MEMORANDUM UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASH IN GTO N , D

. C. 204 60

November 19,2012

OFFIC E OF AIR A N D RAD IAT ION

SUBJECT: Next Steps for Pending Redesignation Requests and State Implementation Plan Actions Affected by the Recent Court Decision Vacating the 201I Cross-State Air Pollution Rule
FROM : Gina McCarthy Assistant Administrator

... TO: Air Division Directors, Regions I

- I 

### 0 The purpose ofthis memorandum is to communicate to Environmental Protection Agency (EPA) Regional Offices about our intent with regard to a range of actions potentially affected by the August 2I, 2012, decision by the U.S. Court ofAppeals to vacate the 2011 Cross-State Air Pollution Rule (CSAPR). (EME Homer City Generation, L.P. v. EPA, No. 11-1302. (D.C. Cir. 2012)). As you know, we have filed a petition for rehearing ofthe Court's decision. Until a decision is made, CSAPR is stayed and the 2005 Clean Air Interstate Rule (CAJR) remains in effect. In the meantime, we have work to do. Statutory deadlines and other circumstances will require us to take various actions during this period and it is important that we all understa nd how best to take into account the Court's decision. Certain state submittals awaiting approval by the EPA, such as pending redesignation requests for the 1997 ozone National Ambient Air Quality Standards (NAAQS) and the 1997 and 2006 PM2.s NAAQS, and pending submittals ofcertain ozone, PM2.s, and regional haze State Implementation Plans (SIPs), may be partly dependent on the assurance ofongoing regional NOx and S02 emission reductions. In many cases, state and local air agencies made these submittals with the expectation that CSAPR, which was designed to limit emissions of NOx and S02 from power plants , would be fully implemented, thus ensuring such reductions would take place.
At the time ofthe Court's decision, the EPA was considering whether to approve a number of attainment SIPs, redesignation requests, and associated maintenance SIPs that relied on CSAPR in part to provide the necessary regional emission reductions for attaining the ozone and PM2.s NAAQS and maintaining the standards for the relevant future time period. With the Court's

Internet Address ( UR L ) • http

.//www

.epa
. gov Recycled/ Recyc l ab l e • Pnnted w1th Vegetable 011 Based Inks on 100% Postconsume r
. Process C h lo ri ne Free Recycled PaperAugust 2012 decision to vacate CSAPR, the ability of states to ensure that the necessary reductions wou ld be achieved and maintained was brought into question. However, on page 60 of its August 2012 decision, the Court also ordered the EPA to " continue administering CAIR pending the promulgation ofa valid replacement. " While we have filed a petition for rehearing ofthe Court ' s decision on CSAPR, based on this direction from the Court, we believe that it will be appropriate to rely on CAIR emission reductions as permanent and enforceable for certain actions in certain circumstances. Specifically, we believe it will be appropriate to rely on those reductions either until that petition and any further proceedings in the CSAPR case are resolved or, ifthe decision vacating CSAPR is not changed, until a valid replacement rule is developed and implementation plans complying with any new rule are submitted by the states and acted upon by the EPA. Thus, action on those pending requests and SIPs may go forward. With respect to regional haze , there is one pending action that has yet to be finalized for a state plan that relies on the use ofCAIR to satisfy the requirements ofthe regional haze program for its electric generating units. Given the need to act on this plan, we believe that it will be appropriate to approve the submitted state plan that relies on CAIR emission reductions, for the reasons explained above. You may also receive questions about two other categories ofregional haze act ions taken prior to the CSAPR decision: (I) determinat ions that certain haze plans did not meet the requirements ofthe Clean Air Act because ofthe plans ' reliance on CAIR, and (2) actions relying on the CSAPR trading programs to satisfy Best Available Retrofit Technology (BART) for power plants. For these actions, we be lieve it is the best use ofour own, the states ', and the courts ' resources to await the decision on our petition for rehearing before deciding whether we need to revisit these final actions.
I have directed OAR staffto work closely with EPA Regional Offices to identify, prioritize, and act promptly on any pending redesignation reque sts and SIP submittal s that involve CSAPR reductions. While noting that each EPA action on a pending state request will need to address the spec ific s of the state's submittal, it is my expectation that Regional Offices, working with national program staff, can move forward to draft and process these notices expeditiously. I would also like to note that the recent CSAPR decision made certain holdings regarding the requirement for states to submit SIPs addressing the provisions ofClean Air Act section 110(a)(2 )(D)(i)(l) , the good neighbor provision that addresses upwind emissions linked to NAAQS attainment problems in downwind states. The decision states that a SIP cannot be deemed deficient for failing to meet the good neighbor obliga tion before the EPA quantifies that obligation. Although we have filed a petition for rehearing ofthe Court ' s decision, including this element ofthe deci s ion, and although the mandate for that decision has not yet been issued, we intend to act in accordance with the decision during the pendency ofthe appeal. Therefore, at this time the EPA does not intend to make findings that states failed to submit SIPs to comply with section 11 O(a)(2)(0)(i)(l). To the extent states may inquire about their obligations to submit SIPs

2addressing this provision, we believe it would be appropriate to convey that at this time we do not intend to make such findings with respect to section 11 0( a)(2)(D)(i)(I).
I trust that this information will be helpful to you in responding to questions about pending state actions , and I encourage you to distribut e this memo to state and local air agenc ies in your Region. We will continue to assist Regional Offices on an individual basis to ensure that pending and new actions are being processed as exp editiously as possible in accordance with the recent CSAPR court decision

.

3