From: Lydia Wegman/RTP/USEPA/US

To: "Frey, Nathan J." <Nathan_J._Frey@omb.eop.gov>, "Lee, Amanda I." 

<Amanda_I._Lee@omb.eop.gov>

Cc: Joseph-J Dougherty/DC/USEPA/US@EPA, Darryl Weatherhead/RTP/USEPA/US@EPA, Bryan 

Hubbell/RTP/USEPA/US@EPA, Lillian Bradley/RTP/USEPA/US@EPA, Robin 

Langdon/RTP/USEPA/US@EPA

Date: 12/13/2012 11:38 AM

Subject: Part I of response to your comments on the RIA

Nathan and Amanda, 

Attached is an explanation which clarifies the way in which we performed the analysis for the final RIA 

and hopefully answers your questions about this analysis. By this afternoon we expect to send to you a 

fuller description of how monitor values changed between proposal and final.

Please let us know if you have any questions. 

Lydia
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Date: December 12, 2012

Re: EO12866/13563 Interagency Review

This memorandum follows the December 11, 2012 discussion on the PM2.5 National Ambient Air Quality Standards 

(NAAQS) final Regulatory Impact Analysis (RIA). Specifically, this memorandum provides additional detail and 

clarification on (i) some of the analytical methods applied in the final RIA and (ii) differences between the PM2.5 

NAAQS proposal RIA and the final RIA. The memorandum is divided into the following sections (1) Section 1

outlines and provides details on the analyses conducted to illustrate attainment with the revised standard of 12

μg/m3; and (2) Section 2 walks through examples of analyses conducted from the proposal and final RIAs.

Analyses Conducted to Illustrate Attainment

The flowchart below outlines the analytical steps taken to illustrate attainment with the revised standard of 12

μg/m3, and the following discussion, by primary flowchart section, describes each of the steps taken.

1. Flowchart Section 1 -- Establishing the Analytical Baseline – This section of the flowchart 

reflects analytical steps taken to account for rules and programs currently underway, as well as to reflect 

attainment of the current annual and daily standards of 15/35 μg/m3. Detailed discussions of the 

elements of this section of the flowchart are in Chapters 1 and 3 of the final RIA.
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a. Adjusted 2020 Base Case with “On the Books” Federal and State Rules and Programs -- The 

adjusted 2020 base case includes reductions expected prior to 2020 from existing (i.e., “onthe-books”) state and federal control programs. In addition, we made adjustments to reflect 

PM2.5 reductions expected from the implementation of existing burn ban programs in certain 

counties and to remove the effects of atypical events such as wildfires and fireworks 

displays. (See Map below for illustration.)

Annual NAAQS Exceedances*in 

“Adjusted 2020 Base Case” Scenario

*

24-hr PM2.5 NAAQS Exceedances as Follows:

• San Joaquin Valley (6 counties); South Coast (2 counties); Imperial, CA; Allegheny, PA; Salt Lake, UT; Lake, 

OR; and Sacramento, CA

b. Analytical Baseline -- The analytical baseline includes reductions from additional controls 

that the EPA estimates are needed to attain the current standard (15/35μg/m3). In 

determining the level of reductions needed to meet both the current annual and daily 

standards, it is necessary to determine which of the standards will be “controlling”, e.g. 

which standard will require the most reductions to reach attainment. This is important for 

establishing the analytical baseline because when the daily standard is controlling (as is the 

case in much of California), the emissions reductions required to meet the daily standard will 

result in reductions in the annual design value to below the annual standard of 15 μg/m3. As 

a result, the annual PM2.5 increment needed to attain alternative standards will not be 

relative to an annual design value of 15 μg/m3, rather, the increment will vary by county 

based on the annual design value in that county that resulted from applying emissions 

controls to meet the 35 μg/m3daily standard. For example, in the map below, for counties

labeled as exceeding the 12 μg/m3annual standard, the baseline design values can be any 

value between 12 and 15 μg/m3. Similarly, exceedances of the 11 μg/m3and 13 μg/m3

standards can be anywhere between 11 or 13 and 15 μg/m3. 
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The analytical baseline reflects attainment of 15/35 μg/m3in 2020. We also modified the

analytical baseline in the South Coast Air Quality Management District and the San Joaquin 

Valley Air Pollution Control District to reflect reductions in NOx emissions that these areas 

are expected to achieve between 2020 and 2025. These reductions in NOx emissions are not 

attributable to attainment of the current or revised PM standards, but reflect the impacts of 

other programs. (See Map below for illustration.) 

Annual NAAQS Exceedances in 

“Analytical Baseline” Scenario

• 13 Level: 2 Counties (Tulare, CA and Riverside, CA)

• 12 Level: 7 Counties (All in CA)

• 11 Level: 23 Counties

2. Flowchart Section 2 -- Control Strategies – This section of the flowchart reflects analytical steps 

taken to analyze controls and emissions reductions needed beyond the current standard (15/35 μg/m3) 

and other existing major rules to achieve the revised standard (12 μg/m3). We apply control options that 

might be available to states for application by 2020. Detailed discussion of the elements of this section of 

the flowchart is in Chapter 4 of the final RIA.

a. Select Controls by Emissions Sector and Pollutant -- Non-EGU point and nonpoint control 

measures were applied for the revised and alternative standards’ control strategies. These 

controls were identified using the U.S. EPA’s Control Strategy Tool. Additional control 

measures were not applied to EGUs because of the extensive nature of controls resulting 

from the inclusion of MATS.
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b. Adjust 2020 Control Scenario to Meet Alternate Standards -- After identifying the known 

controls in the control scenario that were needed to meet the analytical baseline, additional 

known controls needed to meet the revised and alternative standards were identified. The 

EPA used air quality modeling results to determine whether the control scenario was 

sufficient to meet the revised and alternative standards for each geographic area. Where the 

control scenario modeling resulted in design value reductions below the level needed for the 

revised or alternative standards for specific geographic areas, county-specific ratios of air 

quality response to emission reductions were used to determine the subset of controls that 

were needed to attain the standard. Where it was determined that the control scenario was 

not sufficient in attaining the standard, these same response factors were used to calculate 

the amount of additional emission reductions beyond known controls needed to meet the 

standard. For the revised and alternative control strategy analysis, known controls for two 

sectors were used: non-EGU point and area sources. Onroad mobile source controls were 

not used in the revised and alternative standards analysis because they were applied 

previously in the analytical baseline analysis where they were deemed to be most cost 

effective.

3. Flowchart Section 3 -- Analysis of Costs – This section of the flowchart reflects analytical steps taken to 

estimate the costs of both known and unknown controls. Detailed discussion of the elements of this 

section of the flowchart is in Chapter 7 of the final RIA.

a. Estimate Known Controls Engineering Costs, Estimate Extrapolated Costs -- We provide 

engineering cost estimates for the control strategies identified in Chapter 4 that include control 

technologies on non-EGU point sources and area sources. Engineering costs generally refer to the 

capital equipment expense, the site preparation costs for the application, and annual operating 

and maintenance costs. For this analysis, we included known controls for all of the geographic 

areas likely to exceed the revised and/or alternative standards. We also provide estimates for the 

engineering costs of the additional emissions reductions that are needed beyond the application 

of known controls to reach full attainment of the alternative standards analyzed; the cost 

estimates derived from this approach are referred to as “extrapolated” costs. By definition, no 

cost data currently exists for the additional emissions reductions needed beyond known controls. 

We employ two methodologies for estimating the costs of unidentified future controls, and both 

approaches assume that innovative strategies and new control options make possible the 

emissions reductions needed for attainment by 2020.

4. Flowchart Section 4 -- Full Attainment – This section of the flowchart reflects analytical steps taken to 

estimate the costs of attainment, the benefits of attainment and the net benefits for the revised standard 

of 12 μg/m3. Detailed discussions of the elements of this section of the flowchart are in Chapter 5, 

Chapter 7, and Chapter 8 of the final RIA.

a. Calculate Full Attainment Costs – In Chapter 7 we present a summary of the total national costs 

of attaining the revised annual standard of 12 μg/m3 and the alternative annual standards of 13 

μg/m3and 11 μg/m3 in 2020. This summary includes the known and extrapolated costs. The total 

cost estimates are $53 million (2010$) and $350 million (2010$) for the revised annual standard 

of 12 μg/m3; $11 million and $100 million for the alternative annual standard of 13 μg/m3; and 

$320 million and $1,700 million for the alternative annual standard of 11 μg/m3.

b. Calculate Full Attainment Benefits – Chapter 5 presents the estimated human health benefits for 

the revised NAAQS. We quantify the health-related benefits of the fine particulate matter 

(PM2.5)-related air quality improvements resulting from the illustrative emissions control 

scenarios that reduce emissions of directly emitted particles and precursor pollutants including 

SO2 and NOx to reach alternative PM2.5 NAAQS levels in 2020. These benefits are relative to an 
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analytical baseline reflecting nationwide attainment of the current primary PM2.5 standards (i.e., 

annual standard of 15 μg/m3and 24-hour standard of 35 μg/m3) that includes promulgated 

national regulations and illustrative emissions controls to simulate attainment with 15/35 as well 

as a NOx emission adjustment to reflect expected reductions in mobile NOx emissions between 

2020 and 2025. 

The estimated benefits for the revised and alternative standards are in addition to the 

substantial benefits estimated for several recent implementation rules. Rules such as the 

Mercury and Air Toxics Standard (MATS) and other emission reductions will have substantially 

reduced ambient PM2.5 concentrations by 2020 in the East, such that no additional controls 

would be needed in the East for the revised annual standard of 12 μg/m3. Thus, all of the 

estimated benefits occur in California because this is the only state that needs additional air 

quality improvement beyond the analytical baseline after accounting for air quality 

improvements from recent rules.

c. Net Benefits -- Chapter 8 compares estimates of the benefits with costs and summarizes the net 

benefits of revised annual standard of 12 μg/m3 and the alternative annual standards of 13 

μg/m3 and 11 μg/m3relative to the analytical baseline that includes recently promulgated 

national regulations and additional emissions reductions needed to attain the existing 15/35 

μg/m3standards, as well as adjustments to NOx emissions in the San Joaquin and South Coast 

areas.

Examples of Analyses Conducted to Illustrate Attainment -- Proposal RIA and Final RIA

Additional text and information forthcoming