EPA is resp onding to these comments grouped by issue.

a. Comments that broad state discretion to develop SIP provisions includes the authority to create provisions that include director’s discreti on variances or exemptions for excess emission during SSM events.

Comment: A number of state and industry comment ers argued that because states have great discretion when developing SIP provisions in general, this necessarily includes the ability to create director’s discretion pr ovisions in SIPs that authorize st ate personnel to grant unilateral variances or exemptions for emissions duri ng SSM events. According to commenters, the overarching principle of “cooperativ e federalism” and court decisi ons concerning the division of regulatory responsibilities between the states and the EPA support their view that states can create SIP provisions that provide authority to alter the SIP emission limitations or other requirements via director’s discretio n provisions without restriction. Response: The EPA disagrees with the commente rs’ view that director’s discretion provisions in SIPs are per se permissible because of the principles of cooperative federalism. As explained in more detail in section V.D.2 of this document, states and the EPA each have authorities and responsib ilities under the CAA. With respect to SIPs, under section 107(a) the states have primary responsibility for assuring attainment of the NAAQS within their borders. Under section 110(a) the st ates have a statutory duty to deve lop and submit a SIP that provides for the attainment, maintenance and enforcemen t of the NAAQS, as well as meeting many other CAA requirements and objectives. The specific pro cedural and substantiv e requirements that

states must meet for SIPs are set forth in se ction 110(a)(1) and section 110(a)(2) and in other more specific requirements throughout the CAA ( e.g. , the attainment plan requirements for each*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 292 of 539 of the NAAQS as specified in part D). By contra st, the EPA has its own st atutory authorities and responsibilities, including the obligation to review new SIP submissions for compliance with CAA procedural and substantive requirements pur suant to sections 110(k )(3), 110(l) and 193. In addition, the EPA has authority to assure that previously approved SIP provisions continue to meet CAA requirements, whether through the SIP ca ll authority of section 110(k)(5) or the error correction authority of section 110(k)(6). As the EPA explained in detail in the Febr uary 2013 proposal, SIP pr ovisions that include

unbounded director’s discretion to alter the othe rwise applicable emission limitations are inconsistent with CAA requirements. Such provi sions purport to author ize air agency personnel unilaterally to change or to el iminate the applicable SIP emission limitations for a source without meeting the requirements for a SIP revision. Purs uant to the EPA’s ow n responsibilities under sections 110(k)(3), 110(l) and 193 and any othe r CAA provision substantively germane to the specific SIP provision at issue, it would be inappropriate for the Agency to approve a SIP provision that automatically preauthorized the state unilaterally to revise the SIP emission limitation without meeting the applicable procedural and substantive statutory requirements for a SIP revision. Section 110(i) prohibits modification of SIP require ments for stationary sources by either the state or the EPA, except through specified processes. The EPA’s implementing regulations applicable to SIP provisions likewise impose requireme nts for a specific process for the approval of SIP revisions. 248 In addition, section 116 explic itly prohibits a state from adopting or enforcing regulations for sources that are less stringent than what is required by the emission limitations in its SIP, i.e. , the emission limitation previ ously approved by the EPA as

248 See, e.g. , 40 CFR 51.104(d) and 40 CFR 51.105.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 293 of 539 meeting the requirements of the CAA applicable to that specific SIP provision. It is a

fundamental tenet of the CAA that states cannot unilaterally change SIP provisions, including the emission limitations within SIP provisions, wi thout the EPA’s approval of the change through the appropriate process. This core principle has been recognized by multiple courts. 249

b. Comments that director’s discretion provisions are an exercise of “enforcement

discretion.”

Comment: Several state and industr y commenters asserted that the EPA was wrong to interpret the CAA to preclude di rector’s discretion provisions, because such provisions are merely an exercise of a state’s tr aditional “enforcement discretion.” Response: The EPA disagrees that a director’s discretion provision in a SIP is a valid

exercise of enforcement discretion. Normall y, the concept of enforcement discretion is understood to mean that a regulator has discretion to determine whether a specific violation of the law by a source warrants enforcement and to determine the nature of the remedy to seek for any such violation. The EPA of course agrees that states have enforcement discretion of this type and that the states may exercise such enforcement discretion as they see f it, as does the Agency

249 See, e.g., Sierra Club, et al. v. TVA , 430 F.3d 1337, 1346 (11th Cir. 2005 ) (“If a state wants to add, delete, or otherwise modify a SIP provision, it must submit the proposed change to EPA for approval”); Duquesne Light Co. v. EPA , 698 F.2d 456, 468 n.12 (D.C. Cir. 1983) (“with certain enumerated exceptions, states do not have th e power to take any action modifying any requirement of their SIPs, w ithout approval from EPA”); Train v. NRDC , 421 U.S. 60, 92 (1975) (“[A] polluter is subject to existing requirements until such time as he obtains a variance, and variances are not available under the revision authority until they have been approved by both the State and the Agency”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 294 of 539 itself. However, the EPA does not agree that air agencies may create SIP provisions that operate to eliminate the ability of the EPA or citizens to enforce the emission limitations of the SIP. The EPA stated clearly in the 1999 SSM Guidance that it would not approve SIP provisions that

“would enable a State director’s decision to bar EPA’s or citizens ’ ability to enforce applicable requirements.” 250 The Agency explained at that time that such an approach is inconsistent with the requirements of the CAA applicable to the enforcement of SIPs. The commenters’ argument was that states may create SIP provisions through which they may unilaterally decide that the emissions fr om a source during an SSM event should be exempted, such that the emissions cannot be treated as a violation by anyone. A common formulation of such a provision pr ovides only that the source needs to notify the state regulatory agency that an exceedance of th e emission limitations oc curred and to report that the emissions

were the result of an SSM event. If those mini mal steps occur, then such provisions commonly authorize state personnel to make an administrative decision that the emissions in question were not a “violation” of the applicable emission limitat ion. It may be entirely appropriate for the state agency to elect not to bring an enforcement action based on the facts and circumstances of a given SSM event, as a legitimate exercise of its own enforcement discretion. However, by creating a SIP provision that in effect authorizes the state ag ency to alter or suspend the otherwise applicable SIP emissi on limitations unilaterally thr ough the granting of exemptions, the state agency would functionally be revising the SIP with resp ect to the emission limitations on the source. This revision of the applicable emission limitation would have occurred without satisfying the requirements of the CAA fo r a SIP revision. As a result of this ad ho c revision of

250 1999 SSM Guidance at 3.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 295 of 539 the SIP emission limitation, the EPA and other partie s would be denied the ability to exercise their own enforcement discretion. This is contrary to the fundamental enforcement structure of the CAA, as provided in section 113 and secti on 304, through which the EPA and other parties are authorized to bring enforcement actions for violations of SIP emissi on limitations. The state’s

decision not to exercise its own enforcement disc retion cannot be a basis on which to eliminate the legal rights of the EPA and othe r parties to seek to enforce. The commenters also suggested that the di rector’s discretion pr ovisions authorizing exemptions for SSM events are nonsegreg able parts of the emission limitations, i.e. , that states have established the numerical limitations at overly stringent levels specifically in reliance on the existence of exemptions for any emissions during SSM events. Although commenters did not provide facts to support the claims that states set more stringent emission limitations in reliance on SSM exemptions, in general or with respec t to any specific emission limitation, the EPA acknowledges that this could possibly have been th e case in some instances. Even if a state had taken this approach, however, it does not follow that SIP provisions containing exemptions for SSM events are legally permissibl e. Emission limitations in SIPs must be continuous. When a state takes action in response to this SIP call to eliminate the director’s discretion provisions or otherwise to revise them, the st ate may elect to overhaul the em ission limitation entirely in order to address this concern. So long as the resul ting revised SIP emission limitation is continuous and meets the requirements of sections 110(k)(3), 110(l) and 193 and any ot her sections that are germane to the type of SIP provision at issue, th e state has discretion to re vise the provision as it

determines best.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 296 of 539 c. Comments that the EPA’s having pr eviously approved a SIP provision that authorizes the granting of variances or exemp tions for SSM events through the exercise of director’s discretion renders the provisi on consistent with CAA requirements.

Comment: Several state and industry commenters argued that the EPA’s past approval of a SIP provision with a director’s discretion feature automatically m eans that the exercise of that authority (whether to revise the applicable SI P emission limitations unilaterally or to grant ad

hoc exemptions from SIP emission limitations) is valid under the CAA. One commenter asserted that because the EPA has previous ly approved such a provision, “that discretion is itself part of the SIP, and the exercise of discretion in no way modifies SIP requirements.” Another commenter argued that director’s discretion provisions in SIPs are per se valid because “[a]ll of the SIP provisions went through a public procedure at the time of their initial SIP approval.” Response: First, the EPA disagrees with the th eory that a SIP provision that includes director’s discretion authority for state personnel to modify or grant exemptions from SIP emission limitations unilaterally is valid merely by virtue of the fact that the Agency previously approved it. By definition, when the EPA makes a finding of substantial inadequacy and issues a SIP call, that signifies that the Agency previ ously approved a SIP provision that does not meet CAA requirements, whether that deficiency existe d at the time of the original approval or arose later. The EPA has explicit author ity under section 110(k)(5) to requi re that a state eliminate or revise a SIP provision that the Agency previously approved, when ever the EPA finds an existing SIP provision to be substantially inadequate to meet CAA require ments. The fact that the EPA previously approved it does not mean that a de ficient provision may remain in the SIP forever once the Agency determines that it is deficient.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 297 of 539 Second, the EPA disagrees that the fact that a SIP provision underw ent public process at the time of its original creation by the state, or at the time of its approval by EPA as part of the SIP, means per se that the provision is consistent with CAA requirements. If an existing SIP provision is deficient because it in effect allows a state to revise existing SIP emission limitations without meeting the many explicit statutory requi rements for a SIP revision, the fact that the revision that created the impermissible provisi on itself met the proper procedural requirements for a SIP revision is irrelevant. Even perfect co mpliance with the procedural requirements for a

SIP revision at the time of its development by the state or its approval by the EPA does not override a substantive deficiency in the provision, nor does it precl ude the later issuance of a SIP call to correct a substantive deficiency. Third, the EPA disagrees with the circular logic that because a deficient provision with director’s discretion currently exists in a SIP, it means that exercise of the director’s discretion to grant variances or outright exemptions to sources for emissions during SSM events is therefore consistent with CAA requirements for SIPs. An unbounded director’s discretion provision that authorizes an air agency to alter or eliminat e the otherwise applicable SIP emission limitation functionally allows the state to revise the SIP emission limitation without meeting the requirements for a SIP revision. In particular, when such provisi ons authorize state personnel to grant outright exemptions from the SIP emission limitations, this is tantamount to a revision of the SIP emission limitation without complying with the procedural and substantive requirements of the CAA applicable to SIP revisions, incl uding section 110(l), s ection 193 and any other substantive requirements applicable to the pa rticular SIP emission limitation in question.

d. Comments that director’s discretion provisions in SI Ps are not prohibited by the CAA, based on recent judicial decisions.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 298 of 539 Comment: A number of state and industry comment ers argued that nothing in the CAA explicitly prohibits states from having SIP pr ovisions that include di rector’s discretion authorization for state personnel to modify or eliminate existing SI P provisions unilaterally, with or without any process or with in any limiting parameters. In support of this proposition, the commenters cited recent decisions of the Fifth Circuit in two cases concerning the EPA’s disapproval of SIP submissions from the state of Texas. Commenters argued that the EPA’s interpretation of the CAA to prohi bit director’s discretion provisions in SIPs is incorrect in light

of the decision of the court in Texas v. EPA

. 251 According to commenters, the court’s decision establishes that no provision of the CAA bars such provisions. To support this contention, one commenter quoted the court’s decision extensivel y, highlighting the statement, “...the EPA has

invoked the term ‘director discreti on’ as if that term were an independent and authoritative standard, and has not linked the term to the language of the CAA.” Similarly, the commenters

cited another decision of that court in Luminant Generation Co. v. EPA

. 252 From that decision, commenters quoted the court’s statement that the “EPA had no legal basis to demand ‘replicable’

limitations on the Director’s di scretion” and the succeeding senten ce, “[n]ot once in its proposed or final disapproval, or in its argument before th is court, has the EPA pointed to any applicable provision of the Act or its regula tions that includes a ‘replicabili ty’ standard.” These commenters did not, however, address the specific statutory provisions identified by th e EPA in the February 2013 proposal and the explanation that the Agency provided with respect to this issue. Response: The EPA disagrees that either deci sion cited by commenters stands for the definitive proposition they assert, i.e. , that director’s discretion provisions in SIPs are not

251 690 F.3d 670 (5th Cir. 2012). 252 675 F.3d 917 (5th Cir. 2012).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 299 of 539 precluded by the CAA. In Luminant Generation Co. v. EPA , the court evaluated the EPA’s disapproval of a SIP submission from the state of Texas that crea ted SIP provisions to implement minor source permitting requirements. The EPA disapproved the SIP submission for several reasons, one of which was based on the director ’s discretion provision prohibiting use of the standard permit for a pollution control project that the director dete rmines raises health concerns or threatens the NAAQS. The EPA was concerned th at this provision gave the director of the state agency discretion to make case-by-case de cisions about what the specific permit terms would be for each source, without sufficient parame ters or limitations on the exercise of that authority. Thus, the EPA reasoned that without a ny boundaries on the exercise of this authority for director’s discretion, it w ould be impossible for the Agency to know in advance ( i.e. , at the time of acting on the SIP submission) whether the state agency would only use that discretion in a way that would result in permits with terms consistent with meeting CAA requirements. 253 As the EPA explained in the ru lemaking at issue in the Luminant Generation v. EPA case, “[t]here are no replicable conditions in the PCP Standard Permit that specify how the [TCEQ] Director’s

253 The EPA notes that the Luminant court focused on the fact th at the director’s discretion provision included the discretion to require more of sources, if ther e “are health effects concerns or the potential to exceed the [NAAQS],” and th e court expressed that it did not understand why that requirement was not alone adequa te to allay the Agency’s concerns. Luminant , 675 F.3d 917, 929 n.11. The EPA’s primary concern, although not clearly articulate d in the rulemaking record, was that at the time of acting on the SI P submission, there was no way for the Agency to know in advance what the state would require of any source in the first in stance, let alone what additional things the state might require in situations where it unilaterally decided that more might be necessary in any given permit.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 300 of 539 discretion is to be implemented” for th e individual case-by-case determinations. 254 In other words, the EPA was being asked to approve a SIP provision without knowing how the SIP provision would actually be implemented and thus without knowing whet her the results would be consistent with applicable CAA requirements. As the commenters stated, the Luminant court vacated the EPA’s disapproval of the SIP submission for several reasons, including the rejec tion of the Agency’s argu ment that it could not approve the SIP submission due to the director’s discre tion feature of the SIP provisions and the resulting lack of “replicability.” 255 The court found that the EPA “failed to iden tify a single provision of the Act that Texas’s program violated, let alone expl ain its reasons for reaching its

conclusion.” 256 With respect to the director s’ discretion issue, phrased in terms of “replicability,” the court found that “[n]ot once in its proposed or final disapproval, or in its argument before this

254 See “Approval and Promulgation of Implementa tion Plans; Texas; Re visions to the New Source Review (NSR) State Implementation Plan (S IP); Prevention of Significant Deterioration (PSD), Nonattainment NSR (NNSR) for the 1997 8-Hour Ozone Standard, NSR Reform, and a Standard Permit; Proposed rule,” 74 FR 48467 at 48476 (September 23, 2009).

255 The term “replicable” was taken from EP A guidance concerning SIP provisions for attainment plans. As a “fundamental princi ple” for SIP provisions and permits, the EPA explained that the requirements impose d upon sources should be “replicable”; i.e. , if they contain “procedures for changing the rule, interpreting th e rule, or determining compliance with the rule, the procedures are sufficiently specific and nons ubjective so that tw o independent entities applying the same procedures would obtain the same result.” See General Preamble, 57 FR 13498 at 13568 (April 16, 1992). The EPA’s intent in using this term, although not clearly expressed in the rulemaking r ecord, has been to indicate th at a properly constructed SIP provision with an appropriate degree of discre tion and flexibility would contain sufficient specifications and limits on the exercise of that di scretion such that the Agency could adequately evaluate the provision at the time of its submi ssion. Absent sufficient limits on the discretion, the EPA could not properly evaluate how exercise of the discretion could affect compliance with CAA requirements. 256 Luminant , 675 F.3d 917, 924 (5th Cir. 2012).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 301 of 539 court, has the EPA pointed to any applicable provision of the Act or its regulations that include a ‘replicability’ standard.”

The EPA believes that the Luminant court’s decision is dist inguishable on several important grounds. Most importantly, the court rejected the EPA’s di sapproval of the SIP submission because the Agency had not provided an adequate explanation of why the director’s discretion provision at issue was inconsistent with the requirements of the CAA for SIP provisions. The Luminant court emphasized the absence of a ny explanation in the administrative record for the proposed or final actions that explained which specific provisions of the CAA preclude such a provision and why. In the Februa ry 2013 proposal and in this notice, the EPA has identified and explained the specific CAA provisions that operate to preclude unbounded director’s discretion pr ovisions in SIPs. Second, the Luminant court based its decision in part on the view that the specific director’s discretion provision at issue in that case would alwa ys result in more stringent regulation of affected sources and always entail exercise of the discretion in a way that would protect the NAAQS. 257 Although its view was not articulated clearly in the record, the EPA did not agree with that assessment because it was not possible to evaluate in advance how the director’s discretion authority woul d in fact be exercised. By cont rast, the SIP provisions at issue in this action are not structured in such a way as to allow the exercise of discretion only to make

the emission limitations more stringent . To the contrary, the director ’s discretion provisions at issue in this action authorize the state agencies to excuse sources from compliance with the

257 Luminant , 675 F.3d 917, 929 n.11 (“The provision at i ssues states: “This standard permit must not be used [if] the executive director determines there are health effects concerns or the potential to exceed a [NAAQS] . . . until those concerns are addre ssed to the satisfaction of the executive director.”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 302 of 539 otherwise applicable SIP emissi on limitation during SSM events. Were the sources seeking these discretionary exemptions meeting the applicable SIP emission limitations, they would not need an exemption. It logically follows that source s are seeking these exemptions because their emissions during such events are higher than th e otherwise applicable em ission limitation allows. Unlike the specific director’s disc retion provision at issue in the Luminant Generation v. EPA case, which the court said “can only serve to prot ect the NAAQS,” the exercise of the director’s discretion authority in the SIP pr ovisions at issue in th is action can operate to make the emission limitations less stringent and can thereby undermin e attainment and maintenance of the NAAQS, protection of PSD increments, improvement of visibility and achi evement of other CAA objectives.

In the Texas decision, the court evaluated the EPA’s disapproval of another SIP submission from the state of Texas that pertained to requirements for the permitting program for minor sources. The EPA had disapproved the submi ssion for several different reasons, including that the Agency believed the spec ific provisions at issue provided the state agency with too much director’s discretion authority to decide what, if any, monito ring, recordkeeping and reporting requirements should be imposed on any individu al affected source in its permit. The EPA

concluded that if at the time it was evalua ting the SIP provision for approval it could not reasonably anticipate how the state agency woul d exercise the discretion authorized in the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 303 of 539 provision, this made the submission unapprovable “for being too vague and not replicable.” 258

The Texas court disagreed. The court concluded that the “degree of discretion conferred on the TCEQ director cannot sustain th e EPA’s rejection of the MRR requirements” and that the EPA

insisted on “some undefined limit on a director’s di scretion . . . based on a standard that the CAA does not empower the EPA to enforce.” 259

The EPA believes that the decision of the court in Texas v. EPA is also distinguishable with respect to the issue of wh ether director’s discretion provis ions are consistent with CAA requirements. First, the Texas court based its decision primarily on the conclusion that the EPA had failed to identify and expl ain the provisions of the CAA th at (i) preclude approval of SIP provisions that include unbounded director’s discretion or (i i) impose a requirement for “replicability” in the exercise of director’s discretion. The Texas court emphasized that although the EPA disapproved the SIP submission for failur e to meet CAA requirements, the court found that the EPA “is yet to explain why.” 260 The court further reasoned that “the EPA has invoked

the term ‘director discretion’ as if that term we re an independent and au thoritative standard, and has not linked the term to language of the CAA.” 261 Later in the opinion the court explicitly emphasized that because it was reviewing the EPA’s decisionmaking process in the disapproval action, the court could not consider any basis for the disapproval that was not articulated by the EPA in the rulemaking record. 262 The EPA is explaining its inte rpretation of the relevant CAA provisions in this action.

258 Id. , 690 F.3d 670, 680. 259 Id. , 690 F.3d 670, 682. 260 Id. , 690 F.3d 670, 681. 261 Id. 262 Id. , 690 F.3d 670, 682.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 304 of 539 Second, the Texas court also asserted its own conclu sion that there is nothing in the CAA that pertains to direct or’s discretion in SIP provisions or to any limitations on the exercise of

such discretion. As th e court stated it: There is, in fact, no independent and au thoritative standard in the CAA or its implementing regulations requiring that a state director’s discretion be cabined in the way that the EPA suggests. Therefore, the EPA’s insistence on some undefined limit on a director’s discretion is . . . based on a sta ndard that the CAA does not empower the EPA to enforce. However, the court reached this conclusion base d upon the administrative record before it and reiterated that it could not consider any basis for the disapproval not ar ticulated by the EPA in the rulemaking record: “We are reviewing an agen cy’s decisionmaking process, so the agency’s action must be upheld, if at all, on the basis articulated by the agency itself.” 263 Given the court’s conclusion that the EPA had failed to provide any explanation as to why the CAA precludes director’s discretion provisions in the challenge d rulemaking, the EPA believ es that the court did not have the opportunity to consider the Agency’s rationale that is provided in this action. In the February 2013 proposal and in this notice, the EPA is heeding the court’s admonishment to explain in the rulemaking record the statutory basis for the Agency’s interpretation of the CAA to prohibit director’s discretion provisions that are inadequate ly bounded. As explained in this action, SIP provisions that functio nally authorize a state agency to amend existing SIP emission limitations applicable to a source unilaterally without a SIP revision are contrary to multiple specific provisions of the CAA th at pertain to SIP revisions. Third, the Texas court emphasized that, notwithstanding the apparent flexibility that the director’s discretion provision provided to the st ate agency with respect to deciding on the level

263 Id. , 690 F.3d 670, 682.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 305 of 539 of monitoring, recordkeeping and reporting to be imposed on each source by permit, the state’s regulations explicitly prohibited re laxations of the level of control. The court gave weight to the explicit wording of the specific pr ovision at issue in the case wh ich provided that “[t]he existing level of control may not be lessened for any facility.” 264 The EPA does not agree that the specific requirements for monitoring, recordkeeping and re porting for a given source are unrelated to the level of control. In any event, the director’s di scretion provisions of the type at issue in this

action are not limited to those that would not “lessen” the level of control. To the contrary, the provisions at issue in this SI P call action authorize state agen cy personnel to grant outright exemptions from otherwise applicable SIP em ission limitations during SSM events. Thus, the EPA concludes that this porti on of the reasoning of the Texas decision would not apply to the

current action. Finally, the Texas court viewed the fact that the EPA had previously approved similar director’s discretion provisions in Texas and in Georgia as eviden ce that such provisions must be consistent with CAA requirements. The EPA acknowledges that it has, from time to time, approved SIP submissions that it should not have, whether through failure to recognize an issue, through a misunderstanding of the facts, through a mistaken interpretation of the law or as a result of other such circumstances. Congress itself clearly recogni zed that the EPA may occasionally take incorrect action on SIP submissions , whether incorrect at the time of the action

or as a result of later events. Section 110(k)(5) and s ection 110(k)(6) both pr ovide the EPA with explicit authority to address past approvals of SIP submissions that turn out to have been mistakes, whether at the time of the original appr oval or as a result of later developments. The

264 Id. , 690 F.3d 670, 681.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 306 of 539 fact that the EPA has explicit au thority to issue a SIP call estab lishes that Congress anticipated that the Agency may at some point approve a SIP provision that it s hould not have approved because the provision is substantially inadequate to meet CAA requirements. The EPA does not agree, however, that its approval of a comparable SIP provision at some time in the past negates the Agency’s authority to disapprove a current SIP submission that fails to meet applicable procedural or substantive requirements. A challe nger of the disapproval can always argue that the inconsistency between the prior approval and the later disapproval is evidence that the EPA is being arbitrary and capricious in its interpretation of the st atute—but at bottom the correct question is whether the Agency is correctly interpreting the CAA in the disapproval action currently being challenged. The fact that the EPA may have approved another SIP submission with a comparable defect in the past does not override the requirements of the CAA. Significantly, the commenters apparently make the same mistake as the EPA did in the rulemakings at issue in the cited court decisi ons, by not adequately addressing the relevant statutory provisions that apply to SIP provisions in general and apply to revi sions of existing EPA-approved SIP provisions in particular. The co mmenters failed to consider the core problem

with unbounded director’s di scretion provisions ( i.e. , that such provisions allow for unilateral revision, relaxation or exemption from SIP emi ssion limitations, without adequate evaluation by the EPA and the public). As a result, the commen ters do not address the proper application of CAA provisions that govern SIP re visions and the rationale for re quiring that such SIP revisions be reviewed by the EPA in accordance with th e explicit requirements of sections 110(k)(3), 110(l) and 193 and the other requirements germane to the SIP provision at issue ( e.g. , RACTlevel controls for sources locat ed in nonattainment areas). Indeed, the commenters did not acknowledge the inherent problem with director’s disc retion provisions, which is that such*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 307 of 539 provisions have the potential to undermine SIP emission limit ations dramatically through ad hoc exemptions for excess emissions during SSM events. By allowing for exemptions for emissions during SSM events, these provisi ons also remove the incentives for sources to be properly designed, maintained and operated so that they will comply continuously with SIP emission limitations during all modes of source operation.

The EPA notes that the commenters did not acknowledge or address the specific explanation that the Agency provided in th e February 2013 proposal, including the EPA’s identification of the specific st atutory provisions applicable to the revision of SIP provisions.

Because these commenters did not address the EP A’s explanation of the CAA provisions that it interprets to preclude di rector’s discretion provisions in SIPs , the commenters have not provided substantive comment concerning the EPA’s inte rpretation of the CAA on this issue. The commenters did not dispute the EPA’s interpretation of the CAA on this particular point on statutory grounds. Rather, the commenters argue d based on their own policy preferences for an approach to director’s discretion provisions that would allow sources to receive ad hoc exemptions for excess emissions during SSM events without the need for imposition of an appropriate alternative SIP emission limitation, fo r adequate public proce ss for development of

such an alternative SIP emission limitation or fo r oversight by the EPA of any revision to the applicable SIP emission limitations as required by the CAA. e. Comments opposed to the EPA’s appr oach on the premise that there is no “director’s discretion” concern if the SIP provi sion creates a permit program through which state officials grant sources variances or exemptions from otherwise applicable SIP provisions.

Comment: State commenters argued that they ha ve imposed sufficient boundaries on the

exercise of director’s discretion provisions in their SIPs, by virtue of the fact that they grant*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 308 of 539 sources variances or exemptions from SIP emission limitations through a permitting program. Commenters stated that their permitting program provides a more structured process and an opportunity for public input into the decisions concerning variances or exemptions. Moreover, they argued that state law does provide preconditi ons to the granting of variances or exemptions and thus these are not grante d automatically. Based upon these procedural requirements, the

commenters contended that their exercise of director’s discre tion is not “unbounded” as the EPA suggested in the February 2013 proposal. The EPA acknowledges that a permitting progra m can provide a more structured and consistent process than may be provided in a SIP for granting variances and exemptions from SIP emission limitations and related requirement s and may provide more opportunity for public participation in those decisions. However, to the extent that the end resu lt of this permitting process is that a given source is given a less stringent emission limitation than the otherwise applicable SIP emission limitation or is given an outright exemption from the SIP emission limitation, this result still func tionally constitutes a revision of the SIP emission limitation without meeting the statutory re quirements for a SIP revision. The EPA is not authorized to approve a program that in essence allows a SIP revision without compliance with the applicable statutory requirements in sect ions 110(k)(3), 110(l) and 193 a nd any other provision that is germane to the particular SIP emission limitation at issue. The EPA emphasizes that air agencies always re tain the ability to regulate sources more stringently than required by the provisions in its SIP. Section 116 explicitly provides, with certain limited exceptions, that states retain the authority to regulate emissions from sources. Unless preempted from controlling a particular s ource, nothing precludes st ates from regulating sources more stringently than ot herwise required to meet CAA requirements, so long as they*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 309 of 539 meet CAA requirements. However, if there is an applicable emission limitation in a SIP provision (or an EPA regulation promulgated pursuant to se ctions 111 or 112), section 116 explicitly stipulates, “such Stat e or political subdivision may not adopt or enforce any emission

standard or emission limitation which is less stri ngent than the standard or limitation under such plan or limitation.” Thus, a state could elect to regulate a source more st ringently than required by a specific SIP emission limitation ( e.g. , by imposing a more stri ngent numerical emission limitation on a particular source or by impos ing additional recordkeeping, reporting and monitoring requirements in addition to those of the SIP provision), but th e state cannot weaken or eliminate the SIP emission limitation ( e.g., by granting exemptions from applicable SIP emission limitations for emissions during SSM even ts). If a state elects to alter an emission limitation in a SIP provision, the state must do so in accordance with the statutory provisions applicable to SIP revisions. Finally, the EPA notes, if a state elects to use a permitting process as a source-by-source means of imposing more stringent emission limitations or additional requirements on sources, doing so can be an acceptable approach. So long as the underlying SIP provisions are adequate to provide the requisite level of control or requireme nts to assure enforceability, a state is free to use a permitting program to impose additional requirements above and beyond those provided in

the SIP. D. Enforcement Discretion Provisi ons Pertaining to SSM Events 1. What the EPA Proposed In the February 2013 proposal, the EPA explaine d in detail that it be lieves that the CAA allows states to adopt SIP provisions that impose reasonable limits upon the exercise of enforcement discretion by air agency personnel, so long as those provisions do not apply to the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 310 of 539 EPA or other parties. The EPA believes that its interpretation of the CAA with respect to enforcement discretion provisions applicable to emissions during SSM events has been clear in the SSM Policy. In the 1982 SSM Guidance and the 1983 SSM Guidance, the EPA indicated that states could elect to adopt SIP provisions that include criteria that apply to the exercise of enforcement discretion by state personnel. In the 1999 SSM Guidance, the EPA emphasized that it would not approve such provisions if they w ould operate to impose the state’s enforcement discretion decisions upon the EPA or other parties because this would be inconsistent with requirements of title I of the CAA. 265 The EPA acknowledged, however, that both the states and the Agency have failed to adhere to the CAA with respect to this issue in the past, and thus the need for this SIP call action to correct the existing deficiencies in SIPs. 2. What is Being Finalized in This Action In order to be clear about this important point on a going-forward basis, the EPA is reiterating that SIP provisions cannot contain enforcement discre tion provisions that would bar enforcement by the EPA or citizens for any violati on of SIP requirements if the state elects not to

enforce.

265 See 1999 SSM Guidance at 3.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 311 of 539 The EPA has previously issued a SIP call to a state specifically for purposes of clarifying an existing SIP provision to assure that regu lated entities, regulator s and courts will not

misunderstand the correct inte rpretation of the provision. 266 As the EPA stated in that action: . . . SIP provisions that give exclusive aut hority to a state to determine whether an enforcement action can be pursued for an exceedance of an emission limit are inconsistent with the CAA’s regulatory scheme. EPA and citizens, and any court in which they seek to file an enforcement claim, must retain the authority to independently evaluate whether a sour ce’s exceedance of an emission limit warrants enforcement action. 267 3. Response to Comments a. Comments that supported the clarific ation of ambiguous enforcement discretion provisions in general but opposed the EPA’s view s with respect to sp ecific SIP provisions.

Comment: Environmental group commenters disagr eed with the EPA’s proposed denial of the Petition with respect to specific enforcement discretion pr ovisions in the SIPs of several

states. The commenters contended that the SI P provisions are too ambiguous for courts to recognize that the exercise of enforcement discretion by state personnel did not preclude enforcement by the EPA or others. Response: The EPA disagrees with these comments . In the February 2013 proposal, the EPA explained how it reads the specific enforcemen t discretion provisions in the SIPs of each of these states. The EPA explained its evaluation of these provisi ons in detail. In comments submitted on the February 2013 proposal, the states in question agreed with the EPA’s reading of the provisions. Each state agreed that these prov isions only applied to ai r agency personnel and

266 See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision,” 75 FR 70888 at 70892–93 (November 19, 2010) (proposed SIP call, inter alia , to rectify an enforcement discretion pr ovision that in fact appeared to bar enforcement by the EPA or citizens if the state decided not to enforce). 267 See id.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 312 of 539 not to the EPA or any other party. Thus, the EPA believes that there should be no dispute about the proper interpretation of these SIP provisions in any poten tial future enforcement action. b. Comments that opposed the EPA’s issui ng SIP calls to obta in state agency clarification of ambiguous enforcemen t discretion provisions in SIPs.

Comment: One commenter asserted that requi ring states to correct an ambiguous “enforcement discretion” provision in its SIP in order to eliminate “perceived ambiguity” is a “waste of resources.” Although agreeing that a st ate’s exercise of enforcement discretion cannot affect enforcement by the EPA or other parties under the citizen suit provision, the commenter believed that the existence of ambiguous provisions that could be misconstrued by a court to bar enforcement by the EPA or others if the state elec ts not to enforce is no t a significant concern. Response: The EPA agrees with the commenter that a state’s legitimate exercise of

enforcement discretion not to enforce in the event of violations of SIP provisions should have no bearing whatsoever on whether the EPA or others may seek to enforce for the same violations. However, the Agency disagrees with the comm enter concerning whether some SIP provisions

need to be clarified in order to assure that this principle is adhered to in practice in enforcement actions. For example, if on the face of an approved SIP provision the state appears to have the unilateral authority to decide that a specific even t is not a “violation” or if it otherwise appears that if the state elects not to pursue enforcement for such violation then no other party may do so, then that SIP provision fails to meet fundament al legal requirements for enforcement under the CAA. If the SIP provision appears to provide that the decision of the state not to enforce for an

exceedance of the SIP emission limit bars the EPA or others from bringing an enforcement action, then that is an impermissible imposition of the state’s enforcement discretion decisions on other parties. The EPA has previously issued a SI P call to resolve just such an ambiguity, and its*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 313 of 539 authority to do so has been upheld. 268 Given that the commenter agrees with the underlying principle that a state’s exercise of enforcement discretion should have no bearing on the exercise of enforcement authority of the EPA or citizens, the Agency presumes that the commenter would not in fact oppose a SIP revision to clarify that point. Moreover, the commenter would not be harmed by such a SIP revision and would have no basis upon which to challenge it. As the clarification of the ambiguous SI P provision should be in the in terest of all involved, including the regulated entities, th e regulators and the public, the EPA doe s not believe that resources used to eliminate such ambiguities would be wasted. E. Affirmative Defense Provisions in SIPs During Any Period of Operation As explained in detail in the SNPR, the EPA believes that the CAA prohibits affirmative defense provisions in SIPs. The EPA acknow ledges that since the 1999 SSM Guidance, the Agency had interpreted the CAA to allow narrowly tailored affirmative defense provisions. However, the EPA’s interpretation of the statute was based on arguments that have since been rejected by the D.C. Circuit in the NRDC v. EPA decision. The EPA received a substantial number of comments, both supportive and adverse, concerning the issue of affirmative defense provisions in SIPs. These comments and the EPA’ s responses to them are discussed in section

IV.D of this notice. F. Relationship Between SIP Provisions and Title V Regulations As the EPA explained in the February 2013 pr oposal, the SIP provisions identified in the Petition highlighted an area of potential ambi guity or conflict between the SSM Policy applicable to SIP provisions a nd the EPA’s regulations applic able to CAA title V operating

268 See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision; Proposed rule,” 76 FR 21639 (April 18, 2011).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 314 of 539 permit provisions. The EPA has promulgated regulat ions in 40 CFR part 70 applicable to state operating permit programs and in 40 CFR part 71 applicable to federal operating permit

programs. 269 Under each set of regulations, the EPA ha s provided that permits may contain, at the permitting authority’s discretion, an “emergency provision.” 270 The regulatory parameters applicable to su ch emergency provisions in operating permits are the same for state operating permit progra m regulations and the federal operating permit program regulations. The definiti on of emergency is identical in the regulations for each

program: An “emergency” means any situation arising from sudden and reasonably unforeseeable events beyond the control of the source, including acts of God, which situation requires immediate corrective action to restore normal operation, and that causes the source to exceed a technology-based emission limitation under the permit, due to unavoidable increase s in emissions attributable to the emergency. An emergency shall not incl ude noncompliance to the extent caused by improperly designed equipment, lack of preventative maintenance, careless or improper operation or operator error. 271 Thus, if there is an emergency event mee ting the regulatory definition, then the EPA’s regulations for operating permit programs provide for an “affirmative defense” to enforcement for noncompliance with technology -based standards during the em ergency event, provided the source can demonstrate through specified forms of evidence that the event and the permittee’s actions during and after the event me t a number of specific requirements. 272

269 See 40 CFR sections 70.1–70.12; 40 CFR sections 71.1–71.27. 270 See 40 CFR 70.6(g); 40 CFR 71.6(g). The EPA also notes that states are no t required to adopt the “emergency provision” contained in 40 CFR 70.6(g) into their state operating permit programs, and many states have chosen not to do so. See, e.g., “Clean Air Act Full Approval of Partial Operating Permit Program; Allegheny County; Pennsylvania; Direct Final Rule,” 66 FR 55112 at 55113 (November 1, 2001). 271 See 40 CFR 70.6(g)(1); 40 CFR 71.6(g)(1). 272 40 CFR 70.6(g)(3); 40 CFR 71.6(g)(3).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 315 of 539 The Petitioner did not directly request that the EPA evaluate the existing regulatory provisions applicable to operati ng permits in 40 CFR part 70 and 40 CFR part 71, and the EPA is not revising those provisions in this action. In its February 2013 proposal, the EPA explained that while it was proposing to allow narrowl y drawn affirmative defense provisions for malfunctions in SIPs, SIP provisions that were modeled after the regula tions in 40 CFR part 70 and 40 CFR part 71 were still in conflict with the EPA’s interpretation of the CAA for SIP provisions and thus could not be allowed. 273 However, as explained in the SNPR, the reasoning in the subsequent NRDC v. EPA court decision is that even narro wly defined affirmative defense provisions in SIPs are no l onger consistent with the CAA. 274 Accordingly, regardless of whether affirmative defense provisions in SIPs were defined more narro wly than were the provisions applicable to operating permits under 40 CFR pa rt 70 and 40 CFR part 71, they cannot be

included in SIPs. For these reas ons, the EPA has evaluated the sp ecific SIP provisions identified in the Petition and is taking final action to find s ubstantial inadequacy and to issue a SIP call for those SIP provisions that include features that are inappropriate for SIPs, regardless of whether those provisions contain term s found in other regulations. Additionally, we are not taki ng action in this rulemaking to alter the emergency provisions found in 40 CFR part 70 and 40 CFR part 71. Those regulations, which are applicable to title V operating permits, may only be change d through appropriate rulemaking to revise parts 70 and 71. Further, any existing permits that co ntain such emergency provisions may only be changed through established permitting procedures . The EPA is considering whether to make changes to 40 CFR part 70 and 40 CFR part 71, and if so, how best to make those changes. In

273 See February 2013 proposal, 78 FR 12459 at 12481–82. 274 See SNPR, 79 FR 55919 at 55929–30.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 316 of 539 any such action, EPA would also intend to addre ss the timing of any changes to existing title V operating permits. Until that time, as part of normal permitting process, the EPA encourages permitting authorities to consider the discretiona ry nature of the emergency provisions when determining whether to continue to include permit terms modeled on those provisions in operating permits that the permitting authorities ar e issuing in the first instance or renewing. G. Intended Effect of the EPA’s Action on the Petition As in the 2001 SSM Guidance, the EPA is ende avoring to be particul arly clear about the

intended effect of its final acti on on the Petition, of its clarifications and revisions to the SSM Policy and of its application of the updated SSM Policy to the specific existing SIP provisions

discussed in section IX of this document. First, the EPA only intends its actions on the larger policy or legal issues raised by the Petitioner to inform the public of the EPA’s curr ent views on the requirements of the CAA with respect to SIP provisions related to SSM events. Thus, for example, the EPA’s proposed grant of the Petitioner’s request that the EPA interpre t the CAA to disallow all affirmative defense provisions is intended to convey that the EPA has changed its vi ews about such provisions and that its prior views expresse d in the 1999 SSM Guidance a nd related rulemakings on SIP submissions were incorrect. In this fashion, the EPA’s action on the Pe tition provides updated guidance relevant to future SIP actions. Second, the EPA only intends its actions on the specific existing SIP pr ovisions identified in the Petition to be applicable to those provisions. The EPA does not intend its action on those specific provisions to alter the current status of any other existing SIP pr ovisions relating to SSM events. The EPA must take later rulemaking acti ons, if necessary, in order to evaluate any comparable deficiencies in other existing SIP pr ovisions that may be inconsistent with the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 317 of 539 requirements of the CAA. Again, however, the EPA’s actions on the Petition provide updated guidance on the types of SIP provisions that it believes would be consistent with CAA requirements in future rulemaking actions. Third, the EPA does not intend its action on the Petition to affect immediately any existing permit terms or conditions regarding ex cess emissions during SSM events that reflect previously approved SIP provision s. The EPA’s finding of substant ial inadequacy and a SIP call for a given state provides the state time to revi se its SIP in response to the SIP call through the necessary state and federal administrative process. Thereafter, any needed revisions to existing permits will be accomplished in the ordinary course as the state issues new permits or reviews and revises existing permits. The EPA does not intend the issuance of a SIP call to have automatic impacts on the terms of any existing permit. Fourth, the EPA does not intend its action on th e Petition to alter the emergency defense provisions at 40 CFR 70 .6(g) and 40 CFR 71.6(g), i.e., the title V regulations pertaining to “emergency provisions” permissible in title V operating permits. The EPA’s regulations applicable to title V operating permits may only be changed through appropriate rulemaking procedures and existing permit terms may onl y be changed through established permitting

processes. Fifth, the EPA does not intend its interpretations of the requirements of the CAA in this action on the Petition to be legally dispositive with respect to a ny particular current enforcement proceedings in which a violation of SIP emissi on limitations is alleged to have occurred. The EPA handles enforcement matters by assessi ng each situation, on a case-by-case basis, to determine the appropriate respons e and resolution. For purposes of alleged violations of SIP*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 318 of 539 provisions, however, the terms of the applicable SIP provision will continue to govern until that provision is revised following the appropriate process for SIP revisi ons, as required by the CAA. Finally, the EPA does intend this final acti on, developed through no tice and comment, to

be the statement of its most current SSM Polic y, reflecting the EPA’s interpretation of CAA requirements applicable to SIP pr ovisions related to excess emissi ons during SSM events. In this regard, the EPA is adding to and clarifying its prior statements in the 1999 SSM Guidance and making the specific changes to that guidance as di scussed in this action. Thus, this final notice

for this action will constitute the EPA’s SSM Policy on a going-forward basis. VIII. Legal Authority, Process and Timing for SIP Calls A. SIP Call Authority U nder Section 110(k)(5) 1. General Statutory Authority The CAA provides a mechanism for the corr ection of flawed SI Ps, under CAA section 110(k)(5), which provides: (5) Calls for plan revisions

Whenever the Administrator finds that the applicable implementation plan for any area is substantially inadequate to attain or maintain the relevant national ambient air quality standards, to mitiga te adequately the interstate pollutant transport described in section [176A] of this title or secti on [184] of this title, or to otherwise comply with any requirement of [the Act], the Administrator shall require the State to revise the plan as n ecessary to correct such inadequacies. The Administrator shall notify the State of the inadequacies and may establish reasonable deadlines (not to exceed 18 months after the date of such notice) for the submission of such plan revisions. By its explicit terms, this pr ovision authorizes the EPA to fi nd that a state’s existing SIP is “substantially inadequate” to meet CAA requi rements and, based on that finding, to “require*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 319 of 539 the State to revise the [SIP] as necessary to corr ect such inadequacies.” This type of action is commonly referred to as a “SIP call.” 275 Significantly, CAA section 110(k)(5) explicitly authorizes the EPA to issue a SIP call “whenever” the EPA makes a finding that the ex isting SIP is substantially inadequate, thus providing authority for the EPA to take action to correct existing inadequate SIP provisions even long after their initial ap proval, or even if the provisions only become inadequate due to subsequent events. 276 The statutory provision is worded in the present tens e, giving the EPA authority to rectify any deficiency in a SIP that currently exists, regardless of the fact that the EPA previously approved that particular provision in the SIP and regardless of when that approval occurred.

275 The EPA also has other discretionary authority to address incorrect SI P provisions, such as the authority in CAA section 110(k)(6) for the EPA to correct errors in prior SIP approvals. The authority in CAA section 110(k)(5) and CAA sec tion 110(k)(6) can sometimes overlap and offer alternative mechanisms to address problematic SI P provisions. In this instance, the EPA believes that the mechanism provided by CAA section 110(k )(5) is the better approach, because using the mechanism of the CAA section 110( k)(6) error correction would el iminate the affected emission limitations from the SIP potentially leaving no emission limitation in place, whereas the mechanism of the CAA section 110(k)(5) SIP call will keep the provisions in place during the pendency of the state’s revision of the SIP and the EPA’s action on that revision. In the case of provisions that include impermissible automatic exemptions or discretionary exemptions, the EPA believes that retention of the existing SIP provision is preferable to the absence of the provision in the interim. 276 See, e.g. , Michigan v. EPA , 213 F.3d 663 (D.C. Cir. 2000) (upholding the “NOx SIP Call” to states requiring revisions to prev iously approved SIPs with respect to ozone transport and section 110(a)(2)(D)(i)(I)); “A ction to Ensure Authority To Issu e Permits Under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP Call; Fina l Rule,” 75 FR 77698 (December 13, 2010) (the EPA issued a SIP call to 13 states because the endangerment finding for GHGs meant that these previously approved SIPs were substantially in adequate because they did not provide for the regulation of GHGs in the PSD permitting programs of these states as required by CAA section 110(a)(2)(C) and section 110(a)(2)(J )); “Finding of Substantial In adequacy of Implementation Plan; Call for Utah State Implementati on Plan Revision,” 74 FR 21639 (April 18, 2011) (the EPA issued a SIP call to rectify SI P provisions dating back to 1980).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 320 of 539 It is also important to empha size that CAA section 110(k)(5) expressly directs the EPA to take action if the SIP provision is substantially inadequate, not just for purposes of attainment or maintenance of the NAAQS but also for purposes of “any requirement” of the CAA. The EPA interprets this reference to “any requirement” of the CAA on its face to authorize reevaluation of an existing SIP provision for compliance with th ose statutory and regulatory requirements that are germane to the SIP provision at issue. Thus, for example, a SIP provision that is intended to be an “emission limitation” for purposes of a nonattainment plan for purposes of the 1997 PM 2.5 NAAQS must meet various a pplicable statutory and regul atory requirements, including requirements of CAA section 110(a)(2)(A) such as enforceability, the definition of the term “emission limitation” in CAA section 302(k), the leve l of emissions control required to constitute a “reasonably available control measure” in C AA section 172(c)(1) and the other applicable statutory requirements for th e implementation of the 1997 PM 2.5 NAAQS. Failure to meet any of those applicable requirements coul d constitute a substantial inad equacy suitable for a SIP call, depending upon the facts and circumstances. By cont rast, that same SIP pr ovision should not be expected to meet specifications of the CAA th at are completely irrelevant for its intended purpose, such as the unrelated requirement of CAA section 110(a)(2)(G) that the state have general legal authority comparable to CAA section 303 for emergencies. Use of the term “any requirement” in CAA s ection 110(k)(5) also re flects the fact that SIP provisions could be substantially inadequa te for widely differi ng reasons. One provision might be substantially inadequate because it fa ils to prohibit emissions that contribute to violations of the NAAQS in downwind areas many states away. Another provision, or even the same provision, could be substantia lly inadequate because it also infringes on the legal right of members of the public who live ad jacent to the source to enfor ce the SIP. Thus, the EPA has*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 321 of 539 previously interpreted CAA section 110(k)(5) to au thorize a SIP call to r ectify SIP inadequacies of various kinds, both broad and narrow in terms of the scope of the SI P revisions required. 277 On its face, CAA section 110(k)(5) authorizes the EPA to take action with respect to SIP provisions that are substantia lly inadequate to meet any CAA requirements, including requirements relevant to the proper treatment of excess emissions during SSM events. An important baseline question is whether a given deficiency rende rs the SIP provision “substantially inadequate.” The EP A notes that the term “substantia lly inadequate” is not defined in the CAA. Moreover, CAA section 110(k)(5) does not specify a particular form of analysis or methodology that the EPA must use to evaluate SIP provisions for substantial inadequacy. Thus,

under Chevron step 2, the EPA is authorized to inte rpret this provision reasonably, consistent with the provisions of the CAA. In addition, the EPA is authorized to ex ercise its discretion in applying this provision to determine whether a gi ven SIP provision is substantially inadequate. To the extent that the term “substantially inad equate” is ambiguous, the EPA believes that it is reasonable to interpret the term in light of th e specific purposes for which the SIP provision at

277 See, e.g. , “Finding of Significant Co ntribution and Rulemaking fo r Certain States in the Ozone Transport Assessment Group Region for Pu rposes of Reducing Regional Transport of Ozone,” 63 FR 57356 (October 27, 1998) (the EPA issued a SIP call to 23 states requiring them to rectify the failure to address interstate transport of pollutants as required by section 110(a)(2)(D); “Finding of Substant ial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision,” 74 FR 21639 (April. 18, 2011) (the EPA issued a SIP call to one state requiring it to rectify severa l very specific SIP provisions).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 322 of 539 issue is required, and thus whether the pr ovision meets the fundamental CAA requirements applicable to such a provision. The EPA does not interpret CAA section 110(k)(5 ) to require a showing that the effect of a SIP provision that is facially inconsistent w ith CAA requirements is causally connected to a particular adverse impact. For example, the plain language of CAA section 110(k)(5) does not require direct causal evidence that excess emi ssions have occurred during a specific malfunction at a specific source and have lite rally caused a violation of the NAA QS in order to conclude that the SIP provision is substantially inadequate. 278 A SIP provision that purp orts to exempt a source from compliance with applicable emission lim itations during SSM events, contrary to the requirements of the CAA for continuous em ission limitations, does not become legally permissible merely because there is not defini tive evidence that any excess emissions have resulted from the exemption and have li terally caused a specific NAAQS violation. 279 Similarly, the EPA does not interpret CAA s ection 110(k)(5) to require direct causal evidence that a SIP provision that improperly unde rmines enforceability of the SIP has resulted

278 See US Magnesium, LLC v. EPA , 690 F.3d 1157 (10th Cir. 2012) (upholding the EPA’s interpretation of section 110( k)(5) to authorize a SIP call when the SIP provisions are inconsistent with CAA requirements). 279 The EPA notes that the GHG SIP call did not require “proof” that the failure of a state to address GHGs in a given PSD permit “caused” pa rticularized environmental impacts; it was sufficient that the state’s SIP failed to meet the current funda mental legal requirements for regulation of GHGs in accordance with the CAA. See “Action to Ensure Authority To Issue Permits Under the Prevention of Significant De terioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inade quacy and SIP Call; Final Rule,” 75 FR 77698 (December 13, 2010).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 323 of 539 in a specific failed enforcement attempt by a ny party. A SIP provision th at has the practical effect of barring enforcement by the EPA or thr ough a citizen suit, either because it would bar enforcement if an air agency elects to grant a discretionary exemption or to exercise its own enforcement discretion, is inconsistent w ith fundamental requirements of the CAA. 280 Such a provision also does not become legally permissi ble merely because there is not definitive evidence that the state’s action literally undermin ed a specific attempted enforcement action by other parties. Indeed, the EPA notes that these impediments to effective enforcement likely have a chilling effect on potential enforcement in general. The possibility for effective enforcement of emission limitations in SIPs is itself an impor tant principle of the CAA, as embodied in CAA

sections 113 and 304. The EPA’s interpretation of CAA section 110(k) (5) is that the fundamental integrity of the CAA’s SIP process and structure are undermined if emission limitations relied upon to meet CAA requirements related to protection of public health and the environment can be violated without potential recourse. For example, the EPA does not believe that it is authorized to issue a SIP call to rectify an impermissible automatic ex emption provision only af ter a violation of the NAAQS has occurred, or only if that NAAQS vi olation can be directly linked to the excess emissions that resulted from the impermissibl e automatic exemption by a particular source on a particular day. If the SIP contains a provision that is inconsistent with fundamental requirements of the CAA, that renders the SIP pr ovision substantially inadequate.

280 See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision,” 74 FR 21639 at 21641 (April 18, 2011); see also US Magnesium, LLC v. EPA , 690 F.3d 1157, 1168 (10th Cir. 2012) (upholding the EPA’s interpretation of section 110(k)(5 ) to authorize a SIP call when th e state’s SIP provision worded so that state decisions whether a given excess em issions event constituted a violation interfered with enforcement by the EPA or citizens for such event).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 324 of 539 The EPA notes that CAA section 110(k)(5) can also be an appropria te tool to address ambiguous SIP provisions that c ould be read by a court in a way that would violate the requirements of the CAA. For example, if an existing SIP provision concerning the state’s

exercise of enforcement discre tion is sufficiently ambiguous that it could be construed to preclude enforcement by the EPA or through a citizen suit if the state elec ts to deem a given SSM event not a violation, then that could rend er the provision substantially inadequate by interfering with the enfor cement structure of the CAA. 281 If a court could construe the ambiguous SIP provision to bar enforcement, then the EPA believes that it may be appropriate to take action to eliminate that uncertainty by re quiring the state to re vise the ambiguous SIP provision. Under such circumstances, it may be a ppropriate for the EPA to issue a SIP call to assure that the SIP provisions are sufficiently clear and consistent with CAA requirements on

their face. 282 In this instance, the Petition raised questi ons concerning the adequacy of existing SIP provisions that pertain to th e treatment of excess emissions during SSM events. The SIP provisions identified by the Petitioner generally fa ll into four major categories: (i) automatic

281 Courts have on occasion interp reted SIP provisions to limit the EPA’s enforcement authority as a result of ambiguous SIP provisions. See, e.g. , U.S. v. Ford Motor Co. , 736 F.Supp. 1539 (W.D. Mo. 1990) and U.S. v. General Motors Corp. , 702 F. Supp. 133 (N.D. Texas 1988) (the EPA could not pursue enforcement of SIP em ission limitations where states had approved alternative emission limitations under proced ures the EPA had approved in the SIP); Florida Power & Light Co. v. Costle , 650 F.2d 579, 588 (5th Cir. 1981) (the EPA to be accorded no discretion in interpreting state law). The EPA does not agree with the holdi ngs of these cases, but they illustrate why it is reasona ble to eliminate any uncertainty about enforcement authority by requiring a state to remove or revi se a SIP provision that could be r ead in a way inconsistent with the requirements of the CAA. 282 See US Magnesium, LLC v. EPA , 690 F.3d 1157, 1170 (10th Cir. 2012) (upholding the EPA’s use of SIP call authority in order to clarify language in the SIP that could be read to violate the CAA, even if a court has not yet inte rpreted the language in that way).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 325 of 539 exemptions; (ii) exemptions as a result of director’s di scretion; (iii) provisions that appear to bar enforcement by the EPA or through a citizen suit if the state decides not to enforce through exercise of enforcement discretion; and (iv) a ffirmative defense provisions that purport to limit or eliminate a court’s jurisdiction to assess liab ility and impose remedies for exceedances of SIP

emission limitations. The EPA believes that each of these types of SIP deficiency potentially justifies a SIP call pursuant to CAA section 110(k)(5), if the Agency determines that a SIP call is the proper means to rectify an ex isting deficiency in a SIP. 2. Substantial Inadequacy of Automatic Exemptions The EPA believes that SIP provisions that provide an automatic exemption from otherwise applicable emission limitations ar e substantially inadequate to meet CAA requirements. A typical SIP provisi on that includes an impermi ssible automatic exemption would provide that a source has to meet a specific emission limitatio n, except during startup, shutdown and malfunction, and by definition any excess em issions during such events would not be

violations and thus there could be no enfor cement based on those excess emissions. The EPA’s interpretation of CAA requirements for SIP provi sions has been reiterated multiple times through the SSM Policy and actions on SIP submissions that pertain to this issue. The EPA’s longstanding view is that SIP pr ovisions that include automatic exemptions for excess emissions during SSM events, such that the excess emissi ons during those events are not considered violations of the applicable emission limita tions, do not meet CAA requirements. Such exemptions undermine the attainment and ma intenance of the NAAQS, protection of PSD increments and improvement of visibility, and SI P provisions that include such exemptions fail to meet these and other fundamental requirements of the CAA.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 326 of 539 The EPA interprets CAA sections 110(a)(2)(A ) and 110(a)(2)(C) to require that SIPs contain “emission limitations” to meet CAA requi rements. Pursuant to CAA section 302(k),

those emission limitations must be “continuous .” Automatic exemptions from otherwise applicable emission limitations t hus render those limits less than continuous as required by CAA sections 302(k), 110(a )(2)(A) and 110(a)(2 )(C), thereby inconsiste nt with a fundamental requirement of the CAA and thus substantially inadequate as contempl ated in CAA section 110(k)(5). This inadequacy has far-reaching impacts. For example, air agencies rely on emission limitations in SIPs in order to provide for a ttainment and maintenance of the NAAQS. These emission limitations are basic building blocks fo r SIPs, often used by ai r agencies to meet various requirements including: (i) in the estimates of emissions for emissions inventories; (ii) in

the determination of what level of emissions meets various statutory requirements such as “reasonably available control measures” in nonattainment SIPs or “best available retrofit technology” in regional haze SIPs; and (iii) in cr itical modeling exercises such as attainment demonstration modeling for nonattainment areas or increment use for PSD permitting purposes. Because the NAAQS are not directly enforceable against individual sources, air agencies rely on the adoption and enforcement of these gene ric and specific emission limitations in SIPs in order to provide for attainment and maintena nce of the NAAQS, protection of PSD increments and improvement of visibility, and to meet other CAA requirements. Automatic exemption provisions for excess emissions eliminate the possibility of enforcement for what would

otherwise be clear violations of the relied-upon emission limitations and thus eliminate any opportunity to obtain injunctive relief that may be needed to protect the NAAQS or meet other CAA requirements. Likewise, the elimination of any possibility for penalties for what would*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 327 of 539 otherwise be clear violations of the emission limitations, regardless of the conduct of the source, eliminates any opportunity fo r penalties to encourage ap propriate design, operation and maintenance of sources and to encourage efforts by source operators to prevent and to minimize excess emissions in order to protect the NAAQS or to meet other CAA requirements. Removal of this monetary incentive to comply with the SIP reduces a source’ s incentive to design, operate, and maintain its facility to meet emission limitations at all times. 3. Substantial Inadequacy of Dir ector’s Discretion Exemptions The EPA believes that SIP provisions that allo w discretionary exemptions from otherwise applicable emission limitations are substantiall y inadequate to meet CAA requirements for the same reasons as automatic exemptions, but for additional reasons as well. A typical SIP provision that includes an impe rmissible “director’s discretio n” component would purport to authorize air agency personnel to modify exis ting SIP requirements under certain conditions,

e.g. , to grant a variance from an otherwise applicab le emission limitation if the source could not meet the requirement in certain circumstances. 283 If such provisions are sufficiently specific, provide for sufficient public process and are su fficiently bounded, so that it is possible to anticipate at the time of the EP A’s approval of the SIP provision how that provision will actually be applied and the potential adverse impacts thereo f, then such a provision might meet basic CAA requirements. In essence, if it is possible to anticipate and evaluate in advance how the exercise of enforcement discretion could impact compliance with other CAA requirements, then

283 The EPA notes that problematic “director’s discretion” provisions are not limited only to those that purport to authorize alternative emi ssion limitations from those required in a SIP. Other problematic director’s discretion provisions could include t hose that purport to provide for discretionary changes to other substantive requirement s of the SIP, such as applicability, operating requirements, recordkeeping requirement s, monitoring requirements, test methods, and alternative compliance methods.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 328 of 539 it may be possible to determine in advance that th e preauthorized exercise of director’s discretion will not interfere with other CAA requirements, such as providing for attainment and maintenance of the NAAQS. Most director’s disc retion-type provisions ca nnot meet this basic

test. Unless it is possible at the time of the appr oval of the SIP provision to anticipate and analyze the impacts of the potenti al exercise of the director ’s discretion, such provisions functionally could allow de facto revisions of the approved emi ssion limitations required by the SIP without complying with the process for SIP revisions required by the CAA. Sections 110(a)(1) and (2) of the CAA impos e procedural requirements on stat es that seek to amend SIP provisions. The elements of CA A section 110(a)(2) and other sections of the CAA, depending upon the subject of the SIP provision at issue, im pose substantive requireme nts that states must meet in a SIP revision. Section 110(i) of the C AA prohibits modification of SIP requirements for stationary sources by either the state or the EPA, except through specified processes. 284 Section

284 Section 110(i) of the Act stat es that “no order, suspension, plan revision or other action modifying any requirement of an applicable impl ementation plan may be taken with respect to any stationary source by the State or by the Admi nistrator” except in compliance with the CAA’s requirements for promulgation or revisi on of a plan, with limited exceptions. See, e.g.,

“ Approval and Disapproval and Promulgation of Air Quality Implementation Plans; Colorado; Revisions to Regulation 1; Notice of proposed rulemaking,” 75 FR 42342 at 42344 (July 21, 2010) (proposing to disapprove “director discre tion” provisions as inconsistent with CAA requirements and noting that “[s]ection 110(i) sp ecifically prohibits States, except in certain limited circumstances, from taking any action to modi fy any requirement of a SIP with respect to any stationary source, except through a SIP revision”), fina lized as proposed at 76 FR 4540 (January 26, 2011); “Corrections to the California State Impl ementation Plan,” 69 FR 67062 at 67063 (November 16, 2004) (noting that “a state- issued variance, though binding as a matter of State law, does not prevent EPA from enforci ng the underlying SIP provi sions unless and until EPA approves that varian ce as a SIP revision”); Industrial Environmen tal Association v. Browner , No. 97-71117 at n.2 (9th Cir. May 26, 2000) ( noting that the EPA has consistently treated individual variances gran ted under state variance provisions as “modifications of the SIP requiring independent EPA approval”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 329 of 539 110(k) of the CAA imposes procedural and s ubstantive requirements on the EPA for action upon any SIP revision. Sections 110(l) and 193 of the CAA both impos e additional procedural and substantive requirements on the state and the EP A in the event of a SIP revision. Chief among these many requirements for a SIP revision would be the necessary demonstration that the SIP revision in question would not interfere with any requirement con cerning attainment and reasonable further progress or “any other applic able requirement of” the CAA to meet the requirements of CAA section 110(l). Congress presumably imposed these many explicit requirements in order to assure that there is adequate public process at both the air agency and federal level for any SIP revision and to assure that any SIP revision meets the appl icable substantive requirements of the CAA. Although no provision of the CAA explicitly addr esses whether a “director’s discretion” provision by that term is acceptable, the EPA inte rprets the statute to prohibit such provisions unless they would be consistent with the statutory and regulatory requirements that apply to SIP

revisions. 285 A SIP provision that purports to give broad and unbounded director’s discretion to alter the existing legal requireme nts of the SIP with respect to meeting emission limitations would be tantamount to allowing a revision of the SIP without mee ting the applicable procedural

285 See, e.g., EPA’s implementing regulations at 40 CFR 51.104(d) (“In order for a variance to be considered for approval as a revision to the [SIP ], the State must submit it in accordance with the requirements of this section”) and 51.105 (“Revisions of a plan, or any portion thereof, will not be considered part of an applicable plan until such revisions have been approved by the Administrator in accordan ce with this part.”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 330 of 539 and substantive requirements for such a SIP re vision. The EPA’s approval of a SIP provision that purported to allow unilateral revisi ons of the emission limitations in the SIP by the state, without complying with the statutory requirements for a SIP revision, would itself be contrary to fundamental procedural and substant ive requirements of the CAA. For this reason, the EPA has long discourag ed the creation of new SIP provisions containing an impermissible direct or’s discretion feature and has also taken actions to remove existing SIP provisions that it ha d previously approved in error. 286 In recent years, the EPA has also recommended that if an air agency elects to have SIP provisions th at contain a director’s discretion feature, then to be consistent with CAA requirements the provisions must be structured so that any resulting variances or other deviations from the emission limitation or other SIP requirements have no federal law validity, unless and until the EPA specifically approves that exercise of the director’s disc retion as a SIP revision. Barring such a later ratification by the EPA through a SI P revision, the exercise of dir ector’s discreti on is only valid for state (or tribal) law purposes and would have no bearing in th e event of an action to enforce the provision of the SIP as it was originally approved by the EPA.

286 See, e.g. , “Approval and Disapproval and Promulgati on of Air Quality Implementation Plans; Colorado; Revisions to Regula tion 1,” 76 FR 4540 (January 26, 2011) (partial disapproval of SIP submission based on inclusion of impermissible dire ctor’s discretion provisions); “Correction of Implementation Plans; American Samoa, Ariz ona, California, Hawaii, and Nevada State Implementation Plans; Notice of proposed rulemaking,” 61 FR 38664 (July 25, 1996) (proposed SIP correction to remove, pursuant to CAA sec tion 110(k)(6), several variance provisions from American Samoa, Arizona, California, Hawaii, and Nevada SIPs), finalized at 62 FR 34641 (June 27, 1997); “Approval and Promulgation of Implementation Plans; Corrections to the Arizona and Nevada State Implementation Plan s,” 74 FR 57051 (November 3, 2009) (direct final rulemaking to remove, pursuant to CAA section 110(k)(6), variance provis ions from Arizona and Nevada SIPs).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 331 of 539 The EPA’s evaluation of the specific SIP provisi ons of this type identified in the Petition indicates that none of them pr ovides sufficient process or sufficient bounds on the exercise of director’s discretion to be permissible. Most on their face would allow potentially limitless exemptions from SIP requirements with potentially dramatic adverse impacts inconsistent with the objectives of the CAA. More importantly, however, each of the identified SIP provisions goes far beyond the limits of what might theore tically be a permissibl e director’s discretion provision, by authorizing state pers onnel to create case-by-case ex emptions from the applicable emission limitations or other requirements of the SIP for excess emissions during SSM events. Given that the EPA interprets the CAA not to allow exemptions from SIP emission limitations for excess emissions during SSM events in the fi rst instance, it follows that providing such exemptions through the ad hoc mechanism of a director’s di scretion provision is also not permissible and compounds the problem. As with automatic exemptions for excess em issions during SSM events, a provision that allows discretionary exemptions would not meet the statutory requirements of CAA sections 110(a)(2)(A) and 110(a)(2)(C) that require SIPs to contain “emi ssion limitations” to meet CAA requirements. Pursuant to CAA section 302(k), those emission limitations must be “continuous.” Discretionary exemptions from otherwise applicab le emission limitations render those limits less than continuous, as is required by CAA sec tions 110(a)(2)(A) and 110( a)(2)(C), and thereby

inconsistent with a fundamental requirement of the CAA and thus substantially inadequate as contemplated in section CAA 110(k)(5). Such exemptions undermine the objectives of the CAA such as protection of the NAAQS and PSD increm ents, and they fail to meet other fundamental requirements of the CAA.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 332 of 539 In addition, discretionary exemptions undermin e effective enforcement of the SIP by the EPA or through a citizen suit, because often ther e may have been little or no public process concerning the exercise of director’s discreti on to grant the exemptions, or easily accessible documentation of those exemptions, and thus even ascertaining the possible existence of such ad

hoc exemptions will further burden parties who seek to evaluate whether a given source is in compliance or to pursue enforcement if it appears th at the source is not. Where there is little or no public process concerning such ad hoc exemptions, or there is inadequate access to relevant documentation of those exemptions, enforcemen t by the EPA or through a citizen suit may be severely compromised. As explained in the 199 9 SSM Guidance, the EPA does not interpret the CAA to allow SIP provisions that would allow th e exercise of directo r’s discretion concerning violations to bar enforcement by the EPA or thr ough a citizen suit. The exercise of director’s discretion to exempt conduct that would otherwise constitute a violation of the SIP would

interfere with effective enforcement of the SI P. Such provisions are inconsistent with and

undermine the enforcement structure of the CA A provided in CAA sections 113 and 304, which provide independent authority to the EPA and citizens to enfo rce SIP provisions, including emission limitations. Thus, SIP prov isions that allow discretionary exemptions from applicable SIP emission limitations through the exercise of dire ctor’s discretion are s ubstantially inadequate to comply with CAA requirements as c ontemplated in CAA section 110(k)(5). 4. Substantial Inadequacy of Imprope r Enforcement Discretion Provisions The EPA believes that SIP provisions that pert ain to enforcement discretion but could be construed to bar enforcement by the EPA or through a citizen suit if the ai r agency declines to enforce are substantially inadequate to meet CAA requirements. A typi cal SIP provision that includes an impermissible enforcement discretion provision specifies certain parameters for*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 333 of 539 when air agency personnel should pursue enforcem ent action, but is worded in such a way that

the air director’s decision defines what cons titutes a “violation” of the emission limitation for purposes of the SIP, i.e., by defining what constitutes a vi olation, the air agency’s own enforcement discretion decisions are imposed on the EPA or citizens. 287 The EPA’s longstanding view is that SIP provisions cannot enable an air agency’s decision concerning whether or not to pursue enfo rcement to bar the ability of the EPA or the public to enforce applicable requirements. 288 Such enforcement discretion provisions in a SIP

would be inconsistent with the enforcement st ructure provided in the CAA. Specifically, the statute provides explicit inde pendent enforcement authority to the EPA under CAA section 113 and to citizens under CAA section 304. Thus, the CAA contemplates that the EPA and citizens have authority to pursue enforcement for a violati on even if the air agency elects not to do so. The EPA and citizens, and any court in which they seek to pursue an enforcement claim for violation of SIP requirements, mu st retain the authority to ev aluate independently whether a

source’s violation of an emission limitation warrants enforcement action. Potential for enforcement by the EPA or through a citizen suit provides an important safeguard in the event that the air agency lacks resources or ability to enforce violations and provides additional deterrence. Accordingly, a SIP pr ovision that operates at the air agency’s election to eliminate the authority of the EPA or the public to pursue enforcement actions would undermine the

287 See, e.g. , “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision,” 75 FR 70888 at 70892 (November 19, 2010). The SIP provision at issue provided that information concerning a malfunction “shall be used by the executive secretary in determining whether a violation has occurred and/or the need of further enforcement action.” This SIP language appeared to give the state official exclusive authority to determine whether excess emissions c onstitute a violation. 288 See 1999 SSM Guidance at 3.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 334 of 539 enforcement structure of the CAA and would t hus be substantially inadequate to meet fundamental requirements in CAA sections 113 and 304. 5. Substantial Inadequacy of Affirmative Defense Provisions The EPA believes that SIP provisions that provide an affirmative defense for excess emissions during SSM events are substantially in adequate to meet CAA requirements. A typical SIP provision that includes an impermissible a ffirmative defense operates to limit or eliminate the jurisdiction of federal courts to assess liab ility or to impose remedies in an enforcement proceeding for exceedances of SIP emission limitations. Some affirmative defense provisions apply broadly, whereas others are components of specific emission limitations. Some provisions use the explicit term “affirmative defense,” whereas others are structured as such provisions but do not use this specific terminology. All of th ese provisions, however, share the same legal deficiency in that they purport to alter the stat utory jurisdiction of federal courts under section 113 and section 304 to determine liability and to impose remedies for violations of CAA requirements, including SIP emission limitations. Accordingly, an affirmative defense provision that operates to limit or to eliminate the jurisd iction of the federal courts would undermine the

enforcement structure of the CAA and would t hus be substantially inadequate to meet fundamental requirements in CAA sections 113 and 304. By undermining enforcement, such provisions also are inconsistent with fundamental CAA requirements such as attainment and maintenance of the NAAQS, protection of PSD in crements and improvement of visibility. B. SIP Call Process Under Section 110(k)(5) Section 110(k)(5) of the CAA provides the EP A with authority to determine whether a SIP is substantially inadequate to attain or maintain the NAAQS or otherwise comply with any*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 335 of 539 requirement of the CAA. Where the EPA makes such a determination, the EPA then has a duty

to issue a SIP call. In addition to providing general authority for a SIP call, CAA section 110(k)(5) sets forth the process and timing for such an action. First, th e statute requires the EPA to notify the state of the final finding of substantial inadequacy. The EPA typically provides notic e to states by a letter

from the Assistant Administrator for the Office of Air and Radiation to the appropriate state officials in addition to publica tion of the final action in the Federal Register

. Second, the statute requires the EPA to establis h “reasonable deadlines (not to exceed 18 months after the date of such notice)” for st ates to submit corrective SIP submissions to eliminate the inadequacy in response to the SIP call. The EPA proposes and takes comment on

the schedule for the submission of corrective SIP revisions in order to as certain the appropriate timeframe, depending on the natu re of the SIP inadequacy. Third, the statute requires that any finding of substantial in adequacy and notice to the state be made public. By undert aking a notice-and-comment rulemaking, the EPA assures that the air agencies, affected sources and members of the public all are adequately informed and afforded the opportunity to par ticipate in the process. Through the February 2013 proposal, the SNPR and this final notice, the EPA is providing a full evaluation of the issues raised by the Petition and has used this process as a means of giving clear and up-to-date guidance concerning SIP provisions relevant to the tr eatment of excess emissions during SSM events that is consistent with CAA requirements.

If the state fails to submit the corrective SI P revision by the deadline established in this final notice, CAA section 110(c) au thorizes the EPA to “find[] that [the] State has failed to make*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 336 of 539 a required submission.” 289 Once the EPA makes such a finding of failure to submit, CAA section 110(c)(1) requires the EPA to “promulgate a Federa l implementation plan at any time within 2 years after the [finding] . . . unle ss the State corrects the deficien cy, and [the EPA] approves the plan or plan revision, before [the EPA] promulgates such [FIP].” Thus, if the EPA finds that the air agency failed to submit a complete SIP revision that responds to this SIP call, or if the EPA disapproves such SIP revision, then the EPA will have an obligation under CAA section 110(c)(1) to promulgate a FIP no later than 2 years from the date of the finding or the disapproval, if the deficiency has not been corrected before that time. 290 The finding of failure to submit a revision in response to a SIP call, or the EPA’s disapproval of that corrective SIP revision, can al so trigger sanctions under CAA section 179. If a state fails to submit a complete SIP revision that responds to a SIP call, CAA section 179(a) provides for the EPA to issue a finding of state failure. Such a finding st arts mandatory 18-month

and 24-month sanctions clocks. The two sanctions that apply under CAA section 179(b) are the 2-to-1 emission offset requirement for all ne w and modified major sources subject to the nonattainment new source review program and restrictions on highway funding. However,

section 179 leaves it to the EPA to decide th e order in which these sanctions apply. The EPA

issued an order of sanctions rule in 1994 but di d not specify the order of sanctions where a state fails to submit or submits a deficient SIP revision in response to a SIP call. 291 In the February 2013 proposal, as the EPA has done in other SI P calls, the EPA proposed that the 2-to-1

289 CAA section 110(c)(1)(A). 290 The 2-year deadline does not necessarily apply to FIPs following disapproval of a tribal implementation plan. 291 See “Selection of Sequence of Mandatory Sancti ons for Findings Made Pursuant to Section 179 of the Clean Air Act,” 59 FR 39832 (A ugust 4, 1994), codified at 40 CFR 52.31.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 337 of 539 emission offset requirement will apply for all new sources subject to the nonattainment new source review program beginning 18 months fo llowing such finding or disapproval unless the state corrects the deficiency before that da te. The EPA proposed that the highway funding

restrictions sanction will also apply beginning 24 months follo wing such finding or disapproval unless the state corrects the deficiency before that date. Finally, the EPA proposed that the provisions in 40 CFR 52.31 regarding staying the sanctions clock and deferring the imposition of sanctions would also apply. In this action, the EPA is finalizi ng the order of sanctions as proposed in the February 2013 proposal and finali zing its decision concerning the application of

40 CFR 52.31. Mandatory sanctions under CAA section 179 generally apply only in nonattainment areas. By its definition, the emissi on offset sanction applies only in areas required to have a part D NSR program, i.e. , areas designated nonattainment. Sec tion 179(b)(1) expressly limits the highway funding restriction to nonattainment areas. Additionally, the EPA interprets the section 179 sanctions to apply only in the area or areas of the state that are subject to or required to have in place the deficient SIP and for the pollutant or pollutants that the specific SIP element addresses. For example, if the deficient provi sion applies statewide and applies for all NAAQS pollutants, then the mandatory sanctions would apply in all areas desi gnated nonattainment for all NAAQS within the state. In th is case, the EPA will evaluate the geographic sc ope of potential

sanctions at the time it makes a determination that the air agency has failed to make a complete SIP submission in response to this SIP call, or at the time it disapproves such a SIP submission. The appropriate geographic scope for sanctions may vary depending upon the SIP provisions at

issue. C. SIP Call Timing Under Section 110(k)(5)*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 338 of 539 When the EPA finalizes a finding of substantial inadequacy and a SIP call for any state, CAA section 110(k)(5) requires th e EPA to establish a SIP su bmission deadline by which the state must make a SIP submission to rectify the identified deficiency. Pursuant to CAA section 110(k)(5), the EPA has authority to set a SIP su bmission deadline that is up to 18 months from the date of the final finding of inadequacy. The EPA proposed to establish a date 18 mont hs from the date of promulgation of the final finding for the state to respond to the SIP ca ll. After further evaluation of this issue and consideration of comments on the proposed SIP call, the EPA has decided to finalize the proposed schedule. Thus, the SIP submission deadlin e for each of the states subject to this SIP call will be November 22, 2016. Ther eafter, the EPA will review the adequacy of that new SIP submission in accordance with the CAA requirements of sections 110(a), 110(k), 110(l) and 193, including the EPA’s interpretation of the CAA reflected in the SSM Policy as clarified and updated through this rulemaking. The EPA is providing the maximum time perm issible under the CAA for a state to respond to a SIP call. The EPA believes that it is appropriate to provide states with the full 18

months authorized under CAA sec tion 110(k)(5) in order to allow states sufficient time to make SIP revisions following their own SIP development pr ocess. In general, the EPA considers this a reasonable time period for the affect ed states to revise their stat e regulations, provide for public input, process the SIP revision through the state’ s own procedures and submit the SIP revision to

the EPA. Such a schedule will allow for the n ecessary SIP development process to correct the deficiencies, yet still achieve the necessary SI P improvements as expeditiously as practicable. There may be exceptions, particularly in states that have adopted especially time-consuming procedures for adoption and submission of SIP revisions. The EPA acknowledges that the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 339 of 539 longstanding existence of many of the provisions at issue, such as automatic exemptions for SSM events, may have resulted in undue reli ance on them as a compliance mechanism by some sources. As a result, development of appropriate SIP revisions may enta il reexamination of the applicable emission limitations themselves, a nd this process may require the maximum time allowed by the CAA. For example, if circumstance s do not allow the state to develop alternative emission limitations within that time, the state may find it necessary to remove the automatic exemptions in an initial responsive SIP revision and establish alternative emission limitations in a later SIP revision. Nevertheless, the EPA encourag es the affected states to make the necessary revisions in as timely a fashion as possible and encourages the stat es to work with the respective EPA Regional Office as they develop the SIP re visions. The EPA intends to review and act upon the SIP submissions as promptly as resources will a llow, in order to correct these deficiencies in as timely a manner as possible. Recent experience w ith several states that elected to correct the

deficiencies identified in the Fe bruary 2013 proposal in a dvance of this final action suggests that

these SIP revisions can be addr essed efficiently through cooperat ion between the air agencies

and the EPA.

The EPA notes that the SIP call for affected st ates finalized in this action is narrow and applies only to the specific SIP provisions determined to be inconsistent w ith the requirements of

the CAA. To the extent that a state is concerned that elimination of a pa rticular aspect of an existing emission limitation, such as an imperm issible exemption, will render that emission limitation more stringent than the state originally intended and more stringent than needed to meet the CAA requirements it was intended to addr ess, the EPA anticipates that the state will revise the emission limitation accordingly, but without the impermissible exemption or other

feature that necessitate d the SIP call. With adequate jus tification, this SIP revision might, e.g. ,*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 340 of 539 replace a numerical emission limitation with an alternative control method (design, equipment, work practice or operational sta ndard) as a component of the emission limitation applicable during startup and/or shutdown periods. Finally, the EPA notes that its authority under CAA section 110(k)(5) does not extend to requiring a state to adopt a partic ular control measure in its SIP revision in response to the SIP call. Under principles of cooperative federalism , the CAA vests air agen cies with substantial discretion to develop SIP provision s, so long as the provisions m eet the legal requirements and objectives of the CAA. 292 Thus, the inclusion of a SIP call to a state in this ac tion should not be misconstrued as a directive to the state to adopt a particular control meas ure. The EPA is merely requiring that affected states make SIP revisions to remove or revise ex isting SIP provisions that fail to comply with fundamental requirements of th e CAA. The states retain discretion to remove or revise those provisions as they determine best, so long as they bring their SIPs into compliance with the requirements of the CAA. 293 Through this rulemaking action, the EPA is reiterating, clarifying and updating its interpretations of the CAA with respect to SIP provisions that apply to emissions from sources during SSM events in order to provide states with comprehensive guidance concerning such provisions. D. Response to Comments Concerning SI P Call Authority, Process and Timing

292 See Virginia, et al. v. EPA , 108 F.3d 1397 (D.C. Cir. 1997) (SIP call remanded and vacated because, inter alia , the EPA had issued a SIP call that require d states to adopt a particular control measure for mobile sources). 293 Notwithstanding the latitude stat es have in developing SIP provisi ons, the EPA is required to assure that states meet the basic legal criteria for SIPs. See Michigan, et al. v. EPA , 213 F.3d 663, 686 (D.C. Cir. 2000) (upholding NOx SIP call because, inter alia , the EPA was requiring states to meet basic legal requirement that SIPs comply with section 110(a)(2)(D), not dictating the adoption of a particular control measure).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 341 of 539 The EPA received a wide range of commen ts on the February 2013 proposal and the SNPR questioning the scope of the Agency’s authority to issue this SIP call action under section 110(k)(5), the process followed by EPA for this SIP call action, or the timing that the EPA provided for response to this SIP call action. Although there were numerous comments on these general topics, the majority of the comments raised the same questions and made similar arguments ( e.g. , that the EPA has an obligation under se ction 110(k)(5) to “p rove” not only that an exemption for SSM events in a SIP emission limitation is contrary to the explicit legal requirements of the CAA but also that this ille gal exemption “caused” a specific violation of the NAAQS at a particular monitor on a particular da y). For clarity and ease of discussion, the EPA is responding to thes e overarching comments grouped by topic. 1. Comments that section 110(k)(5 ) requires the EPA to “prove causation” to have authority

to issue a SIP call.

Comment: Numerous state and industry comm enters argued that the EPA has no authority to issue a SIP call with respect to a given SIP provision unless and until the Agency first proves definitively that the provision has caused a specific harm, such as a specific violation of the NAAQS in a specific area. These commen ters generally focused upon the “attainment and maintenance” clause of section 110(k)(5) and did not address the “comply with any requirement

of” the CAA clause. For example, many industry commenters opposed the EPA’s interpretation of section 110(k)(5) on the grounds that the Agency had fail ed to provide a specific technical analysis “proving” how the SIP provisions failed to prov ide for attainment or maintenance of the NAAQS. For areas attaining the NAAQS, commen ters asserted that there should be a presumption that existing SIP provi sions are adequate if they have resulted in attainment of the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 342 of 539 NAAQS. For areas violating the NAAQS, commente rs claimed that the EPA is required to conduct a technical analysis to de termine if there is a “nexus be tween the provisions that are the subject of its SSM SIP Call Propos al and the specific pollutants for which attainment has not been achieved.” Other industry commenters argued th at in order to have au thority to issue a SIP call, the EPA must prove through a technical analysis that a give n SIP provision “is” substantially inadequate, not that it “may be.” These commenters claimed that the EPA has not shown how any of the SIP provisi ons at issue in this action “threatens the NAAQS, fails to sufficiently mitigate interstate transport, or comply with any other CAA requirement.” Many industry commenters questioned whether exem pt emissions during SSM events pose any attainment-related concerns, making assertions such as: “[i]nfrequent malfunction, startup and

shutdown events at a limited number of stati onary sources are likely to have no effect on

attainment.” Many state commenters made similar argumen ts, based on the specific attainment or nonattainment status of areas in their respective states. For example, one state commenter claimed that the EPA failed to make required tec hnical findings that the specific provisions the Agency identified as legally deficient “are so subs tantially inadequate that the State cannot attain or maintain the NAAQS or otherwise comply w ith the CAA.” The commenter claimed that the

EPA should have evaluated all of the state’s emission limitations, emission inventories and

attainment and maintenance demonstrations for the NAAQS, rather than focusing on these individual SIP provisions. In order to dem onstrate substantial in adequacy under section 110(k)(5), the state claimed, the EPA “must point to facts” that show “the State cannot attain or maintain the NAAQS or comply with the CAA” if the provisions remain in the SIP. Other states made comparable arguments with respect to the SIP provisions at issue in their SIPs and claimed*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 343 of 539 that the EPA is required to establish how the provisions caused or contributed to a specific violation of a NAAQS in those states. By contrast, many environmental group co mmenters and individual commenters took the opposite position concerning what is necessary to support a finding of substantial inadequacy under section 110(k)(5). These commenters argued that that the EPA may issue a SIP call not only where it determines that a SIP is substantia lly inadequate to attain or maintain a NAAQS with a technical analysis but also where the Ag ency determines that the SIP is substantially inadequate “to comply with any requirement of the Act.” The commenters noted that the EPA identified specific statutory provi sions of the CAA with which the SIP provisions at issue in this action do not comply. For example, these commen ters agreed with the EPA’s view that SIP provisions with automatic or di scretionary exemptions for emissions during SSM events do not meet the fundamental requirements that SIP emi ssion limitations must apply to limit emissions from sources on a continuous basis, in accordan ce with sections 110(a)(2)(A), 110(a)(2)(C) and 302(k). In addition to arguing that failure to meet legal requirements of the CAA is a sufficient basis for a SIP call, some commenters provi ded additional support to illustrate how SIP provisions with deficiencies such as automatic or discretionary exemptions for emissions during SSM events result in large amounts of excess emissi ons that would otherwise be violations of the applicable emission limitations. Response: The EPA disagrees with the argument th at it has no authority to issue a SIP call under section 110(k)(5) unle ss the Agency provides a factua l or technical analysis to demonstrate that the SIP provisi on at issue caused a specific envi ronmental harm or undermined a specific enforcement case. As explained in the February 2013 proposal, in the SNPR and in this final action, the EPA interprets its authority und er section 110(k)(5) to authorize a SIP call for*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 344 of 539 not only provisions that are subs tantially inadequate for purposes of attainment or maintenance of the NAAQS but also those prov isions that are substantially inadequate for purposes of “any requirement” of the CAA. 294 To be clear, the EPA can also issue a SIP call whenever it

determines that a SIP as a whol e, or a specific SIP provision, is deficient because the SIP did not prevent specific violatio ns of a NAAQS, at a specific monitor, on a specific date. However, that

is not the extent of the EPA’s authority under section 110(k)(5). On its face, section 110(k)(5) does not impose any explicit re quirements with respect to what specific form of factual or analytical basi s is necessary for issuance of a SIP call. Because the statute does not prescribe the basis on whic h the EPA is to make a finding of substantial inadequacy, the Agency interprets section 110(k) (5) to provide discreti on concerning what is necessary to support such a finding. The Agency believes that the nature of the factual or analytical basis necessary to make a finding is dependent upon the specific nature of the substantial inadequacy in a given SIP provision. For example, when the EPA issued the NOx SIP Call to multiple states because their SIPs failed to address interstate transport adequately in accordance with sec tion 110(a)(2)(D)(i)(I), the Agency did base that SIP call on a detailed factual analysis including ambient air impacts. 295 In that situation, the specific requirement of the CAA at issue was the statutory obligation of each

state to have a SIP that contai ns adequate provisions to prohi bit emissions from sources “in amounts” that “contribute significantly to nonatta inment in, or interfere with maintenance by,

294 See February 2013 proposal, 78 FR 12459 at 12483–89 (February 22, 2013); SNPR, 79 FR 55919 at 55935. 295 See “Finding of Significant Contribution and Ru lemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone,” 63 FR 57356 (October 27, 1998).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 345 of 539 any other State” with respect to the NAAQS. Because of the phrase “in amounts,” the EPA considered it appropriate to evaluate whether each state’s SIP was substantially inadequate to comply with section 110(a)(2)(D)(i )(I) through a detailed analysis of the emissions from the state and their impacts on other states. Moreover, given the use of ambiguous terms in section 110(a)(2)(D)(i)(I) such as “contribute significantly,” the EPA concluded that it was appropriate to conduct a detailed analysis to quantify the amount of emissions that each of the affected states needed to eliminate in order to comply with section 110(a)(2)(D)(i)(I) fo r the specific NAAQS in question. However, the EPA’s decision to determin e these facts and to conduct these analyses as a basis for that particular SIP call action was due to the nature of the SIP deficiency at issue and the wording of section 110(a)(2)(D)(i)(I). The EPA has similarly issued other SIP calls for which the Agency determined that a specific factual or technical analysis was appropriate to support the finding of substantial inadequacy. 296 Not all situations, however, requ ire the same type of detailedfactual analysis to support the finding of substantial inadequacy. For exampl e, when the EPA issued the PSD GHG SIP call

to 13 states for failure to have a PSD permitting program that properly addresses GHG emissions, the Agency did not need to base that SIP call action on a detailed factual analysis of ambient air impacts. 297 In that situation, the statutory re quirement of the CAA in question was

296 See, e.g. , “Finding of Substantial Inadequacy of Implementation Plan; Call for Iowa State Implementation Plan Revision,” 76 FR 41424 (J uly 14, 2011) (SIP call to Iowa due to PM 2.5 NAAQS violations in Muscatine area); “Approv al and Promulgation of State Implementation Plans; Call for Sulfur Dioxide SIP Revisions for Billings/Laurel, MT,” 58 FR 41430 (August 4, 1993) (SIP call to Montana due to modeled violations of the SO 2 NAAQS). 297 See “Action to Ensure Authority to Issue Pe rmits Under the Prevention of Significant Deterioration Program to Sources of Gree nhouse Gas Emissions; Finding of Substantial Inadequacy and SIP Call,” 75 FR 77698 (December 13, 2010). The EPA notes that a number of petitioners challenged this SIP call on various grounds, but the court ultimately determined that they did not have standing. Texas, et al. v. EPA , 726 F.3d 180 (D.C. Cir. 2013).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 346 of 539 the obligation of each state SIP under section 110(a)(2)(C) to include a PSD permitting program that addresses all federally regulated air pollu tants, including GHGs. In that action, the EPA made a finding that the SIPs of 13 states were substantially inadequate to “comply with any requirement” of the CAA because the PSD permitti ng programs in their EPA-approved SIPs did not apply to GHG emissions from new and modified sources. Acco rdingly, the EPA issued a SIP

call to the 13 states because their SIPs failed to comply with specific legal requirements of the CAA. This failure to meet an explicit CAA legal requirement to address GHG emissions in permits for sources as required by statute did not require the EPA to provide a technical analysis of the specific environmental imp acts that this substantial inade quacy would cause. For this type of SIP deficiency, it was sufficient for the EPA to make a factual finding that the affected states

had SIPs that failed to meet th is fundamental legal requirement. 298 The EPA has issued other SIP calls for which the Agency made a finding that a st ate’s failure to meet specific legal requirement

of the CAA for SIPs was a substa ntial inadequacy without the need to provide a technical air quality analysis relati ng to NAAQS violations. 299

298 Id ., 75 FR 77698 at 77705-07. 299 See, e.g. , “Finding of Substantial Inadequacy of Implementation Plan; Call for California State Implementation Plan Revision,” 68 FR 37746 (June 25, 2003) (SIP call to California for failure to meet legal requirements of secti on 110(a)(2)(C), section 110(a)(2)(I), and section 110(a)(2)(E) because of exemptions for agri cultural sources from NNSR and PSD permitting requirements); “Credible Evidence Revisi ons,” 62 FR 8314 at 8327 (February 24, 1997) (discussing SIP calls requiring states to revise their SIPs to meet CAA requirements with respect to the use of any credible evidence in enforcement actions for SIP violations).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 347 of 539 The EPA believes that the most relevant pr ecedent for what is necessary to support a finding of substantial inadequacy in this action is the SIP call that the Agency previously issued to the state of Utah for deficient SIP provisions related to the treatment of excess emissions during SSM events. 300 In that SIP call action, the EPA made a finding that two specific provisions in the state’s SIP were substantially inadequate because they were inconsistent with legal requirements of the CAA. For one of the provisions th at included an exemption for emissions during “upsets” ( i.e. , malfunctions), the EPA explained: “Contrary to CAA section 302(k)’s de finition of emission limitation, the exemption [in the provision] renders em ission limitations in the Utah SIP less than continuous and, contrary to the requirements of CAA sections 110(a)(2)(A) and (C), undermines the ability to en sure compliance with SIP emissions limitations relied on to achieve the NAAQS and other relevant CAA requirements at all times. Therefore, the [provisi on] renders the Utah SIP substantially inadequate to attain or maintain the NAAQS or to comply with other CAA requirements such as CAA sections 110(a)(2)(A) and (C) and 302(k), CAA provisions related to prevention of significant deterioration (PSD) and nonattainment NSR permits (sections 165 and 173), and provisions related to protection of visibility (section 169A).” 301 For a second provision, the EPA made a findi ng of substantial inadequacy because the provision interfered with the enforcement st ructure of the CAA. The EPA explained:

300 See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revision; Proposed rule,” 76 FR 21639 (April 18, 2011). 301 Id ., 76 FR 21639 at 21641. The EPA also found the first provision substantially inadequate because it operated to create an additional ex emption for emissions during malfunctions that modified the existing emission limitations in some federal NSPS and NESHAP that the state had incorporated by reference into its SIP. The EPA’s 1999 SSM Guidance had indicated that state SIP provisions could not valid ly alter NSPS or NESHAP.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 348 of 539 “This provision appears to give the ex ecutive secretary exclusive authority to determine whether excess emissions constitu te a violation and thus to preclude independent enforcement action by EPA and citizens when the executive secretary makes a non-violation determina tion. This is inconsistent with the enforcement structure under the CAA, which provides enforcement authority not only to the States, but also to EPA and citizens. . . . Because it undermines the envisioned enforcement structure, it also undermines the ability of the State to attain and maintain the NAAQS and to comply with other CAA requirements related to PSD, visibil ity, NSPS, and NESHAPS.” 302 In the Utah SIP call rulemaking, the EPA recei ved similar adverse comments arguing that the Agency has no authority under section 110(k)(5) to issue a SIP call wit hout a factual analysis that proves that the deficient SIP provisions ca used a specific environm ental harm, such as a NAAQS violation. Commenters in that rulemaki ng likewise argued that the EPA was required to prove a causal connection between the excess emissions that occurred during a specific exempt malfunction and a specific violation of the NA AQS. In response to those comments, the EPA explained: “[W]e need not show a direct causa l link between any specific unavoidable breakdown excess emissions and violations of the NAAQS to conclude that the SIP is substantially inadequate. It is our interpretation th at the fundamental integrity of the CAA’s SIP process and st ructure is undermined if emission limits relied on to meet CAA requirements can be exceeded withou t potential recourse by any entity granted enforcement authorit y by the CAA. We are not restricted to issuing SIP calls only after a violation of the NAAQS has occurred or only where a specific violation can be linked to a specific excess emissions event.” 303 The EPA’s interpretation of section 110(k)(5) in the Utah action was directly challenged

in US Magnesium v. EPA

. 304 Among other claims, the petitione rs argued that the EPA did not have authority for the SIP call because the Agency had not “set out facts showing that the [SIP provision] has prevented Utah from attain ing or maintaining the NAAQS or otherwise

302 Id

. 303 Id ., 76 FR 21639 at 21643. 304 690 F.3d 1157 (10th Cir. 2012).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 349 of 539 complying with the CAA.” Thus, the same argumen ts raised by commenters in this action have previously been advanced and rejected by the EPA and the courts. The court expressly upheld the EPA’s interpretation of sec tion 110(k)(5), concluding: “Certainly, a SIP could be deemed substantially inadequate because air-quality records showed that actions perm itted under the SIP resulted in NAAQS violations, but the statute can likewise a pply to a situation like this, where the EPA determines that a SIP is no longer consistent with the EPA’s understanding of the CAA. In such a case, the CAA permits the EPA to find that a SIP is substantially inadequate to comply with the CAA, which would allow the EPA to issue a SIP call under CAA section 110(k)(5).” 305 Finally, the EPA disagrees with the commenters on this specific point because it is not a logical construction of section 110(k)(5). The imp lication of the commenters’ argument is that if a given area is in attainment, then the question of whether the SIP provi sions meet applicable legal requirements is irrelevant. If a given area is not in attainment, then the implication of the commenter’s argument is that the EPA must pr ove that the legally deficient SIP provision factually caused the violation of the NAAQS or else the legal de ficiency is irrelevant. In the latter case, the logical extension of the commen ter’s argument is that no matter how deficient a SIP provision is to meet applicable legal requir ements, the EPA is foreclosed from directing the state to correct that deficiency unless and until there is proof of a specific environmental harm caused, or specific enforcement case thwarted, by th at deficiency. Such a r eading is inconsistent

with both the letter and the in tent of section 110(k)(5). 2. Comments that the EPA must make specific factual findings to meet the requirements of section 110(a)(2)(H)(ii) to have authority to issue a SIP call.

305 Id . 690 F.3d at 1168.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 350 of 539 Comment : A number of commenters argued that even if section 110(k)(5) does not require the EPA to provide a technical analysis to support a finding of substantial inadequacy, section 110(a)(2)(H)(ii) does impose this oblig ation. The commenters noted that section 110(a)(2)(H)(ii) requires states to revise their SIPs “whenever the Administrator finds on the

basis of information available to the Administrator that the plan is substantially inadequate.” The

commenters claimed that this stat utory language imposes a requireme nt for the EPA to “find” the SIP inadequate and “clearly indicates that a SIP Call must be justified by factual findings supported by record evidence.” One commenter argued that the use of the word “finds” should be read in light of the dictionary definition of “find” —”to discover by study or experime nt.” The commenter noted that courts commonly hold that agencies must draw a link between the facts and a challenged agency decision. To support this basic principle of administrative law, the commenter cited a litany of cases including: Motor Vehicle Mfrs Ass’n v. St ate Farm Mut Auto Ins. Co. , 463 U.S. 29. 43 (1983); Appalachian Power Co. v EPA , 251 F.3d 1026, 1034 (D.C. Cir. 2001); Tex Tin Corp. v.

EPA , 992 F.2d 353, 356 (D.C. Cir. 1993); Nat’l Gypsum v. EPA , 968 F.2d 40, 43-44 (D.C. Cir. 1992); Michigan v. EPA , 213 F.3d 663, 681 (D.C. Cir. 2000) Thus, the commenter suggested that the statutory language of section 110(a)(2)(H)(ii) requires a specific factual or technical demonstration concerning the ambient air impacts of an inadequate SIP provision, even if the language of section 110(k)(5) does not. Another commenter argued that the phrase “on the basis of information available to the Administrator” in section 110(a )(2)(H)(ii) means that the EP A must not only consider the specific terms of the SIP provisions relative to the legal requirements of the statute but must also consider other information that is “available,” including how the provisions have been affecting*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 351 of 539 air quality or enforcement since approval. In support of this proposit ion, the commenter cited 1970 legislative history for section 110(a)(2)(H): Whenever the Secretary or his representative finds from new information developed after the plan is a pproved that the plan is not or will not be adequate to achieve promulgated ambient air quality st andards he must notify the appropriate States and give them an opportunity to respond to the new information. 306 Thus, the commenter concluded that the EPA mu st not only find that the SIP is facially inconsistent with the legal requirements of the CAA but also find it “substantially inadequate” to achieve the goals of the requirements as a f actual matter before issuing a SIP call. The implication of the commenter’s argument is th at section 110(a)(2)(H)( ii) imposes additional limitations upon the EPA’s authority to issue a SIP call. Response: The EPA disagrees that it has not made the findings necessary to support the present SIP call action. The thrust of the comment ers’ argument is that the facts that the EPA “finds” or the “information” upon which the EPA bases such a finding can only be technical or scientific facts proving that a given SIP provision resulted in emissions that caused a specific violation of the NAAQS. As with section 110(k)( 5), however, nothing in section 110(a)(2)(H)(ii) compels such a narrow reading. The plain langua ge of section 110(a)(2)(H)(ii) does not support the commenters’ arguments. To the extent that section 110(a)(2)(H)(ii ) is ambiguous, however, the EPA does not interpret it to require th e types of technical findings claimed by the commenters in the case of SIP provi sions that do not meet legal requirements of the CAA. To the contrary, the EPA interprets the statutory language to leave to the Agency’s discretion what facts or information are necessary to find that a given SIP provision is substantially inadequate. In short, the EPA’s “finding” may be a finding that a SIP provision does not meet applicable legal

306 See S. Rep No. 91-1196 at 55-56 (1970).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 352 of 539 requirements without definitive proof that this le gal deficiency caused a specific outcome, such as a specific impact on the NAAQS or a specific enforcement action. First, section 110(a)(2)( H)(ii) does not on its face directly address the scope of the EPA’s authority, unlike section 110(k)(5). Section 110(a)(2 )(H)(ii) appears in se ction 110(a)(2), which contains a listing of specific structural or program requirements that each state’s SIP must

include. In the case of section 110 (a)(2)(H)(ii), the CAA requires ea ch state to have provisions in its SIP that “provide for revision of such plan” in the event that the EPA issues a SIP call. Given that section 110(k)(5) is the provision that directly addresse s the EPA’s authority to issue a SIP call, section 110(a)(2)(H)(ii) should not be interpre ted in a way that contra dicts or curtails the broad authority provided in sec tion 110(k)(5). As described in response to comments, the EPA does not interpret section 110(k)(5 ) to require proof that a give n SIP provision caused a specific environmental harm or undermined a specific enforcement action in order to find the provision substantially inadequate . If the provision fails to meet f undamental legal requirements of the CAA for SIP provisions, that alone is sufficient. Second, even if read in isolation, section 110( a)(2)(H)(ii) does not sp ecify what type of finding the EPA is required to make or specify th e way in which the Agency should make such a finding. The EPA agrees that this section of th e CAA describes findings that the EPA makes “on

the basis of information available to the Administrator that the plan is substantially inadequate to attain” the NAAQS. This section does not, however , expressly state that the “information” in question must be a particular fo rm of information, nor does it expressly require any specified form of technical analysis such as modeling that demonstrates that a particular SIP deficiency caused a violation of the NAAQS. Because the term “information” is not limited in this way, the EPA interprets it to mean whatever form of info rmation is relevant to the finding in question. For*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 353 of 539 certain types of deficiencies, the EPA may de termine that such a technical analysis is appropriate, but that does not mean that it is required as a basi s for all findings of substantial inadequacy. 307 Third, section 110(a)(2)(H )(ii), like section 110(k)(5), is not limited to findings related exclusively to attainment of the NAAQS. Sec tion 110(a)(2)(H)(ii) also expressly refers to findings by the EPA that a SIP is substantiall y inadequate “to otherw ise comply with any additional requirements establishe d under” the CAA. The EPA interp rets this explicit reference to “any additional requirements” to include any legal requirements applicable to SIP provisions, such as the requirement that emission limita tions must apply con tinuously. The commenters misconstrue section 110(a)(2)(H)(ii) to refer exclusively to provis ions that are literally found to cause a specific viola tion of the NAAQS. The EPA acknowledge s that the legislative history quoted by the commenters discusse s findings related to a failure of a SIP to attain the NAAQS, but the passage quoted does not explain the meani ng of “new information” any more specifically than the statute, nor does the passage explain why the actual statutory text of section

307 See, e.g. , “Finding of Significant Co ntribution and Rulemaking fo r Certain States in the Ozone Transport Assessment Group Region for Pu rposes of Reducing Regional Transport of Ozone; Final rule,” 63 FR 57355 (October 27, 1998) (E PA found that the SIPs of multiple states did not adequately control emissi ons that resulted in significant contribution to nonattainment in other states); “Action To Ensure Authority To Issue Permits Under the Prevention of Significant Deterioration Program to Sources of Gree nhouse Gas Emissions: Finding of Substantial Inadequacy and SIP Call; Final rule,” 75 FR 77697 (December 13, 2010) (EPA found that the SIPs of multiple states did not meet the legal requirements for PSD permitting for GHG emissions).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 354 of 539 110(a)(2)(H)(ii) now refers to findings related to failures to meet “any additional requirements”

of the CAA. 308 Moreover, the commenters did not addre ss the changes to the CAA in 1977 that added to the statutory language to refer to othe r requirements, nor did they address the changes to the CAA in 1990 that added section 110(k)(5), which refers to all ot her requirements of the CAA. The EPA believes that the more recent change s to the statute in fact support its view that section 110(a)(2)(H)(ii) entails compliance with the legal requir ements of the CAA, not the narrow reading advocated by the commenters. Fourth, the EPA disagrees with the commenters ’ arguments that it did not make factual “findings” to support this SIP call. To the contrary, the EPA has made numerous factual determinations with regard to the specific SIP provisions at issue. For example, for those SIP provisions that include automatic exemptions for emissions during SSM events, the EPA has found that the provisions are inconsistent with th e definition of “emission limitation” in section 302(k) and that SIP provisions that allow sources to exceed otherwise applicable emission limitations during SSM events may interfere with attainment and maintenance of the NAAQS.

The EPA has also made the factual determina tion that other SIP provi sions that authorize director’s discretion exemptions during SSM events are inconsistent with the statutory provisions applicable to the approval and revision of SIP provisions. The EPA has found that overbroad enforcement discretion provisions ar e inconsistent with the enforcement structure of the CAA in that they could be interpreted to allow the st ate to make the final decision whether such

308 The EPA notes that the si gnificance of this 1970 legislat ive history was raised in US Magnesium, LLC v. EPA , 690 F.3d 1157, 1166 (10th Cir. 2012). Th at court found the legislative history “inapposite” simply because it did not pe rtain to section 110(k)(5) which Congress added to the CAA in 1990. This legislative history passag e is of limited significance in this action as well.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 355 of 539 emissions are violations, thus impeding the abil ity of the EPA and citizens to enforce the emission limitations of the SIP. Similarly, th e EPA has found, consistent with the court’s

decision in NRDC v. EPA , that affirmative defenses in SIP provisions are inconsistent with CAA requirements because they operate to alter or elim inate the jurisdiction of the courts to determine liability and impose penalties. In short, the EP A has made the factual findings that specific provisions are substantially inade quate to meet requirements of the CAA, as contemplated in both section 110(a)(2)(H)(ii) and section 110(k)(5). Finally, the EPA notes that the cases cited by the commenters to support their contentions concerning the factual basis for agency decisions are not relevant to the specific question at hand. The correct question is whether se ction 110(a)(2)(H)(ii) re quires the type of factual or technical analysis that they claim. None of the cases they cited address this specific issue. By contrast, the

decision of the Tenth Circuit in US Magnesium, LLC v. EPA is much more relevant. In that decision, the court concluded that the EPA’s author ity under section 110(k)(5) is not restricted to situations where a deficient SIP provision ca used a specific violation of the NAAQS and the exercise of that authority does not require specific factual findings that the provision caused such impacts. 309 3. Comments that the EPA lacks authority to i ssue a SIP call because it is interpreting the

term “substantial inad equacy” incorrectly.

Comment: Some commenters claimed that although the term “substantially inadequate” is not defined in the statute, the EPA made no effort to interpret the term. Citing Qwest Corp. v.

309 Id ., 690 F.3d 1157, 1166.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 356 of 539 FCC , 258 F.3d 1191, 1201-02 (10th Cir. 2001), the comm enters argued that the EPA is not entitled to any deference to its interpretati on of the term “substantial inadequacy.” Other commenters acknowledged that the EPA took the position that the term “substantially inadequate” is not defined in the CAA and that the Agency can establish an interpretation of that provision under Chevron 2 . However, these commenters disagreed that the EPA’s interpretation of the term in the February 2013 proposal was reasonab le. In particular, the commenters disagreed with the EPA’s view that once a SIP provision is found to be “facially inconsistent” with a specific legal requirement of the CAA, nothing more is required to find the provision “substantially inadequate” to “comply with” that requirement. Commenters claimed that the EPA’s interpretation conflicts with the statute because it ignores the statutory requirement that a SIP call be based on inade quacies that are “substa ntial” and that the interpretation does not meet the “high bar” Congr ess established before st ates could be required to undertake the difficult task of revising a SIP.

State commenters claimed that the requirement that the EPA must determine that the SIP is “substantially” inadequate establishes a hea vy burden for the EPA. The commenters relied on a dictionary definition of “substantially” as mean ing “considerable in importance, value, degree, amount, or extent.” The commenter s argued that when modifying th e word “inadequate,” the use of the modifier “substantially” in section 110(k)(5) enhances the degree of proof required. Thus, the commenters argued that the EPA cannot ju st assume that the provisions may prevent attainment of the NAAQS. Other industry commenters disagreed that the term “substantially inadequate” is ambiguous but claimed that even if it were , the EPA’s own interpretation is vague and ambiguous. The commenters asserted that the EP A’s statement that it must evaluate the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 357 of 539 adequacy of specific SIP provisi on “in light of the sp ecific purposes for which the SIP provision at issue is required” and with respect to whether the provi sion meets “fundamental legal requirements applicable to such a provision” is not a reasonable interpre tation of the statutory language. Furthermore, the commenters argued, the EPA’s interpretation of section 110(k)(5) to authorize a SIP call in the absence of any causal evidence that the SIP provision at issue causes a particular environmental impact reads out of the statute “the explicit requirement that a SIP call related to NAAQS be made only where the state pl an is substantially inadequate to attain or

maintain the relevant standard.” Response : The EPA disagrees with commenters w ho claimed that the Agency did not explain its interpretation of secti on 110(k)(5) in general, or the term “substantially inadequate” in particular, in the February 2013 proposal. To the contrary, the EPA provided an explanation of why it considers section 110(k)(5) to be ambiguous and provided a detailed explan ation of how the Agency is interpreting and applying that statut ory language to the specific SIP provisions at

issue in this action. 310 Moreover, the EPA explained why it beli eves that the four major types of provisions at issue are inconsiste nt with applicable legal requ irements of the CAA and thus substantially inadequate. In the SNPR, the EPA re iterated its interpretation of section 110(k)(5) with respect to affirmative defense provisions in SIPs but updated that interpretation in response to the logic of the more recent court decision in NRDC v. EPA . Thus, the commenters’ reliance

on the Qwest decision is not appropriate, because the EPA did explain its interpretation of the

statute and it is not one that is contrary to the statute. A mo re appropriate precedent is the

decision in US Magnesium LLC v. EPA, in which the same court upheld the EPA’s interpretation

310 See February 2013 proposal, 78 FR 12459 at 12483–88.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 358 of 539 of its authority under section 110(k)(5). In s hort, the EPA believes that section 110(k)(5) provides the EPA with discretion to determine wh at constitutes a substantial inadequacy and to determine the appropriate basis for such a finding in light of the relevant CAA requirements at issue. Thus, the commenters are in error that the EPA did not articulate its interpretation of section 110(k)(5). The EPA also disagrees with those commenters who argued th at the Agency has ignored or misinterpreted the term “s ubstantial” in this action. As many commenters acknowledged, this

term is not defined in the statute. Their relian ce on a dictionary definition, however, is based on the incorrect premise that a failure to comply with the legal requirements of the CAA for SIP provisions is not “considerable in importance, value, de gree, amount, or extent.” First, the commenters’ argument ignores the fu ll statutory language of section 110(k)(5)

in which the EPA is authorized to issue a SI P call whenever it determines that a given SIP provision is inadequate, not only because of impacts on attainme nt of the NAAQS but also upon a failure to meet “any other requirement” of the CAA. As explained in the February 2013 proposal and in the SNPR, the EPA interprets its authority under section 110(k)(5) to encompass any type of deficiency, including failure to meet specific legal requirements of the CAA for SIP provisions. Failure to comply with these legal requirements can have the effect of interfering with attainment and maintenance of the NAAQS ( e.g. , by allowing unlimited emissions from sources during SSM events), but th e failure to comply with the legal requirements is in and of

itself a basis for a SIP call. Second, the commenters’ argument implies that fa ilure of a SIP provision to meet a legal requirement of the CAA is not a “substantial” inadequacy. The EPA strongly disagrees with the view that complying with applicable legal requi rements is not an important consideration in*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 359 of 539 general, and not important with respect to the sp ecific legal defects at issue here. For example, the EPA considers a SIP provision that does not apply continuously because it contains SSM exemptions to be substantially inadequate becaus e it fails to meet legal requirements of sections 110(a)(2)(A), 110(a)(2)(C) and 302(k). In particular, failure to meet the legal requirements for an emission limitation as contemplated in section 3 02(k) is a “substantial” inadequacy. The EPA is not alone in this view; the D.C. Circuit in the Sierra Club v. Johnson case held that emission

limitations must be continuous and cannot cont ain SSM exemptions. If inclusion of SSM exemptions in emission limitations were not a “substantial” deficiency from the court’s perspective, presumably the court would have ruled differently. As another example, the EPA

considers the inclusion of affirmative defenses in SIP provisions that operate to alter the jurisdiction of the courts to be a substantial inadequacy. Ag ain, the EPA’s view that SIP provisions cannot interfere with the enforcement structure of the CAA set forth in section 113

and section 304 is not unreasona ble. The court’s decision in NRDC v. EPA held that EPA regulations cannot alter or eliminate the jurisdicti on of courts to determ ine liability and impose remedies in judicial enforcement cases and th is same logic extends to the states in SIP provisions. Contrary to the arguments of the co mmenters, the EPA reasonably interprets the term “substantial” in section 110(k)(5 ) to include compliance with th e legal requirements of the CAA applicable to SIP provisions. Third, the EPA notes that its reading of s ection 110(k)(5) does not “read out of the statute” the statutory language th at SIP provisions can be substant ially inadequate “to attain or maintain the relevant NAAQS” as claimed by the commenters. The EPA agrees that SIP provisions can be found substantially inadequate for this specific reason, but it is the commenters

who read words out of section 110(k)(5) by disregarding the porti on of the statute that also*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 360 of 539 authorizes a SIP call whenever a SIP provision does not “comply with any requirement of” the CAA. Indeed, the EPA believes that SIP provisi ons that fail to meet the specific legal requirements of the CAA are very like ly to have these impacts as well; e.g. , the unlimited emissions authorized by SSM exemptions can inte rfere with attainment and maintenance of the NAAQS. The EPA believes that Congress consci ously included these fundamental legal requirements in order to assure that SIP provisi ons will achieve the objectives of the CAA, such as attainment and maintenance of the NAAQS. For example, legislative history for section 302(k) indicates that Congress intentionally required that emission limitations apply continuously in order to assure th at they would achieve these goals as well as be consistent with

the enforcement structure of the CAA. 311 4. Comments that the EPA lacks authority to issue a SIP call because it is required to “quantify” the magnitude of any alleged SIP deficiency in order to establish that it is substantial.

Comment: A number of commenters argued that, in addition to failing to provide a required technical analysis to s upport a SIP call, the EPA was also failing to quantify in advance the degree of inadequacy that is necessary for a given SIP provision to be substantially inadequate. The commenters assert ed that the EPA has a burden to define in advance what amount of inadequacy is “substantia l,” before the Agency can require states to comply with a SIP

311 See, e.g. , H.R. 95-294, at 92 (1977) (ref erring to emission limitations as a fundamental tool for assuring attainment and maintenance of the NAAQS and stating that unless they are “complied with at all times, there can be no assura nce that ambient standards will be attainment and maintained.”*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 361 of 539 call. Some commenters made this argument based upon their experien ce with prior SIP call rulemakings, such as the NOx SIP call in which the Agency performed such an analysis. Other commenters, however, evidently based this argu ment upon their reading of the D.C. Circuit’s

decision in EME Homer City Generation, L.P. v. EPA. 312 Some commenters also argued that “all” past EPA SIP calls have been based upon a specific technical anal ysis concerning the sufficiency of a SIP to provide for attainment and maintenance of a NAAQS and that this

establishes that such an an alysis is always required. Response: The EPA disagrees that section 110(k)(5) requires the Agency to “quantify” the degree of inadequacy in a given SIP provision before issuing a SIP call. As explained in detail in the February 2013 propos al and this notice, the EPA in terprets section 110(k)(5) to authorize the Agency to determine the nature of the analysis necessary to make a finding that a SIP provision is substantially inadequate. The EP A agrees that for certain SIP call actions, such as the NOx SIP call, the specific nature of the SIP call in questi on for section 110(a)(2)(D)(i) did

warrant a technical evaluation of whether the emissions from sources in particular states were significantly contributing to viol ations of a NAAQS in other states. Thus, the EPA elected to perform a specific form of analysis to determine whether emissions from sources in certain states significantly contributed to viola tions of the NAAQS in other stat es, and if so, what degree of reductions were necessary to remedy that interstate transport.

The nature of the SIP deficiencies at issue in this action does not require that type of technical analysis and does not re quire a “quantification” of the ex tent of the deficiency. In this action, the EPA is promulgating a SIP call action that directs the affected stat es to revise existing

312 696 F.3d 7, 29 (D.C. Cir. 2012) rev’d , 134 S. Ct. 1584 (2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 362 of 539 SIP provisions with specific legal deficiencies that make the provisions inconsistent with fundamental legal requireme nts of the CAA for SIPs, e.g. , automatic exemptions for emissions during SSM events or affirmativ e defense provisions that limit or eliminate the jurisdiction of courts to determine liability and impose reme dies for violations. Accordingly, the EPA has determined that it is not necessary to establish that these deficiencies literally caused a specific violation of the NAAQS on a particular day or un dermined a specific enforcement case. It is sufficient that the provisions fail to meet a legal requirement of the CAA and thus are substantially inadequate as pr ovided in section 110(k)(5). 5. Comments that the EPA’s interpretation of substantial inadequacy would override state discretion in developmen t of SIP provisions.

Comment: Some state and industry commenters ar gued that the EPA’s interpretation of its authority under sectio n 110(k)(5) is wrong because it is in consistent with the principle of cooperative federalism. These commenters asserted that the EPA’s interp retation of the term “substantially inadequate,” as explained in the February 2013 proposal, would allow the Agency

to dictate that states revise th eir SIPs without any consideration of whether the states’ preferred

control measures affect attain ment of the NAAQS, thereby e xpanding the EPA’s role in CAA implementation. Consequently, these commenters c oncluded, the EPA’s interpretation of section 110(k)(5) is neither “reasonable” nor “a permissible c onstruction of the statute” under the principles of Chevron deference. 313 Response: The EPA disagrees with these commenters because it disagrees with their view of the cooperative-federalism rela tionship established in the CAA, as explained in detail in

313 Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 843–44 (1984).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 363 of 539 section V.D.2 of this document. Because th e commenters are misconstruing the respective responsibility and authorities of the states and the EPA under cooperative federalism, the Agency does not agree that its interpre tation of section 110( k)(5) is “unreasonable” for this reason under the principles of Chevron . As explained in detail in the February 2013 proposal, the EPA interprets its authority under sec tion 110(k)(5) to include the ability to require states to revise their SIP provisions to correct the types of deficiencies at is sue in this action. Section 110(k)(5) explicitly authorizes the EP A to issue a SIP call for a broad range of reasons, including to address any SIP provisions that relate to attainment and maintenance of the NAAQS, to interstate transport, or to any other requirement of the CAA. 314 The EPA’s authority and responsibility to review SIP submissions in the first instance is to assure that they meet all applicable procedural and substantive requi rements of the CAA, in accordance with the requirements of sections 110(k)(3), 110(l) and 193. The EPA’s authority and responsibility under the CAA includes assuring that SI P provisions comply with specifi c statutory requirements, such as the requirement that emission limitations apply to sources conti nuously. The CAA imposes these statutory requirements in order to assure th at the larger objectives of SIPs are achieved,

such as the attainment and maintenance of the NAAQS, protection of PSD increments, improvement of visibility and providing for e ffective enforcement. The CAA imposes this authority and responsibility upon the EPA when it first evaluates a SIP submission for approval. Likewise, after the initial approva l, section 110(k)(5) authorizes the EPA to require states to

314 See, e.g., US Magnesium, LLC v. EPA , 690 F.3d 1157, 1168 (10th Cir. 2012) (citing 42 U.S.C. 7410(k)(5)) (holding that the EPA ma y issue a SIP call not only based on NAAQS violations, but also whenever “EPA determines th at a SIP is no longer consistent with the EPA’s understanding of the CAA”); id. at 1170 (upholding the EPA’s author ity “to call a SIP in order to clarify language in the SIP that could be read to violate the CAA,” ev en absent a pertinent judicial finding).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 364 of 539 revise their SIPs whenever the Agency later de termines that to be necessary to meet CAA requirements. This does not in any way allow the EP A to interfere in the states’ selection of the control measures they elect to impose to satisfy CAA requirements relating to NAAQS attainment and maintenance, provided that t hose selected measures comply with all CAA requirements such as the need for continuous emissions limitations. Accordingly, the EPA does not believe that its interpretation of section 110(k)(5 ) is at odds with the principles of cooperative federalism but rather believes that its interpreta tion is fully consistent with the letter and the purpose of those principles.

6. Comments that the EPA cannot issue a SIP call for an existing SI P provision unless the provision was deficient at the time the state orig inally developed and submitted the provision for EPA approval.

Comment: Commenters argued that the EPA is us ing the SIP call to require states to change SIP provisions that were acceptable at the time they were originally approved and argued that section 110(k)(5 ) cannot be used for that purpose. Speci fically, one commenter asserted that section 110(k)(5) provides that findings of substantial inadequacy shall “subject the State to the requirements of this chapter to which the State was subject when it developed and submitted the plan for which such finding was mad e.” (Emphasis added by commenter.) The implication of the commenters’ argument is that a SIP provision only needs to meet the requirements of the CAA that were applicable at the time the state originally developed and submitted the provision for EPA approval. Because the EPA has no authority to issue a SIP call under th eir preferred reading of section 110(k)(5), the commenters claimed, the EPA would have to use its authority under section 110(k)(6) and would have to establish that the or iginal approval of each of the provisions

at issue in this action was in error.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 365 of 539 Response : The EPA disagrees with this reading of section 110(k)(5). As an initial matter, the commenter takes the quoted ex cerpt of the statute out of context. The quoted language

follows “to the extent the Administrator deems a ppropriate.” Thus it is cl ear when the statutory provision is read in full that th e EPA has discretion in specifyi ng the requirements to which the state is subject and is not limited to specifying only those requirements that applied at the time the SIP was originally “developed and submitted.” Moreover, this cramped reading of section 110(k)(5) is not a reasonab le interpretation of th e statute because by this logic, the EPA could never require states to update grossly out-of-date SIP provisions so long as the provisions originally met CAA requirements. Given that th e CAA creates a process by which the EPA is required to establish and to update the NAAQS on a continuing basis, and states are required to update and revise their SIPs on a continuing basis, the Agency believes that Congress would not have intended that SIP provisions remain static for all time simply because they were adequate when first developed and approved. Such an inte rpretation would mean that subsequent legally significant events such as amendments of the CAA, court decisions interpreting the CAA and new or revised EPA regulations are not relevant to the continuing ade quacy of existing SIP provisions. Similarly, such an interpretation w ould mean that facts ar ising later could never provide a basis for a SIP call, e.g. , to address interstate transport that was not evident at the time of the original development and approval of the SIP provisions or that needs to be addressed further because of a revised NAAQS. The commenters also argued that if a state’s SIP provision wa s flawed at the time the EPA approved it, then the Agency’s only alternat ive for addressing the de ficient provision is through the error correction au thority of section 110(k)(6). The EPA disagrees. The CAA provides a number of tools to address flawed SIPs and the EPA does not interpret these*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 366 of 539 provisions to be mutually exclusive. While th e EPA could potentially have relied on section 110(k)(6) to remove the deficient provisions at issue in this action, the Agency believes that section 110(k)(5) authority also provides a means to address flawed SIP provisions. As explained in the February 2013 proposal, the EPA specifically considered the relative merits of reliance on section 110(k)(5) and section 110(k)( 6) and determined that the former was a better approach for

this action. 315 In the present circumstances, the EPA is not addressing a single targeted flaw, i.e. , a specific SIP revision that was flawed. Moreover, the EPA is not only dealing with a multitude of states in this action, but also in many cases with numerous SIP provisions developed over the years by a specific state. The provisions at issue of ten are included in several different places in a complex SIP and can affect multiple emission limitations in the SIP that apply to sources for purposes of multiple NAAQS. Comparing the SIP call and erro r correction approaches, the EPA concluded that the SIP call authority under section 110(k)(5 ) provides the better approach for this action, in that it

allows the states to evaluate the overall structure of their existing SIPs and determine how best to modify the affected SIP provisions in order to address the identified deficiencies. By contrast,

use of the error correction au thority under section 110(k)(6 ) would result in immediate disapproval and removal of existi ng SIP provisions from the SIP, which could cause confusion in terms of what requirements apply to sources . Moreover, the EPA’s disapproval of a SIP submission through an error correction that reve rses a prior SIP approval of a required SIP provision starts a “sanctions cl ock,” and sanctions would apply if the state has not submitted a revised SIP within 18 months. Similarly, the EPA would be required to promulgate a FIP if the

315 See February 2013 proposal, 78 FR 12459 at 12483, n.72.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 367 of 539 Agency has not approved a revised SIP submis sion from the state within 24 months. In comparison, the sanctions and federal plan “clock s” would not start under the SIP call approach

unless and until the state fails to submit a SIP revi sion in response to this SIP call, or unless and until the EPA disapproves that SIP submission. As explained in the February 2013 proposal, the EPA determined that the SIP call process was a better procedure through which to address the deficient SIP provisions at issue in this action.

7. Comments that the EPA failed to consider how excess emissions resulting from SSM exemptions would affect compliance with sp ecific NAAQS, including NAAQS with different averaging periods or differe nt statistical forms.

Comment: In addition to general claims that th e EPA failed to provide required technical analysis to support the proposed SIP call to states for auto matic and discretionary SSM exemptions, commenters specifically argued that the EPA is required to establish that these exemptions have caused violations in light of the cons iderations such as the averaging time or statistical form of specific NAAQS. The implicat ion of the commenters’ argument is that in order to demonstrate that a given SIP provisi on with an SSM exemption is substantially inadequate under section 110(k)(5), the EPA has to establish definitively that the emissions during SSM events would cause a violation of a particular NAAQS. This would potentially include an evaluation of the impacts of the exempted emissions on NAAQS with different averaging periods, e.g. , impacts on an annual NAAQS, a 24- hour NAAQS, or a 1-hour NAAQS, and impacts on NAAQS with di fferent statistical forms, e.g. , a NAAQS that measures attainment by an annual arithmetical mean versus one th at is measured by a 98t h-percentile value. Moreover, commenters alluded to the difficulty of ascertaining definitively how emissions of*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 368 of 539 specific precursor pollutants duri ng a given exempted SSM event w ould affect attainment of one or more NAAQS. To support the argument that the validity of SSM exemptions must be evaluated with respect to specific NAAQS, the commenters relied upon recent modeling guidance for the 1-hour

NO 2 NAAQS in which, the commenters claimed, the EPA directed states to disregard emissions during SSM events for purposes of demons trating compliance with that NAAQS. The commenters claimed that the cited EPA guidance supports their argument that emissions from a source during any specific SSM event are unlik ely to cause a violation of the 1-hour NO 2 NAAQS. Accordingly, the commenters argued that the EPA has no authority to interpret the CAA to preclude exemptions for emissions during SSM events without first demonstrating that the exempt emissions cause NAAQS violations. Response : As explained in the February 2013 proposal, and in response to other comments in this action, the EPA does not interpret section 110(k)(5) to require a specific technical analysis to support a SIP call related to legal deficiencies in SIP provisions. In section 110(k)(5), Congress left it to the Agency’s disc retion to determine what type and level of analysis is necessary to establis h that a SIP provision is substantia lly inadequate. As explained in the February 2013 proposal, the EPA does not need to define the precise c ontours of its authority under section 110(k)(5) for a ll potential types of SIP deficiencies in this action. For purposes of this action, it is sufficient that the SIP provisi ons at issue are inconsis tent with applicable requirements. While an ambient air quality impact analysis may be appropriate to support a SIP call with respect to certain requirements of the CAA, e.g. , a SIP call for failure to have SIP provisions to prevent significant contribution to nonattainment in another state in accordance with section 110(a)(2)(D)(i )(I), the EPA does not interpret the CAA to require such an analysis*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 369 of 539 in all instances. In particular, where the substant ial inadequacy is related to a failure to meet a fundamental legal requirement for SIP provisions, su ch as the requirement in section 302(k) that emission limitations apply continuously, the EPA doe s not believe that such a technical analysis is required. For example, section 302(k) does not diffe rentiate between the legal requirements applicable to SIP emission limitations for an annual NAAQS versus for a 1-hour NAAQS, nor between any NAAQS based upon the statistical form of the respective standards. In addition to being supported by the text of section 302(k), the EPA’s interpre tation of the requirement for sources to be subject to con tinuous emission limitations is al so the most logical given the consequences of the commenters’ theory. The commenters’ argument provides additional practical reasons to support the EPA’s interpre tation of the CAA to preclude exemptions for emissions during SSM events from SIP emission lim itations as a basic legal requirement for all

emission limitations. The EPA agrees that to ascertain the speci fic ambient impacts of emissions during a given SSM event can sometimes be difficult. This difficulty can be exacerbated by factors such as exemptions in SIP provisions that not only excuse compliance with emission limitations but also affect reporting or recor dkeeping related to emissions during SSM events. Determining specific impacts of emissions during SSM events can be further complicated by the fact that the limited monitoring network for the NAAQS in many states may make it more difficult to establish that a given SSM event at a given s ource caused a specific vi olation of the NAAQS. Even if a NAAQS violation is monitored, it ma y be the result of emissions from multiple sources, including multiple sources having an SSM event simultaneously. The different averaging periods and statistic al forms of the NAAQS may make it yet more difficult to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 370 of 539 determine the impacts of specific SSM events at specific sources, perhaps until years after the event occurred. By the commenters’ own logic, there could be situations in which it is functionally impossible to demonstrate definitivel y that emissions during a given SSM event at a single source caused a specific vi olation of a specific NAAQS. The commenters’ argument, taken to its logica l extension, could result in situations where a SIP emission limitation is only required to be continuous for purposes of one NAAQS but not for another, based on considerations such as av eraging time or statistic al form of the NAAQS. Such situations could include illogical outcomes such as the same emission limitation applicable to the same source simultaneously being allowe d to contain exemptions for emissions during SSM events for one NAAQS but not for another. For example, purely hypothetically under the commenters’ premise, a given s ource could simultaneously be required to comply with a ratebased NOx emission limitation continuously for purposes of a 1-hour NO 2 NAAQS but not be required to do so for purposes of an annual NO 2 NAAQS, or the source could be required to comply continuously with the same NOx limitation for purposes of the 8-hour ozone NAAQS

and the 24-hour PM 2.5 NAAQS but not be required to do so for purposes of the annual PM 2.5 NAAQS. Add to this the further complication that the source may be located in an area that is designated nonattainment for some NAAQS and attainment for other NAAQS, and thus subject

to emission limitations for attainment and maintenance requirements simultaneously. Under the commenters’ premise, the same SI P emission limitation, subject to the same statutory definition in section 302(k), could va lidly include SSM exemptions for purposes of some NAAQS but not others. Such a system of regulation would make it unnecessarily hard for regulated entities, regulators a nd other parties to determine wh ether or not a source is in compliance. The EPA does not believe that this is a reasonable interpretation of the requirements*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 371 of 539 of the CAA, nor of its authority under section 110(k)(5). This unnecessary confusion is easily resolved simply by interpreting the CAA to re quire that a source subject to a SIP emission limitation for NOx must meet the emission limitation continuously, in accordance with the express requirement of section 302(k), thus making SSM exemp tions impermissible. The EPA does not agree that the term “emission limitatio n” can reasonably be interpreted to allow

noncontinuous emission limitations for some NA AQS and not others. The D.C. Circuit has already made clear that the term “emission lim itation” means limits that apply to sources continuously, without exemptions for SSM events. Finally, the EPA disagrees with the specifi c arguments raised by commenters concerning the modeling guidance for the 1-hour NO 2 NAAQS. 316 As relevant here, that guidance provides recommendations about specific issu es that arise in modeling that is used in the PSD program for purposes of demonstrating that proposed construc tion will not cause or cont ribute to a violation

of the 1-hour NO 2 NAAQS. Thus, as an initial matter, th e EPA notes that the context of that guidance relates to determining the extent of emi ssion reductions that a so urce needs to achieve in order to obtain a permit under the PSD progr am, which is distinct from the question of whether an emission limitation in a permit mu st assure continuous emission reductions. The commenters argued that this EPA guidance “allows sources to completely exclude all emissions during startup and shutdown scenarios. ” This characterization is inaccurate for a number of reasons. First, the guidance in ques tion is only intended to address certain modeling issues related to predictive modeling to demonstr ate that proposed construction will not cause or

316 See Memorandum, “Additional Clarification Regarding Application of Appendix W Modeling Guidance for the 1-hour NO 2 National Ambient Air Quality Standard,” from T. Fox, EPA/OAQPS, to Regional Air Di vision Directors, March 1, 2011.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 372 of 539 contribute to viola tion of the 1-hour NO 2 NAAQS, for purposes of determining whether a PSD permit may be issued and whether the emission li mitations in the permit will require sufficient

emission reductions to avoid a violation of this standard. Second, to the extent that the guidance indicates that air quality cons iderations might in certain circumstances and for certain purposes be relevant to determining what emission limitations should apply to a source, that does no t mean a source may legally have an exemption from compliance with existing emissions limitatio ns during SSM events. In the guidance cited by the commenter, the EPA did recommend that under certain circumstances, it may be appropriate to model the projected impact of the sour ce on the NAAQS without taking into account “intermittent” emissions from sources such as emergency generators or emissions from particular kinds of “startup/shutdown” operations. 317 However, the EPA did not intend this to suggest that emissions from sources during SSM events may va lidly be treated as exempt in SIP emission limitations. Within the same guidance document, the EPA stated unequivoca lly that the guidance “has no effect on or relevance to existing polic ies and guidance regarding excess emissions that may occur during startup and shutdown.” The EPA explained further that “all emissions from a new or modified source are subject to the a pplicable permitted emission limits and may be subject to enforcement concerning such excess em issions, regardless of whether a portion of

those emissions are not included in the modeli ng demonstration based on the guidance provided

here.” 318 In other words, even if a state elects not to include intermittent emissions from some types of startup and shutdown even ts in certain modeling exercise s, this does not mean that

317 Id. at 2. 318 Id. at 11.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 373 of 539 sources can be excused from compliance with the emission limitation during startup and shutdown, via an exemption for such emissions. Third, the guidance does not say that all SSM emissions may be considered intermittent and excluded from the modeling de monstration. The guidance expl icitly recommends that the modeling be based on “emission scenarios that ca n logically be assumed to be relatively continuous or which occur frequently enough to contribute significan tly to the annual distribution of daily maximum 1- hour concentrations” and gives the example that it may be appropriate to include startup and shutdown emissions from a p eaking unit at a power plant in the modeling demonstration because those units go through frequent st artup/shutdown cycles. 319 Thus, the guidance does not support commenters’ pr emise that the EPA must evaluate the air quality impacts from SSM events in SIP actions to determine that SSM exemptions in SIP provisions are substantially inadequate to meet fundamental requirements of the CAA.

8. Comments that this SIP call action is inconsistent with 1976 EPA guidance for

such actions.

Comment: One commenter argued that the EPA mi sinterpreted the te rm “substantially inadequate” in the February 2013 proposal because the Agency is reading this term differently than in the past. In support of this cont ention, the commenter poi nted to a 1976 guidance document from the EPA concerning the question of when a SIP may be substantially inadequate. The commenter argued that the EPA is wrong to inte rpret that term to mean anything other than a demonstrated failure to provide for factua l attainment of the NAAQS. According to the commenter, the content of the 1976 guidance indicates that the EPA is obligated to conduct a

319 Id. at 9.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 374 of 539 specific analysis to determine the air quality imp act of an alleged inadequacy in a SIP provision and to establish and document the specific air quality impacts of the inadequacy. Response: The EPA disagrees with the commenter for multiple reasons. First, the 1976 document referred to by the commenter was the EPA’s guidance on the requirements of the CAA as it was embodied in 1970, not as Congre ss substantially ame nded it in 1990. The 1976 guidance pertained not to the cu rrent SIP call provision at sec tion 110(k)(5) but rather to the requirements of section 110(a)(2)(H). This is particularly significant because the 1990 CAA Amendments added section 110(k)(5) to the stat ute. Although section 110(a)(2)(H) remains in the statute, it is primarily a requirement applicable to state “infrastructure” SIP obligations through which states are required to have state law authority to m eet the structural SIP elements required in section 110(a)(2). 320 In reviewing SIPs for compliance with section 110(a)(2)(H), the EPA verifies that state SIPs include the legal au thority to respond to any SIP call. By contrast, the EPA’s authority to issue a SIP call under se ction 110(k)(5) is worded broadly, explicitly including the authority to make a finding of substantial inadequ acy not only for failure to attain or maintain the NAAQS but also fo r failures related to interstate transport or “otherwise to comply with any requirement of” the CAA.

320 See “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Section 110(a)(1) and 110(a)(2 )” from Stephen D. Page, Di rector OAQPS to Regional Air Directors, Regions 1–10, Septem ber 13, 2013, at page 51 (explaini ng that a state meets section 110(a)(2)(H) by having authority to revise its SIP in response to a SIP call).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 375 of 539 Second, even setting aside that the guidance is not relevant to the EPA’s authority under section 110(k)(5), the 1976 guidance on its face did not purport to define the full contours of the term “substantially inadequate” in section 110(a)(2)(H). The 1976 guidance stated explicitly that “it is difficult to develop comp rehensive guidelines for all cases” and only listed “[s]ome factors that could be considered” in evaluating whethe r a state’s SIP is substantially inadequate. 321 While the EPA acknowledges that these factor s were primarily focused upon ambient air considerations as suggested by the commenter, they were not limited to that topic. Moreover, the EPA stated that factors “other than air qual ity and emission data must be considered” and provided several examples, including potential amendments to the CAA under consideration at that point in time that might change state SIP oblig ations and thus create the need for a SIP call. More significantly, nothing in the 1976 guidance indicated that the EPA should or would ignore legal deficiencies in existing SIP provisions or that legal deficiencies are not relevant to the question of whether a SIP would provi de for attainment of the NAAQS. Third, the EPA notes that the commenter di d not advocate that the Agency follow the 1976 guidance with respect to other issues, e.g. , that the EPA would init iate the obligations of states to revise their SIPs simply by making an announcement of substant ial inadequacy “without proposal”; that states would be required to make the necessary SIP revisi on within 12 months; or that states should make those revisions by no la ter than July 1, 1977. The EPA interprets the commenters’ silence on these aspects of the guidance as a tacit r ecognition that the 1976 guidance has been superseded.

321 Id . at 10–11.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 376 of 539 The EPA has fully articulated its interpretati on of the term “substa ntial inadequacy” in section 110(k)(5) in the Februa ry 2013 proposal. As explained in the proposal, the EPA interprets its current authority to include the issuance of a SIP call for the types of legal

deficiencies identified in this action. In order to establish th at these legal deficiencies are substantial inadequacies, the EPA does not interpret sect ion 110(k)(5) to require the Agency to document precisely how each deficiency factually undermines the objectives of the CAA, such as attainment and maintenance of the NAAQS in a particular location on a pa rticular date. It is sufficient that these provisions are inconsistent with the legal requirements for SIP provisions set

forth in the CAA that are intended to assure that SIPs in fact do achieve the intended objectives. 10. Comments that because the EPA has misinterpreted the statutory terms “emission limitation” and “continuous,” the EPA has not established a substa ntial inadequacy.

Comment: Many state and industry co mmenters disagreed with the EPA’s interpretation of the CAA to prohibit SSM exemptions in SI P provisions. These arguments took many tacks, based on the interpretation of various statutory pr ovisions, the applicability of the court decision

in Sierra Club v. Johnson , alleged EPA inconsistencies with this requirement in its own NSPS and NESHAP regulations and a variety of othe r arguments. In particular, many commenters argued that the EPA was misi nterpreting the statutory te rms “emission limitation” and “continuous” in section 302(k) to preclude automatic or discreti onary exemptions for emissions during SSM events in SIP provi sions. As an extension of these arguments, commenters also argued that the EPA lacks authority under sec tion 110(k)(5) to issue a SIP call when it has incorrectly interpreted a relevant statutory term as the basis for finding a SIP provision to be substantially inadequate.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 377 of 539 Response: The EPA disagrees that it lacks authority to issue this SIP call on the grounds claimed by the commenters. As explained in de tail in the February 2013 proposal and in this final action, the EPA has long interpreted th e CAA to preclude SSM exemptions in SIP provisions. This interpretation has been stated by the EPA si nce at least 1982, reiterated in subsequent SSM Policy guidance documents, a pplied in a number of notice and comment rulemakings and upheld by courts. With respect to the arguments that the EPA has incorrectly interpreted the terms

“emission limitation” and “continuous” in this ac tion, the EPA has responded in detail in section

VII.A.3 of this notice and need not repeat those responses here. In short, the EPA is interpreting

those terms consistent with the relevant statutor y language and consistent with the decision of the

court in Sierra Club v. Johnson . Because the specific SIP provisions identified in this action with automatic or discretionary exemptions for emissions during SSM events do not limit emissions from the affected sources continuously, the EPA has found these provisions substantially inadequate to meet CAA requirements in accordance with section 110(k)(5). 11. Comments that section 110(k)(5) imposes a “higher burden of proof” upon the EPA than section 110(l) and that section 110 (l) requires the EPA to conduct a specific technical analysis of the impacts of a SIP revision.

Comment: Commenters argued that the EPA is misinterpreting sect ion 110(k)(5) to authorize a SIP call using a lowe r “standard” than the section 110( l) “standard” that requires disapproval of a new SIP provision in the first instance. The commenters stated that section 110(k)(5) requires a determination by the EPA that a SIP provision is “substantially inadequate” to meet CAA requirements in order to authorize a SIP call, whereas section 110(l) provides that the EPA must disapprove a SIP revision provi sion only if it “would interfere with” CAA*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 378 of 539 requirements. Thus, the commenters asserted that “the SIP call st andard is higher than the SIP

revision standard.” The commenters further argued that it would be “illogical and contrary to the CAA to interpret section 110 to establish a lowe r standard for calling a previously approved SIP and demanding revisions to it than for disapproving that SIP in the first place.” For purposes of section 110(l), the commenters claimed, the EPA “is required” to rely on specific “data and evidence” that a given SIP revision would interf ere with CAA requirements and this requirement is thus imposed by section 110(k)(5) as well. In support of this reasoning, the commenters relied on prior court decisions pe rtaining to the requiremen ts of section 110(l). Response: The EPA disagrees with the commente rs’ interpretations of the relative

“standards” of section 1 10(k)(5) and section 110(l) and with the commenters’ views on the court decisions pertaining to section 110(l). In addition, the EPA notes that the commenters did not fully address the related requi rements of section 110(k)(3) co ncerning approval and disapproval of SIP provisions, of section 302( k) concerning requirements for em ission limitations or of any

other sections of the CAA that are substantively germane to specific SIP provisions and to enforcement of SIP provisions in general. 322 The commenters argued that, by the “plain language” of the CAA and because of “common sense,” Congress intended the section 110(k )(5) SIP call standard to be “higher” than

322 CAA section 110(k)(5) states that “[w]henever the [EPA] finds that the applicable implementation plan for any area is substantially in adequate to attain or maintain the relevant [NAAQS], to mitigate adequately [] interstate pollutant transport. . . ,or to otherwise comply with any requirement of [the CAA], the [EPA] shall require the State to re vise the plan as necessary to correct such inadequacies.” Secti on 110(l) states that, in the ev ent a state submits a SIP revision, the EPA “shall not approve a revision of a pl an if the revision would interfere with any applicable requirement concerning attainment a nd reasonable further progress . . . or any other applicable requirement of [the CAA].” Section 1 10(k)(3) states that the EPA “shall approve such submittal . . . if it meets all the requirements of [the CAA].”*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 379 of 539 the section 110(l) SIP revision. Th e EPA disagrees that this is a question resolved by the “plain language.” To the contrary, the three most rele vant statutory provision s, section 110(k)(3), section 110(l), and section 110(k )(5), are each to some de gree ambiguous and are likewise ambiguous with respect to how they operate toge ther to apply to newly submitted SIP provisions versus existing SIP provisions. Section 110(k)(3) requires the EPA to approve a newly submitted SIP provision “if it meets all of the applicable requirements of [the CAA].” Implicitly, the EPA is required to disapprove a SIP provision if it does not meet all applicable CAA requirements. Section 110(l) provides that the EPA may not approve any SIP revision that “would interfere with . . . any other applicable requirement of [the CAA].” Section 110(k)(5) provides that the EPA shall issue a SIP call “whenever” the Agency finds an existing SIP provision “substantially inadequate . . . to otherwise comply with [the C AA].” None of the core terms in each of the three provisions is defined in the CAA. Thus, whether the “would interfere with ” standard of section 110(l) is per se a “lower” standard than the “substant ially inadequate” standard of section 110(k)(5) as advocated by the comme nters is not clear on the face of the statute, and thus the EPA considers these terms ambiguous. As explained in detail in th e February 2013 proposal, the EP A interprets its authority under section 110(k)(5) broadl y to include authority to require a state to revise an existing SIP provision that fails to meet fundame ntal legal requirements of the CAA. 323 The commenters raise a valid point that section 110(l) and section 110(k)(5), as well as section 1 10(k)(3), facially appear to impose somewhat different standards. However, the EPA does not agree that the proper comparison is necessarily between section 110 (k)(5) and section 110(l) but instead would

323 See February 2013 proposal, 78 FR 12459 at 12483–88.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 380 of 539 compare section 110(k)(5) and section 110(k)(3 ). Section 110(l) is primarily an “antibacksliding” provision, meant to assure that if a state seeks to revise its SIP to change existing SIP provisions that the EPA has previously determined did meet CAA requirements, then there must be a showing that the revisi on of the existing SIP provisions ( e.g. , a relaxation of an emission limitation) would not interfere with attainment of the NAAQS, reasonable further progress or any other requireme nt of the CAA. By contrast , section 110(k)(3) is a more appropriate point of comparison because it dire cts the EPA to approve a SIP provision “that meets all applicable requirements ” of the CAA and section 110(k)(5 ) authorizes the EPA to issue a SIP call for previously approved SIP provisions that it later determines do not “comply with any requirement” of the CAA. Notwithstanding that each of these three statutor y provisions applies to different stages of the SIP process, all three of them explicitly make compliance with the legal requirements of the CAA a part of the analysis. At a minimum, the EPA believes that Congres s intended these three sections, working together, to ensure that SIP provisions must meet all applicable legal CAA requirements when they are initiall y approved and to ensure that SI P provisions continue to meet CAA requirements over time, allowing for poten tial amendments to the CAA, changes in interpretation of the CAA by the EPA or courts or simply changed facts. With respect to compliance with the applicable legal requirements of the CAA, the EPA does not interpret section 110(k)(5) as setting a per se “higher” standard. Under sect ion 110(l), the EPA is likewise directed not to approve a SIP revision that is not consistent with legal requirements imposed by the CAA, including those relevant to SIP provisions such as sect ion 302(k). Pursuant to section 110(l), the EPA would not be authorized to approv e a SIP revision that co ntradicts requirements*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 381 of 539 of the CAA; pursuant to section 110( k)(5) the EPA is authorized to direct states to correct a SIP provision that it later determines does not meet the requirements of the CAA. The EPA also disagrees with the commenters’ characterization of the requirements of section 110(l) and their arguments based on court decisions concerning section 110(l). Commenters rely on the decision in Ky. Res Council v. EPA to support their argument that section 110(l) requires the EPA to disapprove a SIP revision only if it “would interfere” with a requirement of the CAA, not if it “cou ld interfere” with such requirements. 324 From this decision, the commenters argue that the EPA is require d to conduct a specific t echnical analysis under section 110(l) to determine the specific impacts of the revision on attainment and maintenance of the NAAQS and argue that by inference this mu st therefore also be required by section 110(k)(5). To the extent that co urt decisions concerning section 110(l) are relevant, these court decisions do not support th e commenters’ position. First, the EPA notes that the commenters mischaracterize secti on 110(l) as requiring a particular form or method of analysis to support approval or disappr oval of a SIP revision. Section 110(l) does not contain any such explicit requirement or specifications. The EPA interprets section 110(l) only to require an analysis that is appropriate for the particular SIP revision at issue, and that analys is can take different forms or different levels of complexity depending on the facts and circumstances relevant to the SIP revision. Li ke section 110(l), the

EPA believes that section 110(k)(5) does not specify a particular form of analysis necessary to find a SIP provision substa ntially inadequate.

324 See 467 F.3d 986 (6th Cir. 2006).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 382 of 539 Second, the commenters mischaracterize the primary decision that they rely upon. The

court in Ky. Res Council v. EPA expressly discussed the fact that section 110(l) does not specify precisely how any such analysis should be conducted and deferred to the EPA’s reasonable interpretation of what form of analysis is appropriate for a given SIP revision. 325 Indeed, the decision stands for the proposition that the EPA does not necessarily have to develop an

attainment demonstration in order to evaluate the im pacts of a SIP revision, i.e. “prove” whether the revision will interfere with attainment, mainte nance, reasonable further progress or any other requirements of the CAA. Thus, the commenters’ argument that section 110( k)(5) has to require a specific technical analysis of impacts on attainment and main tenance because section 110(l) does so is simply in error. Third, the section 110(1) cases cited by the commenters did not involve SIP revisions in which states sought to change existing SIP provisions so that they would fail to meet the specific CAA requirements at issue in this action. For example, none of the cases involved the EPA’s approval of a new automatic exemption for emissions during SSM events. Had the state

submitted a SIP revision that failed to meet applicable requirements of the CAA for SIP provisions, such as changing ex isting SIP emission limitations so that they would thereafter include SSM exemptions, then the EPA would have had to disapprove them. 326 The challenged rulemaking actions at issue in the cases reli ed upon by the commenters involved SIP revision changes unrelated to the specific legal requiremen ts at issue in this action. Accordingly, the

325 See 467 F.3d at 995 (rejecting claim that sect ion 110(l) required a modeled attainment demonstration to prove that the SIP revision would meet applicable CAA requirements). 326 The EPA notes that the one exception to this, of course, is the Agency’s recent approval of new SIP provisions in Texas that created an a ffirmative defense for malfunctions. As discussed elsewhere in this notice, however, the EPA has determined that such provisions do not meet CAA requirements and is thus issuin g a SIP call for those provisions.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 383 of 539 EPA’s evaluation of those SIP revisions focused upon other issues, such as whether the revision would factually result in emissions that would in terfere with attainment and maintenance of the NAAQS, that were relevant to the particular provisions at issue in those cases. 12. Comments that the EPA is misinterpreting US Magnesium and that the decision provides no precedent for this action.

Comment: A number of industry commenters argued that the EPA’s reliance on the

decision of the Tenth Circuit in US Magnesium, LLP v. EPA is misplaced. 327 According to the commenters, the EPA did not correctly interpret the decision and is misapplying it in acting upon

the Petition. The commenters asserted that the decision provides no precedent for this action because it was decided upon issues different from those at issue here. Commenters also argued that the court did not reach an important issue because the petitioner had failed to comment on it,

i.e. , the argument that the EPA had not defined the term “substantially inadequate” in the rulemaking. 328 Response: The EPA disagrees with the commenters on this point. The EPA of course acknowledges that the court in US Magnesium did not address the full ra nge of issues related to the correct treatment of emissions during SSM even ts in SIP provisions that were raised in the Petition, e.g. , the court did not need to address the le gal basis for affirmative defense provisions

in SIPs because of the nature of the SIP provisions at issue. However, the US Magnesium court evaluated many of the same key questions raised in this rulemaking and reached decisions that are very relevant to this action.

327 See 690 F.3d 1157 (10th Cir. 2012). 328 Id ., 690 F.3d 1167, n.3.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 384 of 539 First, the US Magnesium court specifically upheld the EPA’s SIP call action requiring the state to remove or revise a SIP provision that included an automatic exemption for emissions from sources during “upsets,” i.e. , malfunctions. In doing so, the court was fully aware of the reasons why the EPA interprets the CAA to pr ohibit such exemptions, because they violate statutory requirements including section 302( k), section 110(a)(2(A) and (C), and other requirements related to attainment and mainte nance of the NAAQS. The court explained at length the EPA’s reasoning about why the SI P provisions were inconsistent with CAA requirements for SIP provisions. 329 Second, the court specifically upheld the EP A’s SIP call action requiring the state to

revise its SIP to remove or revise another SIP provision that could be in terpreted to give state personnel the authority to determ ine unilaterally whether excess emissions from sources are a violation of the applicable emission limitati on and thereby preclude any enforcement action by

the EPA or citizens. Third, the court also upheld the EPA’s author ity to issue a SIP call requiring a state “to clarify language in the SIP that could be read to violate the CAA, wh en a court has not yet interpreted the language in that way.” Indeed, th e court opined that “in light of the potential conflicts” between compe ting interpretations of the SIP pr ovision, “seeking revision of the SIP was prudent, not arbitrary or capricious.” 330 Fourth, the court exp licitly upheld the EPA’s reasona ble interpretation of section 110(k)(5) to authorize a SIP call wh en a state’s SIP provision is s ubstantially inadequate to meet applicable legal requirements, without making “specific factual findings” that the deficient

329 Id. , 690 F.3d at 1159–63 330 Id ., 690 F.3d at 1170.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 385 of 539 provision resulted in a NAAQS viol ation. The EPA interpreted the C AA to allow a SIP call if the Agency “determined that aspects of the SIP unde rmine the fundamental integrity of the CAA’s SIP process and structure, regardless of whether or not the EPA could point to specific instances where the SIP allowed violations of the NAAQS.” The US Magnesium court explicitly agreed that section 110(k)(5 ) authorizes issuance of a SIP call “where the EPA determines that a SIP is no longer consistent with the EP A’s understanding of the CAA.” 331 Fifth, the court rejected claims that the EPA was requiring states to comply with the SSM Policy guidance rather than the CAA requirement s, and the court noted that the Agency had undertaken notice-and-comment rulemaking to evalua te whether the SIP provisions at issue were consistent with CAA requirements. 332 Sixth, the court rejected the claim that the EPA was interpreting the requirements of the CAA incorrectly because the EPA is in the pr ocess of bringing its own NSPS and NESHAP regulations into line with CAA requirements for emission limitations, in accordance with the

Sierra Club v. Johnson decision. 333 The court noted that the EPA is now correcting SSM exemptions in its own regulations, and thus its prior interpretation of the CAA, rejected by the

court in Sierra Club v. Johnson , did not make the SIP call to Utah arbitrary and capricious. 334 On these and many other issues, the EPA believes that the court’s decision in US Magnesium provides an important and co rrect precedent for the Agency’s interpretation of the CAA in this action. The commenters’ apparent di sagreement with the court does not mean that

the decision is not relevant to this action. The commenters specific ally argued that the US

331 Id ., 690 F.3d at 1168. 332 Id ., 690 F.3d at 1168. 333 Id ., 690 F.3d at 1169. 334 Id ., 690 F.3d at 1170.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 386 of 539 Magnesium court did not reach the issue of whether the EPA had “defined” the term “substantial inadequacy” in the challenged rulemaking because the petitioner had not raised this point in comments. The EPA does not necessarily agree that “defining” the full contours of the term is a necessary step for a SIP call, but regardless of th at fact the Agency did explain its interpretation of the term “substantial inadequacy” with respect to the SIP provisions at issue in the February 2013 proposal, the SNPR a nd this final action.

13. Comments that EPA has to evaluate a SIP “as a whole” to have the authority to issue a

SIP call.

Comment: Many state and industry commenters ar gued that the EPA cannot evaluate individual SIP provisions in isol ation and that the Agency is required to evaluate the entire SIP and any related permit requirements in order to determine if a specific SIP provision is substantially inadequate . In particular, some commenters argued that the EPA was wrong to focus upon the exemptions in SIP emission limitati ons for emissions during SSM events without considering whether some other requirement of th e SIP or of a permit might operate to override or otherwise modify the exemptions. Many of the commenters asserted that other “general duty” clause requirements, elsewhere in other SIP provisions or in pe rmits for individual sources, make the SSM exemptions in SIP emission limitations valid under the CAA. 335 These other requirements were often general duty-type standards that require sources to minimize emissions,

335 The EPA notes that other commenters on the February 2013 proposal made similar arguments with respect to affirmative defense provisions in their SIPs, asserting that other SIP provisions or terms in permits provided additional criteria th at would have made the affirmative defense provisions at issue consistent with the EP A’s interpretation of the CAA in the 1999 SSM Guidance. See, e.g. , Comment from Virginia Department of Environmental Quality at 1–2, in the rulemaking docket at EPA-HQ-OAR-2012-0322-0613. B ecause the EPA no longer interprets the CAA to allow any affirmative defense provi sions, these comments are not germane.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 387 of 539 to exercise good engineering judgment or not to cause a violation of the NAAQS. The implication of the commenters’ arguments is th at such general-duty requirements legitimize an SSM exemption in a SIP emission limitation—even if they are not explicitly a component of the SIP provision, if they are not in corporated by reference in the SI P provision and if they are not adequate to meet the applicable substantive requirements for that type of SIP provision. Response: The EPA disagrees with the basic pr emise of the commenters that the EPA cannot issue a SIP call directing a state to correc t a facially deficient SI P provision without first determining whether an unrelated and not cross-referenced provi sion of the SIP or of a permit might potentially apply in such a way as to co rrect the deficiency. As explained in section VII.A.3 of this document, the EPA believes that all SIP provisions must meet applicable requirements of the CAA, including the requirem ent that they apply co ntinuously to affected sources. In reviewing the specific SIP provisions id entified in the Petition, the EPA determined that many of the provisions incl ude explicit automatic or discreti onary exemptions for emissions during SSM events, whether as a component of an emission limitation or as a provision that operates to override the otherwise applicable emission limitation. Based on the EPA’s review of these provisions, neither did they apply “continuously” as required by section 302(k) nor did they include cross-references to any other limitations that applie d during such exempt periods to potentially provide continuous limitations. To the extent that the SIP of a state contained any other requirements that applied during such periods, that fact was not plain on the face of the SIP provision. If the EPA was unable to ascertain what, if anything, applied during these explicitly exempt periods, then the Agency concludes that regulated entities, members of and the public, and the courts will have the same problem. Th e EPA has authority under section 110(k)(5) to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 388 of 539 issue a SIP call requiring a state to clarify a SIP provision that is ambiguous or unclear such that the provision can lead to misunderstanding and th ereby interfere with effective enforcement. 336

To the extent that an affected state belie ves that the EPA has overlooked another valid provision of the SIP that would cu re the substantial inadequacy that the Agency has identified in this action, the state may seek to correct the deficient SIP provision by properly revising it to remove the impermissible exemption or affi rmative defense and replacing it with the requirements of the other SIP provision or by incl uding a clear cross-reference that clarifies the applicability of such provision as a component of the specific em ission limitation at issue. The state should make this revision in such a way th at the SIP emission limitation is clear on its face as to what the affected sources are required to do during all modes of operation. The emission limitation should apply continuously, and what is required by the emission limitation under any mode of operation should be readily ascertainable by the regulated entities, the regulators and the public. The EPA emphasizes, however, that each re vised SIP emission limitation must meet the substantive requirements applicable to that type of provision ( e.g. , impose RACM/RACT-level controls on sources located in nonattainment areas) and must be legally and practically enforceable ( e.g. , have sufficient recordkeeping, reporti ng and monitoring requirements). The

revised SIP emission limitation must be consiste nt with all applicable CAA requirements. 14. Comments that the EPA inappropriately is “using guidance” as a basis for the SIP call

action.

Comment: State and industry commenters asserted that the EPA is relying on guidance as the basis for issuing this SIP ca ll action and argued that the EP A cannot issue a SIP call based on

336 See US Magnesium, LLC v. EPA , 690 F.3d 1157, 1169 (10th Cir. 2012).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 389 of 539 guidance. The commenters argued that the EP A guidance provided in the SSM Policy is not binding and that states thus have the flexibili ty to develop SIP provi sions that are not in conformance with EPA guidance. Some commenters claimed that if the EPA wishes to make the interpretations of the CAA in its SSM Policy binding upon states, then it must do so through a notice-and-comment rulemaking and must codify those requiremen ts in binding regulations in the CFR. The commenters argued that states shou ld not be subject to a SIP call for existing provisions in their SIPs on the basis that they do not conform to guidance in the SSM Policy. Some commenters acknowledged that the EPA is providing no tice and comment on its SSM Policy through this action, but sti ll they contended that the EPA’s interpretation of the CAA is not binding upon states unless the Ag ency codifies its updated SSM Policy in regulations in the

CFR. Response: The EPA disagrees with arguments that the Agency has acted inappropriately by relying on its interpretations of the CAA set forth in the SSM Policy in issuing this SIP call. As explained in the February 2013 proposal, the SSM Policy is merely guidance. It is correct that guidance documents are nonbinding. Howeve r, the guidance provides the EPA’s recommendations concerning how be st to interpret the statutory requirements of the CAA that are binding. Moreover, the EPA’s interpretati on of the CAA in the SSM Policy can become binding once the Agency adopts and applies that interpretation thr ough notice-and-comment rulemaking. The EPA is issuing this SIP call action through notice-and-comment rulemaking and has specifically taken comment on its interpretations of the CAA as they apply to the specific*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 390 of 539 SIP provisions at issue in this action. Thus, the EPA is requiring the affected states to comply with the requirements of the CAA, not with the SSM Policy guidance itself. 337 The EPA also disagrees with commenters that in order to rely on its interpretation of the CAA in the SSM Policy, the EPA must first i ssue regulatory provision s applicable to SIP provisions. There is no such gene ral obligation for the EPA to codify its interpretations of the CAA in regulatory text. Unless Congress has specifically direct ed the EPA to promulgate regulations for a particular purpose, the EPA ha s authority and discretion to promulgate such regulations as it deems necessary or helpful in accordance w ith its authority under section 301. With respect to issues concerning proper treat ment of excess emissions during SSM events in SIP provisions, the EPA has historically proceed ed by issuance of guidance documents. In this action, the EPA is undergoing notice-and-comment rulemaking to update and revise its guidance and to apply that guidance to specific existing SIP provisions. Thus, the EPA is not required to promulgate specific implementing regulations as a precondition to making a finding of substantial inadequacy to address existing deficient SIP provisions. 15. Comments that the EPA’s redesignation and a pproval of a maintenance plan for an area in a state with a SIP that has provisions at issue in the SIP call establishes that all provisions in the SIP meet CAA requirements.

Comment: Commenters argued that the “EPA’s a llegations that SSM provisions could threaten the NAAQS is contradicted by” the fact that the “EPA has consistently approved re-

337 The EPA’s reliance on interpretations of the CAA in the SSM Policy through notice-andcomment rulemakings has previously been upheld by several courts. See, e.g. , US Magnesium. LLC v. EPA , 690 F.3d 1157, 1168 (10th Cir. 2012) (upholding the EPA’s SIP call to Utah for existing SIP provisions); Mich. Dep’t of Envtl. Quality v. Browner , 230 F.3d 181 (6th Cir. 2000) (upholding the EPA’s disapprova l of a SIP submission).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 391 of 539 designation requests and attainment and mainte nance plans, notwithst anding SSM provisions.” According to these commenters, “[t]he fact that EPA has already approved numerous redesignation requests ... indicates that EPA has already (and in many cases, very recently) admitted that the [State SIPs are] fully appr oved, sufficient to achieve the NAAQS, and fully enforceable.” The commenters argued that the ap propriate time for the EPA to have addressed any issues concerning deficient SIP provisions applicable to em issions during SSM events was “in the context of its review and approval of [maintenance] plans.” Because the EPA has been approving maintenance plans for areas in states subject to this SIP ca ll action, the commenters believed, this “is evidence that the Agency has no t viewed SSM-related emissions as a threat to attainment or maintenance of the NAAQS.” In esse nce, these commenters argued that the EPA’s redesignation of any area in any of the states at issue in this rulemaking indicates that the SIPs of these states fully meet all CAA requirements and th at there are no deficiencies whatsoever in the

SIPs of these states. Response: The EPA disagrees with the commenters’ premise that the Agency’s approval of redesignation requests and maintenance plans fo r certain nonattainment areas, notwithstanding the presence of impermissible provisions related to emissions during SSM events that may have been present in the SIP for those areas, is evidence that the EPA does not view SSM-related

emissions as a threat to attainment or maintena nce of the NAAQS. Contrary to the theory of the commenters, the EPA’s redesignation of an area to attainment does not mean that the SIP for the state in question fully meets each an d every requirement of the CAA. The CAA sets forth the general criteria for re designation of an ar ea from nonattainment to attainment in section 107(d)(3 )(E). These criteria include a de termination by the EPA that the

area has attained the re levant standard (section 107(d)(3 )(E)(i)) and that the EPA has fully*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 392 of 539 approved the applicable implementation plan for the area for purposes of redesignation (section 107(d)(3)(E)(ii) and (v)). Th e EPA must also determine that the improvement in air quality in the area is due to reductions that are permanent a nd enforceable (section 107(d)(3)(E)(iii)) and that the EPA has fully approved a maintenance pl an for the area under section 175A (section 107(d)(3)(E)(iv)). For purposes of redesignation, the EPA has long held that SIP requirements that are not linked with a particular nonattain ment area’s designation and clas sification, including certain section 110 requirements, are not “applicable” for purposes of evaluating compliance with the specific redesignation criteria in C AA sections 107(d)(3)(E)(ii) and (v). 338 The EPA maintains this interpretation because these requirements remain applicable after an area is redesignated to attainment. For at least the past 15 years, the EP A has applied this interpretation with respect to requirements to which a state will continue to be subject after the area is redesignated. 339 Courts

338 See, e.g. , “Approval and Promulgation of Implementation Plans and Designation of Areas for Air Quality Planning Purposes ; State of Arizona; Redesigna tion of the Phoenix-Mesa Nonattainment Area to Attainment for the 1997 8- Hour Ozone Standard; Proposed rule,” 79 FR 16734 at 16739 n.22 (March 26, 2014). 339 See, e.g., 73 FR 22307 at 22312–13 (April 25, 2008) (proposed redesignation of San Joaquin Valley; EPA concluded that sec tion 110(a)(2)(D) transport requir ements are not applicable under section 110(d)(3)(E)(v) because they “continue to apply to a state regardle ss of the designation of any one particular area in the state”); 62 FR 24826 at 24829–30 (May 7, 1997) (redesignation of Reading, Pennsylvania, Area; the EPA concluded th at the additional controls required by section 184 were not “applicable” for purposes of sectio n 107(d)(3)(E) because “they remain in force regardless of the area’s redesignation status”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 393 of 539 reviewing the EPA’s interpretation of the term “applicable” in sect ion 107(d)(3) in the context of requirements applicable for redesigna tion have agreed with the Agency. 340 The EPA therefore approves redesignation re quests in many instances without passing judgment on every part of a state’s existing SIP, if it finds those part s of the SIP are not “applicable” for purposes of section 107(d)(3). For example, the EPA recently approved Arizona’s request to redesignate the Phoenix-Mesa 1997 8-hour oz one nonattainment area and its accompanying maintenance plan, while recognizing that Arizona’s SIP may contain affirmative defense provisions that are not consistent with CAA requirements. 341 In that case, the EPA explicitly noted that approval of the redesignation of the Phoenix-Mesa nonattainment area did not relieve Arizona or Maricopa County of its obligation to re move the affirmative defense provisions from the SIP, if the EPA was to take later action to require correction of the Arizona SIP with respect to those provisions. 342 The EPA also disagrees with commenters to the extent they suggest that the Agency must use the redesignation process to evaluate whether any existing SIP provisions are legally deficient. The EPA has other statutory mech anisms through which to address existing deficiencies in a state’s SIP, and courts have ag reed that the EPA retains the authority to issue a

340 See Sierra Club v. EPA , 375 F.3d 537 (7th Cir. 2004); Wall v. EPA, 265 F.3d 426, 438 (6th Cir. 2001). 341 79 FR 55645 (September. 17, 2014). 342 Id. at 55648. The EPA notes that it has included the deficient SIP provisi ons that include the affirmative defenses in this action, thereby illust rating that it can take action to address a SIP deficiency separately from the re designation action, where appropriate.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 394 of 539 SIP call to a state pursuant to CAA section 110(k )(5) even after redesigna tion of a nonattainment

area in that state. 343 The EPA recently addressed this issue in the context of redesignating the Ohio portion of the Huntington-Ashland (OH–WV– KY) nonattainment area to attainment for the

PM 2.5 NAAQS. 344 In response to comments challenging the proposed redesignation due to the presence of certain SSM provisions in the Ohio SIP, the EPA concluded that the provisions at issue did not provide a basis for di sapproving the redesignation request. 345 In so concluding, the EPA noted that the SSM provisions and related SIP limitations at issue in that state were already approved into the SIP and thus “permanent and enforceable” for the purposes of meeting section 107(d)(3)(E)(iii) and that the Agency has other statutory m echanisms for addressing any problems associated with the SSM provisions. 346 The EPA emphasizes that the redesignation of

areas to attainment does not relie ve states of the res ponsibility to remove legally deficient SIP provisions either independently or pursuant to a SIP call. To the contrary, the EPA maintains that it may determine that deficient provisions such as exemptions or affirmative defense provisions applicable to SSM events are c ontrary to CAA requirements and take action to require correction

343 See Southwestern Pennsylvania Growth Alliance v. EPA, 114 F.3d 984 (6th Cir. 1998) (Redesignation of Cleveland-Akron-Lorain ar ea determined valid even though the Agency subsequently proposed a SIP call to require Ohio a nd other states to revise their SIPs to mitigate ozone transport to other states). 344 See 77 FR 76883 (December 31, 2012). 345 Id. at 76891–92. 346 The EPA notes that the provision s at issue in the redesignation action are included in this SIP call, thus illustrating that the Agency can address these deficien t provisions in a context other than a redesignation request.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 395 of 539 of those provisions even after an area is rede signated to attainment for a specific NAAQS. This interpretation is consistent w ith prior redesignation actions. In some cases, the EPA has stated that the presence of illegal SSM provisions does constitute grounds for denying a redesignation reque st. For example, the EPA issued a proposed disapproval of Utah’s redesigna tion requests for Salt Lake Count y, Utah County and Ogden City

PM 10 nonattainment areas. 347 However, the specific basis fo r the proposed disapproval in that action, which was one of many SIP deficiencies identified by EPA, was the state’s inclusion in the submission of new provisions not previously in the SIP that would have provided blanket exemptions from compliance with emission standards during SSM events. Those SSM exemptions were not in the previously approved SIP, and the EPA declined to approve them in connection with the redesignation request because such provisions are inconsistent with CAA requirements. In most redesignation actions, stat es have not sought to create new SIP provisions that are inconsistent with CAA requirements as part of their re designation requests or maintenance plans. Finally, the EPA disagrees with commenters th at approval of a maintenance plan for any area has the result of precluding the Agency fr om later finding that certain SIP provisions are substantially inadequate under the CAA on the basis that th ose provisions may interfere with attainment or maintenance of the NAAQS or fail to meet any other legal requirement of the CAA. The approval of a state’s redesignation re quest and maintenance plan for a particular NAAQS is not the conclusion of the state’s a nd the EPA’s responsibil ities under the CAA but rather is one step in the process Congress esta blished for identifying a nd addressing the nation’s

347 74 FR 62717 (December 1, 2009).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 396 of 539 air quality problems on a continuing basis. Th e redesignation process allows states with

nonattainment areas that have attained the relevant NAAQS to provide the EPA with a demonstration of the control measures that will keep the area in attainment for 10 years, with the caveat that the suite of measures may be revis ited if necessary and must be revisited with a second maintenance plan for the 10 years follo wing the initial 10-year maintenance period. Moreover, it is clear from the structure of section 175A maintenan ce plans that Congress understood that the EPA’s approval of a maintenance plan is not a guarantee of future attainment air quality in a nonattainment area. Rather, C ongress foresaw that violations of the NAAQS could occur following a redesignat ion of an area to attainment and therefore required section 175A maintenance plans to include contingency m easures that a state co uld implement quickly in response to a violation of a standard. The no tion that the EPA’s approval of a maintenance plan must be the last word with regard to the contents of a state’s SI P simply does not comport with the framework Congress established in the CAA for redesignations. The EPA has continuing authority and responsibility to assure that a state’s SIP m eets CAA requirements, even after approving a redesignation request for a particular NAAQS. In conclusion, the EPA is not required to reevaluate the validity of all previously approved SIP provisions as part of a redesignation. The existe nce of provisions such as impermissible exemptions and affirmative defenses applicable during SSM events in an approved SIP does not preclude the EPA’s determ ination that emission reductions that have provided for attainment and that will provide for maintenance of a NAAQS in a nonattainment area are “permanent and enforceable,” as those te rms are meant in section 107(d)(3), or that the state has met all applicable requirements under section 110 and part D relevant for the purposes of redesignation. Finally, if the EP A separately determines that th e state’s SIP is deficient after*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 397 of 539 the redesignation of the area to attainment, the Agency can issue a SIP call requiring a corrective SIP revision. Redesignation of areas to attainment in no way relie ves states of their continuing responsibilities to remove defici ent SIP provisions from their SIPs in the event of a SIP call. 16. Comments that in issuing a SIP call the EPA is “dictating” to states how to regulate their sources and taking away their di scretion to adopt appropriate c ontrol measures of their own choosing in developing a SIP.

Comment: Several commenters claimed that the EPA’s SIP call action removes discretion

that states would otherwise have under the C AA. Commenters claimed that the action has the effect of unlawfully directing states to impose a particular control measure by requiring the state to regulate all periods of opera tion for any source it chooses to re gulate. Because the alternative emission limitations and work practice standards that the EPA asserts are necessary under the statutory definition of “emissions limitation” are not real options in some cases, the commenters claimed, the EPA’s proposal is the type of mandate that the court in the Virginia decision found

to have violated the CAA. 348 Other commenters also cited to the Virginia decision, as well as citing to the U.S. Supr eme Court’s decision in Train v. NRDC , in which the Court held that “so long as the ultimate effect of a State’s choice of emissions limitations is compliance with the national standards, the State is at liberty to adopt whatever mi x of emissions limitations it deems best suited to its pa rticular situation.” 349 The commenters concluded that the EPA cannot prescribe the specific terms of SIP provisions appli cable to SSM events absent evidence that the provisions undermine the NAAQS or are othe rwise inconsistent with the Act.

348 108 F.3d at 1410. 349 421 U.S. 60, 79 (1975).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 398 of 539 Commenters claimed that states are provided substantial discretion under the Act to develop SIPs and that the EPA’s SIP call action is inconsistent with this long-recognized discretion because it limits the states to one opt ion: “eliminate any consideration of unavoidable emissions during planned startups and shutdow ns and adopt only an extremely limited

affirmative defense for unavoidable emissions during a malfunction.” The commenters claimed that other options available to states include “justifying existing provisions, adopting alternative numeric emission limitations, work practice stan dards, additional operational limitations, or revising existing numeric emission limitations and/or their associated averaging times to create a sufficient compliance margin for unavoidable SSM emissions.”

The commenters further asserted that th e EPA’s February 20 13 proposal contained inconsistent statements about how the Agency expects states to res pond to the SIP call. For example, according to one commenter, the EPA states in one place that startup and shutdown emissions above otherwise applicable limits mu st be considered a vi olation yet elsewhere discusses the fact that states can adopt altern ative emission limitations for startup and shutdown.

The commenter also asserted that the EPA recommended that states could elect to adopt the an approach to emissions during startup and shutdown like that of the EPA’s recent MATS rule but that the EPA then failed to explain that the MATS rule contains “exemptions” for emissions during startup and shutdown that apply so long as the source meets the general work practice

standards in the rule. This commenter claimed that the EPA’s own approach is inconsistent with statements in the February 2013 pr oposal that states should treat all startups and shutdowns as “normal operations.” Response: The EPA disagrees with the commenter’s claims that the SIP call violates the structure of “cooperative federalism” that Congr ess enacted for the SIP program in the CAA.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 399 of 539 Under this structure, the EPA establishes nationa l ambient air quality standards and reviews state plans to ensure that they meet the requirements of the CAA. States take primary responsibility for developing plans to attain a nd maintain the NAAQS, but the EPA is required to step in if states fail to adopt plans that meet the statutory requirements. As the court in Virginia recognized, Congress gave states di scretion in choosing the “mix of controls” necessary to attain and maintain the NAAQS. See also Train v. NRDC , 421 U.S. 60, 79, 95 (1975). The U.S. Supreme Court first recognized this pr ogram of cooperative federalism in Train , and the Court

stated: “The Act gives the Agency no authority to question the wisdom of a State’s choices of emissions limitations if they are part of a plan which satisfies the standards of § 110(a)(2) ... [S]o long as th e ultimate effect of a State’s choice of emissions limitations is compliance with the national standards, the State is at liberty to adopt whatever mix of emissions limitations it deems best suited to its particular situation.” The issue in that case concerned whether change s to requirements that would occur before the area was required to attain the NAAQS were vari ances that should be addressed pursuant to the provision governing SIP revisions or were “postponements” that mu st be addressed under section 110(f) of the CAA of 1970, which contained prescr iptive criteria. The cour t concluded that the EPA reasonably interpreted section 110(f) not to restrict a state’ s choice of the mix of control measures needed to attain the NAAQS and that revisions to SIPs that would not impact attainment of the NAAQS by the attainment date we re not subject to the li mits of section 110(f). While the court recognized that states had disc retion in determining the appropriate emissions limitations, it also recognized th at the SIP must meet the stan dards of section 110(a)(2). In Virginia , the issue was whether at the request of the Ozone Transport Commission the EPA*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 400 of 539 could mandate that states adopt specific motor vehicle emission standards more stringent than those mandated by CAA sections 177 and 202 for regulating emissions from motor vehicles. As the EPA has consistently explained in its SSM Policy, the Agency does not believe that exemptions from compliance with any a pplicable SIP emission limitation requirements during periods of SSM are consistent with the obligation of states in SIPs, including the requirements to demonstrate that plans will attain and maintain the NAAQS, protect PSD increments and improve visibilit y. If a source is free from any obligation during periods of SSM, there is nothing restraining those emissions and such emissions could cause or contribute to an exceedance or violation of the NAAQS. Moreover, neither the state nor citizens would have authority to take enforcement action regarding su ch emissions. Also, even if historically such

excess emissions have not caused or contributed to an exceedance or violation, this would not mean that they could not do so at some time in the future. Finally, given that there are many locations where air quality is not monitored su ch that a NAAQS exceedance or violation could be observed, the inability to demonstrate that such excess emissions have not caused or

contributed to an exceedance or violation would not be proof that they have not. Thus, the EPA has long held that exemptions fr om emission limitations for emissions during SSM events are not consistent with CAA requirements, including the obligation to attain and maintain the NAAQS and the requirement to ensure adequate enforcement authority. Despite claims by the commenter to the cont rary, the EPA has not mandated the specific means by which states should re gulate emissions from sources during startup and shutdown events. Requiring states to ensu re that periods of startup and shutdown are regulated consistent with CAA requirements is not tantamount to pres cribing the specific means of control that the state must adopt. By the SIP call, the EPA has simply explained the statutory boundaries to the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 401 of 539 states for SIP provisions, and the next step is for the states to revise their SIPs consistent with those boundaries. States remain free to choose the “mix of controls,” so long as the resulting SIP revisions meet CAA requirements. The EPA ag rees with the commenter who notes several options available to the states in responding to the SIP call. The commenter stated that there are various options available to st ates, such as “adopting alterna tive numeric emission limitations, work practice standards, additional operational limitations, or revising existing numeric emission limitations and/or their associated averaging times to create a sufficient compliance margin for

unavoidable SSM emissions.” Howeve r, the state must demonstrate how that mix of controls for all periods of operation will ensu re attainment and maintenan ce of the NAAQS or meet other required goals of the CAA relevant to the SIP provision, such as visibility protection. For example, if a state chooses to modify averaging times in an emission limitation to account for higher emissions during startup and shutdown, the st ate would need to consider and demonstrate to the EPA how the variability of emissions over that averaging period might affect attainment and maintenance of a NAAQS with a short averaging period ( e.g. , how a 30-day averaging period for emissions can ensure attainment of an 8-hour NAAQS). One option noted by the commenter, “justifying existing provisions,” doe s not seem promising, based on the evaluation that the EPA has performed as a basis for this SIP call action. If by jus tification, the commenter simply means that the state may seek to justif y continuing to have an exemption for emissions during SSM events, the EPA has already determined that this is impermissible under CAA requirements. The EPA regrets any confusion that may ha ve resulted from its discussion in the preamble to the February 2013 proposal. The EP A’s statement that startup and shutdown emissions above otherwise applicable limitations must be considered a violation is simply*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 402 of 539 another way of stating that st ates cannot exempt sources from complying with emissions standards during periods of star tup and shutdown. This is not inconsistent with the EPA’s

statement that states can devel op alternative requirements for periods of startup and shutdown where emission limitations that appl y during steady-state operations c ould not be feasibly met. In such a case, startup and shutdow n emissions would not be exempt from compliance but rather would be subject to a different, but enforceable , standard. Then, only emissions that exceed such

alternative emission limitations would constitute violations.

17. Comments that because areas are in attain ment of the NAAQS, SIP provisions such as automatic exemptions for excess emissions duri ng SSM events are rendered valid under the

CAA.

Comment: Commenters argued that SSM exempti ons should be permissible in SIP provisions applicable to areas designated attainment because, they asserted, there is evidence that the exemptions do not result in emissions that cause violations of th e NAAQS. To support this contention, the commenters observed that a numbe r of states with SSM exemptions in SIP provisions at issue in this SIP call are currently designated attainment in all areas for one or all NAAQS and also that some of these states had areas that previ ously were designated nonattainment for a NAAQS but subsequently have come into attainment. Thus, the commenters asserted, the SIP provisions that the EPA identified as deficient due to SSM exemptions must instead be consistent with CAA requirements because these states are in attainment. The

commenters claimed that because these areas have s hown they are able to attain and maintain the NAAQS or to achieve emission re ductions, despite SSM exemptions in their SIP provisions, the EPA’s concerns with respect to SSM exempti ons are unsupported and un warranted. Based on the premise that SSM exemptions are not inconsiste nt with CAA requirements applicable to areas*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 403 of 539 that are attaining the NAAQS, the commenters claimed that such provisions cannot be substantially inadequate to meet CAA requirements. Response: The EPA disagrees with the commenters’ view that, so long as the provisions apply in areas designated attainment, the CAA allows SIP provisions with exemptions for emissions during SSM events. The commenters based their argument on the incorrect premise that SIP provisions applicable to sources locate d in attainment areas do not also have to meet fundamental CAA requirements such as s ections 110(a)(2)(A), 110(a)(2)(C) and 302(k). Evidently, the commenters were only thinking na rrowly of the statutory requirements applicable to SIP provisions in SIPs for purposes of part D attainment plans, which are by design intended

to address emissions from sources located in non attainment areas and to achieve attainment of the NAAQS in such areas. The EPA does not inte rpret the fundamental statutory requirements applicable to SIP provisions ( e.g. , that they impose continuous emission limitations) to apply exclusively in nonattainment areas; these requirements are relevant to SIP provisions in general. The statutory requirements applicable to SIPs are not limited to areas designated nonattainment. To the contrary, section 107(a) impos es the responsibility on each state to attain and maintain the NAAQS “within the entire ge ographic areas comprising such State.” The requirement to maintain the NAAQS in section 107( a) clearly applies to ar eas that are designated attainment, including those that may previously have been designated nonattainment. Similarly, section 110(a)(1) explicitly require s states to have SIPs with provisions that provide for the implementation, maintenance and enforcement of the NAAQS. By inclusion of “maintenance,” section 110(a)(1) clearly encompasses areas design ated attainment as well as nonattainment. The SIPs that states develop must also meet a number of more specific requirements set forth in section 110(a)(2) and other secti ons of the CAA relevant to pa rticular air quality issues ( e.g. , the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 404 of 539 requirements for attainment plans for the different NAAQS set out in more detail in part D). Among those basic requirements that states mu st meet in SIPS are section 110(a)(2)(C), requiring a permitting program applicable to sources in areas designated attainment, and section 110(a)(2)(D)(i)(II), requiring SIP pr ovisions to prevent interference with protection of air quality in areas designated attainment in other states. Part C, in turn, imposes additional requirements on states with respect to prevention of significant deterioration of air quali ty in areas designated attainment. Although the EPA agrees that the C AA distinguishes between, and imposes different requirements upon, areas designated attainment vers us nonattainment, there is no indication that the statute distinguishes between the basic requirements for emi ssion limitations in these areas, including that they be continuous. Section 110(a)(2)(A) requires states to incl ude “emission limitations” in their SIPs “as may be necessary or appropriate to meet applic able requirements of” the CAA. The EPA notes that the commenters have raised other argumen ts concerning the precise meeting of “necessary or appropriate” ( see section VII.A.3 of this not ice), but in this context the Agency believes that because states are required to have SIPs that provide for “maintenance” of the NAAQS it is clear that the general requirements for emission limitati ons in SIPs are not limited to areas designated nonattainment. Section 110(a)(2 )(A) contains no language dist inguishing between emission limitations applicable in attain ment areas and emission limitations applicable in nonattainment areas. Significantly, the definition of the term “emission limitation” in section 302(k) likewise makes no distinction between requirements applicab le to sources in atta inment areas versus

nonattainment areas. The EPA sees no basis fo r interpreting the term “emission limitation” differently for attainment areas and nonattainment areas, with respect to whether such emission limitations must impose continuous controls on the affected sources. Most importantly, section*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 405 of 539 110(a)(2)(A) does explicitly require that any such emission limitations must “meet the applicable requirements” of the CAA, and the EPA interprets this to include the requirement that emission limitations apply continuously, i.e. , contain no exemptions for emissions during SSM events. This requirement applies equally in all areas, including attainment and nonattainment areas. The EPA’s interpretation of the CAA in the SSM Policy has long extended to SIP provisions applicable to attainment areas as well as to nonattainment areas. Since at least 1982, the SSM Policy has stated that SIP provisions with SSM exemptions are inconsistent with requirements of the CAA to provide both for attainment and maintenance of the NAAQS, i.e. , inconsistent with requirements applicable to both nonattainment and attainment areas. 350 Since at least 1999, the EPA’s SSM Policy has clearly stated that SIP provisions with SSM exemptions are inconsistent with protection of PSD increments in attainment areas. 351 The EPA provided its full statutory analysis with respect to SSM ex emptions and CAA requirements applicable to areas designated attainment in the bac kground memorandum accompanying the February 2013 proposal. 352 Finally, the EPA disagrees with the commenters ’ theory that, absent proof that the SIP deficiency has caused or will cause a specific violation of the NAAQS, the Agency lacks authority to issue a SIP call for SIP provisions that apply only in ar eas attaining the NAAQS. This argument is inconsistent wi th the plain language of sect ion 110(k)(5). Section 110(k)(5)

authorizes the EPA to issue a SIP call whenever th e SIP is substantially inadequate to attain or maintain the NAAQS, to mitigate interstate tr ansport or to comply with any other CAA

350 See 1982 SSM Guidance, Attachment at 1. 351 See 1999 SSM Guidance at 2. 352 See Memorandum, “Statutory, Regulatory, and Policy Context for this Rulemaking,” February 4, 2013, in the rulemaki ng docket at EPA-HQ-OAR-2012-0322-0029.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 406 of 539 requirement. The explicit reference to a SIP’s being inadequate to ma intain the NAAQS clearly

indicates that the EPA has aut hority to make a finding of subs tantial inadequacy for a SIP provision applicable to a ttainment areas, not only for a SIP pr ovision applicable to nonattainment areas. In addition, s ection 110(k)(5) explic itly authorizes th e EPA to issue a SIP call not only in instances related to a specific violation of the NAAQS but rather whenever the Agency determines that a SIP provision is inadequate to meet requirements related to attainment and maintenance of the NAAQS or any other applicable requirement of the Ac t, including when the provision is inadequate to meet the fundamental legal requirements applicable to SIP provisions. Were the EPA’s authority limited to issuing a SIP call only in the event an area was violating the NAAQS, section 110(k)(5) would not explicitly in clude requirements related to “maintenance” and would not explicitly include the statement “o therwise comply with any requirement of [the CAA].” 18. Comments that the EPA’s initial approval of these deficient provisions, or subsequent indirect approval of them through action on ot her SIP submissions, establishes that these provisions meet CAA requirements.

Comment: A number of commenters argued that because the EPA initially approved the SIP provisions at issue in this rulemaking, this establishes that thes e provisions meet CAA requirements. Other commenters argued that subsequent actions on other SIP submissions in effect override the fact that the SIP provisions at issue are legally deficient. For example, an industry commenter asserted that there have been “dozens of instances where EPA has reviewed

Alabama SIP revision submittals” and the EPA has never indicated “that it believed these rules

to be inconsistent with the CAA.” Other stat e commenters made similar arguments suggesting*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 407 of 539 that the EPA’s original approval of these provisions, and the fact that the EPA has not previously taken action to require states to revise them, indicates that they are not deficient. Response: The EPA disagrees with these commenters. The fact that the EPA once approved a SIP provision does not mean that the SIP provision is per se consistent with the CAA, or consistent with the CAA notwithstanding any later legal or factual developments. This is demonstrated by the very existence of the SI P call provision in section 110(k)(5), whereby the EPA may find that an “applicable implementation plan for any area is substantially inadequate to attain or maintain the relevant [NAAQS] ... or to otherwise comply with any requirement of” the CAA. This SIP call authority expressly authorizes the EPA to direct a stat e to revise its SIP to remedy any substantial inadequacy, including failure s to comply with legal requirements of the CAA. By definition, when the EPA promulgates a SIP call, this means that the Agency has previously approved the provision into the SIP, rightly or wrongly. The SIP call provision would be meaningless if a SIP provision were cons idered perpetually consistent with CAA requirements after it was origin ally approved, and merely because of that prior approval as commenters suggest. In the February 2013 proposal, the EPA acknowledged its own responsibility in approving pr ovisions that were inconsiste nt with CAA requirements. The EPA also disagrees with the argument th at the Agency’s action on other intervening SIP submissions from a state over the years sinc e the approval of the original deficient SIP provision in some way negates the original de ficiency. The industry commenter pointed to

“dozens of instances where EPA reviewed Alabama SIP revision submittals” as times when the EPA should have addressed any SSM-related defi cient SIP provisions. However, the EPA’s approval of other SIP revisions does not necessarily entail reexamination and reapproval of every provision in the SIP. The EPA often only examines the specific provision the state seeks to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 408 of 539 revise in the SIP submission without reexamin ing all other provisions in the SIP. The EPA

sometimes broadens its review if commenters br ing other concerns to the Agency’s attention during the rulemaking process that are releva nt to the SIP submission under evaluation. 19. Comments that exemptions for excess emi ssions during exempt SSM events would not distort emissions inventories, SIP control meas ure development or modeling, because the EPA’s regulations and guidance concerni ng “rule effectiveness” adequa tely account for these emissions, and therefore the proposed SIP calls are not needed or justified.

Comment : One commenter argued that provisions allowing exemptions or affirmative defenses for excess emissions during startup and s hutdown are consistent w ith a state’s authority

under CAA section 110 and that this is evidenced by the fact that the EPA has issued guidance on “rule effectiveness” that pl ainly takes into account a “d iscount” factor in a state’s

demonstration of attainment when it chooses to adopt startup/shut down provisions. This

commenter cited the EPA’s defini tion of “rule effectiveness” at 40 CFR 51.50 and EPA guidance on demonstrating a ttainment of PM 2.5 and regional haze air quality goals. 353 Response : The EPA disagrees with the characteri zation in this comment of past EPA guidance and with the conclusi on that the fact of the exis tence of EPA guidance on “rule effectiveness” would support th e claim that the CAA provides authority for exemptions or

affirmative defenses for excess emissions durin g startup and shutdown. Th e EPA’s definition of

“rule effectiveness” at 40 CF R 51.50 does not refer to startup and shutdown; it refers only to

353 The commenter appears to have been meani ng to cite to the draft EPA guidance document “Draft Guidance for Demonstrating Atta inment of Air Quality Goals for PM 2.5 and Regional Haze,” January 2, 2001. This draft guidance on PM 2.5 and Regional Haze was combined with similar guidance on ozone in the final guidance document “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM 2.5 , and Regional Haze,” April 2007, EPA-454/B-07-002.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 409 of 539 “downtime, upsets, decreases in control effici encies, and other deficiencies in emission estimates,” and once defined the term “rule effect iveness” is not subsequently used within 40 CFR part 51 in any way that woul d indicate that it is meant to cap ture the effect of exemptions during startup and shutdown. The EPA guida nce on demonstrating attainment of PM 2.5 and regional haze goals cited by the commenter also does not address rule effectiveness or excess emissions during startup and shutdown. The terms “startup” and “shutdown” do not appear in the attainment demonstration guidance. The EPA di d issue a different guidance document in 1992 on rule effectiveness, 354 but that document focused only on the preparation of emissions inventories for 1990, not on demonstrating attainment of NA AQS or regional haze goals. Moreover, the 1992 guidance document addressed ways of esti mating actual 1990 emissions in light of the likelihood of a degree of source noncompliance with applicable emission limitations, not on the emissions that would be permissi ble in light of the absence of a continuous emission limitation applicable during startup and shutdown. The te rms “startup” and “shutdown” do not appear in the 1992 guidance. In 2005, the EPA replaced th e 1992 guidance document on rule effectiveness as part of providing guidance for the implementation of the 1997 ozone and PM 2.5 NAAQS. 355 Like the 1992 guidance, the 2005 gui dance associated “rule effec tiveness” with the issue of noncompliance and did not provide any specific advice on quantifyi ng emissions that could be legally emitted because of SSM exemptions in SIPs. To avoid misunderstanding, the 2005 guidance included a question and an swer on startup and shutdown em issions to the effect that

354 “Guidelines for Estimating and Applying Rule Effectiveness for Ozone/CO State Implementation Plan Base Year Inve ntories,” November 1992, EPA-4S2JR-92.010

. 355 “Emissions Inventory Guidance for Implementa tion of Ozone and Part iculate Matter National Ambient Air Quality Standards (NAAQS) and Regi onal Haze Regulations,” Appendix B, August 2005, EPA-454/R-05-001.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 410 of 539 emissions during startup and shutdown should be included in “actual emissions.” This question

and answer included the statem ent, “[L]ess preferably, [emi ssions during startup, shutdown, upsets and malfunctions] can be accounted for using the rule effectiveness adjustment procedures outlined in this guidance.” However, other than in this question and answer, the 2005 guidance does not mention emissions during startup a nd shutdown events; it focuses on issues of noncompliance with applicable emission limitati ons. The fact that the 1992 guidance document

did not intend for “rule effectiveness” to enco mpass SIP-exempted emi ssions during startup and shutdown, and that the 2005 guidanc e also did not, is confirmed by a statement in a more recent draft EPA guidance document: “In addition to estimating the actual em issions during startup/shutdown periods, another approach to estimate startup/s hutdown emissions is to adjust control parameters via the emissions calculation parameters of rule effectiveness or primary capture efficiency. Using these parameters for startup/shutdown adjustments is not th eir original purpose , but can be a simple way to increase the emissions and still have a record of the routine versus startup/shutdown portions of the emissions. (Emphasis added.)” 356 Furthermore, as explained in the proposals for this action and in this notice, the EPA believes that it is a fundamental requirement of the CAA that SIP emission limitations be continuous, which therefore precludes exempti ons for excess emissions during startup and shutdown. At bottom, although it is true that th ese guidance documents indicated that one less preferable way to account for startup and s hutdown emissions could be through the rule effectiveness analysis, this does not in any way indicate that exemptions from emissions limitations would be appropriate for such periods.

356 “Draft Emissions Inventory Guidance for Impl ementation of Ozone [and Particulate Matter]* National Ambient Air Quality Standards (NAAQS ) and Regional Haze Regulations,” April 11, 2014, page 62.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 411 of 539 Comment : A commenter argued that the EPA has not shown any substantial inadequacy with respect to CAA requirements but that the cl osest the EPA comes to identifying a substantial inadequacy is in the EPA’s discussion of its concern regarding the impacts of SSM exemptions on the development of accurate emissions invent ories for air quality modeling and other SIP planning. This commenter and another commenter in particular noted a passage in the February 2013 proposal that stated that emission limitations in SIPs are used to meet various requirements for attainment and maintenance of the NAAQS a nd that all of these uses typically assume continuous source compliance with emission limitations. 357 These commenters disagreed with

the EPA’s statement that all of these uses typically assume continuous source compliance with applicable emission limitations, and the commen ters cited several EPA guidance documents and statements that, they believe, address SSM and ensure that states do not simply assume continuous compliance. These commenters in addition cited to foot note 4 of the EPA’s 1999

SSM Guidance. 358 The commenters argued that as long as states are complying with the EPA’s inventory and modeling rules and guidance, SSM exemptions and similar applicability provisions have no negative impact on SIP planning. Response : The EPA acknowledges that the cited st atement in the February 2013 proposal, that various types of required analysis used to develop SIPs or permits “typically assume continuous source compliance with emission limit ations,” was an overs implification of a complex situation. However, the EPA disagrees w ith the commenters’ asse rtion that the EPA’s

357 February 2013 proposal , 78 FR 12459 at 12485. 358 The EPA interprets the citation “ See supra pp. 21-24” as being inte nded to refer to those pages of “Guidelines for Estimating and Appl ying Rule Effectiveness for Ozone/CO State Implementation Plan Base Year Inve ntories,” November 1992, EPA-4S2JR-92.010, which this commenter did not refer to by title.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 412 of 539 inventory rules and other guidance are sufficient to ensure that SSM exemptions, where they still exist in SIPs, have no negative impact on SIP pl anning. Also, if the EPA were to allow them, such exemptions could become more prevalen t and have a larger negative effect. More importantly, as explained elsewhere in this noti ce, the EPA believes that it is a fundamental requirement of the CAA that SIP emission limita tions be continuous, which therefore precludes exemptions for excess emissions during SSM events . This would be the case even if the EPA’s guidance could and did ensure that SSM exemp tions would have no negative impact on whether SIPs actually provide for attainment and maintenance of the NAAQS. Generally, the EPA’s guidance and rules do not say that it is correct for estimates of source emissions used in SIP development to be based on an assumption of continuous compliance with the SIP emission limitations even if the SIP contains exemptions for SSM periods. Rather, the EPA has generally emphasized that SIPs and permits should be based on the best available information on actual emissions, in cluding in most cases the effects of known or reasonably anticipatable noncompliance w ith emission limitations that do apply. 359 Because the EPA’s longstanding SSM Policy has interpreted the Act to prohibit exemptions during SSM events, it has not been a focus of EPA guidance to explain to states how to take account of such exemptions. As the commenters have pointed out, some aspects of some EPA guidance documents have some relationship to the issue of accounting for SSM exemptions. Nevertheless,

359 New source permitting under the prevention of si gnificant deterioration (PSD) program is an exception to the principle that the effects of noncompliance shoul d be included in estimates of source emissions. The air quality impact analys is for a proposed PSD permit is based on an assumption that the source will operate without malfunctions. However, it may be necessary in this type of analysis to consid er excess emissions that are the re sult of poor maintenance, careless operation or other pr eventable conditions. See 40 CFR part 51, appendix W, section 8.1.2, footnote a.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 413 of 539 taken together, the EPA’s guidance does not and cannot ensure that emission estimates used in developing SIPs and permits co rrectly reflect actual emissions in all cases in which SSM exemptions still exist in SIPs, particularly for sources that, unlike all or most of the sources represented by these two commenters, are not su bject to continuous emissions monitoring. For a source not subject to conti nuous emissions monitoring, when excess emissions during SSM events are exempted by a SIP—whether auto matically, on a special showing or through director’s discretion—it is much more likely th at those emissions would not be quantified and reported to the air agency such that they coul d be accounted for in SIP and permit development. For example, when the SIP includes exemptions for excess emissions during SSM events, there may be no motive for a source to perform a special stack test during a SS M period in which there is no applicable emission limitati on and possibly no legal basis for an air agency to require such

a stack test. It would also be unusual to find well-documented emission factors for such transient operation that could be used in place of source-specific testing. As explained in a response provided earlier in this notice, the EPA guidance documents also cited by these commenters in fact do not addr ess how the effect of exemptions in SIPs for excess emissions during startup and shutdown can be accounted for in an attainment or

maintenance demonstration. The cited 1992 “rule e ffectiveness” guidance in regard to issues such as noncompliance in the form of non-operation of control equipment, malfunctions, poor maintenance and deterioration of control equi pment was meant to address how the issues affected emissions in 1990, not in a future year when the NAAQS must be attained. The 2005 guidance also did not provide any particular a dvice on how “rule effectiveness” concepts could be used to estimate emissions during exempt SSM periods. Given that the EPA’s longstanding SSM Policy has been that exemptions for excess emissions during SSM events are not*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 414 of 539 permissible, the EPA had no reason to provide guidance on how attainment demonstrations should account for such exemptions. The commenters are right to infer that the EP A does believe that where exemptions for excess emissions during anticipatable events still remain in current SIPs, attainment demonstrations ideally should account for them . Indeed, the EPA’s guidance has recommended that all emissions during startup and shutdown events be included in both hi storical and projected

emissions inventories. 360 However, as long as exemptions for excess emissions during SSM events have the effect of making such excess emi ssions not be violations and thus not reportable as violations, it will be difficult for air agencies to have confidence that they have sufficient knowledge of the magnitude, location and timing of such emissions as would be needed to accurately account for those emissions in attainme nt demonstrations, esp ecially for NAAQS with averaging periods of one day or less. The EP A has promulgated emissions inventory reporting rules, but these rules apply requirements to air agencies rather than to the sources that would have actual knowledge of startup and shutdown events and emissions. To make a complying inventory data submission to the EPA, an ai r agency does not have to obtain from sources information on the magnitude and timing of emissions during SSM events for which an exemption applies, and to the EPA’s knowledge mo st air agencies do not obtain this information.

360 For example, see “Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Qu ality Standards (NAAQ S) and Regional Haze Regulations,” Appendix B, August 2005, EPA-454/R-05-001. A recent draft EPA guidance on the preparation of emissions inventories for at tainment demonstrations recognizes that, in contrast to startup and shutdown emissions, em issions during malfunctions are not predictable and do not need to be included in projected i nventories for the future year of attainment. See “Draft Emissions Inventory Guidance for Impl ementation of Ozone [and Particulate Matter]* National Ambient Air Quality Standards (NAAQS ) and Regional Haze Regulations,” April 11, 2014, page 62.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 415 of 539 The EPA’s emissions inventory rules require the reporting of historical annual-total emissions only (and in some areas “typical” seasonal and/or daily emissions for certain pollutants), not dayto-day emissions. Actual emissions during SSM events should be included in these annual emissions. While data formats are available from the EPA to allow a state to segregate the total annual emissions during SSM events from annual emissions during other type of operation, to segregate the emissions is not a requirement and few states do so. Moreover, the EPA’s emissions inventory rules require reporting on most sources only on an “every third year” basis, which means that unless an air agency has author ity to and does require more information from sources than is needed to meet the air agency’s reporting obligation to th e EPA, the air agency will not be in a position to know whether and ho w, between the triennial inventory reports, excess emissions during startup and shutdown ma y be changing due to variations in source operation and possibly affecting attainment or maintenance. Thus, the EPA’s emissions inventory rules provide air agencies only limited leverage in terms of ability to obtain detailed information from sources regarding the extent to which actual emissions during SSM events may be unreported in emissions inventories, due to SIP exemptions. The EPA believes that when exemptions for excess emissions during SSM ev ents are removed from SIPs, thereby making high emissions during SSM events specifically re portable deviations from emission limitations for more sources than now report them as such, it will be easier for air ag encies to understand the timing and magnitude of event-related emissions that can affect attainment and maintenance. However, this belief is not the basis for this SIP call action, only an expected useful outcome of

it.

Footnote 4 of the EPA’s 1999 SSM Guidance su ggested that “[s]tates may account for [potential worst-case emissions th at could occur duri ng startup and shutdown] by including them*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 416 of 539 in their routine rule effectiveness estimates. ” This statement in the 1999 document’s footnote may seem at odds with the statement in this re sponse that the “rule effectiveness” concept was not meant to embrace excess emissions during startup and shutdown that were allowed because of SIP exemptions. However, the footnote is at tached to text that addresses “worst-case” emissions that are higher than allowed by the app licable SIP, because that text speaks about the required demonstration to support a SIP revision containi ng an affirmative defense for violations of applicable SIP emission limitations. Thus, es timates of such worst-case emissions would reflect the effects of noncompliance, which is within the intended scope of the EPA’s “rule effectiveness” guidance. Footnot e 4 was not referring to the i ssue of how to account for the effect of SSM exemptions. 361

Comment : A number of commenters stated th eir understanding that the EPA has proposed SIP calls as a way of improving air agencies’ implementati on of EPA-specified requirements in emissions invent ory or modeling, and they stated that if this is the EPA’s

concern then the EPA should address the issue in that context. Response : To clarify its position, the EPA explains here that while it believes that approvable SIP revisions in response to the prop osed SIP calls will have the benefit of providing information on actual emissions during SSM events that can improve emi ssions inventories and modeling, the availability of this additional information is not the basis for the SIP calls that are being finalized. The EPA believes that it is a fundamental requi rement of the CAA that SIP emission limitations be continuous, which theref ore precludes exemptions for excess emissions during startup and shutdown.

361 In light of the NRDC v. EPA decision, affirmative defense pr ovisions are not allowed in SIPs any longer, so this aspect of the 1999 SSM Guidance is no longer relevant.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 417 of 539 Comment : An air agency commenter stated that f acilities in its stat e are required to submit data on all annual emissions, including emissions from startup and shutdown operation (and malfunctions), as part of its annual emi ssions inventory, and that it takes these emissions into consideration as part of SIP development. Response : The EPA appreciates the efforts of this commenter to develop SIPs that account for all emissions. However, these effort s and whatever degree of success the commenter enjoys do not change the fundamental requirement of the CAA that SIP emission limitations be continuous, which therefore precludes exempti ons for excess emissions during startup and

shutdown.

Comment : A commenter argued that even to th e extent SSM emissions present some level of uncertainty in model-based air quality projections, that uncertainty is small compared to other sources of uncertainty in modeling analyses, and so SSM emissions will not have any significant impact on attainment demonstrations or any underlying air quality modeling analysis. Response : In support of this very general statem ent, the commenter provided only its own assessment of its own experience and the similar opinion of unnamed permitting agencies. In any case, this SIP call action is not based on any EPA determination about how modeling uncertainties due to SSM exemptions in SIPs compare to other modeling uncertainties. 20. Comments that exemptions for excess emi ssions during SSM events are not a concern with respect to PSD and prot ection of PSD increments.

Comment: Commenters asserted that the EPA has not adequately explained the basis for its concerns about the imp act of emissions during SSM events on PSD increments.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 418 of 539 Response: The EPA disagrees. As explained in detail in the background memorandum included in the docket for this rulemaking, 362 CAA section 110(a)(2)(C) requires that a state’s SIP must include a PSD program to meet CAA requirements for attainment areas. 363 In addition, section 161 explains that “[e]ach [SIP] shall contain emission limitations and such other measures as may be necessary . . . to prevent si gnificant deterioration of air quality for such region . . . designated . . . as attainment or unclass ifiable.” Specifically, each SIP is required to contain measures assuring that certain polluta nts do not exceed designa ted maximum allowable

increases over baseline concentrations. 364 These maximum allowable increases are known as PSD increments. Applicable EPA regulations require states to include in their SIPs emission limitations and such other measures as may be nece ssary in attainment area s to assure protection

of PSD increments. 365 Authorizing sources in attainment areas to exceed SIP emission limitations during SSM events compromises the protection of these increments. The commenters’ concerns seem to be focused on PSD permitting for individual sources

rather than on emission limitations in SIPs. The commenters asserted that the EPA already adequately accounts for all emissions during SS M events when calculating the baseline and

362 See Memorandum, “Statutory, Regulatory, and Policy Context for this Rulemaking,” February 4, in the rulemaking doc ket at EPA-HQ-OAR-2012-0322-0029. 363 “Each implementation plan . . . shall . . . include a program to provide for . . . regulation of the modification and construction of any stationary source within th e areas covered by the plan as necessary to assure that [NAAQS] are achieved, including a permit program as required in . . . part C.” CAA section 110(a)(2)(C). 364 CAA section 163. 365 See 40 CFR 51.166(c).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 419 of 539 increment consumption and expressed concern about the potential fo r “double counting” of emissions by counting them both toward the base line and against increment. The EPA agrees

that emissions should not be double-counted and ha s regulatory requirements in place to ensure

that emissions are either attributed to the ba seline or counted against increment but not both. 366 Nevertheless, permitting agencies base their calculations of both the baseline and increment consumption on air quality data repres enting actual emissions from sources. 367 As explained more fully in the background memorandum accomp anying the February 2013 proposal, the EPA is concerned that as a result of SSM exemptions in SIPs, inventories of actual emissions often do not include an accurate accounting of excess emissions that occur during SSM events. Moreover,

the models used to calculate increment c onsumption typically assume continuous source compliance with applicable emission limitations. 368 Authorizing exceedances of emission limitations during SSM events would compromise the accuracy of the projections made by these

models. Accurate calculations of the baseline and increment consumption rely on the correct accounting of all emissions, including those oc curring during SSM events. Without accurate data, the EPA cannot be certain that state agencies are calc ulating baseline or increment

366 See 40 CFR sections 51.166 and 52.21. 367 See CAA section 169(4) (defining baseline concen tration); 40 CFR 51.16 6(b)(13)(i) (setting forth what is included in baseline concen tration; 40 CFR 52.21(b)(13)(i) (same). The Federal Register document promulgating the revised PSD regulati ons also explained this point. In that notice, the EPA explained, “[B]aseline concentrat ions reflect actual air quality in an area. Increment consumption or expansion is directly related to baseline concentration. Any emissions not included in the baseline are counted against the increment. The complementary relationship between the concepts supports using the same a pproach for calculating emissions contributions to each.” 45 FR 52676, 52718 (August 7 1980). “Act ual emissions” is defined in 40 CFR sections 51.166(b)(21)(i ) and 52.21(b)(21)(i). 368 See 45 FR 52717 (“increment consumption and expansion should be based primarily on actual emissions increases and decreases, which can be presumed to be allowable emissions for sources subject to source-speci fic emissions limitations.”).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 420 of 539 consumption correctly or that increments in attainment areas are not being exceeded. For the foregoing reasons, the EPA is concerned that SSM ex emptions in SIPs compromise the ability of the PSD program to protect air quality increments. 21. Comments that because ambient air quality has improved over the duration of the CAA through various regulatory programs such as the Acid Rain Program, this disproves that SIP provisions including exemptions for excess emi ssions during SSM events pose any concerns with respect to protection of public health and the environment.

Comment: Industry commenters claimed that because ambient air quality data show that air quality has been consistently improving over a period of years, this proves that exemptions for emissions during SSM events do not impede th e ability of areas to attain and maintain the NAAQS. The commenters provided a chart showi ng percentage reduction in emissions of the various NAAQS pollutants ranging from 52 percent reduction in NOx between 1980 and 2010 to 83 percent reduction in direct PM 10 emissions for that same tim e period. The commenters further claimed that a significant portion of the recen t emissions reductions have been achieved by electric utilities. The commenters also provide d charts and graphs showing reductions in pollutants under the CAA Acid Rain Program. The commenters further claimed that the states in which they operate—Alabama, Florida, Georgia, Mississippi and North Carolina—are meeting the NAAQS, with isolated exceptions. The comm enters further stated that, although the EPA recently has promulgated several new NAAQS, the attainment plans for those standards are not yet due, and thus the new standards cannot jus tify the SIP call. The commenters concluded by noting that the states’ success in achieving th e various NAAQS, even as the NAAQS have been strengthened, demonstrates that the existing SSM exemptions in SIP provisions identified by the EPA do not “place the NAAQS at risk.” Regarding vi sibility, the commenters noted that plans to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 421 of 539 show progress in meeting the regional haze goal were due in 2013 and that evidence shows that visibility is also improving notwithst anding the existing SSM exemptions. Response: The EPA agrees that many areas in the U.S. have made great strides in improving ambient air quality under the CAA. Ho wever, excess emissions from sources during SSM events have the potential to undermine that progress and are also inconsistent with the requirements of the CAA, as discussed elsewhere in the February 2013 proposal and in this final

action. The EPA notes that the fact that an area has attained the NAAQ S does not demonstrate that emissions during SSM events do not have the potential to undermine attainment or maintenance of the NAAQS, interfere with protection of PSD increments or interfere with visibility. For certa in pollutants, such as lead or SO 2 , a single source could have a single SSM

event that could cause an exceedance of the NAA QS that would otherwise not have occurred. It is through its SIP that a state demonstrates that it has in place an air quality management program that will attain and maintain the NAAQS on an ongoing basis, and so it is critical that the state, through its SIP provisions, can ensure that emissions during normal source operation including startup and shutdown events do not exceed levels relied on for purposes of developing attainment and maintenance plans. Similarly, SIP provisions designed to pr otect visibility must also meet requirements of the CAA, and exem ptions for emissions during SSM events would likewise have the potential to undermine visibi lity objectives of the CAA. Thus, it is not appropriate to exempt emissions during thes e SSM events from compliance with emission limitations in SIPs. As explained in this final action, the state has flexibility in choosing how to regulate source during these periods of operation, and sources do not necessarily have to be subject to the same numerical emissions limita tions or the same othe r control requirements during startup and shutdown that apply during other modes of operation. However, SIP emission*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 422 of 539 limitations must be continuous, and t hus sources must be subject to requirements that apply at all times including during startup and shutdown. 22. Comments that the EPA’s position that SIP pr ovisions such as automatic exemptions for excess emissions during SSM events hinder effec tive enforcement for violations is incorrect,

because there have been a number of citizen suits brought under the CAA.

Comment: According to industry commenters, th e EPA’s argument that deficient SIP provisions concerning emissions dur ing SSM events limit enforcement of violations of emissions

limitations under sections 113 and 304 is inaccu rate, because “the facts show that SSM provisions do not preclude or hinder enforcement of any CA A requirements.” The commenters provided a list of “recent” enforcement actions an d asserted that “[t]he sheer number of cases

demonstrates that the existi ng regulations provide ample oppo rtunity for enforcement.” The commenters cited to litigation brought by citizen groups that th e commenters asserted has

resulted in settlements includi ng “injunctive relief and supplemental environmental projects (“SEPs”) worth tens of millions, if not hundreds of millions, of dollars.” The commenters also cited to one example to suggest that “wher eas EPA and/or States may use enforcement discretion” in certain types of cases, “citizen groups do not.” Response: The EPA disagrees with the commenters ’ logic that the mere existence of enforcement actions negates the concern that de ficient SIP provisions in terfere with effective

enforcement of SIP emission limitations. The EP A believes that deficient SIP provisions can interfere with effective enforcement by air agen cies, the EPA and the public to assure that sources comply with CAA requirements, contra ry to the fundamental enforcement structure provided in CAA sections 113 and 304. For exampl e, automatic or discretionary exemption provisions for excess emissions during SSM even ts by definition completely eliminate the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 423 of 539 possibility of enforcement for what may otherwis e be clear violations of emissions limitations during those times. Affirmative defense provision s purport to alter or eliminate the statutory jurisdiction of courts to determine liability or to impose remedies for violations. These types of provisions eliminate the opportunity to obtain injunctive relief or pe nalties that may be needed to ensure appropriate efforts to design, operate a nd maintain sources so as to prevent and to minimize excess emissions, protect the NAAQS and PSD increments and meet other CAA requirements. Similarly, the exemption of sources from liability for excess emissions during

SSM events eliminates incentives to minimize em issions during those times. These exemptions

thus reduce deterrence of future violations from the same sources or other sources during these periods. In the February 2013 proposal, the EPA discu ssed in detail an enforcement case that illustrates and supports the Agency’s position. 369 In that case, citizen suit plaintiffs sought to bring an enforcement action against a source fo r thousands of self-reported exceedances of emission limitations in the source’s operating pe rmit. The source asserted that those exceedances were not “violations,” through application of a permit provision that mi rrored an underlying Georgia SIP provision. The U.S. Co urt of Appeals for the Eleventh Circuit (Eleventh Circuit) ultimately determined that the provision created an “affirmative defense” for SSM emissions that shielded the source from liability for numerous violations. The court no ted that even if the approved provision in Georgia’s SIP was incons istent with the EPA’s guidance on the proper treatment of excess emissions during SSM events , the defendant could rely on the provision

because the EPA had not taken action thr ough rulemaking to rectify any discrepancy. 370 In this

369 See February 2013 proposal, 78 FR 12459 at 12504–05. 370 See Sierra Club, et al. v. Georgia Power Co. , 443 F.3d 1346 (11th Cir. 2006).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 424 of 539 final action on the Petition, the EP A has determined that the speci fic SIP provision at issue in

that case is deficient for severa l reasons. Had that deficient SIP pr ovision not been in the SIP at the time of the enforcement action, then the pr ovision would not have had any effect on the outcome of the case. Instead, the courts would ha ve evaluated the alleged violations and imposed any appropriate remedies consistent with the applicable CAA provision s, rather than in accordance with the SIP provision that imposed th e state’s enforcement discretion preferences on other parties contrary to th eir rights under the CAA. As the outcome of this case demonstrates, the mere fact that a number of enforcement

actions have been filed does not mean that th e deficient SIP provisions identified by the EPA in

this SIP call action do not hinde r effective enforcement under sections 113 and 304. To the contrary, that case illustrates ex actly how conduct that might otherw ise be a clear violation of the applicable SIP emission limitations by a sour ce was rendered immune from enforcement through the application of a provision that operated to excuse liability for violations and potentially allowed unlimited excess emissions during SSM events.

The commenters cited 15 other enforcemen t cases brought by government and citizen groups over a span of 17 years, but the commen ters do not indicate whether any SIP provisions relevant to emissions during SSM events were involved, nor do th e commenters indicate whether any provisions at issue in this SIP call action we re involved in any of the enforcement cases it*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 425 of 539 cited. 371 Even if an enforcement action has been in itiated, the EPA’s fundamental point remains: SIP provisions that exempt what would otherwise be a violation of SIP emissions limitations can undermine effective enforcement during times when the CAA requires continuous compliance with such emissions limitations. By interfering w ith enforcement, such provisions undermine the integrity of the SIP process and the rights of pa rties to seek enforcement for violation of SIP

emission limitations. A number of commenters on the February 2013 proposal indicated that, from their perspective, a primary benefit of automatic or discretionary exemptions in SIP provisions applicable to emissions during SSM events is to shield sources from liability. Similarly, commenters on the SNPR indicated that, from thei r perspective, a key benefit of affirmative defense provisions is to preven t what is in their opinion inappropriate enforcement action for violations of SIP emission limitations during SSM events. The EPA does not agree that the purpose of SIP provisions should be to preclude or impede effective enforcement of SIP emission limitations. To the contrary, the poten tial for enforcement for violations of CAA requirements is a key component of the enforcemen t structure of the CAA. To the extent that

commenters are concerned about in appropriate enforcement actions for conduct that is not in

371 Even if these cases did all involve SIP provi sions relevant to SSM events, the sampling of cases cited by the commenter still do not prove the commenter’s point. The commenter indicated that 11 of the 15 cited cases resulted in settlement. The EPA presumes that neither party admitted any fault in these settlements and it remain s unknown whether the court would have found the existence of a violation. In addition, because these cases were settled, it is unknown whether exemption or affirmative defense provisions would have prevented the court from finding liability for violation of a CAA emissions limitation that w ould otherwise have applied. In one additional case cited by the commenter, the cour t determined that the defendant successfully asserted an affirmative defense to alleged violations of a 6-minute 40-p ercent opacity limit. The outcome of this case evidently supports the EPA’s concerns about the impacts of such provisions.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 426 of 539 violation of CAA requirements, the EPA believes that the sources already have the ability to defend against any such invalid claims in court. 23. Comments that the EPA’s alleged inclusion of “exemptions” or “affirmative defenses” in enforcement consent decrees negates the Agency’s interpretation of the CAA to prohibit them in SIP provisions.

Comment: One industry commenter claimed that the EPA has itself recently promulgated an exemption for emissions during SSM even ts. The commenter c ited an April 1, 2013, settlement agreement in a CAA enforcement case against Dominion Energy as an example. According to the commenter, this settlement agreement “provides allowances for excess emissions during startup and shutdown” and “allows an EGU to operate w ithout the ESP when it is not practicable.” The commenter characterized this as the creation of an exemption from the applicable emission limitations during startup an d shutdown. The commenter further alleged that the settlement agreement “provides for an affirmative defense to stipulated penalties for excess emissions occurring during start up and shutdown.” The commenter intended the fact that the EPA agrees to this type of provision in an en forcement settlement agreement to establish that affirmative defense provisions must also be vali d in SIP provisions so that sources can assert them in the event of any violation of SIP emission limitations. Response: The EPA disagrees with the commen ter concerning the EPA’s purported creation of exemptions for SSM events in enforc ement consent decrees or settlement agreements. Consent decrees or settlement agreements nego tiated by the EPA to resolve enforcement actions do not contain automatic exemptions for exce ss emissions during SSM periods or any other provisions that are similar to th e SIP provisions that the EPA ha s found substantially inadequate

in this SIP call action.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 427 of 539 The EPA has the authority to enter consent decrees and settlement agreements in its

enforcement cases and uses this discretion to re solve these cases. Settlements aim to achieve the best possible result for a given case, taking into account its specific circumstances and risks, but are still compromises between th e parties to the litigation. The EPA also disagrees with comments that attempt to equate affirmative defense provisions in SIPs with affirm ative defense clauses that the EPA and defendants agree to contractually in a consent decree or settlement agreement to resolve an enforcement case. Some consent decrees and settlement agreements that the EPA enters into contain provisions referred to as “affirmative defenses” that apply only with respect to whether a source must pay stipulated penalties specified in the consent decree or se ttlement agreement. However, the EPA does not believe these agreements are counter to CAA re quirements. The provisions in these contractual agreements are distinguishable from affirmative defense provisions in SIPs for excess emissions during SSM events. Affirmative defenses to stipul ated penalties apply only in the limited context

of violations of the contract terms of the consent decree or settlement agreement. Significantly, these affirmative defense provisi ons apply only to the stipulated penalties of the consent decree or settlement agreement and do not carry over for incorporation into the source’s permit. Most importantly, these affirma tive defense provisions do not affect the penalty for violations of CAA requirements in general or of SIP emission limita tion violations in particular. Further, a consent decree is itself a co urt order, and where thes e provisions have been used in a consent decree they are sanctioned by the court and cannot be seen as a compromise of the court’s own jurisdiction or authority. Ind eed, the specific consent decree cited by the commenter contains exactly these types of “affi rmative defense” provisions that are applicable*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 428 of 539 only to the stipulated penaltie s imposed contractually by the c onsent decree and that do not operate to create any other form of affirm ative defense applicable more broadly. The EPA’s use of these provisions in enfo rcement consent decrees or settlement agreements is not inconsistent with the EPA’ s interpretation of the CAA to preclude such provisions in SIPs. The EPA interprets the CAA to preclude such affirmative defenses in SIP provisions because they purport to al ter or eliminate the jurisdiction of courts to find liability or to impose remedies for CAA violations in the even t of judicial enforcement. No such concern is presented by the types of provisions in consent decrees or settlement agreements raised by the commenters, because the terms of such agreements must be approved and sanctioned by a court. 24. Comments that the EPA should provide more than 18 months for the SIP call because state law administrative process can take longer than that.

Comment: Several state and industr y commenters claimed that states will need longer than 18 months to submit SIPs in response to a SIP call. One state commenter argued generally

that more time is needed for the state to “ch ange rules and submit a pr oposed SIP revision” but did not provide any detail on how much more tim e is needed. The commenter concluded that a “total of five years” is needed for both the st ate to complete its actions and for facilities “to change operating procedures or add hardware.” Another state co mmenter claimed states would need at least 3 years to subm it revised plans and cited to 40 CFR 51.166(a)(6) as providing a 3- year window for submission of SIP revisions. An industry commenter asserted that it has taken EPA numerous years to address the startup and shutdown provisions in its own MACT standards and that states will need a similar amount of time to “unspin” the SSM provisions from SIP emission limitations and replace them with new requirements. The commenter pointed to the difficulty of modifying multiple permits*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 429 of 539 and source-specific or source-category specific regulations. The commenter urged the EPA to provide much more time that the 18 months allowed by statute for a SIP call through “a transition period of a reasonable le ngth far exceeding 48 months.” Another industry commenter stated that more time is necessary but recognized that the maximum statutory period is 18 months. The co mmenter supported the EP A’s providing states with the full 18 months to submit SIP revisions, because that time is n eeded in order for the states to undertake the necessary technical analyses to support th e SIP revisions and in order to allow for the state rulemaking processes. Response: The EPA recognizes that rule developm ent and the associated administrative processes can be complex and time-consuming for states and for the Agency. Thus, the EPA is providing the maximum period allowed under CAA s ection 110(k)(5)—18 mont hs—for states to submit SIP revisions in response to the SIP call. The EPA does not have authority under the statute to provide states with a longer period of time to submit these SIP submissions. To assist states in responding to this SIP call, the EPA is providing updated and comprehensive guidance concerning CAA requirements appl icable to SIP provisions with respect to emissions during SSM events. Ideally, this guidance will allow states and the EPA to address the existing deficiencies as efficiently as possible, given the statutory schedules applicable to both states and the Agency. The commenter who cited to 40 CFR 51.166(a)(6) is incorrect that it provides authority for the EPA to grant states 3 y ears to correct SIPs in respons e to a SIP call. The regulatory provision cited by the commenter is part of the EPA’s regulat ions for the PSD program and simply provides that if the EPA amends that s ection of the PSD regulations, then a state will have 3 years to make a SIP submission to revise its SIP to meet the new PSD requirements in*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 430 of 539 response to such amendments. This final acti on does not amend the PSD regulations and 40 CFR 51.166(a)(6) is not implicated. Under CAA secti on 110(k)(5), the EPA is only authorized to provide a maximum period of 18 months for states to submit SIP revisions to rectify the SIP

deficiencies.

25. Comments that EPA should issue an inte rim enforcement policy, with respect to enforcement between the time that states revise SIP requirements and source permits are revised to reflect those changes.

Comment: One commenter argued that if the EP A finalizes the proposed SIP call for provisions applicable to emissi ons during SSM events, it will ta ke state regulators a significant period of time to “disaggregate” the effect of those deficient provisions on various other SIP provisions and the requirements of source opera ting permits. Because these corrections to SIP provisions and permit requirements will take time to occur, the commenter asserted that “a transition period of reasonable length far exceedi ng 48 months will be needed to shield industry from enforcement.” The commenter thus requested that the EPA impose such a transition period. In addition, the commenter suggested that th e EPA should create “an interim enforcement policy” to shield sources and allow reliance on affirmative defense provisions “even after SIPs are corrected until permits reflect those changes.” The commenter posed this request based upon concern that there will be industry confusion con cerning what requirements apply to individual sources until permits are revised to reflect th e correction of the deficient SIP provisions. Response: The EPA agrees with the commenter that it will take time for states to make the necessary SIP revisions in response to this SIP call, for the EPA to evaluate and act upon those SIP submissions and subsequently for states or the Agency to revise operating permits in the ordinary course to reflect the corrected state SIPs. As explaine d in the February 2013*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 431 of 539 proposal, the EPA consciously elected to proc eed via its SIP call au thority under section 110(k)(5) and to provide the stat utory maximum of 18 months fo r the submission of corrective SIP revisions. The EPA chose this path specifically in order to provide states with time to revise their deficient SIP provisions correctly and in the manner that they think most appropriate, consistent with CAA requirements. The EPA al so explicitly acknowle dged that during the pendency of the SIP revision proces s, and during the time that it will take for permit terms to be revised in the ordinary course, sources will rema in legally authorized to emit in accordance with current permit terms. 372 The EPA is in this final action reiterating that the issuance of the SIP call action does not automatically alter any provisions in existing operating permits. By design, sources for which emission limitations are incorporated in permits will thus have a de facto transition period during which they can take steps to assure that they will ultimately meet the revised SIP provisions ( e.g. , by changing their equipment or mode of ope ration to meet an appropriate emission limitation that applies during star tup and shutdown instead of relying on exemptions). Sources subject to permit requirements will thus have yet more time (beyond the 18 months allowed for the SIP revision in response to this SIP call actio n) over the permit review cycle to take steps to meet revised permit terms reflecting the revise d SIP provisions. However, the EPA does not agree with the commenter that there is a need fo r a “transition period” to “shield” sources from enforcement. The EPA’s objective in this action is to eliminate impermissible SIP provisions that exempt emissions during SSM events or otherw ise interfere with effective enforcement for violations that occur during such events. Fu rther delaying the time by which sources will be

372 See February 2013 proposal, 78 FR 12459 at 12482.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 432 of 539 expected to comply with SIP provisions that are consistent with CAA requirements is inappropriate. Moreover, the primary purpose of SI P provisions is not to shield sources from liability for violations of CAA re quirements but rather to assure th at sources are required to meet CAA requirements. The EPA shares the commenter’s concern that there is the potential for confusion on the part of sources or other partie s in the interim period between the correction of deficient SIP provisions and the revision of source operating pe rmits in the ordinary course. However, the EPA presumes that most sources required to have a permit, esp ecially a title V operating permit, are sufficiently sophisticated and aware of their legal right s and responsibili ties that the possibility for confusion on the part of sources should be very limited. Likewise, by making clear

in this final action that sources will continue to be authorized to operate in accordance with existing permit terms until such time as the perm its are revised after the necessary SIP revision, the EPA anticipates that other part ies should be on notice of this fact as well. Regardless of the potential for confusion by any party, the EPA beli eves that the legal principle of the “permit shield” is well known by regulated entities, regu lators, courts and othe r interested parties. Accordingly, the EPA is not issuing any “enforc ement policy” in connection with this SIP call

action. 26. Comments that a SIP call directing states to eliminate exemptions for excess emissions during SSM events is a “paper exercis e” or “exalts form over substance.”

Comment: A number of commenters argued that by requiring states to correct deficient SIP provisions, such as by requiring removal of exemptions for emissions during SSM events, this SIP call action will not result in any envir onmental benefits. For example, state commenters claimed that they will not be able simply to re vise regulations to elim inate startup and shutdown*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 433 of 539 exemptions. Instead, the commenters claimed, the states will need to revise the emissions limitations completely in order to take into a ccount the EPA’s interpretation of the CAA that such exemptions are impermissible. The commenter s asserted that rewriti ng the state regulations will produce no reduction in emissions or impr ovement in air quality and will merely impose burdens upon states to change existing regul ations. The implication of the commenters’ argument is that states will merely revise SIP emission limitations to allow the same amount of emissions during SSM events by some other me ans, rather than by establishing emission limitations that would encourage sources to be designed, operated and maintained in a fashion

that would better control those emissions. Response: The EPA does not agree with the comment ers’ assertion that revisions to the affected SIP provisions in response to this SI P call action will produce no emissions reductions or improvements in air quality. The EPA recogni zes that some states may elect to develop revised emission limitations that provide for alternative numerical limitations, control technologies or work practices applicable during startup and shut down that differ from requirements applicable during other modes of source operation. Other states may elect to develop completely revised emission limitations and elevate the level of the numerical emission limitation that applies at all times to account fo r greater emissions durin g startup and shutdown. However, any such revised emission limitations mu st comply with applicable substantive CAA requirements relevant to the type of SIP provision at issue, e.g. be RACM and RACT for sources located in nonattainment areas, and must meet other requirements for SIP revisions such as in sections 110(k)(3), 110(l) and 193.

The EPA believes that revision of the existi ng deficient SIP provisi ons has the potential to decrease emissions significantly in comparison to existing provisions, such as those that*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 434 of 539 authorize unlimited emissions during startup and shutdown. Elimination of automatic and director’s discretion exemptions for emissions during SSM events should encourage sources to reduce emissions during startup and shutdown and to take steps to avoid malfunctions. Elimination of inappropriate enforcement di scretion provisions and affirmative defense provisions should provide increased incentive for sources to be properly designed, operated and

maintained in order to reduce emissions at all times. The EPA also antici pates that revision of older SIP emission limitations in light of mo re recent technological advances in control technology, and in light of more recent NAAQS, has the potentia l to result in significant emission control and air quality improvements. In any event, by bringing these provisions into compliance with CAA requirements, the EPA believes that the resulting SIP provisions will support the fundamental integrity of the SIP proc ess and structure, both substantively and with respect to enforceability.

27. Comments that the EPA should make its inte rpretation of the CAA with respect to SSM exemptions applicable only “prospectively” and not require states to correct existing deficient provisions.

Comment: Commenters argued that the EPA should not issue a SIP call to states for existing SIP provisions and should on ly require states to comply with its interpretations of the CAA “prospectively.” One commenter argued that the SIP provisions at issue in this SIP call action were approved by the EPA in the past a nd have largely been “upheld through several EPA refinements and guidance on SSM since then.” Th e commenter estimated that the proposed SIP call would require states to rees tablish emission limits for thousa nds of existing sources or could require existing sources to comply with emission limitations that did not originally take into account emissions during SSM events. The comm enter characterized the EPA’s action on the*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 435 of 539 Petition as a change of policy with which the EPA should only require states to meet prospectively, putting states “on notice” that the EPA will evaluate future SIP submissions under a different test applicable only to new sources going forward. Other commenters argued that the EPA cannot require states to revise their SIP provisions if this would have th e effect of making existing sources have to comply with the revised SIP. According to the commenters, ex isting sources should be “grandfathered” and should not have to change their control strategies or modes of operation to meet the revised SIP requirements. The commenters asserted that issuance of a SIP call without grandfathering existing sources would “retroactively” require so urces to comply with the new SIP provisions and “suddenly” render sources noncompliant, even though they were in compliance with the SIP when they were originally designed, financed an d built. The commenter claimed that the SIP call would “change the legal structure for commercial transactions that have already taken place.” The thrust of the commenters’ argument is that sources, once built, should never be subjected to any additional pollution c ontrol requirements once they are in existence. Response: The EPA disagrees with the commenters ’ suggestions for multiple reasons. At the outset, the EPA notes that the only signifi cant actual “change” in the Agency’s SSM Policy

in this action is the determination that affirma tive defense provisions are not permissible in SIP provisions. Since the 1999 SSM Guidance, the EPA had interpreted the CAA to allow such affirmative defense provisions, so long as they were limited only to civil penalties and very narrowly drawn consistent with criteria reco mmended by the Agency. As fully explained in section IV of this notice, howev er, the EPA has determined in li ght of the court’s decision in

NRDC v. EPA that the CAA does not permit SIP provisions that operate to alter or eliminate the jurisdiction of the courts to determine liability and impose remedies in judicial enforcement*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 436 of 539 actions. 373 In other respects, this acti on primarily consists of the EP A’s taking action to assure that SIP provisions are consistent with the C AA as the Agency has interpreted it in the SSM Policy for many years. In addition, it is not appropria te for the EPA to allow states to retain deficient SIP provisions that would continue to excuse existing sources from complying with the revised SIP provisions in perpetuity or that would only require that future s ources comply with such revised SIP provisions. The commenters advocate for “g randfathering” that would authorize current sources to continue to operate unde r existing deficient SIP provisions ( e.g. , with exemptions for

SSM emissions or with affirma tive defense provisions) while re quiring only new sources to comply with revised SIP provisions that meet CAA requirements. The EPA understands the practical reasons why the commenters make this suggestion, but such an approach would be grossly unfair both to new sources and to the communities affected by emissions from the old sources, as well as flatly inconsistent with the requirements of the CAA for SIP provisions. Existing sources will not be required to comply with the revised SIP emission limitations until the SIPs are updated, and if they are subject to permit requirement s the sources may continue to operate consistent with those permits until the oper ating permits are revised to reflect the revised SIP requirements, but after that time current sour ces will be required to comply. Thus, sources will not immediately be in nonc ompliance with any requirement s. The EPA has authority to issue a SIP call at any time that it determines a SI P provision is substantia lly inadequate, even if it mistakenly thought that the SIP provision was ade quate at some time in the past. Sources will

373 The EPA notes, however, that many of the affirm ative defense type provisions at issue in this action were also not consistent with the Agency’s interpreta tion of the CAA in the 1999 SSM Guidance. Thus, even in the absence of the NRDC v. EPA decision, these provisions were not consistent with the EPA’s prior interpre tation of the CAA for such provisions.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 437 of 539 be on notice of the SIP call and the state’s admi nistrative process to re spond to it long before they will be required to comply with a revised SIP provision, and those sources will have ample opportunity to participate in the rulemakings establishing new requirements at both the state and

federal level. Finally, the EPA notes, the need for states to establish new emission limitations and change permit terms for many sources should not be viewed as an unusual occurrence. The need to reexamine existing SIP provisions and permit term s applicable to sources in response to this SIP call action is comparable to the process that states would undertake to update their SIPs as necessary to meet new and evolving CAA requirements, including future revised NAAQS. For example, under section 110(a)(1) and section 110(a)(2) states are already required to reexamine and potentially to revise their SIP provisions whenever the EP A promulgates a new or revised NAAQS. States already need to reexamine emi ssion limitations required by section 110(a)(2)(A)

and other relevant sections of the CAA in thei r SIPs on a regular basis as the NAAQS are revised ( e.g. , the potential need to revisit what is RACT for a specific source category with respect to a new NAAQS), as new legal requirements are created ( e.g. the potential need to address interstate transport including compliance with any applicable FIP addressing a SIP deficiency with respect to this issue), or as new emissions control technologies are developed ( e.g. , what is RACT for a pollutant may evolve with technological developmen ts). Thus, as a general matter, states already engage in periodic review of their SIP provisions on a regular basis, and the potential need to update the emissions limitations applicable to sources and thereafter th e need to update the permits applicable to those sources is part of th at process. This SIP call action simply directs the affected states to address specific deficiencies in their SIP provisions as part of this normal evolutionary process.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 438 of 539 28. Comments that directing states to correct their existing SIP provisions will require many sources to change terms of their operating permits.

Comment: A number of commenters opposed the Fe bruary 2013 proposal because of the administrative burden the rule would impose on ai r agencies and sources. Commenters asserted that requiring states to rem ove affirmative defense provisions for startup and shutdown from SIPs and to develop alternative emission limitati ons for such periods of operation instead is

unreasonable. Other commenters ar gued that requiring removal of the deficient SIP provisions would impose enormous and time-consuming burde ns on permitting authorities and the regulated community associated with the development of new or revised emissions limitations for startup and shutdown, the revision of SIPs and the revi sion of permits to inco rporate such revised emision limitations. Another commenter asserted that sources only accepted numerical limits in permits with the understanding that they also had the benefit of a ffirmative defenses in the event

of exceedances of those numerical emission limit s during periods of SSM. The commenter thus argued that sources would seek to revise the permit limits in order to account for the absence of

such affirmative defenses. Response: The EPA acknowledges the concerns raised by commenters concerning the need for air agencies to revise the deficient SIP provisions at issu e in this action, as well as the need for the EPA to review the resulting SIP revisions. The EPA does not agree, however, with the commenters’ argument that the need for these administrative actions is a justification for leaving the deficient provisions unaddressed. The EPA also acknowledges that the SIP revisi ons initiated by this SIP call action will result in the removal of deficient provisi ons such as automatic and discretionary SSM exemptions, overly broad enforcement discretion provisions and affirmative defense provisions.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 439 of 539 These SIP revisions will ultimately need to be reflected in revised operating permit terms for sources. This SIP call action will not, however, have an automatic impact on any permit terms and conditions, and the resource burden to revise permits will be spread over many years. After a state makes the necessary revisions to its SIP provisions, any needed revisions to operating permits to reflect the revised SIP provisions will occur in the ordina ry course as the state issues new permits or reviews and revises existing permits . For example, in the case of title V operating permits, permits with more than 3 years remaining will be reopened to add new applicable requirements within 18 months of the promulgation of the requirements. If a permit has less than 3 years remaining, the new applicable requirement will be added at renewal. 374

IX. What is the EPA’s final action for each of the specific SIP provisions identified in the Petition or by the EPA? A. Overview of the EPA’s Evaluati on of Specific SIP Provisions In reviewing the Petitioner’s concerns with respect to the specific SIP provisions identified in the Petition, the EPA notes that most of the provisions relate to a small number of common issues. Many of these provisions are as old as the original SIPs that the EPA approved in the early 1970s, when the states and the EPA had limited experience in evaluating the provisions’ adequacy, enforceability and consistency with CAA requirements. In some instances the EPA does not agree with the Petitioner’s reading of the provision in question, or with the Petitioner’s conclusion that the provisio n is inconsistent with the requirements of the CAA. However, given the comm on issues that arise for multiple states in the

Petition as well as in the EPA’ s independent evaluation, there ar e some overarching conceptual

374 See 40 CFR 70.7(f)(1)(i).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 440 of 539 points that merit discussion in ge neral terms. Thus, this secti on IX.A of the notice provides a general discussion of each of the overarching points, including a summ ary of what the EPA proposed to determine with respect to the releva nt SIP provisions collectively. The EPA received comments on the proposed determinations from affected states, the Petitioner and other

commenters. A detailed discus sion of the comments received with the EPA’s responses is provided in the Response to Comment document av ailable in the docket for this rulemaking. Sections IX.B through IX.K of this document name the specific SIP provisions identified in the Petition or by the EPA, including a summ ary of what the EPA proposed and followed by

the EPA’s stated final action with respect to each SIP provision. 1. Automatic Exemption Provisions A significant number of provisions identified by the Petitioner pertain to existing SIP provisions that create automatic exemptions for excess emissions during periods of SSM. Occasionally, these provisions also pertain to ex emptions for excess emissions that occur during maintenance, load change or other types of nor mal source operation. Th ese provisions typically provide that a source subject to a specific SI P emission limitation is exempted from compliance during SSM, so that the excess emissions are defi ned as not violations. Often, these provisions are artifacts of the early phase s of the SIP program, approved be fore state and EPA regulators recognized the implications of such exemptions . Whatever the genesis of these existing SIP provisions, however, these automatic exemptions from emission limitations are not consistent with the CAA, as the EPA has stated in its SSM Policy si nce at least 1982. After evaluating the Petition, the EPA proposed to determine that a number of states have existing SIP provisions that cr eate impermissible automatic exemptions for excess emissions during malfunctions or during st artup, shutdown or other types of normal source operation. In*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 441 of 539 those instances where the EPA agreed that a SI P provision identified by th e Petitioner contained such an exemption contrary to the requirement s of the CAA, the EPA proposed to grant the Petition and accordingly to issue a SI P call to the appropriate state.

2. Director’s Discretion Exemption Provisions Another category of problematic SIP provision identified by the Petitioner is exemptions for excess emissions that, while not automatic, are exemptions for such emissions granted at the discretion of state regulatory personnel. In some cases, the SIP provision in question may provide some minimal degree of process and some parameters for the granting of such discretionary exemptions, but th e typical provision at issue allows state personnel to decide unilaterally and without meaningful limitations that what would ot herwise be a violation of the applicable emission limitation is instead exempt. Because the state person nel have the authority

to decide that the excess emissions at issue ar e not a violation of th e applicable emission limitation, such a decision would transform the violation into a nonviol ation, thereby barring enforcement by the EPA or others. The EPA refers to this type of provision as a “director’s discretion” provision, and the EPA interprets the CAA generally to forbid su ch provisions in SIPs because they have the potential to undermine fundamental statutory objectives such as the attainment and maintenance of the NAAQS and to undermine effective enforcem ent of the SIP. As described in sections VII.C and VIII.A.3 of this document, unbounded direct or’s discretion provisions purport to allow

unilateral revisions of approved SIP provision s without meeting the applicable statutory substantive and procedural require ments for SIP revisions. The speci fic SIP provisions at issue in the Petition are especially inappropriate because they purport to allow discretionary creation of case-by-case exemptions from the applicable emission limitations, when the CAA does not*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 442 of 539 permit any such exemptions in the first instance. The practical impact of such provisions is that in effect they transform an enforcem ent discretion decision by the state ( e.g. , that the excess emission from a given SSM event should be excuse d for some reason) into an exemption from compliance that also prevents enforcement by the EPA or through a citizen suit. The EPA’s longstanding SSM Policy has interp reted the CAA to preclude SIP provisions in which a state’s exercise of its own enforcement discretion bars enforcement by the EPA or through a citizen suit. Where the EPA agreed that a SIP provision id entified by the Petitione r contained such a discretionary exemption contrary to the requirements of the CAA, the EPA proposed to grant the

Petition and to call for the stat e to rectify the problem. 3. State-only Enforcement Discretion Provisions The Petitioner identified existing SIP provisions in many states that ostensibly pertain to parameters for the exercise of enforcement di scretion by state personnel for violations due to excess emissions during SSM events. The EPA’s SSM Policy has consistently encouraged states

to utilize traditional enforcement discretion within appropriate bounds for such violations and, in the 1982 SSM Guidance, explicitly recommended criter ia that states might consider in the event that they elected to formalize their enforcement di scretion with provisions in the SIP. The intent has been that such enforcement discretion provi sions in a SIP would be “state-only,” meaning that the provisions apply only to the state’s own enforcement pers onnel and not to the EPA or to

others.

The EPA determined that a number of states have SIP provisions that, when evaluated carefully, could reasonab ly be construed to allow the stat e to make enforcement discretion decisions that would purport to foreclose en forcement by the EPA under CAA section 113 or by

citizens under section 304. In those instances wh ere the EPA agreed that a specific provision*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 443 of 539 could have the effect of impedi ng adequate enforcement of the requirements of the SIP by parties other than the state, the EPA proposed to grant the Petition and to take action to rectify the problem. By contrast, where the EPA’s evaluati on indicated that the ex isting provision on its face or as reasonably construed could not be read to preclude enforcement by parties other than the state, the EPA proposed to deny the Petition, and the EPA invited comment on this issue in particular to assure that the state and the EPA have a common understanding that the provision does not have any impact on potential enforcement by the EPA or through a citizen suit. This process was intended to ensure that there is no misunderstanding in the fu ture that the correct reading of the SIP provision would not bar enforcement by the EPA or through a citizen suit

when the state elected to exercise its own enforcement discretion. In the February 2013 proposal, the EPA noted that another method by which to eliminate any potential ambiguity about the meaning of th ese enforcement discretion provisions would be

for the state to revise its SIP to remove the provisions. Because these provisions are only applicable to the state, the EPA’s view was, and still is, that the provisions need not be included within the SIP. Thus, the EPA supports states that elect to revise their SIPs to remove these provisions to avoid any unnecessary confusion.

4. Affirmative Defense Provisions

The Petitioner asked the EPA to rescind its SSM Policy element that interpreted the CAA

to allow SIPs to include affirmative defenses for violations due to excess emissions during any type of SSM events. Related to th is request, the Petitioner asked th e EPA to find that states with SIPs containing an affirmative defense to monetary penalties for excess emissions during SSM events are substantially inadequate because they do not comply with the CAA. If the EPA were to deny the Petitioner’s request th at the EPA revise its interpretation of the CAA, the Petitioner*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 444 of 539 asked that the EPA in the alternative require states with SIPs that contain such affirmative defense provisions to revise th em so that they are consistent with the EPA’s 1999 SSM Guidance for excess emissions during SSM events and to issue a SIP call to states with provisions inconsistent with the EPA’s interpretation of the CAA.

The Petitioner drew no distinction betw een affirmative defense provisions for malfunctions versus affirmative defense provisi ons for startup and shutdown or other normal modes of operation. As explaine d in section IV.B of the Febr uary 2013 proposal, the EPA did make such distinction in its propo sed response to the Petition, at th at time proposing to revise its SSM Policy to reflect an interpretation of the CA A that affirmative defense provisions applicable during startup and shutdown were not appropria te but reasoning that affirmative defense provisions remained appropriate for violations when due to ma lfunction events. Thus, in the February 2013 proposal, the EPA proposed to issue a SIP call to a state to rectify a problem with an affirmative defense provision only if the prov ision included an affirmative defense that was applicable to excess emissions during startup and shutdown or in cluded an affirmative defense that was applicable to excess emissions duri ng malfunctions but was inconsistent with the criteria recommended in the EPA’s SSM Policy. Subsequent to that February 2013 proposal, a federal court ruled that the CAA precludes authority of the EPA to create affirmative defense provisions applicable to private civil suits. The

NRDC v. EPA decision pertained to a challenge to the EPA’s NESHAP regulations issued pursuant to CAA section 112 to regulate hazardous air pollutants from sources that manufacture

Portland cement. 375 As explained in detail in section V of the SNPR, the court’s decision in

375 NRDC v. EPA , 749 F.3d 1055 (D.C. Cir. 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 445 of 539 NRDC v. EPA compelled the Agency to revise its interpretation of the CAA concerning the legal basis for affirmative defense provisions. As a re sult, the EPA proposed in the SNPR to further revise its SSM Policy with respect to affirma tive defense provisions applicable to excess emissions during SSM events (as described in se ction V of the SNPR) a nd to apply its revised interpretation of the CAA to specific provisions in the SIPs of particular states (as described in section VII of the SNPR). For some of the affirmative defense provisions identified by the Petitioner, the EPA in the SNPR reproposed granting of the Petition but proposed a revised basis for its proposed findings of inadequacy and SIP calls. For other affirmative defense provisions identified by the Petitioner, the EPA in the SNPR reversed its pr ior proposed denial of the Petition, and it newly proposed findings of inadequacy and SIP calls. Fu rther, for some affirmative defense provisions that were not explicitly identif ied by the Petitioner, the EPA in the SNPR proposed findings of inadequacy and SIP calls for additional affirma tive defense provisions that were not explicitly identified by the Petitioner. B. Affected States in EPA Region I

1. Maine

As described in section IX.B.1 of the February 2013 proposal, the Petitioner fi rst objected to a specific provision in the Maine SIP that provides an exemption for certain boilers from otherwise applicable SIP visi ble emission limits during startup and shutdown (06-096-101 Me. Code R. § 3). Second, the Petiti oner objected to a provision that empowers the state to “exempt emissions occurring during periods of unavoida ble malfunction or unplanned shutdown from civil penalty under section 349, subsecti on 2” (06-096-101 Me. Code R. § 4).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 446 of 539 For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to 06-096-101 Me. Code R. § 3 and 06-096-101 Me. Code R. § 4. Consequently, the EPA proposed to find th at 06-096-101 Me. Code R. § 3 and 06-096- 101 Me. Code R. § 4 are substantially inadequate to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Petition with respect to 06-096-101 Me. Code R. § 3 and 06-096-101 Me. Code R. § 4. Accordi ngly, the EPA is finding that these provisions are substantially inadequate to meet CAA require ments and the EPA is thus issuing a SIP call to Maine to correct its SIP with respect to these prov isions. This action is full y consistent with what the EPA proposed in February 2013. Please refe r to the Response to Comment document available in the docket for this rulemaking c oncerning any comments speci fic to the Maine SIP

that the EPA received and considered during the devel opment of this rulemaking. 2. New Hampshire

As described in section IX.B .2 of the February 2013 proposal , the Petitioner objected to two generally applicable provision s in the New Hampshire SIP that allow emissions in excess of otherwise applicable SIP em ission limitations during “malfunction or breakdown of any component part of the air pollu tion control equipment.” The Petit ioner argued that the challenged provisions provide an automatic exemption for excess emissions during the first 48 hours when any component part of air po llution control equipment malfun ctions (N.H. Code R. Env-A 902.03) and further provide that “[t] he director may ... grant an extension of time or a temporary

variance” for excess emissions outside of the initi al 48-hour time period (N.H. Code R. Env-A 902.04). Second, the Petitioner objecte d to two specific provisions in the New Hampshire SIP that provide source-specific exemptions for pe riods of startup for “any process, manufacturing*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 447 of 539 and service industry” (N.H. Code R. Env-A 1203.05) and for pre-June 1974 asphalt plants during startup, provided they are at 60- percent opacity for no more than 3 minutes (N.H. Code R. Env-A 1207.02). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to N.H. Code R. E nv-A 902.03, N.H. Code R. Env-A 1203.05 and N.H.

Code R. Env-A 902.04. Also for re asons explained fully in the February 2013 proposal, the EPA proposed to deny the Petition with re spect to N.H. Code R. Env-A 1207.02. Consequently, the EPA proposed to find that N.H. Code R. Env-A 902.03, N.H. Code R.

Env-A 1203.05 and N.H. Code R. Env-A 902.04 are substantially inadequate to meet CAA requirements and thus proposed to issue a SI P call with respect to these provisions. In this final action, the EPA is granting the Pe tition with respect to N.H. Code R. Env-A 902.03, N.H. Code R. Env-A 1203.05 and N.H. Code R. Env-A 902.04 and denying the Petition with respect to N.H. Code R. Env-A 1207.02. Accordingly, the EPA is finding that the provisions in N.H. Code R. Env-A 902.03, N.H. Code R. Env-A 1203.05 and N.H. Code R. EnvA 902.04 are substantially inadequate to meet C AA requirements and the EPA is thus issuing a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the New Hampshire SIP that the EPA received and considered during the development of this rulemaking.

3. Rhode Island

As described in section IX.B .3 of the February 2013 proposal , the Petitioner objected to a generally applicable provision in the Rhode Island SIP that allows for a case-by-case petition procedure whereby a source can obtain a varian ce from state personnel under R.I. Gen. Laws §*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 448 of 539 23-23-15 to continue to operate during a malfunction of its cont rol equipment that lasts more than 24 hours, if the source demonstrates that enforcement would constitute undue hardship without a corresponding benefit (25-4-13 R.I. Code R. § 16.2). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to 25- 4-13 R.I. Code R. § 16.2. Consequently, the EPA proposed to find that 25 -4-13 R.I. Code R. § 16.2 is substantially inadequate to meet CAA requirements and thus pr oposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Pe tition with respect to 25-4-13 R.I. Code R. § 16.2. Accordingly, the EPA is findi ng that this provision is substa ntially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EP A proposed in February 2013. Please refer to the Response to Comment document available in th e docket for this rulemaking concerning any comments specific to the Rhode Island SIP that the EPA received and considered during the development of this rulemaking. C. Affected State in EPA Region II New Jersey

As described in section IX.C .1 of the February 2013 proposal , the Petitioner objected to two specific provisions in the New Jersey SIP th at allow for automatic exemptions for excess emissions during emergency situations. The Petiti oner objected to the first provision because it provides industrial process units that have the potential to emit sulfur compounds an exemption from the otherwise applicable sulfur emission li mitations where “[t]he discharge from any stack or chimney [has] the sole function of relieving pressure of gas, vapor or liquid under abnormal*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 449 of 539 emergency conditions” (N.J. Admin. Code 7:27-7.2( k)(2)). The Petitioner objected to the second provision because it provides el ectric generating units (EGUs) an exemption from the otherwise applicable NOx emission limitations when the un it is operating at “emergency capacity,” also known as a “MEG alert,” which is statutorily defi ned as a period in which one or more EGUs is operating at emergency capacity at the direction of the load dispatcher in order to prevent or mitigate voltage reductions or interruptions in el ectric service, or both (N.J. Admin. Code 7:27- 19.1). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to N.J. Ad min. Code 7:27-7.2(k)(2). Also for reasons explained fully in the February 2013 proposal, the EPA proposed to de ny the Petition with respect to N.J. Admin.

Code 7:27-19.1. Consequently, the EPA proposed to find th at N.J. Admin. Code 7:27-7.2(k)(2) is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Petition with respect to N.J. Admin. Code 7:27-7.2(k)(2) and denying the Petition with respect to N.J. Admin. Code 7:27-19.1. Accordingly, the EPA is finding that the prov ision in N.J. Admin. Code 7:27-7.2(k)(2) is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment do cument available in the docket for this rulemaking concerning any comments specific to the New Jersey SIP that the EPA received and considered during the development of this rulemaking. D. Affected States in EPA Region III*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 450 of 539 1. Delaware

As described in section IX.D .1 of the February 2013 proposal , the Petitioner objected to seven provisions in the Delaware SIP that prov ide exemptions during startup and shutdown from the otherwise applicable SIP emission limitati ons. The seven source-sp ecific and pollutantspecific provisions that provide exemptions during periods of startup and shutdown are: 7-1100- 1104 Del. Code Regs § 1.5 (Particulate Emissi ons from Fuel Burning Equipment); 7-1100-1105 Del. Code Regs § 1.7 (Particulate Emissions from Industrial Process Operations); 7-1100-1108 Del. Code Regs § 1.2 (Sulfur Dioxide Emissi ons from Fuel Burning Equipment); 7-1100-1109 Del. Code Regs § 1.4 (Emissions of Sulfur Compounds From Industria l Operations); 7-1100- 1114 Del. Code Regs § 1.3 (Visible Emissions); 7-1100-1124 Del. Code Regs § 1.4 (Control of Volatile Organic Compound Emissions); and 7-1100-1142 Del. Code Regs § 2.3.5 (Specific Emission Control Requirements). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to 7-1100-1104 Del. Code Regs § 1.5, 7-1100-1105 Del. Code Regs § 1.7, 7-1100-1108 Del. Code Regs § 1.2, 7-1100-1109 De l. Code Regs § 1.4, 7-1100-1114 Del. Code Regs § 1.3, 7-1100-1124 Del. Code Regs § 1.4 and 7-1100-1142 Del. Code Regs § 2.3.5. Consequently, the EPA proposed to find th at 7-1100-1104 Del. Code Regs § 1.5, 7-1100- 1105 Del. Code Regs § 1.7, 7-1100-1108 Del. Code Regs § 1.2, 7-1100-1109 Del. Code Regs § 1.4, 7-1100-1114 Del. Code Regs § 1.3, 7-1100-1124 Del. Code Regs § 1.4 and 7-1100-1142 Del. Code Regs § 2.3.5 are substantially inad equate to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting th e Petition with respect to 7-1100-1104 Del. Code Regs § 1.5, 7-1100-1105 Del. Code Regs § 1.7, 7-1100-1108 Del. Code Regs § 1.2, 7-*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 451 of 539 1100-1109 Del. Code Regs § 1.4, 7-1100-1114 Del. Code Regs § 1.3, 7-1100-1124 Del. Code Regs § 1.4 and 7-1100-1142 Del. Code Regs § 2.3.1.6 (updated to § 2.3.1.6 from earlier identification as § 2.3.5). Accordingly, the EPA is finding that these provisions are substantially inadequate to meet CAA requirements and the EP A is thus issuing a SIP call with respect to these provisions.

2. District of Columbia

As described in section IX.D .2 of the February 2013 proposal , the Petitioner objected to five provisions in the District of Columbia (DC) SIP as being inconsiste nt with the CAA and the EPA’s SSM Policy. The Petitioner first objected to a generally applicable provision in the DC SIP that allows for discretionary exemptions dur ing periods of maintenan ce or malfunction (D.C. Mun. Regs. tit. 20 § 107.3). Secondly, the Petitio ner objected to the al ternative limitations on stationary sources for visible emissions during periods of “s tart-up, cleaning, soot blowing, adjustment of combustion controls, or malfunc tion,” (D.C. Mun. Regs. tit. 20 § 606.1) and, for fuel-burning equipment placed in initial opera tion before January 1977, alternative limits for visible emissions during startup and shutdown (D.C. Mun. Regs. tit. 20 § 606.2). The Petitioner also objected to the exemption from emission limitations for emergency standby engines (D.C. Mun. Regs. tit. 20 § 805.1(c)(2)). Finally, the Petiti oner objected to the provision in the DC SIP that provides an affirmative defense for viol ations of visible emission limitations during “unavoidable malfunction” (D.C. Mun. Regs. tit. 20 § 606.4). For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to D.C. Mun. Regs. tit. 20 § 107.3 and ’D.C. Mun. Regs. tit. 20 §§ 606.1 and 606.2. Also for reasons explained in the Fe bruary 2013 proposal, the EPA proposed to deny the Petition with respect to D.C. Mun. Regs. tit. 20 § 805.1(c)(2). Also for reasons explained in*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 452 of 539 the February 2013 proposal, the EPA proposed to gr ant the petition with respect to D.C. Mun. Regs. tit. 20 § 606.4 on the basis that it was not a permissible affirmative defense provision consistent with the requirements of the CAA as interpreted in the EPA’s SSM Policy at the time. Subsequently, for reasons explained in th e SNPR, the EPA reproposed granting of the Petition with respect to the affirmative defe nse provision in D.C. M un. Regs. tit. 20 § 606.4, but it proposed to revise the basis fo r the finding of substantial inade quacy and the SIP call for this provision. Consequently, the EPA proposed to find that D.C. Mun. Regs. tit. 20 § 107.3, D.C. Mun. Regs. tit. 20 §§ 606.1 and 606.2 and D.C. Mun. Regs. tit. 20 § 606.4 are substantially inadequate to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Petition with respect to D.C. Mun. Regs. tit. 20 § 107.3, D.C. Mun. Regs. tit. 20 §§ 606.1 and 606.2 and D.C. Mun. Regs. tit. 20 § 606.4 and is denying the Petition with respect to D.C. Mun. Regs. tit. 20 § 805.1(c)(2). Accordingly, the EPA is finding that the provisions in D.C. M un. Regs. tit. 20 § 107.3, D.C. Mun. Regs. tit. 20 §§ 606.1 and 606.2 and D.C. Mun. Regs. tit. 20 § 606.4 are substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call to the District of Columbia to correct its SIP with respect to these provisions . This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Pleas e refer to the Response to Comment document available in the docket for this rulemaking conc erning any comments specifi c to the DC SIP that the EPA received and considered during the development of this rulemaking. 3. Virginia

As described in section IX.D .3 of the February 2013 proposal , the Petitioner objected to a generally applicable provision in the Virginia SIP that allows for discretionary exemptions*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 453 of 539 during periods of malfunction (9 Va. Admin. Code § 5-20-180(G)). First, the Petitioner objected because this provision provides an exemption from the otherwise applicable SIP emission limitations. Second, the Petitioner objected to th e discretionary exemption for excess emissions during malfunction because the provision gives th e state the authority to determine whether a violation “shall be judged to have taken place. ” Third, the Petitioner argued that while the regulation provides criteria, akin to an affirmative defense, by which the state must make such a judgment that the event is not a violation, the cr iteria “fall far short of EPA policy at the time” and the provision “fails to establish any procedure through which the criteria are to be

evaluated.” For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to 9 Va. Admin. Code § 5-20-180(G). Also for reas ons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to this provision on the basis that it was not a permissible affirm ative defense provision consistent with the requirements of the CAA as interp reted in the EPA’s SSM Policy. Subsequently, for reasons explained in th e SNPR, the EPA reproposed granting of the Petition with respect to 9 Va. Admin. Code § 5- 20-180(G), but it proposed to revise the basis for the finding of substantial inadequacy and the SIP call for this provision. Consequently, the EPA proposed to find th at 9 Va. Admin. Code § 5-20-180(G) is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Petition with respect to 9 Va. Admin. Code § 5-20-180(G) and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Please*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 454 of 539 refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Virgin ia SIP that the EPA received and considered during the development of this rulemaking. 4. West Virginia

As described in section IX.D .4 of the February 2013 proposal , the Petitioner made four types of objections identifying inadequacies rega rding SSM provisions in West Virginia’s SIP. First, the Petitioner objected to th ree specific provisions in the We st Virginia SIP that allow for automatic exemptions from emission limitations, standards, and monito ring and recordkeeping requirements for excess emission during startup, shutdown, or malfunction (W. Va. Code R. § 45-2-9.1, W. Va. Code R. §45-7-10.3 and W. Va . Code R. §45-40-100.8). Second, the Petitioner objected to seven discretionary exemption pr ovisions because these provisions provide exemptions from the otherwise applicable SIP em ission limitations. The Petitioner noted that the provisions allow a state official to “grant an exception to the otherw ise applicable visible

emissions standards” due to “unavoidable shor tage of fuel” or “any emergency situation or condition creating a threat to pub lic safety or welfare” (W. Va . Code R. § 45-2-10.1), to permit

excess emissions “due to unavoidable malfunctions of equipment” (W. Va. Code R. § 45-3-7.1, W. Va. Code R. § 45-5-13.1, W. Va. Code R. § 45-6-8.2, W. Va. Code R. § 45-7-9.1 and W. Va. Code R. § 45-10-9.1) and to permit exceedances wh ere the limit cannot be “satisfied” because of

“routine maintenance” or “unavoidable malfunc tion” (W. Va. Code R. §45-21-9.3). Third, the Petitioner objected to the alternative limit impos ed on hot mix asphalt plants during periods of startup and shutdown in W. Va. Code R. § 45-3- 3.2 because it was “not sufficiently justified” under the EPA’s SSM Policy regarding source cate gory-specific rules. Fourth, the Petitioner objected to a discretionary provisi on allowing the state to approve an alternative visible emission*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 455 of 539 standard during startups and s hutdowns for manufacturing processe s and associated operations (W. Va. Code R. § 45-7-10.4). The Petitioner argued that such a provision “allows a decision of the state to preclude enfor cement by EPA and citizens.” For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to W. Va. Code R. § 45-2-9.1, W. Va. Code R. § 45-7-10.3 and W. Va. Code R. § 45-40-100.8 on the basis that each of these provisions allows for automatic exemptions. Also for reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to W. Va. Code R. § 45-2-10.1, W. Va. Code R. § 45-3-7.1, W. Va. Code R. § 45-5-13.1, W. Va. Code R. § 45-6-8.2, W. Va. Code R. § 45-7-9.1, W. Va. Code R. § 45-10-9.1 and W. Va. Code R. § 45-21-9.3 on the basis that these provisions allow for discretionary exemptions from otherwise appl icable SIP emission limitations. Further, for reasons explained in the February 2013 proposal , the EPA proposed to grant the Petition with respect to W. Va. Code R. § 45-3-3.2, W. Va. Code R. § 45-2-10.2 and W. Va. Code R. § 45-7- 10.4. The W. Va. Code R. § 45-3-3.2 applies to a broad category of sources and is not narrowly limited to a source category that uses a specifi c control strategy, as required by the EPA’s SSM Policy interpreting the CAA. Similarly, W. Va. C ode R. § 45-2-10.2 is inconsistent with the EPA’s SSM Policy interpreting the CAA because it is an alternative lim it that applies during periods of maintenance, and such alternative lim its are only permissible during periods of startup

and shutdown. 376 The W. Va. Code R. § 45-7-10.4 allows state officials the discretion to

establish alternative visible em issions standards duri ng startup and shutdo wn upon application.

376 As explained in the February 2013 proposal, the Petitioner specifica lly focused on concern with W. Va. Code R. § 45-2-10.1, but the same issue affects W. Va. Code R. § 45-2-10.2, and so the EPA similarly proposed to issue a SIP call with respect to the latter provision. See 78 FR 12459 at 12500, n.111.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 456 of 539 Subsequently, for reasons explained fully in the SNPR, the EPA identified one affirmative defense provision in the West Virginia SIP in W. Va. Code R. § 45-2-9.4 that was not identified by the Petitioner, and the EPA proposed to make a finding of substantial inadequacy and to issue a SIP call for this provision. Consequently, the EPA proposed to find that W. Va. Code R. § 45-2-9.1, W. Va. Code R. §45-7-10.3, W. Va. Code R. §45-40-100.8, W. Va. C ode R. § 45-2-10.1, W. Va. Code R. § 45-3- 7.1, W. Va. Code R. § 45-5-13.1, W. Va. Code R. § 45-6-8.2, W. Va. Code R. § 45-7-9.1, W. Va. Code R. § 45-10-9.1, W. Va . Code R. §45-21-9.3, W. Va. C ode R. § 45-3-3.2 and W. Va. Code R. § 45-7-10.4, which are provisions identifi ed by the Petitioner, and W. Va. Code R. § 45- 2-10.2 and W. Va. Code R. § 45-2-9.4, which ar e provisions identified by the EPA, are substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Pe tition with respect to the West Virginia SIP provisions identified by the Petitioner. Accordingly, the EPA is finding that the provisions in W. Va. Code R. § 45-2-9.1, W. Va. Code R. §45- 7-10.3, W. Va. Code R. §45-40-100.8, W. Va. Code R. § 45-2-10.1, W. Va. Code R. § 45-3-7.1, W. Va. Code R. § 45-5-13.1, W. Va. Code R. § 45-6-8.2, W. Va. Code R. § 45-7-9.1, W. Va. Co de R. § 45-10-9.1, W. Va. Code R. §45-21-9.3, W. Va. Code R. § 45-3-3.2 and W. Va. Code R. § 45-7-10.4, which are provisions identified by the Petitioner, and W. Va. Code R. § 45-2- 10.2 and W. Va. Code R. § 45-2-9.4, which are provisions identified by the EPA, are substantially inadequate to meet CAA requirements. The EPA is thus issuing a SIP call to West Virginia to correct its SIP with resp ect to these provisions. This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in the docket for this*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 457 of 539 rulemaking concerning any comments specific to the West Virginia SIP that the EPA received and considered during the deve lopment of this rulemaking. E. Affected States and Local Ju risdictions in EPA Region IV

1. Alabama

As described in section IX.E.1 of the Febr uary 2013 proposal, the Petitioner objected to two generally applicable provision s in the Alabama SIP that allo w for discretionary exemptions during startup, shutdown or load change (Ala Admin Code Ru le 335-3-14-.03(1)(h)(1)), and during emergencies (Ala Admin Co de Rule 335-3-14-.03(1)(h)(2)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Ala Admin Code Rule 335-3-14-.03(1)(h)(1) and Ala Admin Code Rule 335-3-14-.03(1)(h)(2). Consequently, the EPA proposed to fi nd that Ala Admin Code Rule 335-3-14- .03(1)(h)(1) and Ala Admin Code Rule 335-3-14-.03( 1)(h)(2) are substan tially inadequate to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Pe tition with respect to Ala Admin Code Rule 335-3-14-.03(1)(h)(1) and Ala Admi n Code Rule 335-3-14-.03(1)(h)(2 ). Accordingly, the EPA is finding that these provisions ar e substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to thes e provision. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking c oncerning any comments specific to the Alabama

SIP that the EPA received and considered dur ing the development of this rulemaking.

2. Florida*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 458 of 539 As described in section IX.E.2 of the Febr uary 2013 proposal, the Petitioner objected to three specific provisions in the Florida SIP th at allow for generally applicable automatic exemptions for excess emissions during SSM (F la. Admin. Code Ann Rule 62-201.700(1)), for fossil fuel steam generators during startup and shutdown (Fla. Admin. Code Ann Rule 62- 201.700(2)), and for such sources during boiler clean ing and load change (Fla. Admin. Code Ann Rule 62-201.700(3)). After objecting to the three provisions that creat e the exemptions, the Petitioner noted that the related provision in Fla. Admin. Code Ann Rule 62-201.700(4) reduces the potential scope of the exemptions in the other three provisions if the excess emissions at issue are caused entirely or in part by things such as poor maintenance but th at it does not eliminate the impermissible exemptions. For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Fla. Admin. Code A nn Rule 62-201.700(1), Fla. Admin. Code Ann Rule 62-201.700(2), Fla. Admin. Code Ann Rule 62-2 01.700(3) and Fla. Admin. Code Ann Rule 62- 201.700(4). Consequently, the EPA proposed to find th at Fla. Admin. Code Ann Rule 62-201.700(1), Fla. Admin. Code Ann Rule 62-201.700(2), Fla. Admin. Code Ann Rule 62-201.700(3) and Fla. Admin. Code Ann Rule 62-201.700(4) are substantially inadequate to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Petition with respect to Fla. Admin. Code Ann Rule 62-201.700(1), Fla. Admin. Code Ann Rule 62-201.700(2), Fla. Admin. Code Ann Rule 62-201.700(3) and Fla. Admin. Code Ann Rule 62-201.700(4). Accordingly, the EPA is finding that these provisions ar e substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. This action is fully consistent*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 459 of 539 with what the EPA proposed in February 2013. Please refer to the Response to Comment

document available in the docket for this rule making concerning any comments specific to the

Florida SIP that the EPA received and consider ed during the development of this rulemaking. 3. Georgia

As described in section IX.E.3 of the Februa ry 2013 proposal, the Petitioner objected to a provision in the Georgia SIP th at provides for exemptions for excess emissions during SSM under certain circumstances (Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7)). The Petitioner acknowledged that this provision of the Georgia SIP includes some conditions for when sources may be entitled to seek the exemption under state law, such as when the source has used “best operational practices” to minimize em issions during the SSM event. First, the Petitioner objected because the provision creates an exemption from the applicable emission limitations by providing that the excess emissions “shall be allowed” subject to certain conditions. Second, the Petitioner argued that although the provis ion provides some “substantive criteria,” the provision does not meet the criteria the EPA recommended at the time for an affirmative defense provisi on consistent with the requirem ents of the CAA in the EPA’s SSM Policy. Third, the Petitioner asserted that the provision is not a permissible “enforcement discretion” provision applicable only to state personnel, beca use it “is susceptible to interpretation as an enforcement exemption, pr ecluding EPA and citizen enforcement as well as

state enforcement.” For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7). Also for reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition wi th respect to this provision on the basis that it wa s not a permissible affirmative de fense provision consistent with*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 460 of 539 the requirements of the CAA and the EPA’s recommendations in the EPA’s SSM Policy at the

time. Subsequently, for reasons explained in th e SNPR, the EPA reproposed granting of the Petition with respect to Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7), but it proposed to revise the basis for the finding of substantial inadequ acy and the SIP call for this provision. Consequently, the EPA proposed to find that Ga. Comp. R. & Regs . 391-3-1-.02(2)(a)(7) is substantially inadequate to meet CAA require ments and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Pe tition with respect to Ga. Comp. R. & Regs. 391-3-1-.02(2)(a)(7). Accordingly, the EPA is fi nding that this provision is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013 as

revised in the SNPR. Please refer to the Res ponse to Comment document available in the docket for this rulemaking concerning a ny comments specific to the Georgi a SIP that the EPA received and considered during the deve lopment of this rulemaking. 4. Kentucky

As described in section IX.E.4 of the Februa ry 2013 proposal, the Petitioner objected to a generally applicable provision th at allows discretionary exempti ons from otherwise applicable SIP emission limitations in Kentucky ’s SIP (401 KAR 50:055 §1(1)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to 401 KAR 50:055 §1(1).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 461 of 539 Consequently, the EPA proposed to find th at 401 KAR 50:055 §1(1) is substantially inadequate to meet CAA requirements and thus pr oposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Petition with respect to 401 KAR 50:055 §1(1). Accordingly, the EPA is fi nding that this provision is subs tantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EP A proposed in February 2013. Please refer to the Response to Comment document available in th e docket for this rulemaking concerning any comments specific to the Kentucky SIP that the EPA received and considered during the development of this rulemaking. 5. Kentucky: Jefferson County

As described in section IX.E.5 of the Februa ry 2013 proposal, the Petitioner objected to a generally applicable provision in the Jefferson County Air Regulations 1.07 because it provided for discretionary exemptions from complian ce with emission limitations during SSM. The provision required different demons trations for exemptions for excess emissions during startup and shutdown (Regulation 1.07 § 3), malfunction (Regulation 1.07 § 4 and § 7) and emergency (Regulation 1.07 § 5 and § 7). Second, the Petitio ner objected to the affirmative defense for emergencies in Jefferson County Air Regulations 1.07. For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to provisions in the Jefferson County Air Regulations 1.07. Subsequently, for reasons explained fully in the SNPR, the EPA reversed its prior proposed granting of the Petition with respec t to Jefferson County Air Regulations 1.07. For Jefferson County, Kentucky, the provisions for which the EPA proposed in February 2013 to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 462 of 539 grant the Petition were subse quently removed from the SIP. Thus, in the SNPR, the EPA proposed instead to deny the Petition. 377 As explained in the SNPR, the state of Kentucky has revised the SIP provisions appli cable to Jefferson County and eliminated the SIP inadequacies identified in the February 2013 proposal notice. The EPA has already approved the necessary

SIP revisions. 378 Accordingly, the EPA’s final action on the Petition does not include a finding of substantial inadequacy and SI P call for Jefferson County, Kentucky. In this final action, the EPA is denying the Petition with respect to Jefferson County Air Regulations 1.07. This action is fully consistent with what the EPA proposed in February 2013

as revised in the SNPR. Please refer to the Re sponse to Comment document available in the docket for this rulemaking concerning any comments specific to the Kentucky SIP that the EPA received and considered during the development of this rulemaking. 6. Mississippi

As described in section IX.E.6 of the Febr uary 2013 proposal, the Petitioner objected to two generally applicable provision s in the Mississippi SIP that allow for affirmative defenses for violations of otherwise app licable SIP emission limitati ons during periods of upset, i.e., malfunctions (11-1-2 Miss. Code R. § 10.1) and unavoidable maintenance (11-1-2 Miss. Code R. § 10.3). First, the Petitioner objected to both of th ese provisions based on its assertion that the CAA allows no affirmative defense provisions in SIPs. Second, the Petitioner asserted that even if affirmative defense provisions were permissi ble under the CAA, the affirmative defenses in these provisions “fall fa r short of the EPA policy at the time. ” The Petitioner also objected to a

377 See SNPR, 79 FR 55919 at 55925. 378 See Approval and Promulgation of Implementati on Plans; Kentucky; Approval of Revisions to the Jefferson County Portion of the Kentuc ky SIP; Emissions Duri ng Startups, Shutdowns, and Malfunctions, 79 FR 33101 (June 10, 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 463 of 539 generally applicable provision that provides an exemption fr om otherwise applicable SIP emission limitations during startup and s hutdown (11-1-2 Miss. Code R. § 10.2). For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to 11-1-2 Miss. Code R. § 10.1 and 11-1-2 Miss. Code R. § 10.3. Also for reasons explained in the February 2013 proposal , the EPA proposed to grant the petition with respect to these provisions on the basis that they were not appropriate as an affirmative defense provisions because they were inconsistent with fundamental requirements of the CAA. Also for reasons explained fully in the February 2013 pr oposal, the EPA proposed to grant the Petition with respect to 11-1-2 Miss. Code R. § 10.2. Subsequently, for reasons explained in th e SNPR, the EPA reproposed granting of the Petition with respect to the affirmative defens e provisions in 11-1-2 Mi ss. Code R. § 10.1 and 11-1-2 Miss. Code R. § 10.3, but it proposed to re vise the basis for the finding of substantial inadequacy and the SIP call for these provisions. Consequently, the EPA proposed to find that 11-1-2 Miss. Code R. § 10.1, 11-1-2 Miss. Code R. § 10.2 and 11-1-2 Miss. Code R. § 10.3 are substantially inadequate to meet CAA requirements and thus proposed to issue a SI P call with respect to these provisions. In this final action, the EPA is granting the Pe tition with respect to 11-1-2 Miss. Code R. § 10.1, 11-1-2 Miss. Code R. § 10.2 and 11-1-2 Mi ss. Code R. § 10.3. Accordingly, the EPA is finding that these provisions ar e substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in th e docket for this rulemaking concerning any*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 464 of 539 comments specific to the Mississippi SIP that the EPA received and considered during the development of this rulemaking.

7. North Carolina

As described in section IX.E.7 of the Febr uary 2013 proposal, the Petitioner objected to two generally applicable provisi ons in the North Carolina SIP that provide exemptions for emissions exceeding otherwise applicable SIP emi ssion limitations at the discretion of the state agency during malfunctions (15A N.C. Ad min. Code 2D.0535(c)) a nd during startup and shutdown (15A N.C. Ad min. Code 2D.0535(g)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to 15A N.C. Admin. Code 2D.0535(c) and 15A N.C. Admin. Code 2D.0535(g). Consequently, the EPA proposed to find that 15A N.C. Admin. Code 2D.0535(c) and 15A N.C. Admin. Code 2D.0535(g) are substantially inadequate to meet CAA requirements and thus proposed to issue a SIP call w ith respect to these provisions. In this final action, the EPA is granting the Petition with respect to 15A N.C. Admin. Code 2D.0535(c) and 15A N.C. Admin. Code 2D.0535(g). Accordin gly, the EPA is finding that these provisions are substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning an y comments specific to the North Carolina SIP

that the EPA received and considered during the devel opment of this rulemaking. 8. North Carolina: Forsyth County*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 465 of 539 As described in section IX.E.8 of the Febr uary 2013 proposal, the Petitioner objected to two generally applicable provisi ons in the Forsyth County Code that provide exemptions for emissions exceeding otherwise applicable SIP emi ssion limitations at the discretion of a local official during malfunctions (F orsyth County Code, ch. 3, 3D.0535( c)) and startup and shutdown (Forsyth County Code, ch. 3, 3D.0535(g)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Forsyth County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 3D.0535(g). Consequently, the EPA proposed to find that Forsyth County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 3D.0535(g) are substan tially inadequate to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Petition with respect to Forsyth County Code, ch. 3, 3D.0535(c) and Forsyth County Code, ch. 3, 3D.0535(g). Accordingly, the EPA is finding that these provisions are substant ially inadequate to meet CAA re quirements and the EPA is thus issuing a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning an y comments specific to the North Carolina SIP

that the EPA received and considered during the devel opment of this rulemaking.

9. South Carolina

As described in section IX.E.9 of the Febr uary 2013 proposal, the Petitioner objected to three provisions in the South Carolina SIP, arguing that they contai ned impermissible source category- and pollutant-specific exemptions. The Petitioner characterized these provisions as providing exemptions from opacity limits for fuel -burning operations for excess emissions that*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 466 of 539 occur during startup or shutdown (S.C. Code An n. Regs. 61-62.5 St 1(C)), exemptions from NOx limits for special-use burners that are operated less than 500 hours per year (S.C. Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14)) and exemptions from sulfur limits for kraft pulp mills for excess emissions that occur during SSM events (S.C. Code Ann. Regs. St 4(XI)(D)(4)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to S.C. Code Ann. Regs . 61-62.5 St 1(C) and S.C. Code Ann. Regs. St 4(XI)(D)(4). Also for reasons explained fully in the February 2013 proposal, the EPA proposed to deny the Petition with respect to S. C. Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14). Subsequently, for reasons explained fully in the SNPR, the EPA identified one affirmative defense provision in the South Carolina SIP in S. C. Code Ann. Regs. 62.1, Section II(G)(6) that was not identified by the Petitione r, and the EPA proposed to make a finding of substantial inadequacy and to issu e a SIP call for this provision. Consequently, the EPA proposed to find that the provisions in S.C. Code Ann. Regs. 61- 62.5 St 1(C), S.C. Code Ann. Regs. St 4(X I)(D)(4) and S.C. Code Ann. Regs. 62.1, Section II(G)(6) are substantially inadequa te to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Pe tition with respect to S.C. Code Ann. Regs. 61-62.5 St 1(C), S.C. Code Ann. Regs. St 4(XI)(D)(4) and S.C. Code Ann. Regs. 62.1, Section II(G)(6) and denying the Petition with respect to S.C. Code Ann. Regs. 61-62.5 St 5.2(I)(b)(14). Accordingly, the EPA is finding that the provis ions in S.C. Code Ann. Regs. 61-62.5 St 1(C), S.C. Code Ann. Regs. St 4(XI)(D)(4) and S. C. Code Ann. Regs. 62.1, Section II(G)(6) are substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. Th is action is fully consistent with what the EPA proposed in*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 467 of 539 February 2013 as revised in the SNPR. Pleas e refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the South Carolina SIP that the EPA received and considered during the development of this rulemaking.

10. Tennessee

As described in section IX.E.10 of the Febr uary 2013 proposal, the Pe titioner objected to three provisions in the Tennessee SIP. First, th e Petitioner objected to two provisions that

authorize a state official to decide whether to “excuse or proceed upon” (Tenn. Comp. R. & Regs. 1200-3-20-.07(1)) violations of otherwise applicable SIP emission limitations that occur during “malfunctions, startups, and shutdowns ” (Tenn. Comp. R. & Regs. 1200-3-20-.07(3)). Second, the Petitioner objected to a provision th at excludes excess visible emissions from the requirement that the state automatically issue a notice of violation for a ll excess emissions (Tenn. Comp. R. & Regs. 1200-3-5-.02(1)). This provision states that “due allowance may be made for visible emissions in excess of that permitted in this chapter which are necessary or unavoidable due to routine startup and shutdown conditions.” For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Tenn. Comp. R. & Re gs. 1200-3-20-.07(1), Tenn. Comp. R. & Regs. 1200-3-20-.07(3) and Tenn. Comp. R. & Regs. 1200-3-5-.02(1). Consequently, the EPA proposed to find that Tenn. Comp. R. & Regs. 1200-3-20-.07(1), Tenn. Comp. R. & Regs. 1200-3-20-.07(3) and Tenn. Comp. R. & Regs. 1200-3-5-.02(1) are substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting th e Petition with respect to Tenn. Comp. R. & Regs. 1200-3-20-.07(1), Tenn. Comp. R. & Regs. 1200-3-20-.07(3) and Tenn. Comp. R. & Regs.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 468 of 539 1200-3-5-.02(1). Accordingly, the EPA is findi ng that these provisions are substantially inadequate to meet CAA requirements and the EP A is thus issuing a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Tenness ee SIP that the EPA received and considered during the development of this rulemaking. 11. Tennessee: Knox County

As described in section IX.E.11 of the Febr uary 2013 proposal, the Pe titioner objected to a provision in the Knox County portion of the Tenness ee SIP that bars eviden ce of a violation of SIP emission limitations from being used in a citizen enforcement action (Knox County Regulation 32.1(C)). The provision specifies that “[a] determin ation that there has been a violation of these regulations or orders issued pu rsuant thereto shall not be used in any law suit brought by any private citizen.” For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Knox County Regulatio n 32.1(C). For instance, the regulation was inconsistent with requirements related to credible evidence. Consequently, the EPA proposed to find th at Knox County Regulation 32.1(C) is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Petition with re spect to Knox County Regulation 32.1(C). Accordingly, the EPA is fi nding that this provision is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013. Please*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 469 of 539 refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Tenness ee SIP that the EPA received and considered during the development of this rulemaking. 12. Tennessee: Shelby County

As described in section IX.E.12 of the Febr uary 2013 proposal, the Pe titioner objected to a provision in the Shelby County Code (She lby County Code § 16-87) that addresses

enforcement for excess emissions that occur duri ng “malfunctions, startups, and shutdowns” by incorporating by reference the state’s provisions in Tenn. Com p. R. & Regs. 1200-3-20. Shelby County Code § 16-87 provides that “all such addi tions, deletions, changes and amendments as may subsequently be made” to Tennessee’s regulations will automatically become part of the Shelby County Code. For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Shelby County Code § 16-87. Consequently, the EPA proposed to fi nd that Shelby County Code § 16-87 is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Pe tition with respect to Shelby County Code § 16-87. Accordingly, the EPA is findi ng that this provision is substa ntially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EP A proposed in February 2013. Please refer to the Response to Comment document available in th e docket for this rulemaking concerning any comments specific to the Tennessee SIP that the EPA received and considered during the development of this rulemaking.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 470 of 539 F. Affected States in EPA Region V

1. Illinois

As described in section IX.F.1 of the Febr uary 2013 proposal, the Petitioner objected to three generally applicable provi sions in the Illinois SIP which together have the effect of providing discretionary exemptions from othe rwise applicable SIP emission limitations. The Petitioner noted that the provisions invite sources to request, during the permitting process, advance permission to continue to operate durin g a malfunction or breakdown, and, similarly to request advance permission to “v iolate” otherwise applicable em ission limitations during startup (Ill. Admin. Code tit. 35 § 201.261). The Illinois SIP provisions establish criteria that a state official must consider before granting the adva nce permission to violat e the emission limitations (Ill. Admin. Code tit. 35 § 201.262). However, the Pe titioner asserted, the provisions state that, once granted, the advance permission to violate the emission limitations “shall be a prima facie

defense to an enforcement action” (Ill. Admin. Code tit. 35 § 201.265). Further, the Petitioner objected to the use of the term “prima facie defense” in Ill. Admin. Code tit. 35 § 201.265, arguing that the term is “a mbiguous in its operation.” The Petitioner argued that the provision is not clear regarding whether the defe nse is to be evaluated “in a judicial or administrative proceeding or whethe r the Agency determines its availability.” Allowing defenses to be raised in these undefine d contexts, the Petitioner argued, is “inconsistent

with the enforcement structure of the Clean Air Act.” For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262 and Ill. Admin. Code tit. 35 § 201.265.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 471 of 539 Subsequently, for reasons explained fully in the SNPR, the EPA reproposed granting of the Petition with respect to th e affirmative defense provisions in Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262 and Ill. Admin. Code tit. 35 § 201.265, but it proposed to revise the basis for the finding of s ubstantial inadequacy and the SIP call for these provisions. Consequently, the EPA proposed to find that Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262 and Ill. Admin. Code tit. 35 § 201.265 are substantially inadequate to meet CAA requirements and thus pr oposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Pe tition with respect to Ill. Admin. Code tit. 35 § 201.261, Ill. Admin. Code tit. 35 § 201.262 and Ill. Admin. Code tit. 35 § 201.265. Accordingly, the EPA is finding that these provis ions are substantially in adequate to meet CAA requirements and the EPA is thus issuing a SIP ca ll with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Illinois SIP that the EPA received and considered during the development of this rulemaking.

2. Indiana

As described in section IX.F.2 of the Februa ry 2013 proposal, the Petitioner objected to a generally applicable provision in the Indiana SIP that allows for discretio nary exemptions during malfunctions (326 Ind. Admin. Code 1-6-4(a)). The Petitioner noted th at the provision is ambiguous because it states that excess emissi ons during malfunction periods “shall not be

considered a violation” if the source demonstr ates that a number of conditions are met (326 Ind.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 472 of 539 Admin. Code 1-6-4(a)), but the provision does not specify to wh om or in what forum such

demonstration must be made. If the demonstration was required to have b een made in a showing to the state, the Petitioner argued, the provision would give a state official the sole authority to determine that the

excess emissions were not a violation and could thus be read to preclude enforcement by the

EPA or citizens in the event that the state offici al elects not to treat the excess emissions as a violation. If instead, as the Peti tioner noted, the demonstration was required to have been made in an enforcement context, the provision could be interpreted as providing an affirmative

defense. For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to 326 Ind. Admin. Code 1-6-4(a). Subsequently, for reasons explained fully in the SNPR, the EPA reproposed granting of the Petition with respect to 326 Ind. Admin. Code 1- 6-4(a), but it proposed to revise the basis for the finding of substantial inadequacy and the SIP call for this provision. Consequently, the EPA proposed to find that 326 Ind. Admin. Code 1-6-4(a) is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Petition with respect to 326 Ind. Admin. Code 1-6-4(a). Accordingly, the EPA is finding that this provision is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA pr oposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 473 of 539 concerning any comments specific to the Indi ana SIP that the EPA received and considered during the development of this rulemaking. 3. Michigan

As described in section IX.F.3 of the Februa ry 2013 proposal, the Petitioner objected to a generally applicable provision in Michigan’s SIP, Mich. Admin. Code r. 336.1916, that provides for an affirmative defense to monetary penaltie s for violations of ot herwise applicable SIP emission limitations during peri ods of startup and shutdown. For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to Mich. Admin. Code r. 336.1916. Subsequently, for reasons explained fully in the SNPR, the EPA reproposed granting of the Petition with respect to the affirmative defense provision in Mich. Admin. Code r. 336.1916, but it proposed to revise the basis for the finding of substantial inadequ acy and the SIP call for this provision. Consequently, the EPA proposed to fi nd that Mich. Admin. Code r. 336.1916 substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Pe tition with respect to Mich. Admin. Code r. 336.1916. Accordingly, the EPA is finding that this pr ovision is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA pr oposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Michig an SIP that the EPA received and considered during the development of this rulemaking.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 474 of 539 4. Minnesota

As described in section IX.F.4 of the Februa ry 2013 proposal, the Petitioner objected to a provision in the Minnesota SIP that provides automatic exemptions for excess emissions resulting from flared gas at pe troleum refineries wh en those flares are caused by SSM (Minn. R. 7011.1415). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Minn. R. 7011.1415. Consequently, the EPA proposed to find that Minn. R. 7011.1415 is substantially inadequate to meet CAA requirements and thus pr oposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Petition with re spect to Minn. R. 7011.1415. Accordingly, the EPA is finding that this provis ion is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP ca ll with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to

Comment document available in the docket fo r this rulemaking concerning any comments specific to the Minnesota SIP that the EPA recei ved and considered during the development of this rulemaking.

5. Ohio

As described in section IX.F.5 of the Februa ry 2013 proposal, the Petitioner objected to a generally applicable provision in the Ohio SIP that allows for discretionary exemptions during periods of scheduled maintenance (Ohio Admi n. Code 3745-15-06(A)(3)). The Petitioner also objected to two source category-specific and po llutant-specific provisi ons that provide for discretionary exemptions during malfunctions (Ohio Admin. Code 3745-17-07(A)(3)(c) and*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 475 of 539 Ohio Admin. Code 3745-17-07(B)(11)(f)). The Pe titioner also objected to a source categoryspecific provision in the Ohio SIP that allows for an automatic exemption from applicable emission limitations and requirements during pe riods of startup, shutdown, malfunction, or regularly scheduled maintenance activities (Ohio Admin. Code 3745-14- 11(D)). Finally, the Petitioner objected to five provi sions that contain exemptions for Hospital/Medical/Infectious Waste Incinerator (HMIWI) sources during st artup, shutdown, and malfunction—Ohio Admin. Code 3745-75-02(E), Ohio Admin. Code 3745-75-02( J), Ohio Admin. Code 3745-75-03(I), Ohio Admin. Code 3745-75-04(K) and Ohio Admin. Code 3745-75-04(L). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Ohio Admin. C ode 3745-15-06(A)(3), Ohio Admin. Code 3745-17- 07(A)(3)(c), Ohio Admin. Code 3745-17-07(B)( 11)(f) and Ohio Admin. Code 3745-14-11(D). Also for reasons explained fully in the Febr uary 2013 proposal, the EPA proposed to deny the Petition with respect to Ohio Admin. Code 3745-75-02(E), Ohio Admi n. Code 3745-75-02(J), Ohio Admin. Code 3745-75-03(I), Ohio Admi n. Code 3745-75-04(K), and Ohio Admin. Code 3745-75-04(L), on the basis that they are not part of the Ohio SI P and thus cannot represent a substantial inadequacy in the SIP. In addition, for reasons explained fully in the February 2013 proposal, the EPA proposed to find that anothe r provision, Ohio Admin. Code 3745-15-06(C), is substantially inadequate to meet CAA requirements and proposed to issue a SIP call with respect to this provision, even though the Petitioner did no t request that the EPA evaluate this provision. As explained in the February 2013 proposal, th e EPA determined that Ohio Admin. Code 3745- 15-06(C) was the regulatory mechanism in the SI P by which exemptions are granted in the two provisions to which the Petitioner did object.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 476 of 539 Consequently, the EPA proposed to find that the provisions in Ohio Admin. Code 3745- 15-06(A)(3), Ohio Admin. Code 3745-17-07(A)(3)(c ), Ohio Admin. Code 3745-17-07(B)(11)(f), Ohio Admin. Code 3745-14-11(D) and Ohio Admin. Code 3745-15-06(C) are substantially inadequate to meet CAA requirements and thus pr oposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Petition with respect to Ohio Admin. Code 3745-15-06(A)(3), Ohio Admin. Code 3745-17- 07(A)(3)(c), Ohio Admin. Code 3745-17- 07(B)(11)(f), Ohio Admin. Code 3745-14-11(D) and Ohio Admin. Code 3745-15-06(C) are substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. Th is action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specifi c to the Ohio SIP that the EPA received and considered during the development of this rulemaking. G. Affected States in EPA Region VI

1. Arkansas

As described in section IX.G .1 of the February 2013 proposal , the Petitioner objected to two provisions in the Arkansas SIP. First, the Pe titioner objected to a provision that provides an automatic exemption for excess emissions of VOC for sources located in Pulaski County that occur due to malfunctions (Re g. 19.1004(H)). Second, the Petitione r objected to a separate provision that provides a “complete affirmative defense” for excess emissions that occur during emergency conditions (Reg. 19.602). The Petitioner ar gued that this prov ision, which the state may have modeled after the EPA’s title V regulations, is impermissi ble because its application is not clearly limited to operating permits.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 477 of 539 For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to Reg. 19.1004(H) and Reg. 19.602. Subsequently, for reasons explained fully in the SNPR, the EPA reproposed granting of the Petition with respect to the affirmative defense provision in Reg. 19.602, but it proposed to revise the basis for the finding of substantial inadequacy and the SIP call for this provision. Consequently, the EPA proposed to find that Reg. 19.1004(H) and Reg. 19.602 are substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting th e Petition with respect to Reg. 19.1004(H) and Reg. 19.602. Accordingly, the EPA is finding that these provisions are substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. This action is fully consistent wi th what the EPA proposed in February 2013 as

revised in the SNPR. Please refer to the Res ponse to Comment document available in the docket for this rulemaking concerning a ny comments specific to the Arkans as SIP that the EPA received and considered during the deve lopment of this rulemaking.

2. Louisiana

As described in section IX .G.2 of the February 2013 propos al, the Petitioner objected to several provisions in the Louisiana SIP that a llow for automatic and discretionary exemptions from SIP emission limitations during various situations, includ ing startup, shutdown, maintenance and malfunctions. First, the Petitioner objected to provisions that provide automatic exemptions for excess emissions of VOC from wastewater tanks (LAC 33:III.2153(B)(1)(i)) and

excess emissions of NOx from certain source s within the Baton Rouge Nonattainment Area (LAC 33:III.2201(C)(8)). The LAC 33:III.2153(B)(1)(i) provides that control devices “shall not*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 478 of 539 be required” to meet emission limitations “dur ing periods of malfunction and maintenance on the devices for periods not to exceed 336 hours per year.” Similarly, LAC 33:III.2201(C)(8) provides that certain sources “are exempted” from emission limitations “during start-up and shutdown . . . or during a malfunction.” Second, the Petitioner objected to provisions that provide discretionary exemptions to various emission limitations. Three of these provisions provide discretionary exemptions from otherwise applicable SO 2 and visible emission limitations in the

Louisiana SIP for excess emissions that occur dur ing certain startup and shutdown events (LAC 33:III.1107, LAC 33:III.1507(A)(1) a nd LAC 33:III.1507(B)(1)), whil e the other two provide such exemptions for excess emissions from nitric acid plants during startu ps and “upsets” (LAC 33:III.2307(C)(1)(a) and LA C 33:III.2307(C)(2)(a)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to LAC 33:III.2153(B)(1)(i) and LAC 33:III.2201(C)(8) on the basis that these provisions allow for automatic exemptions for excess emissions from otherwise applicable SIP emission limitations. Also for reasons expl ained fully in the Fe bruary 2013 proposal, the EPA proposed to grant the Petition with re spect to LAC 33:III.1107(A), LAC 33:III.1507(A)(1), LAC 33:III.1507(B)(1), LAC 33:III.2307(C)(1)(a) and LAC 33:III.2307(C)(2)(a) on the basis that these provisions allow impermis sible discretionary exemptions. Consequently, the EPA proposed to fi nd that LAC 33:III.2153(B)(1)(i), LAC 33:III.2201(C)(8), LAC 33:III.1107(A), LAC 33:III.1507(A)(1), LAC 33:III.1507(B)(1), LAC 33:III.2307(C)(1)(a) and LAC 33:III. 2307(C)(2)(a) are substantially inadequate to meet CAA requirements and thus proposed to issue a SI P call with respect to these provisions. In this final action, the EPA is gran ting the Petition with respect to LAC 33:III.2153(B)(1)(i), LAC 33:III.2201(C)(8), LA C 33:III.1107(A), LAC 33:III.1507(A)(1), LAC*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 479 of 539 33:III.1507(B)(1), LAC 33:III .2307(C)(1)(a) and LAC 33:III.2307(C)(2)(a). Accordingly, the EPA is finding that these provisi ons are substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment

document available in the docket for this rule making concerning any comments specific to the

Louisiana SIP that the EPA received and consider ed during the development of this rulemaking.

3. New Mexico

As described in section IX.G .3 of the February 2013 proposal , the Petitioner objected to three provisions in the New Mexico SIP that pr ovide affirmative defenses for excess emissions that occur during malfunctions (20.2.7.111 NMAC), during startup and shutdown (20.2.7.112 NMAC) and during emergencies (20.2.7.113 NMAC). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to 20.2.7.111 NM AC, 20.2.7.112 NMAC and 20.2.7.113 NMAC. Subsequently, for reasons explained fully in the SNPR, the EPA reproposed granting of the Petition with respect to the affirm ative defense provisi ons in 20.2.7.111 NMAC, 20.2.7.112 NMAC and 20.2.7.113 NMAC, but it proposed to revise the basis for the finding of substantial inadequacy and the SIP call for these provisions. Consequently, the EPA proposed to fi nd that the provisions in 20.2.7.111 NMAC,

20.2.7.112 NMAC and 20.2.7.113 NMAC are substant ially inadequate to meet CAA requirements and thus proposed to issue a SI P call with respect to these provisions. In this final action, the EPA is granting the Petition with respect to 20.2.7.111 NMAC, 20.2.7.112 NMAC and 20.2.7.113 NMAC. Accordingly, the EPA is finding that these provisions are substantially inadequate to meet CAA requi rements and the EPA is thus issuing a SIP call*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 480 of 539 with respect to these provisions . This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Pleas e refer to the Response to Comment document available in the docket for this rulemaking conc erning any comments specifi c to the New Mexico

SIP that the EPA received and considered dur ing the development of this rulemaking. 4. New Mexico: Albuquerque-Bernalillo County The Petitioner did not identify a ny provisions in the SIP for th e state of New Mexico that specifically apply in the Albuquerque-Bernalillo County area, which is why this area was not explicitly addressed in th e February 2013 proposal. Subsequently, for reasons explained fully in the SNPR, the EPA ’identified three affirmative defense provisions in the SIP for the state of New Mexico that apply in the Albuquerque-Bernalillo County area, and the EPA proposed to make a finding of substantial inadequacy and to issue a SIP call for these provisions. These provision s provide affirmative

defenses available to sources for excess emi ssions that occur during malfunctions (20.11.49.16.A NMAC), during startup and shutdown (20.11.49.16.B NMAC) and during emergencies (20.11.49.16.C NMAC). In this final action, the EPA is findi ng that the provisions in 20.11.49.16.A NMAC,

20.11.49.16.B NMAC and 20.11.49.16.C NMAC are substa ntially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. The EPA

notes that removal of 20.11.49.16.A NM AC, 20.11.49.16.B NMAC and 20.11.49.16.C NMAC from the SIP will render 20.11.49.16.D NMAC, 20.11.49.16.E, 20.11.49.15.B (15) (concerning reporting by a source of intent to assert an affirmative defens e for a violation), a portion of 20.11.49.6 NMAC (concerning the objectiv e of establishing affirmative defense provisions) and 20.11.49.18 NMAC (concerning actions where a determination has been made under*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 481 of 539 20.11.49.16.E NMAC) superfluous and no longer operative, and the EPA thus recommends that these provisions be removed as well. This action is fully consis tent with what the EPA proposed in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the New Mexico SIP that the EPA received and considered during the development of this rulemaking.

5. Oklahoma

As described in section IX.G .4 of the February 2013 proposal , the Petitioner objected to two provisions in the Oklahoma SIP that togeth er allow for discretionary exemptions from emission limitations during st artup, shutdown, maintenance a nd malfunctions (OAC 252:100-9- 3(a) and OAC 252:100-9-3(b)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to OAC 252:1 00-9-3(a) and OAC 252:100-9-3(b). Consequently, the EPA proposed to find that OAC 252:100-9-3(a) and OAC 252:100-9- 3(b) are substantially inadequate to meet CAA requirements and t hus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting th e Petition with respect to OAC 252:100-9-3(a) and OAC 252:100-9-3(b). Accordingly, the EPA is finding that these provisions are substantially inadequate to meet CAA requirements and the EP A is thus issuing a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Oklaho ma SIP that the EPA received and considered during the development of this rulemaking.

6. Texas*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 482 of 539 The Petitioner did not identify in the June 2011 petition any pr ovisions in the SIP for the state of Texas, which is why this state was not explicitly addressed in the February 2013 proposal. Subsequently, for reasons explained fully in the SNPR, the EPA identified four affirmative defense provisions in the SIP for the state of Texas, and the EPA proposed to make a finding of substantial inadequacy and to issue a SIP call for these provisions. These provisions provide affirmative defenses available to sources for excess emissions that occur during upsets (30 TAC 101.222(b)), unplanned events (30 TA C 101.222(c)), upsets with respect to opacity limits (30 TAC 101.222(d)) and unplanned events with respect to opacity limits (30 TAC 101.222(e)). In this final action, the EPA is finding that the provisions in 30 TAC 101.222(b), 30 TAC 101.222(c), 30 TAC 101.222(d) and 30 TAC 101.222(e) are substantia lly inadequate to meet CAA requirements and the EPA is t hus issuing a SIP call with resp ect to these provisions. This action is fully consistent with what the EPA proposed in the SNPR. Please refer to the Response

to Comment document available in the docket for this rulemaking concerning any comments specific to the Texas SIP that the EPA received and considered during the development of this rulemaking. H. Affected States in EPA Region VII

1. Iowa

As described in section IX.H .1 of the February 2013 proposal , the Petitioner objected to a specific provision in the Iowa SIP that allows for automatic exemptions from otherwise applicable SIP emission limitations during period s of startup, shutdown or cleaning of control equipment (Iowa Admin. Code r. 567-24.1(1)). Also, the Petitioner objected to a provision that*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 483 of 539 empowers the state to exercise enforcement discre tion for violations of the otherwise applicable SIP emission limitations during malfunction pe riods (Iowa Admin. Code r. 567-24.1(4)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Iowa Ad min. Code. R. 567-24.1(1) on the ba sis that this provision allows for exemptions from the othe rwise applicable SIP emission limitations. Also for reasons explained fully in the February 2013 proposal, the EPA proposed to deny the Petition with respect to Iowa Admin. Code r. 567-24.1(4) on the ba sis that the provision is on its face clearly applicable only to Iowa state enforcement pe rsonnel and that the provision thus could not reasonably be read by a court to foreclose en forcement by the EPA or through a citizen suit where Iowa state personnel elect to exercise enforcement discretion. Consequently, the EPA proposed to find th at Iowa Admin. Code r. 567-24.1(1) is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Pe tition with respect to Iowa Admin. Code r. 567-24.1(1). Accordingly, the EPA is finding that th is provision is substan tially inadequate to meet CAA requirements and the EPA is thus issu ing a SIP call with respect to this provision. This action is fully consistent with what the EP A proposed in February 2013. Please refer to the Response to Comment document available in th e docket for this rulemaking concerning any comments specific to the Iowa SIP that the EPA received and considered during the development of this rulemaking.

2. Kansas

As described in section IX.H .2 of the February 2013 proposal , the Petitioner objected to three provisions in the Kansas SIP that allow for exemptions for excess emissions during*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 484 of 539 malfunctions and necessary repairs (K.A.R. § 28 -19-11(A)), scheduled maintenance (K.A.R. § 28-19-11(B)), and certain routine modes of operation (K.A.R. § 28-19-11(C)). For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to K.A.R. § 28-19-11(A), K.A.R. § 28-19-11(B) and K. A.R. § 28-19-11(C). Consequently, the EPA proposed to find that K.A.R. § 28-19-11(A), K.A.R. § 28-19- 11(B) and K.A.R. § 28-19-11(C) are substantially inadequate to meet CAA requirements and thus proposed to issue a SIP call w ith respect to these provisions. In this final action, the EPA is granting th e Petition with respect to K.A.R. § 28-19- 11(A), K.A.R. § 28-19-11(B) and K.A.R. § 28-19- 11(C). Accordingly, the EPA is finding that these provisions are substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Kansas SIP that the EPA received and considered during the development of this rulemaking.

3. Missouri

As described in section IX.H .3 of the February 2013 proposal , the Petitioner objected to two provisions in the Missouri SIP that could be interpreted to pr ovide discretionary exemptions. The first provides exemptions for visible emi ssions exceeding otherwise applicable SIP opacity limitations (Mo. Code Regs. Ann. tit 10, § 10-6.220(3 )(C)). The second provides authorization to state personnel to decide whether excess emissions “warrant enforcement action” where a source submits information to the state showing that such emissions were “t he consequence of a malfunction, start-up or shutdown.” (Mo. C ode Regs. Ann. tit 10, § 10-6.050(3)(C)).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 485 of 539 For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Mo. Code Regs. A nn. tit 10, § 10-6.220(3)(C) on the basis that this provision could be read to allow for exemptions from the otherwise applicable SIP emission limitations through a state official’s unilateral ex ercise of discretionary authority that is insufficiently bounded and includes no additional public process at the stat e or federal level. Also for reasons explained fully in the Febr uary 2013 proposal, the EPA proposed to deny the Petition with respect to Mo. Code Regs. A nn. tit 10, § 10-6.050(3)(C) on the basis that the provision is on its face clearly a pplicable only to Missouri state enforcement personnel and that the provision thus could not reasonably be read by a court to foreclose enforcement by the EPA or through a citizen suit where Mi ssouri state personnel elect to ex ercise enforcement discretion Consequently, the EPA proposed to find that the provision in Mo. Code Regs. Ann. tit 10, § 10-6.220(3)(C) is substantially inadequate to meet CAA requirements and thus proposed to issue a SIP call with resp ect to this provision. In this final action, the EPA is granting the Petition with respect to Mo. Code Regs. Ann. tit 10, § 10-6.220(3)(C). Accordingly, the EPA is finding that this provision is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Missou ri SIP that the EPA received and considered during the development of this rulemaking.

4. Nebraska

As described in section IX.H .4 of the February 2013 proposal , the Petitioner objected to two provisions in the Nebraska SIP. First, th e Petitioner objected to a generally applicable*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 486 of 539 provision that provides authori zation to state personnel to de cide whether excess emissions

“warrant enforcement action” where a source submits information to the st ate showing that such emissions were “the result of a malfunction, st art-up or shutdown” (Neb. Admin. Code Title 129 § 11-35.001). Second, the Petitioner obj ected to a specific provision in Nebraska state law that contains exemptions for excess emissions at hospital/medical/infectious waste incinerators (HMIWI) during SSM (Neb. Admi n. Code Title 129 § 18-004.02). For reasons explained fully in the February 2013 proposal, the EPA proposed to deny the Petition with respect to Neb. Admin. Code Title 129 § 11-35.001. Also for reasons explained fully in the February 2013 proposal, the EPA propos ed to deny the Petition with respect to Neb. Admin. Code Title 129 § 18-004.02 on the basis that th is regulation is not part of the Nebraska SIP and thus cannot represent an inadequacy in the SIP. In this final action, the EPA is denying the Petition with respect to Neb. Admin. Code Title 129, Chapter 35, Section 001 (correction to citation, as per comment received from Nebraska DEQ, from earlier identification as Neb. Admin. Code Title 129 § 11-35.001) and Neb. Admin. Code Title 129 § 18-004.02. This action is fully consistent with what th e EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any other comments specific to the Nebraska SI P that the EPA received and considered during the development of this rulemaking.

5. Nebraska: Lincoln-Lancaster

As described in section IX.H .5 of the February 2013 proposal , the Petitioner objected to a generally applicable provision in the Lincol n-Lancaster County Air Pollution Control Program (Art. 2 § 35), which governs the Lincoln-Lancaste r County Air Pollution Control District of*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 487 of 539 Nebraska, that is parallel “in all aspects pertinent to this analys is” to Neb. Admin. Code Title 129 § 11-35.001. (Note that as per comment subsequently received from Nebraska DEQ, the correct

citation is Neb. Admin. Code Title 129, Chapter 35, Section 001.) For reasons explained fully in the February 2013 proposal, the EPA proposed to deny the Petition with respect to Art. 2 § 35, on the basis that Art. 2 § 35 is not part of the SIP. In this final action, the EPA is denying the Petition with respect to Art. 2 § 35. This action is fully consistent with what the EP A proposed in February 2013. Please refer to the Response to Comment document available in th e docket for this rulemaking concerning any other comments specific to the Nebraska SIP th at the EPA received and considered during the development of this rulemaking. I. Affected States in EPA Region VIII

1. Colorado

As described in section IX.I.1 of the Febr uary 2013 proposal, the Petitioner objected to two affirmative defense provisions in the Colorado SIP that provide for a ffirmative defenses to qualifying sources during malfunctions (5 Colo. Code Regs § 1001-2(II.E)) and during periods of startup and shutdown (5 Co lo. Code Regs § 1001-2(II.J)). For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to 5 Colo. Code Regs § 1001-2(II.J). Also for reasons explained in the February 2013 proposal, the EPA proposed to deny the Petition with respect to 5 Colo. Code Regs § 1001-2(II.E) on the basis that it included an affirmative defense applicable to malfunction events that was consistent with the requirement s of the CAA as interpreted by the EPA in the

1999 SSM Guidance.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 488 of 539 Subsequently, for reasons explained fully in the SNPR, the EPA reproposed granting of the Petition with respect to the affirmative defe nse provision in 5 Colo. Code Regs § 1001-2(II.J) applicable to startup and shutdown, but it propo sed to revise the basis for the finding of substantial inadequacy and the SIP call for this provision. Also for reasons explained in the SNPR, the EPA reversed its prior proposed denial of the Petition with respect to the affirmative defense provision 5 Colo. Code Regs § 1001-2(II.E) applicable to malfunctions. Consequently, the EPA proposed to find that the provisions in 5 Colo. Code Regs § 1001- 2(II.J) and 5 Colo. Code Regs § 1001-2(II.E) are substantially inad equate to meet CAA requirements and thus proposed to issue a SI P call with respect to these provisions. In this final action, the EPA is granting the Pe tition with respect to 5 Colo. Code Regs § 1001-2(II.J) and 5 Colo. Code Re gs § 1001-2(II.E). Accordingly, the EPA is finding that the provisions in 5 Colo. Code Regs § 1001-2(II.J ) and 5 Colo. Code Regs § 1001-2(II.E) are substantially inadequate to m eet CAA requirements and the EPA is thus issuing a SIP call to Colorado to correct its SIP with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013 as revise d in the SNPR. Please refer to the Response to

Comment document available in the docket fo r this rulemaking concerning any comments specific to the Colorado SIP that the EPA recei ved and considered during the development of this rulemaking.

2. Montana

As described in section IX.I.2 of the Febr uary 2013 proposal, the Petitioner objected to an exemption from otherwise applicable emission limitations for aluminum plants during startup and shutdown (Montana Admin. R 17.8.334).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 489 of 539 For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to ARM 17.8.334. Consequently, the EPA proposed to find that ARM 17.8.334 is substantially inadequate to meet CAA requirements and thus proposed to issue a SIP call wi th respect to this provision. In this final action, the EPA is granti ng the Petition with respect to ARM 17.8.334. Accordingly, the EPA is findi ng that ARM 17.8.334 is substantia lly inadequate to meet CAA requirements and the EPA is thus issuing a SIP ca ll with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to

Comment document available in the docket fo r this rulemaking concerning any comments specific to the Montana SIP that the EPA received and considered during the development of this rulemaking.

3. North Dakota

As described in section IX.I.3 of the Febr uary 2013 proposal, the Petitioner objected to two provisions in the North Dakota SIP that cr eate exemptions from otherwise applicable emission limitations. The first provision creates ex emptions from a number of cross-referenced opacity limits “where the limits specified in this article cannot be met because of operations and processes such as, but not limited to, oil field service and drilling operations, but only so long as it is not technically feasible to meet said sp ecifications” (N.D. Admin. Code § 33-15-03-04(4)). The second provision creates an implicit exempt ion for “temporary operational breakdowns or cleaning of air pollution equipmen t” if the source meets certain conditions (N.D. Admin. Code § 33-15-05-01(2)(a)(1)). For reasons explained in the February 2013 proposal, the EPA proposed to grant the Petition with respect to N.D. Admin. Code 33-15-03-04.4 (cited in the Petition as N.D. Admin.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 490 of 539 Code § 33-15-03-04(4)) and also with respect to a provision to which the Petitioner cited but did not explicitly object, N.D. Ad min. Code 33-15-03-04.3 (cited in the Petition as N.D. Admin. Code § 33-15-03-04(3)). Also for reasons expl ained in the February 2013 proposal, the EPA proposed to grant the Petition wi th respect to N.D. Admin. Code 33-15-05-01.2a(1) (cited in the

Petition as N.D. Admin. C ode § 33-15-05-01(2)(a)(1)). Subsequently, the state of North Dakota removed N.D. Admin. Code 33-15-03-04.4 and N.D. Admin. Code 33-15-05-01.2.a(1) and eliminated the SIP inadequacies w ith respect to those two of the three provisio ns identified in the February 2013 proposal notice. The EPA has already approved the necessary SIP revisions for those two provisions. 379 Thus, the EPA’s final action on

the Petition does not need to in clude a finding of substantial in adequacy and SIP call for those two provisions. In this final action, the EPA is granting the Petition with respect to N.D. Admin. Code 33-15-03-04.3 and denying the Petition with respect to N.D. Admin. Code 33-15-03-04.4 and N.D. Admin. Code 33-15-05-01.2.a(1). Accordingl y, the EPA is finding that the provision in N.D. Admin. Code 33-15-03-04.3 is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call to North Dakota to correct its SIP with respect to this provision. This action is fully consistent with what the EP A proposed in February 20 13 with respect to this provision. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the North Dakota SIP that the EPA received and considered during the deve lopment of this rulemaking.

4. South Dakota

379 See “Approval and Promulgation of Implementati on Plans, North Dakota, Revisions to the Air Pollution Control Rules,” 79 FR 53045 (October 21, 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 491 of 539 As described in section IX.I.4 of the Februa ry 2013 proposal, the Petitioner objected to a provision in the South Dakota SI P that creates exemptions fr om otherwise applicable SIP emission limitations (S.D. Admin, R. 74:36:12:02(3)). The Petitioner asserted that the provision imposes visible emission limitations on sources but explicitly excludes emissions that occur “for brief periods during such operations as soot blowing, start-up, shut-dow n, and malfunctions.” For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to S.D. Admin, R. 74: 36:12:02(3). Consequently, the EPA proposed to find th at S.D. Admin, R. 74:36:12:02(3) is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting th e Petition with respect to S.D. Admin, R. 74:36:12:02(3). Accordingly, the EPA is findi ng that S.D. Admin, R. 74:36:12:02(3) is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment do cument available in the docket for this rulemaking concerning any comments specific to the South Dakota SIP that the EPA received and considered during the deve lopment of this rulemaking. 5. Wyoming

As described in section IX.I.5 of the Februa ry 2013 proposal, the Petitioner objected to a specific provision in the Wyoming SIP that pr ovides an exemption for excess PM emissions from diesel engines during startup, malfuncti on and maintenance (WAQSR Chapter 3, section 2(d), cited as ENV-AQ-1 Wyo. Code R. § 2(d) in the Petition). The provision exempts emission of visible air pollutants from dies el engines from applicable SI P limitations “during a reasonable*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 492 of 539 period of warmup following a cold start or wh ere undergoing repairs a nd adjustment following

malfunction.” For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to WAQSR Chapter 3, section 2(d) (cited as ENV-AQ-1 Wyo. Code R. § 2(d) in the Petition). Subsequently, the state of Wyoming revi sed WAQSR Chapter 3, section 2(d) and eliminated the SIP inadequacies identified in the February 2013 proposal notice with respect to this provision. The EPA has already approved th e necessary SIP revision for this provision. 380 Thus, the EPA’s final action on the Petition does not need to include a finding of substantial inadequacy and SIP call for this provision. In this final action, the EPA is denying the Petition with respect to WAQSR Chapter 3, section 2(d). Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Wyoming SIP that the EPA received and considered during the development of this rulemaking. J. Affected States and Local Ju risdictions in EPA Region IX

1. Arizona

As described in section IX.J.1 of the Febr uary 2013 proposal, the Petitioner objected to two provisions in the Arizona Department of Air Quality’s (ADEQ) Rule R18-2-310, which provide affirmative defenses for excess emi ssions during malfunctions (AAC Section R18-2- 310(B)) and for excess emissions during startup or shutdown (AAC Section R18-2-310(C)).

380 See “Approval and Promulgation of Implementati on Plans; Wyoming; Revisions to the Air Quality Standards and Regulations ,” 79 FR 62859 (October 21, 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 493 of 539 For reasons explained in the February 2013 proposal, the EPA proposed to deny the Petition with respect to AAC Section R18-2-310(B) on the basis that it included an affirmative defense applicable to malfunction events that wa s consistent with the CAA as interpreted by the

EPA in the 1999 SSM Guidance. Also for reasons explained in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to AAC Section R18-2-310(C). Subsequently, for reasons explained fully in the SNPR, the EPA reversed its prior proposed denial of the Petition with respect to the affirmativ e defense provision AAC Section R18-2-310(B) applicable to malfunctions. Also for reasons explained in the SNPR, the EPA reproposed granting of the Petition with respec t to the affirmative defense provision in AAC Section R18-2-310(C) applicable to startup and shutdown, but it pr oposed to revise the basis for the finding of substantial inadequacy and the SIP call for this provision. Consequently, the EPA proposed to find th at the provisions in AAC Section R18-2- 310(B) and AAC Section R18-2-310( C) are substantially inadequa te to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Petition with respect to AAC Section R18-2- 310(B) and AAC Section R18-2-310( C). Accordingly, the EPA is fi nding that the provisions in AAC Section R18-2-310(B) and AAC Section R18- 2-310(C) are substantially inadequate to meet CAA requirements and the EPA is thus issui ng a SIP call with respect to these provisions. This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Arizona SIP that the EPA received and considered during the development of this rulemaking.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 494 of 539 2. Arizona: Maricopa County

As described in section IX.J.2 of the Febr uary 2013 proposal, the Petitioner objected to two provisions in the Maricopa County Air Pollution Control Regulations that provide

affirmative defenses for excess emissions dur ing malfunctions (Maricopa County Air Pollution Control Regulation 3, Rule 140, §401) and for excess emissions during startup or shutdown (Maricopa County Air Pollution Control Regu lation 3, Rule 140, §402). These provisions in Maricopa County Air Quality Department (MC AQD) Rule 140 are similar to the affirmative defense provisions in ADEQ R18-2-310. For reasons explained in the February 2013 proposal, the EPA proposed to deny the Petition with respect to Maricopa County Ai r Pollution Control Regulation 3, Rule 140, §401 on

the basis that it included an affirmative defe nse applicable to malfunction events that was consistent with the CAA as interpreted by the EPA in the 1999 SSM Guidance. Also for reasons explained in the February 2013 proposal, the EPA pr oposed to grant the Petit ion with respect to Maricopa County Air Pollution Control Regulation 3, Rule 140, §402. Subsequently, for reasons explained fully in the SNPR, the EPA reversed its prior proposed denial of the Petition with respect to the affirma tive defense provision Maricopa County Air Pollution Control Regulation 3, Rule 140, §401 applicable to malfunctions. Also for reasons explained in the SNPR, the EPA reproposed granting of the Petition with respect to the affirmative defense provision in Maricopa County Air Polluti on Control Regulation 3, Rule 140, §402 applicable to startup and shutdown, but it pr oposed to revise the ba sis for the finding of substantial inadequacy and th e SIP call for this provision. Consequently, the EPA proposed to find that the provisions in Maricopa County Air Pollution Control Regulation 3, Rule 140, §401 a nd Maricopa County Air Pollution Control*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 495 of 539 Regulation 3, Rule 140, §402 are substantially inad equate to meet CAA requirements and thus proposed to issue a SIP call with respect to these provisions. In this final action, the EPA is granting the Petition with respect to Maricopa County Air Pollution Control Regulation 3, Rule 140, §401 a nd Maricopa County Air Pollution Control Regulation 3, Rule 140, §402. Accordingly, the EP A is finding that th ese provisions are substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions. Th is action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Pleas e refer to the Response to Comment document available in the docket for this rulemaking conc erning any comments specifi c to the Arizona SIP

that the EPA received and considered during the devel opment of this rulemaking. 3. Arizona: Pima County

As described in section IX.J.3 of the Februa ry 2013 proposal, the Petitioner objected to a provision in the Pima County De partment of Environmental Quality’s (PCDEQ) Rule 706 that pertains to enforcement discretion. For reasons explained fully in the February 2013 proposal, the EPA proposed to deny the Petition with respect to PCDEQ Rule 706. In this final action, the EPA is denying th e Petition with respect to PCDEQ Rule 706. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in th e docket for this rulemaking concerning any comments specific to the Arizona SIP that the EPA received and considered during the development of this rulemaking.

4. California: Eastern Kern Ai r Pollution Control District*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 496 of 539 The Petitioner did not identify a ny provisions in the SIP for th e state of California, which is why this state was not explicitly addressed in th e February 2013 proposal. Subsequently, for reasons explained fully in the SNPR, the EPA identified an affirmative defense provision in the SIP for the state of Ca lifornia applicable in the Eastern Kern Air Pollution Control District (APCD), and the EP A proposed to make a finding of substantial inadequacy and to issue a SIP call for this provisi on. The affirmative defense is included in Kern County “Rule 111 Equipment Breakdown.” This SI P provision provides an affirmative defense

available to sources for excess emissions that occur during a breakdown condition ( i.e. , malfunction). In this final action, the EPA is finding th at Kern County Rule 111 Equipment Breakdown in the California SIP applicable in the Eastern Kern APCD 381 is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in the SNPR. Please refer to the Response

to Comment document available in the docket for this rulemaking concerning any comments specific to the California SIP that the EPA recei ved and considered during the development of this rulemaking. 5. California: Imperial County Air Pollution Control District The Petitioner did not identify a ny provisions in the SIP for th e state of California, which is why this state was not explicitly addressed in th e February 2013 proposal.

381 The EPA is in this final action making a findi ng of substantial inadeq uacy and issuing a SIP call for Kern County Rule 111 Equipment Breakdown in the California SIP as it applies in each the Eastern Kern APCD and the Sa n Joaquin Valley Unified APCD.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 497 of 539 Subsequently, for reasons explained fully in the SNPR, the EPA identified an affirmative defense provision in the SIP for the state of Cali fornia applicable in the Imperial Valley APCD, and the EPA proposed to make a finding of substan tial inadequacy and to i ssue a SIP call for this provision. The affirmative defense is included in Imperial County “Rule 111 Equipment Breakdown.” This SIP provision provides an affirm ative defense available to sources for excess emissions that occur during a breakdown condition ( i.e. , malfunction). In this final action, the EPA is finding that Imperial County “Rule 111 Equipment Breakdown” in the California SIP applicable in the Imperial Valley AP CD is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with wh at the EPA proposed in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the California SIP th at the EPA received and considered during the development of this rulemaking. 6. California: San Joaquin Valley Unif ied Air Pollution C ontrol District The Petitioner did not identify a ny provisions in the SIP for th e state of California, which is why this state was not explicitly addressed in th e February 2013 proposal. Subsequently, for reasons explained fully in the SNPR, the EPA identified affirmative defense provisions in the SIP for the state of California applicable in the San Joaquin Valley Unified APCD, and the EPA proposed to make a fi nding of substantial inad equacy and to issue a SIP call for these provisions. The affirmative de fenses are included in: (i) Fresno County “Rule 110 Equipment Breakdown”; (ii) Kern County “Rule 111 Equipment Breakdown”; (iii) Kings County “Rule 111 Equipment Breakdown”; (iv) Madera County “Rule 113 Equipment Breakdown”; (v) Stanislaus County “Rule 110 E quipment Breakdown”; and (vi) Tulare County*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 498 of 539 “Rule 111 Equipment Breakdown.” Each of these SIP provisions provides an affirmative defense

available to sources for excess emissions that occur during a breakdown condition ( i.e. , malfunction). In this final action, the EPA is finding that the following six provisi ons in the California SIP applicable in the San Joaquin Valley Unifie d APCD are substantiall y inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to these provisions: (i) Fresno County “Rule 110 Equipment Breakdown” ; (ii) Kern County “Rule 111 Equipment Breakdown”; (iii) Kings County “Rule 111 Equipm ent Breakdown”; (iv) Madera County “Rule 113 Equipment Breakdown”; (v) Stanislaus Coun ty “Rule 110 Equipment Breakdown”; and (vi) Tulare County “Rule 111 Equipment Breakdown.” 382 This action is fully consistent with what the EPA proposed in the SNPR. Please refer to th e Response to Comment document available in the docket for this rulemaking concerning any co mments specific to the California SIP that the EPA received and considered during the development of this rulemaking. K. Affected States in EPA Region X

1. Alaska

As described in section IX.K .1 of the February 2013 proposal , the Petitioner objected to a provision in the Alaska SIP that provides an ex cuse for “unavoidable” excess emissions that occur during SSM events, including startup, s hutdown, scheduled maintenance and “upsets” (Alaska Admin. Code tit. 18 § 50.240) . The provision provides: “Exc ess emissions determined to

be unavoidable under this section will be excuse d and are not subject to penalty. This section

382 The EPA is in this final action making a findi ng of substantial inadeq uacy and issuing a SIP call for Kern County Rule 111 Equipment Breakdown in the California SIP as it applies in each the Eastern Kern APCD and the Sa n Joaquin Valley Unified APCD.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 499 of 539 does not limit the department’s power to enjoin the emission or require co rrective action.” As the Petitioner pointed out, the provision is worded as if it were an affirmative defense, but it uses

criteria for enforcement discretion. For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Alaska Admin. Code ti t. 18 § 50.240 on the basis th at, to the extent the provision was intended to be an affirmative defens e, it was not a permissible affirmative defense provision consistent with the re quirements of the CAA as interpreted in the EPA’s 1999 SSM

Guidance. Subsequently, for reasons explained in th e SNPR, the EPA reproposed granting of the Petition with respect to Alaska Admin. Code ti t. 18 § 50.240, but it proposed to revise the basis for the finding of substantial inadequacy and the SIP call for this provision. Consequently, the EPA proposed to find th at Alaska Admin. Code tit. 18 § 50.240 is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Petition with respect to Alaska Admin. Code tit. 18 § 50.240. Accordingly, the EPA is finding that th is provision is substantially inadequate to meet CAA requirements and the EPA is thus issu ing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Alaska SIP that the EPA received and considered during the development of this rulemaking.

2. Idaho*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 500 of 539 As described in section IX.K .2 of the February 2013 proposal , the Petitioner objected to a provision in the Idaho SIP that appears to grant en forcement discretion to th e state as to whether to impose penalties for excess emissions during certain SSM events (Idaho Admin. Code r. 58.01.01.131). For reasons explained fully in the February 2013 proposal, the EPA proposed to deny the Petition with respect to Idaho Admin. Code r. 58.01.01.131. In this final action, the EPA is denying the Pe tition with respect to Idaho Admin. Code r. 58.01.01.131. This action is fully consistent with what the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Idaho SI P that the EPA received and considered during the development of this rulemaking. 3. Oregon

As described in section IX.K .3 of the February 2013 proposal , the Petitioner objected to a provision in the Oregon SIP that gr ants enforcement discretion to the state to pursue violations for excess emissions during certain SS M events (Or. Admin. R. 340-028-1450). For reasons explained fully in the February 2013 proposal, the EPA proposed to deny the Petition with respect to Or. Admin. R. 340-028-1450. In this final action, the EPA is denying the Petition with respect to Or. Admin. R. 340- 028-1450. This action is fully consistent with wh at the EPA proposed in February 2013. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Oreg on SIP that the EPA received and considered during the development of this rulemaking. 4. Washington*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 501 of 539 As described in section IX.K .4 of the February 2013 proposal , the Petitioner objected to a provision in the Washington SIP th at provides an excuse for “una voidable” excess emissions that occur during certain SSM events, including st artup, shutdown, schedul ed maintenance and “upsets” (Wash. Admin. Code § 173-400-107). The pr ovision provides that “[e]xcess emissions determined to be unavoidable under the procedur es and criteria under th is section shall be excused and are not subject to penalty.” The Pet itioner argued that this provision excuses excess

emissions in violation of the CAA and the EPA’ s SSM Policy, which require all such emissions to be treated as violations of the applicable SIP emission limitations. As the Petitioner pointed out, the provision is worded as if it were an affirmative defense, but it uses criteria for

enforcement discretion. For reasons explained fully in the February 2013 proposal, the EPA pr oposed to grant the Petition with respect to Wash. Admin. Code § 173-400-107 on the basis that, to the extent the provision was intended to be an affirmative defens e, it was not a permissible affirmative defense provision consistent with the re quirements of the CAA as interpreted in the EPA’s 1999 SSM

Guidance. Subsequently, for reasons explained in th e SNPR, the EPA reproposed granting of the Petition with respect to Wash. Admin. Code § 173-400-107, but it proposed to revise the basis for the finding of substantial inadequacy and the SIP call for this provision. Consequently, the EPA proposed to find that Wash. Admin. Code § 173-400-107 is substantially inadequate to m eet CAA requirements and thus proposed to issue a SIP call with respect to this provision. In this final action, the EPA is granting the Petition with respect to Wash. Admin. Code § 173-400-107. Accordingly, the EPA is finding that this provision is substant ially inadequate to*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 502 of 539 meet CAA requirements and the EPA is thus issu ing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Washington SIP that the EPA received and considered during the development of this rulemaking. 5. Washington: Energy Facility Site Evaluation Council The Petitioner did not identify any provisions in the SIP for the state of Washington that specifically apply to the Ener gy Facility Site Evaluation Counc il (EFSEC) area, which is why this area was not explicitly addre ssed in the February 2013 proposal. Subsequently, for reasons explained fully in the SNPR, the EPA identified affirmative defense provisions in the SIP for the state of Wa shington that relate to the EFSEC, and the EPA proposed to make a finding of substantial inadequ acy and to issue a SIP call for these provisions in Wash. Admin. Code § 463-39-005. In the EFSE C portion of the SIP, Wash. Admin. Code § 463-39-005 adopts by reference Wash. Admin. Code § 173-400-107, thereby incorporating the affirmative defenses applicable to startup, shutdown, scheduled maintenance and “upsets” that the EPA is also finding substantially inade quate in Wash. Admin. Code § 173-400-107 (see section IX.K.4 of this notice). In this final action, the EPA is findi ng that Wash. Admin. Code § 463-39-005 is substantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA proposed in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Washington SIP that the EPA received and considered during the development of this rulemaking.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 503 of 539 6. Washington: Southwest Clean Air Agency The Petitioner did not identify any provisions in the SIP for the state of Washington that specifically apply in the porti on of the state regulated by th e Southwest Clean Air Agency (SWCAA), 383 which is why this area was not explicitly addressed in the February 2013 proposal. Subsequently, for reasons explained fully in the SNPR, the EPA identified affirmative defense provisions in the SIP for the state of Washington that apply in the portion of the state regulated by SWCAA, and the EPA proposed to ma ke a finding of substantial inadequacy and to issue a SIP call for these provisions. The affi rmative defenses are included in the SIP in SWAPCA “400-107 Excess Emissions.” This SIP section provides an affirmative defense

available to sources for excess emissions that occur during startup a nd shutdown, maintenance and upsets ( i.e. , malfunctions). It is identical to Wash. Admin. Code § 173-400-107 in all respects except that SWAPCA 400-107(3) cont ains a more stringent requirement for the reporting of excess emissions. In this final action, the EPA is finding th at SWAPCA “400-107 Excess Emissions” in the Washington SIP applicable in the area regulated by SWCAA is subs tantially inadequate to meet CAA requirements and the EPA is thus issuing a SIP call with respect to this provision. This action is fully consistent with what the EPA pr oposed in February 2013 as revised in the SNPR. Please refer to the Response to Comment document available in the docket for this rulemaking concerning any comments specific to the Washi ngton SIP that the EPA r eceived and considered during the development of this rulemaking.

383 The EPA notes that the SWCAA was formerly named, and in some places in the SIP still appears, as the “Southwest Air Pollution Control Authority” or “SWAPCA.” The EPA anticipates that the name will be updated in the SI P in due course as the state revises the SIP.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 504 of 539 X. Implementation Aspects of EPA’s SSM SIP Policy A. Recommendations Concerning Alternati ve Emission Limitations for Startup and

Shutdown In response to a SIP call con cerning an existing automatic or discretionary exemption for excess emissions during SSM events, the EPA anticip ates that a state may elect to create an alternative emission limitation that applies duri ng startup and shutdown events (or during any other normal mode of operation during which th e exemption may have applied) as a revised element or component of the existing emission li mitation. The EPA emphasizes that states have

discretion to revise the identifie d deficient provisions by any mean s they choose, so long as the revised provision is consistent with CAA require ments for SIP provisions. If a state elects to create an alternative emission limitation to replac e an existing exemption, there are several issues

that the state should consider. First, as explained in secti ons VII.B and XI of this document, the EPA has longstanding guidance that provides recommendations to states concerning the development of alternative emission limitations applicable during startup and shutdown to replace exemptions in existing SIP provisions. The EPA first provided this guidance in the 1999 SSM Guidance but has reiterated and clarified its guidance in this actio n. The EPA recommends that states consider the

seven clarified criteria described in sections VII.B and XI of this document when developing new alternative emission limitations to replace auto matic or discretionary exemptions, in order to assure that the revised provisions submitte d to the EPA for approval meet basic CAA requirements for SIP emission limitations. Second, the EPA reiterates that SIP emission lim itations that are expressed as numerical limitations do not necessarily have to require th e same numerical level of emissions during all*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 505 of 539 modes of normal source operation. Under appropriate circumstances consistent with the criteria

that the EPA recommends for alternative emissi on limitations, it may be appropriate to have a

numerical emission limitation that has a higher numerical level a pplicable during specific modes of source operation, such as during startup and shutdown. For example, if a rate-based NOx emission limitation in the SIP applies to a spec ific source category, then it may be appropriate for that emission limitation to have a higher num erical standard app licable during defined periods of startup or shutdown. Such an approach can be consistent with SIP requirements, so long as that higher numerical leve l for startup or shutdown is prope rly established and is legally and practically enforceable, and so long as othe r overarching CAA requirements are also met. However, alternative emission limitations applicable during startup and shutdown cannot be inappropriately high or an effectively unlimited or uncontrolled level of emissions, as those would constitute impermissible de facto exemptions for emissions during certain modes of operation. Third, the EPA reiterates that SIP emission limitations do not necessarily have to be expressed in terms of a numer ical level of emissions. There are many sources for which a numerically expressed emission limitation will be the most appropriate and will result in the most legally and practically enforceable SIP requirements. 384 However, the EPA recognizes that for some source categories, under some circum stances, it may be appropriate for the SIP emission limitation to include a specific technol ogical control requirement or specific work

384 The EPA notes that in the CAA there is a presumption in favor of numerical emission limitations for purposes of section 112 and sec tion 169, but section 110(a) does not include such an explicit presumption. However, there may be sources for which a numerically expressed emission limitation is the one that is most legall y and practically enforceab le, even during startup and shutdown, and for which a numerically ex pressed emission limitation is thus most appropriate.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 506 of 539 practice requirement that applies during specifie d modes of source operation such as startup and shutdown. For example, if the ot herwise applicable numerical SO 2 emission limitation in the SIP is not achievable, and the otherwise required SO 2 control measure is not effective during startup

and shutdown and/or measurement of emissions during startup and shutdo wn is not reasonably feasible, then it may be appropriate for that emission limitation to impose a different control measure, such as use of low sulfur coal, a pplicable during defined periods of startup and

shutdown in lieu of a numerica lly expressed emission limitation. Such an approach can be consistent with SIP requirements, so long as th at alternative control m easure applicable during startup and shutdown is properly established and is legally and practically enforceable as a component of the emission limitation, and so long as other overarching CAA requirements are

also met. Fourth, the EPA notes that revisions to replace existing automatic or discretionary exemptions for SSM events with alternative emission limitations applicable during startup and shutdown also need to meet the applicable overarching CAA requirements with respect to the SIP emission limitation at issue. For example, if the emission limitation is in the SIP to meet the requirement that the source category be subject to RACT level controls for NOx for purposes of the ozone NAAQS, then the state should assure th at the higher numerical level or other control measure that will apply to NOx emissions durin g startup and shutdown does constitute a RACT

level of control for such sources for such pollutant during such modes of operation. Finally, the EPA notes that states shoul d not replace automatic or discretionary exemptions for excess emissions during SSM events with alternative emission limitations that are a generic requirement such as a “general duty to minimize emissions” provision or an*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 507 of 539 “exercise good engineering judgment” provision. 385 While such provisions may serve an overarching purpose of encouraging sources to design, maintain and operate their sources correctly, such generic clauses are not a valid su bstitute for more specific emission limitations that apply during normal modes of oper ation such as startup and shutdown. B. Recommendations for Compliance With Sect ion 110(l) and Section 193 for SIP Revisions In response to a SIP call for any type of de ficient provision, the EPA anticipates that each state will determine the best way to revise its SI P provisions to bring them into compliance with CAA requirements. In this action the EPA is only identifying the provisions that need to be revised because they violate fundamental requi rements of the CAA and providing guidance to states in the SSM Policy concerni ng the types of provisions that ar e and are not permissible with respect to the treatment of excess emissions during SSM events. The EPA recognizes that one important consideration for air agencies as they ev aluate how best to revi se their SIP provisions in response to this SIP call is the nature of the analysis that will be necessary for the resulting SIP revisions under section 110(l) and section 19 3. The EPA wants to provide general guidance on this important issue in order to assist states with SIP revisions in response to the SIP call. Section 110(k)(3) directs the EPA to appr ove SIP submissions that comply with applicable CAA requirements and to disapprove t hose that do not. Under section 110(l), the EPA is prohibited from approving any SIP revision that would interfere with any applicable requirement concerning attainment and reasonable further progress or any other requirements of the CAA. To illustrate different ways in which section 110(l) and section 193 may apply in the

385 The EPA notes that the “gen eral duty” imposed under CAA section 112(r) is a separate standard, in addition to the otherw ise applicable emission limitations and is not in lieu of those requirements.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 508 of 539 evaluation of future SIP submissions in response to the SIP call, the EPA anticipates that there

are several common scenarios that states may wish to consider when revising their SIPs: Example 1 : A state elects to revise an exis ting SIP provision by removing an existing automatic exemption provision, director’s discre tion provision, enforcem ent discretion provision or affirmative defense provision, without altering any other aspects of the SIP provision at issue ( e.g. , elects to retain the emission limitation for th e source category but eliminate the exemption for emissions during SSM events ). Although the EPA must revi ew each SIP submission for compliance with section 110(l) and section 193 on the facts and circumstances of the revision, the Agency believes in general that this type of SIP revision should not entail a complicated analysis to meet these statutory requiremen ts. Presumably, removal of the impermissible components of preexisting SIP provisions would not constitute backsliding, would in fact strengthen the SIP and would be consistent with the overarching requirement that the SIP revision be consistent with the requirements of the CAA. Accordingly, the EPA believes that this type of SIP revision should not en tail a complicated analysis for pur poses of section 110(l). If the SIP revision is also governed by section 193, then elimination of the de ficiency will likewise presumably result in equal or greater emissi on reductions and thus comply with section 193 without the need for a more complicated analysis . The EPA has recently ev aluated a SIP revision to remove specific SSM deficiencies in this manner. 386 Example 2 : A state elects to revise its SIP pr ovision by replacing an automatic exemption for excess emissions during startup and shutdown ev ents with an appropriate alternative emission

386 See “Approval and Promulgation of Implementati on Plans; Kentucky; A pproval of Revisions to the Jefferson County Portion of the Kentuc ky SIP; Emissions Duri ng Startups, Shutdowns, and Malfunctions,” proposed at 78 FR 29683 (M ay 21, 2013), finalized at 79 FR 33101 (June 10, 2014).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 509 of 539 limitation ( e.g. , a different numerical limitation or differe nt other control requirement) that is explicitly applicable during startup and shutdown as a comp onent of the revised emission limitation. Although the EPA must review each SIP revision for compliance with section 110(l)

and section 193 on the facts and ci rcumstances of the revision, th e Agency believes in general that this type of SIP revision should not entail a complicated anal ysis to meet these statutory requirements. Presumably, the replacement of an automatic exemption applicable to startup and shutdown with an appropriate alternative emi ssion limitation would not c onstitute backsliding, would strengthen the SIP and would be consistent with the overarching requirement that the SIP revision be consistent with the requirements of the CAA. The state should develop that

alternative emission limitation in accordance with the EPA’s guidance recommendations for such provisions to assure that it would meet CAA requirements. 387 In addition, that alternative

emission limitation would both need to meet the overarching CAA applicable requirements that

the emission limitation is desi gned and intended to meet ( e.g. , RACT-level controls for the source category in an attainment area for a NAAQS) and need to be legally and practically enforceable ( e.g. , have adequate recordkeep ing, reporting, monitoring or other features requisite for enforcement). If a state has developed the alternative emission limitation consistent with these criteria, then the EPA anticipates that the revision of the emission limitation to replace the exemption with an alternative emission limitation applicable to startup and shutdown would not be backsliding, would be a strengthening of the SIP and would be consistent with the requirement of section 110(l) that a SIP revision be c onsistent with the requi rements of the CAA. Similarly, if section 193 applies to the emission limitation that the state is revising, then the

387 These recommendations are discussed in deta il in section VII.B.2 of this document.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 510 of 539 replacement of an exemption applicable to emissions during startup and shutdown with an appropriately developed alternative emission limit ation that explicitly applies during startup and shutdown would presumably result in equal or gr eater emission reductions and thus should meet the requirements of section 193 without the need for a more comp licated analysis. Example 3 : A state elects to revise an existing SIP provision not merely by removal of an existing automatic exemption provision, director’s discretion provision, en forcement discretion provision or affirmative defense pr ovision, but by the removal of the deficiency combined with a

total revision of the emission limitation. The EPA anticipates that there may be emission limitations for which a state may elect to do such a wholesale revision of the SIP provision as part of eliminating an impermissible component of the existing provision ( e.g. , removal of an automatic exemption applicable to emissions dur ing SSM events through a complete revision of

the emission limitation to create a different emis sion limitation that applies at all times, including during SSM events). In developing a completely revised SIP provision, th e state should assure that the replacement provision meets the applicable overarching CAA requirements that the provision is designed and intended to meet, is legally and practically enforceable and is not less stringent than the prior SIP provi sion. The EPA believes in general that this type of SIP revision may require a more in-depth analysis to meet th ese statutory requirements of section 110(l) and section 193. To the extent that there is any concer n that the revised SIP pr ovision is less stringent than the provision it replaces, then there will ne ed to be a careful evaluation as to whether the revised provision would interfer e with any applicable requireme nt concerning attainment and reasonable further progress and with any other a pplicable requirement of the CAA. Presumably, however, so long as the state ha s properly developed the revised emission limitation to assure that it meets the overarching CAA requirements a nd to assure that it will not result in a less*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 511 of 539 stringent emission limitati on, then the complete revision of the emission limitation would not constitute backsliding, would be a strengtheni ng of the SIP and thereby would comply with section 110(l). If the SIP revision is also governed by section 193, then there wi ll also need to be an analysis to assure that the revision will resu lt in equal or greater emission reductions and thus comply with section 193. To the extent that ther e is concern that the re vision would result in a less stringent emission limitation than the preexisting emission limitation, then a more complex analysis would lik ely be required. The EPA emphasizes that each SIP revision must be evaluated for compliance with section 110(l) and section 193 on the facts and circumstances of th e specific revision, but these examples are intended to provide general guidan ce on the considerations and the nature of the analysis that may be appropriate for different ty pes of SIP revisions. Stat es should contact their respective EPA Regional Offices for further recommendations and assistance concerning the analysis appropriate for specific SIP revi sions in response to this SIP call. XI. Statement of the EPA’s SSM SIP Policy as of 2015 The EPA’s longstanding interpre tation of the CAA is that SIP provisions cannot include exemptions from emission limitations for emissions during SSM events. In order to be permissible in a SIP, an emission limitation mu st be applicable to the source continuously, i.e. , cannot include periods during which emissions from the source are le gally or functionally exempt from regulation. Regardless of its form , a fully approvable SIP emission limitation must also meet all substantive requirements of the CAA applicable to such a SIP provision, e.g. , the statutory requirement of section 172(c)(1) for imposition of RACM and RACT on sources located in designated nonattainment areas.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 512 of 539 This section of the notice provides more spec ific guidance on the appr opriate treatment of emissions during SSM events in SIP provisions, replacing the EP A’s prior guidance issued in memoranda of 1982, 1983, 1999 and 2001. The more ex tended explanations and interpretations provided in other sections of this notice are also applicable, should a situ ation arise that is not sufficiently covered by this sec tion’s more concise policy statem ent. This SSM Policy as of 2015 is a policy statement and thus constitutes guida nce. As guidance, this SSM Policy as of 2015 does not bind states, the EPA or other parties, but it does reflect the EPA’s interpretation of the statutory requirements of the CAA. The EP A’s evaluation of any SIP provision, whether prospectively in the case of a new provision in a SIP submission or retrosp ectively in the case of a previously approved SIP su bmission, must be conducted through a notice-and-comment rulemaking in which the EPA will determine whethe r or not a given SIP provision is consistent with the requirements of the CAA and applicable regulations. A. Definitions

The term alternative emission limitation means, in this notice, an emission limitation in a SIP that applies to a source during some but not all periods of normal operation ( e.g. , applies only during a specifically defined m ode of operation such as start up or shutdown). An alternative emission limitation is a component of a continu ously applicable SIP emission limitation, and it may take the form of a control measure such as a design, equipment, work practice or operational standard (whether or not numerical ). This definition of the term is independent of the statutory definitions in sections 111(h)(3) and 112(h)(3). The latter definitions pertain to the conditions under which the EPA may pursuant to sections 1 11 and 112 promulgate emission limitations, or components of emission limitations, that ar e not necessarily in numeric format.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 513 of 539 The term automatic exemption means a generally applicab le provision in a SIP that would provide that if certain c onditions existed during a period of excess emissions, then those

exceedances would not be considered violations of the applicable emission limitations.

The term director’s discretion provision means, in general, a regulatory provision that authorizes a state regulatory offi cial unilaterally to grant exempti ons or variances from otherwise applicable emission limitations or control measur es, or to excuse noncom pliance with otherwise applicable emission limitations or control meas ures, which would be binding on the EPA and the public.

The term emission limitation means, in the context of a SIP, a legally binding restriction on emissions from a source or source category, such as a numerical emission limitation, a

numerical emission limitation with higher or lower levels appli cable during specific modes of source operation, a specific technolog ical control measure requiremen t, a work practice standard, or a combination of these things as compone nts of a comprehensive and continuous emission limitation in a SIP provision. In this respect, the term emission limitation is defined as in section 302(k) of the CAA. By definition, an emissi on limitation can take various forms or a combination of forms, but in order to be permissi ble in a SIP it must be applicable to the source continuously, i.e. , cannot include periods during which emi ssions from the sour ce are legally or functionally exempt from regulation. Regardless of its form, a fully approvable SIP emission limitation must also meet all substantive requirements of the CAA applicable to such a SIP provision, e.g. , the statutory requirement of secti on 172(c)(1) for imposition of reasonably available control measures and reasonably available control tec hnology (RACM and RACT) on sources located in design ated nonattainment areas.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 514 of 539 The term excess emissions means the emissions of air pollutants from a source that exceed any applicable SIP emission limitation. In pa rticular, this term includes those emissions above the otherwise applicable SIP emission limitation that occur during startup, shutdown, malfunction or other modes of source operation, i.e. , emissions that would be considered violations of the applicable emission limita tion but for an impermissible automatic or discretionary exemption from such emission limitation.

The term malfunction means a sudden and unavoidable breakdown of process or control equipment.

The term shutdown means, generally, the cessation of operation of a source for any reason. In this notice, the EPA uses this term in the generic sense. In individual SIP provisions it may be appropriate to include a specifically tailore d definition of this term to address a particular source category for a particular purpose.

The term SSM refers to startup, shutdown or malfunc tion at a source. It does not include periods of maintenance at such a source. An SSM event is a period of startup, shutdown or malfunction during which there are exceedances of the applicable emission limitations and thus

excess emissions.

The term startup means, generally, the setting in ope ration of a source for any reason. In this notice, the EPA uses this term in the generi c sense. In an individua l SIP provision it may be appropriate to include a specifically tailored definition of this term to address a particular source category for a particular purpose.

The term malfunction means a sudden and unavoidable breakdown of process or control equipment.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 515 of 539 The term shutdown means, generally, the cessation of operation of a source for any reason. In this notice, the EPA uses this term in the generic sense. In individual SIP provisions it may be appropriate to include a specifically tailore d definition of this term to address a particular source category for a particular purpose.

The term SSM refers to startup, shutdown or malfunc tion at a source. It does not include periods of maintenance at such a source. An SSM event is a period of startup, shutdown or malfunction during which there are exceedances of the applicable emission limitations and thus

excess emissions.

The term startup means, generally, the setting in ope ration of a source for any reason. In this notice, the EPA uses this term in the generi c sense. In an individua l SIP provision it may be appropriate to include a specifically tailored definition of this term to address a particular source category for a particular purpose.

B. Emission limitations in SIPs must apply continuously during all modes of operation, without automatic or discretionary exemptions or overly broad enforcement discretion provisions that would bar enforcement by the EPA or by other parties in federal court through a citizen suit. In accordance with CAA section 302(k), SIPs must contain emission limitations that “limit the quantity, rate, or con centration of emissions of air pollutants on a continuous basis.” All of the specific requirements of a SIP emission limitation must be discernible in the SIP, for clarity preferably within a single section or provision; must meet the applicable substantive and stringency requirements of the CAA; and must be legally and practically enforceable.

To the extent that a SIP provision allows any period of time when a source is not subject to any requirement that limits emissions, the requirements limiting the source’s emissions by*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 516 of 539 definition cannot do so “on a continuous basis.” Such a source would not be subject to an “emission limitation,” as required by the definitio n of that term under section 302(k). However, the CAA allows SIP provisions that include numerical limitations, specific technological control requirements and/or work practi ce requirements that limit emissi ons during startup and shutdown as components of a continuously applicable emissi on limitation, as discussed in section XI.C of

this document. Accordingly, automatic or discretionary exemption provisions applicable during SSM events are impermissible in SIPs. This impermissibi lity applies even for “brief” exemptions from limits on emissions, because such exemptions nevertheless render the limitation noncontinuous. Furthermore, the fact that a SIP provision in cludes prerequisites to qualifying for an SSM exemption does not mean those prerequisites are themselves an “alternative emission limitation” applicable during SSM events. Automatic exemptions. A typical SIP provisi on that includes an impermissible automatic exemption would provide that a source has to meet a specific emission limitation during all modes of operation except startup, shutdow n and malfunction; by definition any excess emissions during such events w ould not be violations and thus there could be no enforcement based on those excess emissions. With respect to automatic exemptions from emission limitations in SIPs, the EPA’s longstanding interpre tation of the CAA is th at such exemptions are impermissible because they are inconsistent with the fundamental requirements of the CAA. Automatic exemptions from otherwise applicab le emission limitations render those emission limitations less than continuous as require d by CAA sections 302( k), 110(a)(2)(A) and 110(a)(2)(C), thereby inconsistent with a f undamental requirement of the CAA and thus substantially inadequate as contem plated in CAA section 110(k)(5).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 517 of 539 Discretionary exemptions. A typical SIP provision that includes an impermissible “director’s discretion” component would purport to authorize air agency personnel to modify existing SIP requirements under certain conditions, e.g. , to grant a variance from an otherwise applicable emission limitation if the source could not meet the requirement in certain

circumstances. 388 Director’s discretion provi sions operate to allow air agency personnel to make

unilateral decisions on an ad hoc basis, up to and including the granting of complete exemptions for emissions during SSM events , thereby negating any possibili ty of enforcement for what

would be violations of the ot herwise applicable emission limit ation. With respect to such director’s discretion provisions in SIPs, the EPA interprets the CAA to prohibit these if they provide unbounded discretion to allow what would amount to a case-specific revision of the SIP without meeting the statutory requ irements of the CAA for SIP re visions. In particular, the EPA interprets the CAA to preclude SIP provisions that provide dir ector’s discretion authority to create discretionary exemptions for violations when the CAA would not allow such exemptions

in the first instance. If an air agency elects to ha ve SIP provisions that contain a director’s discretion feature, then to be consistent with CAA requirements the provisions must be st ructured so that any resulting variances or other deviations from th e emission limitation or other SIP requirements have no federal law validity, unless and until the EP A specifically approves that exercise of the

director’s discretion as a SIP re vision. Barring such a later ratif ication by the EPA through a SIP

388 The EPA notes that problematic “director’s discretion” provisions are not limited only to those that purport to authorize alternative emi ssion limitations from those required in a SIP. Other problematic director’s discretion provision s include those that purport to provide for discretionary changes to other substantive requirement s of the SIP, such as applicability, operating requirements, recordkeeping requirement s, monitoring requirements, test methods or alternative compliance methods.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 518 of 539 revision, the exercise of director ’s discretion is only valid for state (or tribal) law purposes and would have no bearing in the ev ent of an action to enforce th e provision of the SIP as it was originally approve d by the EPA. Adoption of the EPA’s NSPS or NESH AP that have not yet been revised. The EPA has recently begun revising and will continue to revi se NSPS and NESHAP as needed, to make the EPA’s regulations consistent with CAA require ments by removing exemptions and affirmative defense provisions applicable to SSM events, a nd generally on the same legal basis as for this

action. A state should not submit an NSPS or NESHAP for inclusion into its SIP as an emission limitation (whether through incorpor ation by reference or otherwise) unless either: (i) that NSPS or NESHAP does not include an exemption or a ffirmative defense for SSM events; or (ii) the state takes action as part of the SIP submission to render such exemption or affirmative defense inapplicable to the SIP emission limitation. Because SIP provisions must apply continuously, including during SSM events, the EPA can no longer approve SIP submissions that include any emission limitations with such exemptions, ev en if those emission limitations are NSPS or NESHAP regulations that the EPA has not ye t revised to make consistent with CAA requirements. Alternatively, stat es may elect to adopt an existing NSPS or NESHAP as a SIP provision, so long as the SIP provi sion excludes the exemption or affirmative defense applicable

to SSM events. 389 States may also wish to replace th e SSM exemption in NSPS or NESHAP regulations with appropriately developed alternative emission limitations that apply during

389 Under CAA section 116, states ha ve the explicit general authority to regulate more stringently than the EPA. Indeed, under section 116 states ca n regulate sources subject to EPA regulations promulgated under section 111 or section 112 so long as they do not regulate them less stringently. According, the EPA believes that st ates may elect to adopt EPA regulations under section 111 or section 112 as SIP provisions and expressly eliminate the exemptions for emissions during SSM events.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 519 of 539 startup and shutdown in lieu of the SSM exemption. Otherwise, the EPA’s approval of the deficient SSM exemption provisions into the SI P would contravene C AA requirements for SIP provisions and would potentially result in misinter pretation or misapplication of the standards by regulators, regulated entities, courts and members of the public. The EPA emphasizes that the

inclusion of an NSPS or NESHAP as an emissi on limitation in a state’s SIP is different and

distinct from reliance on such standards indire ctly, such as reliance on the NSPS or NESHAP as

a source of emission reductions th at may be taken into account for SIP planning purposes in

emissions inventories or attainme nt demonstrations. For those uses, states may continue to rely on the EPA’s NSPS and NESHAP regulations, even those that have not yet been revised to remove inappropriate exemptions, in accordance w ith the requirements applicable to those SIP planning functions. Other modes of normal operation . SIPs also may not create automatic or discretionary exemptions from otherwise applicable em ission limitations during periods such as “maintenance,” “load change,” “soot-blowing,” “on-line operating change s” or other similar normal modes of operation. Like startup and shut down, the EPA considers all of these to be modes of normal operation at a source, for wh ich the source can be designed, operated and maintained in order to meet an applicable emission limitations and during which the source should be expected to control and minimize emissions. Excess emissions that occur during planned and predicted periods shou ld be treated as violations of applicable emission limitations. Accordingly, exemptions for emissions during these periods of normal source operation are not consistent with CAA requirements. It may be appropriate for an air agency to es tablish an alternative numerical limitation or

other form of control measure th at applies during these modes of source operation, as for startup*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 520 of 539 and shutdown events, but any such alternative em ission limitation should be developed using the

same criteria that the EPA recommends for a lternative emission limitations applicable during startup and shutdown. Similarly, any SIP provision that includ es an emission limitation for

sources that includes al ternative emission limitations applicab le to modes of operation such as “maintenance,” “load change,” “soo t-blowing” or “on-line operat ing changes” must also meet the applicable level of stringency for that type of emission limitation and be practically and legally enforceable.

C. Emission limitations in SIPs may contain components applic able to different modes of operation that take different form s, and numerical emission limita tions may have differing levels and forms for different modes of operation. There are approaches other than exempti ons that would be consistent with CAA requirements for SIP provisions th at states can use to address excess emissions during certain events. While automatic exemptions and direct or’s discretion exemptions from otherwise applicable emission limitations for SSM events are not consistent with the CAA, SIPs may include criteria and procedures for the use of enforcement discre tion by air agency personnel, as

described in section XI.E of this document. Similarly, SIPs may, rather than exempt excess emissions, include emission limitations that subj ect those emissions to alternative numerical limitations or other control requirements duri ng startup and shutdown events or other normal modes of operation, so long as those component s of the emission limitations meet applicable CAA requirements and are legally and practically enforceable. The EPA does not interpret sect ion 110(a)(2) or section 302(k) to requir e that an emission limitation in a SIP provision be composed of a si ngle, uniformly applicable numerical emission limitation. The text of section 110(a)(2) and sec tion 302(k) does not require states to impose*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 521 of 539 emission limitations that include a static, inflexib le standard. The critical aspect for purposes of section 302(k) is that the SIP provision impos e limits on emissions on a continuous basis, regardless of whether the emission limitation as a whole is expressed numerically or as a combination of numerical limitations, specific control technology requi rements and/or work practice requirements applicable during specific mode s of operation, and re gardless of whether

the emission limitation is static or variable. T hus, emission limitations in SIP provisions do not have to be composed solely of numerical em ission limitations applicable at all times. For example, so long as the SIP provision meets other applicable requirements, it may impose different numerical limitations for startup and shutdown. Also, for example, SIPs can contain

numerical emission limitations a pplicable only to some periods and other forms of controls applicable only to some periods, with certain pe riods perhaps subject to both types of limitation. Thus, SIP emission limitations: (i) do not need to be numerical in format; (ii) do not have to apply the same limitation ( e.g. , numerical level) at all times; and (iii) may be composed of a combination of numerical limitations, specific te chnological control requi rements and/or work practice requirements, with each component of the emission limitation applicable during a defined mode of source operation. In practice, it may be that numerical emission limitations are the most appropriate from a regulatory perspective ( e.g. , to be legally and practically enforceable) and thus the emission limitation would n eed to be established in this form to meet CAA requirements. It is important to emphasize, however, that regardle ss of how the state structures or expresses a SIP emission limitation— whether solely as one numerical limitation, as a combination of different numerical limitations or as a combination of numerical limitations, specific technological control requi rements and/or work practice requirements that apply during certain modes of operation such as startup and shutdown—the emission limitation as a whole*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 522 of 539 must be continuous, must meet applicable CAA st ringency requirements and must be legally and practically enforceable. 390 Startup and shutdown are part of the nor mal operation of a source and should be accounted for in the design and operation of the source. 391 It should be possible to determine an appropriate form and degree of em ission control during startup and shutdown and to achieve that control on a regular basis. Thus, sources shoul d be required to meet defined SIP emission limitations during startup and shutdown. However, the EPA interprets the CAA to permit SIP

emission limitations that include alternative em ission limitations specifically applicable during startup and shutdown. Regarding startup and shut down periods, the EPA considers the following to be the correct approach to creating an emission limitation: (i) the emission limitation contains no exemption for emissions during SSM events; ( ii) the component of any alternative emission limitation that applies during start up and shutdown is clearly stated and obviously is an emission limitation that applies to the s ource; (iii) the component of a ny alternative emission limitation that applies during startu p and shutdown meets the applicable stringency level for this type of emission limitation; and (iv) the emission limitati on contains requirements to make it legally and

390 The EPA notes that CAA section 123 explicitly prohibits certain inte rmittent or supplemental controls on sources. In a situation where an emission limitation is continuous, by virtue of the fact that it has components applicable during all modes of source opera tion, the EPA would not interpret the components th at applied only during certain modes of operation, e.g. , startup and shutdown, to be prohibited intermitte nt or supplemental controls. 391 Every source is designed, maintained and operate d with the expectation that the source will at least occasionally start up and shut down, and t hus these modes of operation are “normal” in the sense that they are to be expected. The EPA uses this term in the ordinary sense of the word to distinguish between such pred ictable modes of source operation and genuine “malfunctions,” which are by definition supposed to be unpredictable and unforeseen events that could not have been precluded by proper source design, maintenance and operation.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 523 of 539 practically enforceable. Section XI.D of this document contains more specific recommendations to states for developing alte rnative emission limitations. In contrast to startup and shutdown, a malfunc tion is unpredictable as to the timing of the start of the malfunction event, its duration and its exact nature. The effect of a malfunction on emissions is therefore unpredic table and variable, making the de velopment of an alternative emission limitation for malfunctions problematic. Th ere may be rare instances in which certain types of malfunctions at certain types of sources are foreseeable and foreseen and thus are an expected mode of source operation. In such ci rcumstances, the EPA believes that sources should be expected to meet the otherwise applicable em ission limitation in order to encourage sources to be properly designed, maintained and operated in order to prevent or minimize any such malfunctions. To the extent that a given type of malfunction is so foreseeable and foreseen that a state considers it a normal mode of operation th at is appropriate for a specifically designed alternative emission limitation, then such alternat ive should be developed in accordance with the

recommended criteria for alternative emission li mitations. The EPA does not believe that generic general-duty provisions, such as a general duty to minimize emissions, is sufficient as an alternative emission limitation for any t ype of event including malfunctions. States developing SIP revisions to remove impermissible exemption provisions from emissions limitations may choose to consider reassessing particular emission limitations, for example to determine whether limits originally applicable only during non-SSM periods can be revised such that well-managed emissions dur ing planned operations such as startup and

shutdown would not exceed the revised emission limitation, while still protecting air quality and meeting other applicable CAA requirements. Such a revision of an emission limitation will need to be submitted as a SIP revision for EPA approval if the existing limitation to be changed is*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 524 of 539 already included in the SIP or if the existing SIP relies on the partic ular existing emission limitation to meet a CAA requirement. Some SIPs contain other gene ric regulatory requirements frequently referred to as “general duty” type requirements, such as a ge neral duty to minimize emissions at all times, a general duty to use good engineeri ng judgment at all times or a general duty not to cause a violation of the NAAQS at any time. To the extent that such other gene ral-duty requirement is properly established and legally and practically enforceable, the EPA would agree that it may be an appropriate separate requirement to impos e upon sources in additi on to the (continuous) emission limitation. The EPA itself imposes separate general duties of this type in appropriate circumstances. The existence of these ge neric provisions does not, however, legitimize exemptions for emissions during SSM events in a SIP provision that imposes an emission

limitation. General-duty requirements that are not clearly pa rt of or explicitly cross-referenced in a

SIP emission limitation cannot be viewed as a component of a continuous emission limitation. Even if clearly part of or explicitly cross-referenced in the SIP emission limitation, however, a given general-duty requirement may not be c onsistent with the a pplicable stringency requirements for SIP provisions th at should apply during startup and shutdown. In general, the EPA believes that a legally and practically enforc eable alternative emission limitation applicable during startup and shutdown should be expres sed as a numerical limitation, a specific technological control requirement or a specific work practice applicable to affected sources during specifically defined periods or modes of operation. Accordingly, while states are free to include general-duty provisions in their SIPs as separate additiona l requirements, for example, to ensure that owners and operators act consistent with reasonable standards of care, the EPA does*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 525 of 539 not recommend using these background standards to bridge unlawful interrupt ions in an emission

limitation. 392 D. Recommendations for Development of Alte rnative Emission Limitations Applicable During Startup and Shutdown A state can develop special, alternative emi ssion limitations that a pply during startup or

shutdown if the source cannot meet the otherwise applicable emission limitation in the SIP. SIP provisions may include alternativ e emission limitations for start up and shutdown as part of a continuously applicable emission limitation when properly developed and otherwise consistent with CAA requirements. However, if a non-nu merical requirement does not itself (or in combination with other components of the em ission limitation) limit the quantity, rate or concentration of air pollutant s on a continuous basis, then the non-numerical standard (or overarching requirement) does not meet the statutory definition of an emission limitation under section 302(k).

In cases in which measurement of emissions during startup and/or shutdown is not reasonably feasible, it may be appropriate for an emission limitation to include as a component a control for startup and/or shutdown periods other than a numerically expressed emission

limitation. The federal NESHAP and NSPS regulations a nd the technical mate rials in the public record for those rules may provide assistance for states as they develop and consider emission

392 For example, the EPA has concerns the some ge neral-duty provisions, if at any point relied upon as the sole requirement purportedly limitin g emissions, could undermine the ability to ensure compliance with SIP emission limitations relied on to achieve the NAAQS and other relevant CAA requirements at all times. See section 110(a)(2)(A), (C); US Magnesium, LLC v. EPA , 690 F.3d 1157, 1161–62 (10th Cir. 2012).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 526 of 539 limitations and alternative emission limitations fo r sources in their stat es, and definitions of startup and shutdown events and work practices for them found in these regulations may be appropriate for adoption by the state in certain ci rcumstances. In particular, the NSPS regulations should provide very relevant information for sources of the same type, size and control equipment type, even if the sources were not cons tructed or modified within a date range that would make them subject to the NSPS. The EPA therefore encourages st ates to explore these approaches. The EPA recommends that, in order to be approvable ( i.e., meet CAA requirements), alternative requirements applicable to the s ource during startup a nd shutdown should be narrowly tailored and take into account considerations such as the technological limitations of the specific source category a nd the control technology that is feasible during startup and shutdown. The EPA recommends the following se ven specific criteria as appropriate considerations for developing em ission limitations in SIP provisi ons that apply during startup

and shutdown: (1) The revision is limited to specific, narro wly defined source cate gories using specific control strategies ( e.g. , cogeneration facilities burning natural gas and using selective catalytic reduction); (2) Use of the control strate gy for this source category is technically infeasible during startup or shutdown periods; (3) The alternative emission limitation requi res that the frequency and duration of operation in startup or shutdown mode are mini mized to the greatest extent practicable;*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 527 of 539 (4) As part of its justification of the SIP revision, the state analy zes the potential worstcase emissions that could occur during startup an d shutdown based on the applicable alternative emission limitation; (5) The alternative emission limitation requi res that all possible steps are taken to minimize the impact of emissions during star tup and shutdown on ambient air quality; (6) The alternative emission limitation requires th at, at all times, the facility is operated in a manner consistent with good practice for minimizi ng emissions and the source uses best efforts regarding planning, design, and operating procedures; and (7) The alternative emission limitation requi res that the owner or operator’s actions during startup and shutdown periods are doc umented by properly signed, contemporaneous operating logs or other relevant evidence.

If a state elects to create an emission limitation with different levels of control applicable during specifically defined peri ods of startup and shutdown than during other normal modes of operation, then the resulting emission limitation must meet the substantive requirements applicable to the type of SIP provision at issue, meet the applicable leve l of stringency for that type of emission limitation and be legally and practically enforceable . Alternative emission limitations applicable during st artup and shutdown cannot be inappropriately high or an effectively unlimited or uncontrolled level of emi ssions, as those would constitute impermissible de facto exemptions for emissions duri ng certain modes of operation. E. Enforcement Discretion Provisions One approach other than exemptions that w ould be consistent with CAA requirements for SIP provisions that states can use to address excess emissions duri ng SSM events is to include in the SIP criteria and procedures for the use of enforcement discretion by air agency personnel.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 528 of 539 SIPs may contain such provisions concerning the exercise of disc retion by the air agency’s own personnel, but such provisions cannot bar enfo rcement by the EPA or by other parties through a

citizen suit. Pursuant to the CAA, all parties with author ity to bring an enforcement action to enforce SIP provisions ( i.e. , the state, the EPA or any parties w ho qualify under the citi zen suit provision of section 304) have enforcement discretion that they may exercise as they deem appropriate in any given circumstances. For example, if the ev ent that causes excess emissions is an actual malfunction that occurred despite reasonable ca re by the source operator to avoid malfunctions, then each of these parties may decide that no en forcement action is warrant ed. In the event that any party decides that an enforcement action is warranted, then it has enforcement discretion with respect to what remedies to s eek from the court for the violation ( e.g. , injunctive relief, compliance order, monetary penalties or all of the above), as well as the t ype of injunctive relief and/or amount of monetary penalties sought. 393 As part of state programs governing enforcemen t, states can include regulatory provisions or may adopt policies setting fort h criteria for how they plan to exercise their own enforcement authority. Under section 110(a)(2), states must have adequate au thority to enforce provisions adopted into the SIP, but states can establish criteria for how they plan to exercise that authority. Such enforcement discretion provisions ca nnot, however, impinge upon the enforcement authority of the EPA or of others pursuant to the citizen suit provisi on of the CAA. Such enforcement discretion provisions in a SIP would be inconsistent with the enforcement structure

393 The EPA notes that only the state and the Agency have authority to s eek criminal penalties for knowing and intentional violation of CAA requi rements. The EPA has th is explicit authority under CAA section 113(c).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 529 of 539 provided in the CAA. Specifica lly, the statute provides explicit independent enforcement authority to the EPA under CAA section 113 and to citizens under CAA section 304. Thus, the CAA contemplates that the EPA and citizens have authority to pursue enforcement for a

violation even if the state elec ts not to do so. The EPA and citi zens, and any federal court in which they seek to pursue an enforcement claim for violation of SIP requirements, must retain the authority to evaluate inde pendently whether a source’s viol ation of an emission limitation

warrants enforcement action. Potential for enfo rcement by the EPA or through a citizen suit provides an important safeguard in the event that the state lacks resources or ability to enforce violations and provides additiona l deterrence. Accordingly, a SIP provision that operates at the state’s election to eliminate the authority of th e EPA or the public to pursue enforcement actions

in federal court would undermin e the enforcement structure of the CAA and would thus be substantially inadequate to meet fundamental requirements of the CAA. Also, states should not adopt overly broad enforcement discretion provisions for inclusion in their SIPs, even for their own pers onnel. Section 110(a)(2) re quires states to have adequate enforcement authorit y, and overly broad enforcement discretion provisions would run afoul of this requirement if they have the effect of precluding ad equate state authority to enforce SIP requirements. If such provi sions are sufficiently specific, provide for sufficient public process and are sufficiently bounded, so that it is possible to antic ipate at the time of the EPA’s approval of the SIP provision how that provision will actually be applied and the potential adverse impacts thereof, then such a provision mi ght meet basic CAA requirements. In essence, if it is possible to anticipate and evaluate in a dvance how the exercise of enforcement discretion could affect compliance with ot her CAA requirements, then it ma y be possible to determine in*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 530 of 539 advance that the preauthorized exercise of direct or’s discretion will not interfere with other CAA requirements, such as providing for atta inment and maintenance of the NAAQS. When using enforcement discretion in dete rmining whether an enforcement action is appropriate in the case of excess emissions dur ing a malfunction, satisfaction of the following

criteria should be considered: (1) To the maximum extent practicable th e air pollution control equipment, process equipment or processes were maintained and ope rated in a manner consis tent with good practice for minimizing emissions; (2) Repairs were made in an expeditious fa shion when the operator knew or should have known that applicable emission limitations were being exceeded. Off-shift labor and overtime were utilized, to the extent practi cable, to ensure that such repair s were made as expeditiously as practicable; (3) The amount and duration of the excess emissions (including any bypass) were minimized to the maximum extent practicab le during periods of such emissions; (4) All possible steps were taken to mini mize the impact of the excess emissions on ambient air quality; and (5) The excess emissions are not part of a recurring pattern indicative of inadequate design, operation or maintenance. F. Affirmative Defense Provisions in SIPs The EPA believes that SIP provisions that func tion to alter the juri sdiction or discretion

of the federal courts under CAA section 113 and section 304 to determine liability and to impose

remedies are inconsistent with fundamental le gal requirements of the CAA, especially with respect to the enforcement regime explicitly created by statute. Affirmative defense provisions*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 531 of 539 by their nature purport to limit or eliminate the aut hority of federal courts to find liability or to impose remedies through factual co nsiderations that differ from, or are contrary to, the explicit grants of authority in section 113(b) and sect ion 113(e). These provisions are not appropriate under the CAA, no matter what type of event they apply to, what criteria they contain or what forms of remedy they purport to limit or eliminate. Section 113(b) provides courts with explicit jurisdiction to determine liability and to impose remedies of various kinds, including inju nctive relief, compliance orders and monetary penalties, in judicial enforcement proceedings. This grant of jurisdiction comes directly from Congress, and the EPA is not authorized to alte r or eliminate this juri sdiction under the CAA or any other law. With respect to monetary pena lties, CAA section 113(e) explicitly includes the

factors that federal courts and the EPA are required to consider in the event of judicial or

administrative enforcement for violations of CAA requirements, including SIP provisions. Because Congress has already given federal courts the jurisdiction to determine what monetary penalties are appropriate in the event of judicial enforcement fo r a violation of a SIP provision,

neither the EPA nor states can alter or eliminat e that jurisdiction by superimposing restrictions on that jurisdiction and discreti on granted by Congress to the cour ts. Accordingly, pursuant to section 110(k) and section 110(l), the EPA ca nnot approve any such affirmative defense provision in a SIP. If such an affirmative defe nse provision is included in an existing SIP, the EPA has authority under section 110(k)(5) to require a state to remove that provision. Couching an affirmative defense provision in terms of merely defining whether or not the emission limitation applies and thus whether or not there is a “v iolation,” as suggested by some commenters, is also problematic. If there is no “violation” when certain criteria or conditions for an “affirmative defense” are met, then there is in effect no emission limitation that applies when*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 532 of 539 the criteria or conditions are met; the affirmative defense thus ope rates to create an exemption from the emission limitation. As explained in th e February 2013 proposal, the CAA requires that emission limitations must apply continuously a nd cannot contain exemptions, conditional or otherwise. This interpretation is consistent with the decision in Sierra Club v. Johnson concerning the term “emission limitation” in secti on 302(k). Characterizing the exemptions as an “affirmative defense” runs afoul of the requi rement that emission limitations must apply continuously.

The EPA wishes to be clear that the absen ce of affirmative defense provisions in SIPs does not alter the legal rights of sources under the CAA. In the event of an enforcement action for an exceedance of a SIP emission limitation, a source can elect to asse rt any common law or statutory defenses that it determines are s upported, based upon the facts and circumstances surrounding the alleged violation. Un der section 113(b), courts have explicit authority to impose injunctive relief, issue compliance orders, asse ss monetary penalties or fees and impose any other appropriate relief. Under section 113(e), federal courts are required to consider the enumerated statutory factors when assessing moneta ry penalties, including “such other factors as justice may require.” For example, if the exceed ance of the SIP emission limitation occurs due to a malfunction, that exceedance is a violation of the applicable em ission limitation but the source retains the ability to defend itself in an en forcement action and to oppose the imposition of particular remedies or to seek the reduction or elimination of monetary penalties, based on the specific facts and circumstances of the event. Thus, elimination of a SIP affirmative defense provision that purported to take away the statutory jurisdiction of the federal court to exercise its authority to impose remedies does not disarm so urces in potential enfo rcement actions. Sources retain all of the equitable arguments they c ould have made under an affirmative defense*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 533 of 539 provision; they must simply make such argum ents to the reviewing court as envisioned by Congress in section 113(b) and section 113(e). Once impermissible SSM exemptions are removed from the SIP, then any excess emissions during such events may be the subject of an enforcement action, in which the parties may use any appropriate evidence to prove or di sprove the existence and scope of the alleged violation and the appropriate remedy for an esta blished violation. Any alleged violation of an applicable SIP emission limitation, if not conced ed by the source, must be established by the party bearing the burden of proof in a legal pr oceeding. The degree to which evidence of an alleged violation may derive from a specific re ference method or any other credible evidence must be determined based upon the facts and ci rcumstances of the exceedance of the emission

limitation at issue. 394 Congress vested the federal courts with the authority to judge how best to weigh the evidence in an enforcement action. G. Anti-Backsliding Considerations The EPA recognizes that one important consideration for air agencies as they evaluate

how best to revise their SIP provisions in response to this SI P call is the nature of the analysis that will be necessary for the resulting SIP revisions under sec tion 110(k)(3), section 110(l) and section 193. Under section 110(l), the EPA is prohibited from a pproving any SIP revision that would interfere with any applicable requirement concerning attainment and reasonable further progress or any other requirement s of the CAA. Section 193 prohi bits states from modifying

394 For example, the degree to which data from continuous opacity monitoring systems (COMS) is evidence of violations of SIP opacity or PM mass emission limitations is a factual question that must be resolved on the facts and circum stances in the context of an enforcement action. See, e.g. , Sierra Club v. Pub. Serv. Co. of Colorado, Inc. , 894 F. Supp. 1455 (D. Colo. 1995) (allowing use of COMS data to pr ove opacity limit violations).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 534 of 539 regulations in place prior to November 15, 1990, unl ess the modification ensures equivalent or greater reductions of the pollutant. SIP revision must be evaluated for compliance with section 110(l) and section 193 on the facts and circumstan ces of the specific revi sion. Section X of this notice provides three example scenarios in whic h a state might remove an impermissible SSM provision from its SIP, including ho w sections 110(l) and 193 considerations might apply. These examples are intended to provide general guidan ce on the considerations and the nature of the analysis that may be appropriate for different ty pes of SIP revisions. Air agencies should contact their respective EPA Regional Offices for furthe r recommendations and assistance concerning the analysis appropriate for specific SIP revisions involving changes in SSM provisions.

XII. Environmental Justice Consideration The final action restates the EPA’s interpre tation of the statutory requirements of the CAA. Through the SIP calls issued to certain st ates as part of this SIP call action under CAA section 110(k)(5), the EPA is only requiring each aff ected state to revise its SIP to comply with existing requirements of the CAA. The EPA’s acti on therefore leaves to e ach affected state the choice as to how to revise the SIP provision in question to make it consistent with CAA requirements and to determine, among other things , which of the several lawful approaches to the treatment of excess emissions during SSM events will be applied to particular sources. The EPA has not performed an environmental justice an alysis for purposes of this action, because it cannot geographically locate or quantify the resulting source-sp ecific emission reductions, but the EPA can expect only benefits from the action. XIII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planni ng and Review and Executive Order 13563: Improving Regulation an d Regulatory Review*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 535 of 539 This action is a “significant regulatory action” that was submitted to the Office of Management and Budget (OMB) for review because it raises novel legal or policy issues. Any changes made in response to OMB recommenda tions have been documented in the docket. B. Paperwork Reduction Act (PRA) This action does not impose an information co llection burden under the PRA. This action merely reiterates the EPA’s interpretation of the statutory requirements of the CAA and does not require states to collect any additional informati on. Through the SIP calls issu ed to certain states as part of this action under CAA section 110(k)(5), the EPA is onl y requiring each affected state to revise its SIP to comply with existing requirements of the CAA. C. Regulatory Flexibility Act (RFA) I certify that this action will not have a si gnificant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. Any agency ma y certify that a rule will not have a significant economic impact on a s ubstantial number of sma ll entities if the rule relieves regulatory burden, has no net burden or otherwise has a positive economic effect on the small entities subject to this rule. This action will not impose any require ments on small entities. Instead, the proposed action merely reiterates the EPA’s interpretation of the statutory requirements of the CAA. Through the SIP calls issued to certain states as part of this SIP call action under CAA section 110(k)(5), the EPA is onl y requiring each affected state to revise its SIP to comply with existing requirements of the CAA. The EPA’s action ther efore leaves to each

affected state the choice as to how to revise the SIP provision in question to make it consistent with CAA requirements and to determine, amon g other things, which of the several lawful*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 536 of 539 approaches to the treatment of excess emissions during SSM events will be applied to particular

sources. D. Unfunded Mandates Reform Act (UMRA) This action does not contain any federal manda te as described in UMRA, 2 U.S.C. 1531- 1538, and does not significantly or uniquely a ffect small governments. The action imposes no new enforceable duty on any state, local or tribal governments or the private sector. The regulatory requirements of this act ion apply to certain states for which the EPA is issuing a SIP

call. To the extent that such a ffected states allow local air dist ricts or planning organizations to implement portions of the state’ s obligation under the CAA, the re gulatory requirements of this action do not significantly or uniquely affect sm all governments because those governments have already undertaken the obligation to comply with the CAA.

E. Executive Order 13132: Federalism This action does not have federalism implica tions. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coor dination with Indian Tribal Governments This action does not have tribal implicati ons as specified in Executive Order 13175. In this action, the EPA is not addressing any tribal implementation plans. This action is limited to states. Thus, Executive Order 13175 does not apply to this action. G. Executive Order 13045: Protection of Childre n from Environmental Health Risks and Safety Risks The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 537 of 539 disproportionately affect childre n, per the definition of “covered regulatory action” in section 2-

202 of the Executive Order. This action is not subject to Executive Order 13045 because, in prescribing the EPA’s action for states regardi ng their obligations for SIPs under the CAA, it implements specific standards esta blished by Congress in statutes. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution or Use This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution or use of energy. This action merely prescribes the EPA’s action for states regarding thei r obligations for SI Ps under the CAA. I. National Technology Transfer and Advancement Act (NTTAA) This rulemaking does not invol ve technical standards.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations

The EPA believes the human health or envir onmental risk addresse d by this action will not have potential disproportionate ly high and adverse human health or environmental effects on minority, low-income or indige nous populations. The rule is in tended to ensure that all communities and populations across the affected states, including minority, low-income and indigenous populations overbur dened by pollution, receive the full human health and environmental protection provided by the CAA. This action concerns states’ obligations regarding the treatment they gi ve, in rules included in thei r SIPs under the CAA, to excess emissions during startup, shutdown and malfunctions . This action requires that certain states bring their treatment of these emissions into li ne with CAA requirements, which will lead to certain sources’ having greater incentives to control emissions during such events.*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 538 of 539 K. Determination Under Section 307(d) Pursuant to CAA section 307(d)(1)(V), the Admi nistrator determines that this action is subject to the provisions of sec tion 307(d). Section 307(d) establ ishes procedural requirements specific to rulemaking under the CAA. Section 307(d)(1)(V) provides th at the provisions of section 307(d) apply to “suc h other actions as the Admi nistrator may determine.” L. Congressional Review Act (CRA) This action is subject to the CRA, and the EP A will submit a rule report to each House of the Congress and to the Comptro ller General of the United States . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

XIV. Judicial Review

The Administrator determines that this ac tion is “nationally applicable” within the meaning of section 307(b)(1) of th e CAA. This action in scope a nd effect extends to numerous judicial circuits because the action on the Pet ition extends to states throughout the country. In these circumstances, section 307(b)(1) and its legi slative history authori ze the Administrator to find the rule to be of “nationwide scope or effect” and thus to indicate the venue for challenges to be in the D.C Circuit. Thus, any petitions for revi ew must be filed in th e U.S. Court of Appeals

for the District of Columbia Circuit. In addition, pursuant to CAA section 307(d)(1 )(V), the EPA is determining that this rulemaking action is subject to the requirements of section 307(d), whic h establish procedural requirements specific to rulemaking under the CAA. XV. Statutory Authority The statutory authority for this action is provided by CAA section 101 et seq. (42 U.S.C.

7401 et seq. ).*** E.O. 12866 Review – Draft – Do Not C ite, Quote, or Release During Review *** EO12866_SSM SIP_2060-AR68_Final_PreambleRule_20150309

Page 539 of 539 Page 53939 of 539 - State Implementation Plans: Response to Petition for Rulemaking; Restatement and Update of EPA’s SSM Policy A pplicable to SIPs; Findings of Substantial Inadequacy; and SIP Calls to Amend Provisi ons Applying to Excess Emissions During Periods of Startup, Shut down and Malfunction

List of Subjects in 40 CFR Part 52 Environmental protection, Affirmative defens e, Air pollution contro l, Carbon dioxide, Carbon dioxide equivalents, Carbon monoxi de, Excess emissions, Greenhouse gases, Hydrofluorocarbons, Incorporation by reference, Intergovernmental relations, Lead, Methane, Nitrogen dioxide, Nitrous oxide, Ozone, Partic ulate matter, Perfluorocarbons, Reporting and recordkeeping requirements, Startup, shutdow n and malfunction, State implementation plan, Sulfur hexafluoride, Sulfur oxide s, Volatile organic compounds.

________________________ Dated:

_________________________ Gina McCarthy, Administrator.