1

6560-50-P

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52, 78, and 97 

[EPA-HQ-OAR-2015-0500; FRL-9935-25-OAR]

RIN 2060-AS05

Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

________________________________________________________________

SUMMARY: The primary purpose of this proposal is to address 

interstate air quality impacts with respect to the 2008 ozone 

National Ambient Air Quality Standards (NAAQS). The EPA 

promulgated the Cross-State Air Pollution Rule (CSAPR) on July 

6, 2011, to address interstate transport of ozone pollution 

under the 1997 ozone NAAQS and fine particulate matter (PM2.5) 

under the 1997 and 2006 PM2.5 NAAQS. The EPA is proposing to 

update CSAPR to address interstate emission transport with 

respect to the 2008 ozone NAAQS. This proposal also responds to 

the July 28, 2015 remand by the Court of Appeals for the 

District of Columbia Circuit of certain states’ ozone-season

nitrogen oxides (NOX) emissions budgets established by CSAPR. 

This proposal also updates the status of certain states’ 

outstanding interstate ozone transport obligations with respect 

to the 1997 ozone NAAQS, for which CSAPR provided a partial 
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remedy. The EPA is taking this action under Clean Air Act 

section 110(a)(2)(D)(i)(I), sometimes called the “good neighbor 

provision.”

This proposal finds that ozone season emissions of NOX in 23

eastern states affect the ability of downwind states to attain 

and maintain the 2008 ozone NAAQS. These emissions can be 

transported downwind as NOX or, after transformation in the 

atmosphere, as ozone. For these 23 eastern states, the EPA 

proposes to issue Federal Implementation Plans (FIPs) that 

generally update the existing CSAPR NOX ozone-season emissions

budgets for electricity generating units (EGUs) and implement 

these budgets via the CSAPR NOX ozone-season allowance trading 

program. One state, Kansas, would have a new CSAPR ozone season 

requirement under this proposal. The remaining 22 states were 

included in the original CSAPR ozone-season program as to the 

1997 ozone NAAQS. The EPA would finalize a FIP for any state 

that does not have an approved SIP addressing its contribution 

by the date this rule is finalized. The EPA is proposing 

implementation starting with the 2017 ozone season. The proposed 

NOX emission reductions do not necessarily eliminate fully 

states’ significant contribution to downwind air quality 

problems. However, the proposed emission reductions would 

provide a partial remedy to address these obligations and would 

result in important near-term reductions in ozone pollution that 
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crosses state lines, thereby improving air quality impacts in 

downwind states. In conjunction with other federal and state 

actions, these requirements would assist downwind states in the 

eastern United States in attaining and maintaining the 2008 

ozone standard.

DATES: Comments must be received on or before [insert date 45 

days after publication in the Federal Register]. Under the 

Paperwork Reduction Act (PRA), comments on the information 

collection provisions are best assured of consideration if the 

Office of Management and Budget (OMB) receives a copy of your 

comments on or before [insert date 30 days after date of 

publication in the Federal Register].

Public hearing. The EPA will be holding one public hearing on 

the proposed Cross-State Air Pollution Rule Update for the 2008 

Ozone National Ambient Air Quality Standards. The hearing will 

be held to accept oral comments on the proposal. The hearing 

will be held on December 17, 2015 in Washington D.C. The hearing 

will begin at 9:00 a.m. EST and will conclude at 8:00 p.m. EST.

Additional information for this public hearing is available in a 

separate Federal Register notice and at 

http://www2.epa.gov/airmarkets/proposed-cross-state-airpollution-update-rule. 

ADDRESSES: Submit your comments, identified by Docket ID No.

EPA-HQ-OAR-2015-0500, to the Federal eRulemaking Portal: 
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http://www.regulations.gov. Follow the online instructions for 

submitting comments. Once submitted, comments cannot be edited 

or withdrawn. The EPA may publish any comment received to its 

public docket. Do not submit electronically any information you 

consider to be Confidential Business Information (CBI) or other 

information whose disclosure is restricted by statute. 

Multimedia submissions (audio, video, etc.) must be accompanied 

by a written comment. The written comment is considered the 

official comment and should include discussion of all points you 

wish to make. The EPA will generally not consider comments or 

comment contents located outside of the primary submission (i.e. 

on the web, cloud, or other file sharing system). For additional 

submission methods, the full EPA public comment policy, 

information about CBI or multimedia submissions, and general 

guidance on making effective comments, please visit 

http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Mr. David Risley, Clean Air 

Markets Division, Office of Atmospheric Programs (Mail Code 

6204M), Environmental Protection Agency, 1200 Pennsylvania 

Avenue NW, Washington, DC 20460; telephone number: (202) 343-

9177; email address: Risley.David@epa.gov.

SUPPLEMENTARY INFORMATION: 
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Preamble Glossary of Terms and Abbreviations

The following are abbreviations of terms used in the 

preamble.

CAA or Act Clean Air Act

CAIR Clean Air Interstate Rule

CAMx Comprehensive Air Quality Model with Extensions

CBI Confidential Business Information

CEMS Continuous Emission Monitoring Systems

CFR Code of Federal Regulations

CSAPR Cross-State Air Pollution Rule

EGU Electric Generating Unit

EPA U.S. Environmental Protection Agency

FIP Federal Implementation Plan

FR Federal Register

GWh Gigawatt hours

ICR Information Collection Request

IPM Integrated Planning Model

Km Kilometer

lb/mmBtu Pounds per Million British Thermal Unit

LNB Low-NOx Burners

mmBtu Pounds per Million British Thermal Unit

MOVES Motor Vehicle Emission Simulator

NAAQS National Ambient Air Quality Standard

NBP NOX Budget Trading Program
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NEI National Emission Inventory

NOX Nitrogen Oxides

NODA Notice of Data Availability

NSPS New Source Performance Standard

OFA Overfire Air

PM2.5 Fine Particulate Matter

PPB Parts Per Billion

RIA Regulatory Impact Analysis

SC-CO2 Social Cost of Carbon

SCR Selective Catalytic Reduction

SIP State Implementation Plan

SMOKE Sparse Matrix Operator Kernel Emissions

SNCR Selective Non-catalytic Reduction

SO2 Sulfur Dioxide

TSD Technical Support Document

Table of Contents

I. Executive Summary

A. Purpose of Regulatory Action

B. Major Provisions

C. Benefits and Costs

II. General Information

A. To Whom Does the Proposed Action Apply

III. Air Quality Issues Addressed and Overall Approach for the 

Proposed Rule

A. The Interstate Transport Challenge under the 2008 

Ozone Standard
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1. Background on the Overall Nature of the Interstate 

Ozone Transport Problem

2. Events Affecting Application of the Good Neighbor 

Provision for the 2008 Ozone NAAQS

B. Proposed Approach to Address Ozone Transport under the 

2008 Ozone NAAQS via FIPS

1. The CSAPR Framework

2. Partial versus Full Resolution of Transport 

Obligation

3. Why We Focus on Eastern States

4. Short-Term NOX Emissions

C. Responding to the Remand of CSAPR NOX Ozone-Season 

Emissions Budgets

D. Addressing the Status of Outstanding Transport 

Obligations for the 1997 Ozone NAAQS

IV. Legal Authority

A. EPA’s Authority for the Proposed Rule

1. Statutory Authority

2. FIP Authority for Each State Covered by the Proposed 

Rule

V. Analyzing Downwind Air Quality and Upwind-State 

Contributions

A. Overview of Air Quality Modeling Platform

B. Emission Inventories

1. Foundation Emission Inventory Data Sets

2. Development of Emission Inventories for EGUs

3. Development of Emission Inventories for Non-EGU 

Point Sources

4. Development of Emission Inventories for Onroad 

Mobile Sources

5. Development of Emission Inventories for Commercial 

Marine Category 3 (Vessel) 

6. Development of Emission Inventories for Other 

Nonroad Mobile Sources

7. Development of Emission Inventories for Nonpoint 

Sources

C. Air Quality Modeling to Identify Nonattainment and 

Maintenance Receptors

D. Pollutant Transport from Upwind States

1. Air Quality Modeling to Quantify Upwind State 

Contributions

2. Application of Screening Threshold

VI. Quantifying Upwind-State EGU NOX Reduction Potential to 

Reduce Interstate Ozone Transport for the 2008 NAAQS
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A. Introduction

B. NOX Mitigation Strategies 

1. EGU NOX Mitigation Strategies

2. Non-EGU NOX Mitigation Strategies

C. Uniform EGU Cost Thresholds for Assessment

D. Assessing Cost, EGU NOX Reductions, and Air Quality

E. Quantifying State Emissions Budgets

VII. Implementation Using the Existing CSAPR Ozone-Season 

Allowance Trading Program and Relationship to Other Rules

A. Background

B. FIP Requirements and Key Elements of the CSAPR Trading 

Programs

1. Applicability

2. State Budgets

3. Allocations of Emission Allowances 

4. Variability Limits, Assurance Levels, and Penalties

5. Implementation Approaches for Transitioning the 

Existing CSAPR NOX Ozone-season Program to Address 

Transport for a Newer NAAQS 

6. Compliance Deadlines

7. Monitoring and Reporting and the Allowance 

Management System

8. Recordation of Allowances

C. Submitting a SIP

1. 2018 SIP Option

2. 2019 and Beyond SIP Option

3. SIP Revisions that Do Not Use The CSAPR Trading 

Program

4. Submitting a SIP to Participate in CSAPR for States 

not Included in this Proposal

D. Title V Permitting

E. Relationship to Other Emission Trading and Ozone 

Transport Programs

1. Interactions with Existing CSAPR Annual Programs, 

Title IV Acid Rain Program, NOX SIP Call, 176A 

Petition, and Other State Implementation Plans

2. Other Federal Rulemakings

VIII. Costs, Benefits, and Other Impacts of the Proposed 

Rule

IX. Summary of Proposed Changes to the Regulatory Text for 

the CSAPR FIPs and CSAPR Trading Program 

X. Statutory and Executive Order Reviews
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A. Executive Order 12866: Regulatory Planning and Review 

and Executive Order 13563: Improving Regulation 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 LowIncome Populations

K. Determinations Under Section 307(b)(1) and (d)

I. Executive Summary
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The EPA promulgated the original Cross-State Air Pollution 

Rule (CSAPR) on July 6, 2011, to address interstate ozone 

transport under the 1997 ozone National Ambient Air Quality 

Standards (NAAQS). The EPA is proposing to update CSAPR to 

address interstate emission transport with respect to the 2008 

ozone NAAQS. The 2008 ozone NAAQS is an 8-hour standard that was 

set at 75 parts per billion (ppb). See 73 FR 16436 (March 27, 

2008).

A. Purpose of Regulatory Action

The purpose of this rulerulemaking is to reduce interstate 

emission transport that significantly contributes to 

nonattainment, or interferes with maintenance, of the 2008 ozone 

NAAQS in the eastern U.S. To achieve this goal, this proposal 

would further limit ozone season (May 1 through September 30) NOX

emissions from electric generating units (EGUs) in 23 eastern 

states.

Ozone causes a variety of negative effects on human health, 

vegetation, and ecosystems. In humans, acute and chronic 

exposure to ozone is associated with premature mortality and a 

number of morbidity effects, such as asthma exacerbation. Ozone 

exposure can also negatively impact ecosystems.

Studies have established that ozone occurs on a regional 

scale (i.e., thousands of kilometers) over much of the eastern 

U.S., with elevated concentrations occurring in rural as well as 
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metropolitan areas. To reduce this regional-scale ozone 

transport, assessments of ozone control approaches have 

concluded that NOX control strategies are most effective. 

Further, studies have found that EGU NOX emission reductions can 

be effective in reducing individual 8-hour peak ozone 

concentrations and in reducing 8-hour peak ozone concentrations 

averaged across the ozone season.1 Specifically, studies indicate 

that EGUs’ emissions, which are generally released higher in the 

air column through tall stacks and are significant in quantity, 

may disproportionately contribute to long-range transport of 

ozone pollution on a per-ton basis.2

Clean Air Act (CAA or the Act) section 110(a)(2)(D)(i)(I), 

sometimes called the “good neighbor provision,” requires states3

to prohibit emissions that will contribute significantly to 

nonattainment in, or interfere with maintenance by, any other 

state with respect to any primary or secondary NAAQS. 

The EPA originally finalized CSAPR on July 6, 2011. See 76 

FR 48208 (July 6Aug. 8, 2011). CSAPR addresses the 1997 ozone 

NAAQS and the 1997 and 2006 fine particulate matter (PM2.5) 

 

1 Summertime Zero-Out Contributions of regional NOX and VOC emissions to 

modeled 8-hour ozone concentrations in the Washington, DC; Philadelphia, PA, 

and New York City MSAs. “Contributions of regional air pollutant emissions to 

ozone and fine particulate matter-related mortalities in eastern U.S. urban 

areas”.

2 Butler, et al., “Response of Ozone and Nitrate to Stationary Source 

Reductions in the Eastern USA”

3 The term “state” has the same meaning as provided in CAA section 

302(d) which specifically includes the District of Columbia.
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NAAQS.4 (See section IV for a discussion of CSAPR litigation and 

implementation.)

CSAPR provides a 4-step process to address the requirements 

of the good neighbor provision for ozone or PM2.5 standards: (1) 

identifying downwind receptors that are expected to have 

problems attaining or maintaining clean air standards (i.e., 

NAAQS); (2) determining which upwind states contribute to these 

identified problems in amounts sufficient to “link” them to the 

downwind air quality problems; (3) for states linked to downwind 

air quality problems, identifying upwind emissions that 

significantly contribute to downwind nonattainment or interfere 

with downwind maintenance of a standard by quantifying available 

upwind emission reductions and apportioning upwind 

responsibility among linked states; and (4) for states that are 

found to have emissions that significantly contribute to 

nonattainment or interfere with maintenance of the NAAQS 

downwind, reducing the identified upwind emissions via regional 

emissions allowance trading programs. Each time the ozone or 

PM2.5 NAAQS are revised, this process can be applied for the new 

NAAQS. In this action, the EPA proposes to apply this 4-step 

process to update CSAPR with respect to the 2008 ozone NAAQS.

 

4 CSAPR did not evaluate the 2008 ozone standard because the 2008 ozone NAAQS 

was under reconsideration during the analytic work for the rule. 
13

Application of this process with respect to the 2008 ozone 

NAAQS provides the analytic basis for proposing to further limit 

ozone season EGU NOX emissions in 23 eastern states. However, the 

EPA seeks comment on this proposal from all states and 

stakeholders.

The requirements of this proposal are in addition to 

existing, on-the-books EPA and state environmental regulations, 

including the Clean Power Plan (CPP), which is included in the 

base case for this proposal. On August 3, 2015, President Obama 

and EPA announced the Clean Power Plan – a historic and 

important action on emissions that contribute to climate change. 

The CPP reduces carbon pollution from the power sector. Due to 

the compliance timeframes of the CPP, the EPA does not 

anticipate significant interactions with the CPP and the nearterm ozone season EGU NOX emission reduction requirements under 

this proposal. However, states and utilities will be able to 

make their compliance plans with both programs in mind. Further 

discussion of the CPP is provided later in this proposal.

In addition to reducing interstate ozone transport with 

respect to the 2008 ozone NAAQS, this proposal also addresses 

the status of outstanding interstate ozone transport obligations 

with respect to the 1997 ozone NAAQS. Under CSAPR, the EPA 

promulgated FIPs for 25 states to address ozone transport under 
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the 1997 NAAQS. For 11 of these states,5 in the 2011 final rule, 

CSAPR quantified ozone season NOX emission reductions that were 

not necessarily sufficient to eliminate all significant 

contribution to downwind nonattainment or interference with 

downwind maintenance of the 1997 ozone NAAQS downwind. Relying 

on base case modeling completed for this proposed rulemaking, 

this action proposes to find that the reductions required by 

those 11 FIPs were in fact sufficient to eliminate such 

significant contributions to downwind air quality problems for 

that standard.

This action also responds to the July 28, 2015 opinion of 

the Court of Appeals for the District of Columbia (D.C. Circuit) 

remanding without vacatur 11 states’ CSAPR phase 2 NOX ozoneseason emissions budgets. EME Homer City Generation, L.P., v. 

EPA, No. 795 F.3d 118, 129-30, 138 (EME Homer City II). This 

action proposes to respond to that remand by replacing the 

budgets invalidated by the D.C. Circuit for nine states and by 

removing two states from the CSAPR NOX ozone-season trading 

program.6

 

5 Alabama, Arkansas, Georgia, Illinois, Indiana, Kentucky, Louisiana, 

Mississippi, Missouri, Tennessee, and Texas. (See CSAPR Final Rule, 

76 FR at 48220, and the CSAPR Supplemental Rule, 76 FR at 80760,

December 27, 2011).

6 The EPA proposes to replace emissions budgets for Maryland, New Jersey, New 

York, North Carolina, Ohio, Pennsylvania, Texas, Virginia, and West Virginia. 

The EPA proposes to remove Florida and South Carolina from the CSAPR ozoneseason NOX trading program.
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On October 1, 2015, the EPA strengthened the ground-level 

ozone NAAQS, based on extensive scientific evidence about 

ozone’s effects on public health and welfare. This proposal to 

reduce interstate emission transport with respect to the 2008 

ozone NAAQS is a separate and distinct regulatory action and is 

not meant to address the CAA’s good neighbor provision with 

respect to the 2015 ozone NAAQS final rule.

The Clean Air Act gives states the responsibility to 

address interstate pollution transport through good neighbor 

State Implementation Plans (SIPs). The EPA supports state 

efforts to submit good neighbor SIPs for the 2008 ozone NAAQS 

and has shared information with states to facilitate such SIP 

submittals. However, in the event that good neighbor SIPs are

not submitted or cannot be approved, this rulerulemaking

proposes Federal Implementation Plans (FIPs), as required under 

section 110(c)(1) of the CAA, to establish and implement EGU NOX

reductions identified in this rule.

On July 13, 2015, the EPA published a rule finding that 24 

states7 failed to make complete submissions that address the 

requirements of section 110(a)(2)(D)(i)(I) related to the 

interstate transport of pollution as to the 2008 ozone NAAQS. 

 

7 The states included in this finding of failure to submit are: Alabama, 

Arkansas, California, Florida, Georgia, Iowa, Illinois, Kansas, 

Massachusetts, Maine, Michigan, Minnesota, Mississippi, Missouri, New 

Hampshire, New Mexico, North Carolina, Oklahoma, Pennsylvania, South 

Carolina, Tennessee, Vermont, Virginia, and West Virginia.
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See 80 FR 39961 (July 13, 2015) (effective August 12, 2015). The 

finding action triggered a 2-year deadline for the EPA to issue 

FIPs to address the good neighbor provision for these states by 

August 12, 2017. 

The EPA would finalize a FIP for a state that we find has

failed to submit a complete good neighbor SIP or for which we 

issue a final rule disapproving its good neighbor SIP. 

The EPA proposes to align implementation of this proposed

rule with relevant attainment dates for the 2008 ozone NAAQS, as 

required by the D.C. Circuit’s decision North Carolina v. EPA.8

The EPA’s final 2008 Ozone NAAQS SIP Requirements Rule9 revised 

the attainment deadline for ozone nonattainment areas currently 

designated as moderate from December 2018 to July 2018 in 

accordance with the D.C. Circuit’s decision in NRDC v. EPA.10

Because July 2018 falls during the 2018 ozone season, the 2017 

ozone season will be the last full season from which data can be 

used to determine attainment of the NAAQS by the July 2018 

attainment date. We believe that North Carolina compels the EPA 

to identify upwind reductions and implementation programs to 

achieve these reductions, to the extent possible, for the 2017 

ozone season. 

 

8 531 F.3d 896, 911-12 (D.C. Cir. 2008) (holding that EPA must 

coordinate interstate transport compliance deadlines with downwind 

attainment deadlines).

9 80 FR 12264, 12268; 40 CFR 51.1103.

10 777 F.3d 456, 469 (D.C. Cir. 2014).
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In order to apply the first and second steps of the CSAPR 

4-step process to interstate transport for the 2008 ozone NAAQS, 

the EPA used air quality modeling to project ozone 

concentrations at air quality monitoring sites to 2017. The EPA 

evaluated these modeling projections for the air quality 

monitoring sites and considered current ozone monitoring data at 

these sites to identify receptors that are anticipated to have 

problems attaining or maintaining the 2008 ozone NAAQS. The EPA 

then used air quality modeling to evaluate contributions from 

upwind states to these downwind receptors.

CSAPR and previous federal transport rules, such as the NOX

SIP Call and the Clean Air Interstate Rule (CAIR) – discussed in 

detail below - addressed collective contributions of ozone 

pollution from states in the eastern U.S. These rules did not 

address contributions in the 11 western contiguous United 

States.11 There may be additional criteria to evaluate regarding 

collective contribution of transported air pollution in the 

West, such as those raised in EPA-state meetings to discuss 

approaches for determining how emissions in upwind states impact 

air quality in downwind states.12 Given that the near-term 2017 

 

11 For the purpose of this action, the western U.S. (or the West) 

consists of the 11 western contiguous states of Arizona, California, 

Colorado, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, 

Washington, and Wyoming.

12 For example, EPA-State meetings held in Research Triangle Park, NC on April 

8, 2013 and Denver, Colorado on April 17, 2013.
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implementation timeframe constrains the opportunity to conduct 

evaluations of additional criteria, the EPA proposes to focus 

this rulemaking on eastern states. This focus would not relieve 

western states of obligations to address interstate transport 

under the Act. The EPA and western states, working together, 

would continue to evaluate interstate transport on a case-bycase basis. While the EPA proposes to focus this rulemaking on 

eastern states, we seek comment on whether to include western 

states in this rule.

To apply the third step of the 4-step process, the EPA 

assessed ozone season NOX reductions that are achievable for the 

2017 ozone season. This assessment reveals that there is 

significant EGU NOX reduction potential that can be achieved for 

2017 at reasonable cost, which would make meaningful and timely 

improvements in ozone air quality. The EPA applied a multifactor test to evaluate EGU NOX reduction potential for 2017 and 

proposes to quantify EGU NOX ozone-season emissions budgets 

reflecting emission reductions from cost-effective pollution 

control measures achievable for the 2017 ozone season (estimated 

to obtain NOX reductions at a uniform cost of approximately 

$1,300 per ton).

The EPA is not proposing to quantify non-EGU emission 

reductions to reduce interstate ozone transport for the 2008 

ozone NAAQS at this time because we are uncertain that 
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significant NOX mitigation is achievable from non-EGUs for the 

2017 ozone season. The EPA will continue to evaluate whether 

non-EGU emission reductions can be achieved on a longer timeframe at a future date. However, as explained later in this 

noticedocument, this proposal seeks comment on a preliminary 

evaluation of stationary non-EGU NOX mitigation potential and on 

allowing a state to include legacy NOX SIP Call non-EGUs in the 

CSAPR trading program by adopting a SIP revision that the EPA 

would approve as modifying the CSAPR trading program provisions 

with regard to that state. 

To evaluate full elimination of a state’s significant 

contribution to nonattainment and interference with maintenance, 

EGU and non-EGU ozone season NOX reductions should both be 

evaluated. To the extent air quality impacts persist after 

implementation of the NOX reductions identified in this 

rulerulemaking, a final judgment on whether the proposed EGU NOX

reductions represent a full or partial elimination of a state’s 

good neighbor obligation for the 2008 NAAQS is therefore subject 

to an evaluation of the contribution to interstate transport 

from additional non-EGU emission sectors. 

However, the EPA believes that it is beneficial to 

implement, without further delay, EGU NOX reductions since they 

are achievable in the near term. Generally, notwithstanding that 

additional reductions may be required to fully address the 
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states’ interstate transport obligations, the proposed NOX

emission reductions are needed for these states to eliminate 

their significant contribution to nonattainment and interference 

with maintenance of the 2008 ozone NAAQS and needed for downwind 

states with ozone nonattainment areas that are required to 

attain the standard by 2018.13

At the same time, the EPA also notes that section 

110(a)(2)(D)(i)(I) of the CAA only requires upwind states to 

prohibit emissions that will significantly contribute to 

nonattainment or interfere with maintenance of the NAAQS in 

other states. It does not shift to upwind states the full 

responsibility for ensuring that all areas in other states 

attain and maintain the NAAQS. Downwind states also have control 

responsibilities because, among other things, the Act requires 

each state to adopt enforceable plans to attain and maintain air 

quality standards. The requirements established for upwind 

states through this proposed rule will supplement downwind 

states’ local emission control strategies that, in conjunction 

with the certainty on maximum allowable upwind state EGU 

emissions that this proposed rule would provide, promote 

attainment and maintenance of the 2008 ozone NAAQS.

 

13 The proposed requirements for one state, North Carolina, would fully 

eliminate that state’s significant contribution to downwind air quality 

problems.
21

To meet the fourth step of the 4-step process (i.e., 

implementation) the proposed FIPs contain enforceable measures 

necessary to achieve the emission reductions in each state. The 

proposed FIPs would require power plants in affected states 

(i.e., states that significantly contribute to ozone transport 

in the east) to participate in the CSAPR NOX ozone-season 

allowance trading program (as modified by the proposed changes 

described elsewhere in this notice). CSAPR’s trading programs 

and EPA’s prior emissions trading programs provide a proven 

implementation framework for achieving emission reductions. In 

addition to providing environmental certainty (i.e., a cap on 

emissions), these programs also provide regulated sources with 

flexibility in choosing compliance strategies. By using the 

existing CSAPR NOX ozone-season allowance trading program, the 

EPA is proposing to use an implementation framework that was 

shaped by notice and comment in previous rulemakings and 

reflects the evolution of these programs in response to court 

decisions. Further, this program is familiar to the EGUs that 

will be regulated under this rule, which means that monitoring, 

reporting, and compliance will be done as it already is under 

CSAPR’s current ozone-season and annual programs.14 

 

14 One state, Kansas, would have a new CSAPR ozone season requirement under 

this proposal. Kansas currently participates in the CSAPR NOX and SO2 annual 

programs. The remaining 22 states were included in the original CSAPR ozoneseason program as to the 1997 ozone NAAQS.
22

These FIP requirements, if finalized, would begin with the 

2017 ozone season and would continue for subsequent ozone 

seasons to ensure that upwind states included in this proposed 

rule meet their Clean Air Act obligation to address interstate 

emissions transport with respect to the 2008 ozone NAAQS for 

2017 and future years. To the extent that emissions in an 

included state would otherwise exceed the promulgated emission 

level, these good neighbor EGU emissions limits will ensure that 

future emissions are consistent with states’ ongoing good 

neighbor obligations. To the extent that emissions in an 

included state would be reduced for other reasons, for example 

planned lower-NOX emitting generation coming online, then those 

actions will help the state comply with its good neighbor 

requirements.

Generally, for states that would be affected by one of the 

FIPs proposed in this action and that are already included in 

the CSAPR NOX ozone-season trading program to address interstate 

ozone transport for the 1997 NAAQS, this action proposes to 

revise the existing part 97 regulations that define that program 

to incorporate lower EGU NOX ozone-season emissions budgets for 

each of the affected states in order to reduce ozone transport 

for the 2008 ozone NAAQS.15 If finalized, compliance with these 

 

15 One state, Kansas, would have a new CSAPR ozone season requirement under 

this proposal. The remaining 22 states were included in the original CSAPR 

ozone-season program as to the 1997 ozone NAAQS.
23

lower emissions budgets for the 2008 ozone NAAQS would also 

satisfy compliance with the existing higher emissions budgets 

for the 1997 ozone NAAQS. Therefore, the EPA proposes to replace 

the existing CSAPR emissions budgets (i.e. for the 1997 ozone 

NAAQS) for the affected states with the lower emissions budgets 

proposed to reduce ozone transport for the 2008 ozone NAAQS. 

Compliance with the final lower emissions budgets for the 2008 

ozone NAAQS would supersede compliance with the CSAPR NOX ozoneseason budgets for the 1997 ozone NAAQS. This action would 

therefore respond to the remand of EME Homer City II with 

respect to the NOX ozone-season emissions budgets for nine 

states16 by replacing the budgets declared invalid by the court 

with revised budgets designed to address the 2008 ozone NAAQS. 

The proposed FIPs, if finalized, would not limit states’ 

flexibility in meeting their CAA requirements, as any state 

included in this proposed rule can submit a good neighbor SIP at 

any time that, if approved by the EPA, could replace the FIP for 

that state. Additionally, CSAPR already provides states with the 

option to submit abbreviated SIPs to customize the methodology 

for allocating NOX ozone-season allowances while participating in 

the ozone-season trading program and we propose to continue that 

approach in this rule.

 

16 The EPA proposes to replace emissions budgets for Maryland, New Jersey, New 

York, North Carolina, Ohio, Pennsylvania, Texas, Virginia, and West Virginia.
24

The EPA therefore proposes revisions to the Code of Federal 

Regulations, specifically 40 CFR part 97, subpart BBBBB (federal 

CSAPR NOX ozone-season trading program); 40 CFR 52.38(b) (rules 

on replacing or modifying the federal CSAPR NOX ozone-season 

trading program with a SIP); 40 CFR 52.540, 52.882, and 52.2140 

(adding or limiting requirements for EGUs in certain individual 

states to participate in the CSAPR NOX ozone-season trading 

program); and 40 CFR 78.1 (modifying the list of decisions 

subject to administrative appeal procedures under part 78) to 

address interstate transport for the 2008 ozone NAAQS. In 

addition, various minor corrections are proposed to these CFR 

sections and other sections of parts 52, 78, and 97 relating to 

the CSAPR ozone-season and annual trading programs.

The 23 eastern states for which the EPA proposes to 

promulgate FIPs to reduce interstate ozone transport as to the 

2008 ozone NAAQS are listed in Table I-1. 

Table I-A-1 Proposed List of Covered States for the 2008 8-

Hour Ozone NAAQS

State Name

Alabama

Arkansas

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana
25

Maryland

Michigan

Mississippi

Missouri

New Jersey

New York

North Carolina

Ohio

Oklahoma

Pennsylvania

Tennessee

Texas

Virginia

West Virginia

Wisconsin

For eastern states for which the EPA is not proposing FIPs 

in this action, the EPA notes that updates to the modeling for 

the final rule, made based on comments received on the proposal,

could change the analysis as to which states significantly 

contribute to nonattainment or interfere with maintenance. In 

this regard, the final modeling could result in additional 

states being included in the final rule. Therefore, the EPA 

provides all data and methods necessary for all eastern states 

to comment on all aspects of this proposal in the Ozone 

Transport Policy Analysis TSD. This information includes EGU NOX

ozone-season emissions budgets for all eastern states, in the 

event that final rule modeling demonstrates that additional 

states significantly contribute to downwind air quality 

problems.
26

The EPA notes that the annual PM2.5 NAAQS was updated after 

CSAPR was promulgated (78 FR 306, January 15, 2013). However, 

this rulerulemaking does not address the 2012 PM2.5 standard. The 

EPA acknowledges that, in EME Homer City II, the D.C. Circuit 

also remanded without vacatur the CSAPR phase 2 SO2 emissions 

budgets as to four states. 795 F.3d at 129, 138. This proposal 

does not address the remand of these CSAPR phase 2 SO2 annual 

emissions budgets. The EPA intends to address the remand of the 

phase 2 SO2 annual emissions budgets separately. The existing 

CSAPR emissions budgets and implementation programs (CSAPR SO2

annual and NOX annual requirements), which address interstate 

transport for the 1997 and 2006 PM2.5 NAAQS, continue to apply at 

this time.

B. Major Provisions

The major provision of this action are described in the 

remainder of this preamble and organized as follows: section III 

describes the human health and environmental context, the EPA’s 

overall approach for addressing interstate transport, and the 

EPA’s response to the remand of certain CSAPR NOX ozone-season 

emissions budgets; section IV describes the EPA’s legal 

authority for this action; section V describes the air quality 

modeling platform and emission inventories that the EPA used to 

identify downwind receptors of concern and upwind state ozone 

contributions to those receptors; section VI describes the EPA’s 
27

proposed approach to quantify upwind state obligations in the 

form of EGU NOX emissions budgets; section VII details the 

implementation requirements including key elements of the CSAPR 

allowance trading program and deadlines for compliance; section 

VIII describes the expected costs, benefits, and other impacts 

of this proposed rule; section IX discusses proposed changes to 

the existing regulatory text for the CSAPR FIPs and the CSAPR 

trading programs; and section X discusses the statutes and 

executive orders affecting this rulemaking. The EPA invites 

comment on this proposed rulemaking.

C. Benefits and Costs

The proposed rule would achieve near-term emission 

reductions from the power sector, lowering ozone season NOX in 

2017 by 85,000 tons, compared to baseline 2017 projections 

without the rule.

Consistent with Executive Order 13563, “Improving 

Regulation and Regulatory Review,” we have estimated the costs 

and benefits of the proposed rule. Estimates here are subject to 

uncertainties discussed further in the Regulatory Impact 

Analysis (RIA) in the docket. The estimated net benefits of the 

proposed rule at a 3 percent discount rate are $700 million to 

$1.2 billion (2011$). The non-monetized benefits include reduced 

ecosystem effects and reduced visibility impairment. Discussion 

of the costs and benefits of the proposal is provided in 
28

preamble section VIII, below, and in the RIA, which is found in 

the docket for this proposed rulemaking. The EPA’s estimate of 

the proposed rule’s costs and quantified benefits is summarized 

in Table I.C-1, below.

Table I.C-1 Summary of Compliance Costs, Monetized Benefits, and 

Monetized Net Benefits of the Proposed Rule for 2017 (2011$)

Description

Impacts at 3 percent 

discount rate

($ millions)

Annualized Compliance Costs a $93

Monetized benefits b $700 to $1,200

Net benefits (benefits-costs $620 to $1,200

a Total annualized social costs are estimated at a 3 percent 

discount rate. The social costs presented here reflect the EGU 

ozone season costs of complying with the proposed FIPs.

b Total monetized benefits are estimated at a 3 percent discount 

rate. The total monetized benefits reflect the human health 

benefits associated with reducing exposure to ozone and PM2.5. It 

is important to note that the monetized benefits and co-benefits 

include many but not all health effects associated with 

pollution exposure. Benefits are shown as a range reflecting 

studies from Krewski et al. (2009) with Smith et al. (2009) to 

Lepeule et al. (2012) with Zanobetti and Schwartz (2008).

II. General Information

A. To Whom Does This Action Apply?

This proposed rule affects EGUs, and regulates the 

following groups:

Industry Group NAICS*

Fossil fuel-fired electric 

power generation 

221112

*North American Industry Classification System
29

This table is not intended to be exhaustive, but rather

provides a guide for readers regarding entities likely to be 

regulated by this action. This table lists the types of entities 

that the EPA is now aware could potentially be regulated by this 

action. Other types of entities not listed in the table could 

also be regulated. To determine whether your entity is regulated 

by this action, you should carefully examine the applicability 

criteria found in 40 CFR 97.504. If you have questions regarding 

the applicability of this action to a particular entity, consult 

the person listed in the FOR FURTHER INFORMATION CONTACT 

section.

III. Air Quality Issues Addressed and Overall Approach for the 

Proposed Rule

A. The Interstate Transport Challenge under the 2008 Ozone 

Standard.

1. Background on the Overall Nature of the Interstate Ozone 

Transport Problem

Interstate transport of NOX emissions poses significant 

challenges with respect to the 2008 ozone NAAQS in the eastern 

U.S. and thus presents a threat to public health and welfare. 

a. Nature of Ozone and the Ozone NAAQS

Ground-level ozone is not emitted directly into the air, 

but is created by chemical reactions between NOX and volatile 
30

organic compounds (VOC) in the presence of sunlight. Emissions 

from electric utilities and industrial facilities, motor 

vehicles, gasoline vapors, and chemical solvents are some of the 

major sources of NOX and VOC.

Because ground-level ozone formation increases with 

temperature and sunlight, ozone levels are generally higher 

during the summer. Increased temperature also increases 

emissions of volatile man-made and biogenic organics and can 

indirectly increase NOX emissions as well (e.g., increased 

electricity generation for air conditioning).

The 2008 primary and secondary ozone standards are both 75 

parts per billion (ppb) as an 8-hour level. Specifically, the 

standards require that the 3-year average of the fourth highest 

24-hour maximum 8-hour average ozone concentration may not 

exceed 75 ppb. 

b. Ozone Transport

Studies have established that ozone formation, atmospheric 

residence, and transport occurs on a regional scale (i.e., 

thousands of kilometers) over much of the eastern U.S., with 

elevated concentrations occurring in rural as well as 

metropolitan areas. While substantial progress has been made in 

reducing ozone in many urban areas, regional-scale ozone 

transport is still an important component of peak ozone 

concentrations during the summer ozone season.
31

The EPA has previously concluded in the NOx SIP Call, CAIR, 

and CSAPR that, for reducing regional-scale ozone transport, a 

NOX control strategy would be most effective. NOX emissions can 

be transported downwind as NOX or, after transformation in the 

atmosphere, as ozone. As a result of ozone transport, in any 

given location, ozone pollution levels are impacted by a 

combination of local emissions and emissions from upwind 

sources. The transport of ozone pollution across state borders 

compounds the difficulty for downwind states in meeting healthbased air quality standards (i.e., NAAQS). 

Recent assessments of ozone, for example those conducted 

for the October 2015 Regulatory Impact Analysis of the Final

Revisions to the National Ambient Air Quality Standards for 

Ground-Level Ozone (EPA-452/R-15-007) continue to show the 

importance of NOX emissions on ozone transport. This analysis is 

in the docket for this proposal and can be also found at the 

EPA’s website at:

http://www3.epa.gov/ozonepollution/pdfs/20151001ria.pdf. 

There are five general categories of NOX emission sources: 

EGUs, non-EGU point, onroad mobile, non-road mobile, and area.

Studies have found that EGU NOX emission reductions can be 

effective in reducing individual 8-hour peak ozone 

concentrations and in reducing 8-hour peak ozone concentrations 

averaged across the ozone season. For example, a study that 
32

evaluates the effectiveness on ozone concentrations of EGU NOX

reductions achieved under the NOX Budget Trading Program shows 

that regulating NOX emissions has been highly effective in 

reducing both ozone and dry-NO3 concentrations during the ozone

season. Further, this study indicates that EGU emissions, which 

are generally released higher in the air column through tall 

stacks and are significant in quantity, may disproportionately 

contribute to long-range transport of ozone pollution on a perton basis.17 Another study shows that EGU NOX emissions can 

contribute between 5 ppb and 25 ppb to average 8-hour peak ozone 

concentrations in mid-Atlantic metropolitan statistical areas.18

Previous regional ozone transport efforts, including the NOX

SIP Call, CAIR, and CSAPR, required ozone season NOX reductions 

from EGUs to address interstate transport of ozone. The EPA has 

taken comment on regulating EGU NOX emissions to address 

interstate ozone transport in the notice-and-comment process for 

these rulemakings. The EPA received no significant adverse 

comments in any of these proposals regarding the rules’ focus on 

ozone season EGU NOX reductions to address interstate ozone 

transport.

 

17 Butler, et al., “Response of Ozone and Nitrate to Stationary Source 

Reductions in the Eastern USA”

18 Summertime Zero-Out Contributions of regional NOX and VOC emissions 

to modeled 8-hour ozone concentrations in the Washington, DC; 

Philadelphia, PA, and New York City MSAs. “Contributions of regional 

air pollutant emissions to ozone and fine particulate matter-related 

mortalities in eastern U.S. urban areas”. 
33

As described later in this notice, the EPA’s analysis finds 

that the power sector continues to be capable of making NOX

reductions at reasonable cost that reduce interstate transport 

with respect to ground-level ozone. EGU NOX emission reductions 

can be made in the near-term under this proposal by fully 

operating existing EGU NOX post-combustion controls (i.e., 

Selective Catalytic Reduction and Selective Non-Catalytic 

Reduction) – including optimizing NOX removal by existing, 

operational controls and turning on and optimizing existing 

idled controls; installation of (or upgrading to) state-of-theart NOX combustion controls; and shifting generation to units 

with lower NOX emission rates. Further, additional assessment 

reveals that these available EGU NOX reductions would make 

meaningful and timely improvements in ozone air quality.

The Clean Air Act's good neighbor provision requires states 

and the EPA to address interstate transport of air pollution 

that affects downwind states' ability to attain and maintain 

NAAQS. Other provisions of the CAA, namely sections 179B and 

319(b), are available to deal with NAAQS exceedances not 

attributable to the interstate transport of pollution covered by 

the good neighbor provisions but caused by emission sources 

outside the control of a downwind state. These provisions
34

address international transport and exceptional events, 

respectively.19,20

c. Health and Environmental Effects

Exposure to ambient ozone causes a variety of negative 

effects on human health, vegetation, and ecosystems. In humans, 

acute and chronic exposure to ozone is associated with premature 

mortality and a number of morbidity effects, such as asthma 

exacerbation. In ecosystems, ozone exposure causes visible 

foliar injury, decreases plant growth, and affects ecosystem 

community composition. See the EPA’s November 2014 Regulatory 

Impact Analysis of the Proposed Revisions to the National 

Ambient Air Quality Standards for Ground-Level Ozone (EPA-452/P14-006), in the docket for this proposal and available on the 

 

19 The EPA recognizes that both in-state and upwind wildfires may contribute 

to monitored ozone concentrations. The EPA encourages all states to consider 

how the appropriate use of prescribed fire may benefit of public safety and 

health by resulting in fewer ozone exceedances for both the affected state 

and their neighboring states.

20 The CAA and the EPA’s implementing regulations, specifically the 

Exceptional Events Rule at 40 CFR 50.14, allow for the exclusion of air 

quality monitoring data from regulatory determinations when events, including 

wildland fires, contribute to NAAQS exceedances or violations if they meet 

certain requirements, including the criterion that the event be not 

reasonably controllable or preventable. Wildland fires can be of two types: 

wildfire (unplanned) and prescribed fire (planned). Under the Exceptional 

Events Rule, wildfires are considered, by their nature, to be not reasonably 

controllable or preventable. Because prescribed fires on wildland are 

intentionally ignited for resource management purposes, to meet the not 

reasonably controllable or preventable criterion, they must be conducted 

under a certified Smoke Management Program or employ basic smoke management 

practices. Both types of wildland fire must also satisfy the other rule 

criteria. The EPA will soon propose revisions to the Exceptional Events Rule 

and release a draft guidance document, which applies the proposed rule 

revisions to wildfire events that could influence ozone concentrations. These 

actions, which the EPA intends to finalize in the summer of 2016, further 

clarify the treatment of wildland fires under the Exceptional Events Rule.
35

EPA’s website at: 

http://www.epa.gov/ttn/ecas/regdata/RIAs/20141125ria.pdf, for 

more information on the human health and welfare and ecosystem 

effects associated with ambient ozone exposure.

2. Events Affecting Application of the Good Neighbor Provision 

for the 2008 Ozone NAAQS

The 2008 revisions to the ozone NAAQS were promulgated on 

March 12, 2008. See National Ambient Air Quality Standards for 

Ozone, Final Rule, 73 FR 16436 (March 27, 2008). The revision of 

the NAAQS, in turn, triggered a 3-year deadline of March 12, 

2011, for states to submit SIP revisions addressing 

infrastructure requirements under CAA sections 110(a)(1) and

110(a)(2), including the good neighbor provision. During this 3-

year SIP development period, on September 16, 2009, the EPA 

announced21 that it would reconsider the 2008 ozone NAAQS. To 

reduce the workload for states during the interim period of 

reconsideration, the EPA also announced its intention to propose 

staying implementation of the 2008 standards for a number of the 

requirements. On January 6, 2010, the EPA proposed to revise the 

2008 NAAQS for ozone from 75 ppb to a level within the range of 

60 to 70 ppb. See 75 FR 2938 (January 19, 2010). The EPA 

 

21 Fact Sheet. The EPA to reconsider Ozone Pollution Standards. 

http://www.epa.gov/groundlevelozone/pdfs/O3_Reconsideration_FACT%20SHE

ET_091609.pdf
36

indicated its intent to issue final standards based upon the 

reconsideration by summer 2011.

On July 6, 2011, the EPA finalized CSAPR, in response to 

the D.C. Circuit’s remand of the EPA’s prior federal transport 

rule, CAIR. See 76 FR 48208 (July 6Aug. 8, 2011). CSAPR 

addresses ozone transport under the 1997 ozone NAAQS, but does 

not address the 2008 ozone standard, because the 2008 ozone 

NAAQS was under reconsideration during the analytic work for the 

rule. 

On September 2, 2011, consistent with the direction of the 

President, the Administrator of the Office of Information and 

Regulatory Affairs of the Office of Management and Budget 

returned the draft final 2008 ozone rule EPA had developed upon 

reconsideration to the Agency for further consideration.22 In 

view of this direction and the timing of the agency’s ongoing 

periodic review of the ozone NAAQS required under CAA section 

109 (as announced on September 29, 2008), the EPA decided to 

coordinate further proceedings on its voluntary reconsideration 

rulemaking of the 2008 ozone standard with that of its ongoing 

periodic review of the ozone NAAQS.23 Implementation for the 

original 2008 ozone standard was renewed. However, during this 

 

22 See Policy Assessment for the Review of the Ozone National Ambient 

Air Quality Standards, August 2014, 

http://www.epa.gov/ttn/naaqs/standards/ozone/data/20140829pa.pdf, at 

1-9.

23 Id.
37

time period, a number of legal developments pertaining to the 

EPA’s promulgation of CSAPR created uncertainty surrounding the 

EPA’s statutory interpretation and implementation of the good 

neighbor provision.

On August 21, 2012, the D.C. Circuit issued a decision in 

EME Homer City Generation, L.P. v. EPA addressing several legal 

challenges to CSAPR and holding, among other things, that states 

had no obligation to submit good neighbor SIPs until the EPA had 

first quantified each state’s good neighbor obligation.24

According to that decision, the submission deadline for good 

neighbor SIPs under the CAA would not necessarily be tied to the 

promulgation of a new or revised NAAQS. While the EPA disagreed 

with this interpretation of the statute and sought review of the 

decision in the D.C. Circuit and the U.S. Supreme Court, the EPA 

complied with the D.C. Circuit’s ruling during the pendency of 

its appeal. In particular, the EPA indicated that, consistent 

with the D.C. Circuit’s opinion, it would not at that time issue 

findings that states had failed to submit SIPs addressing the 

good neighbor provision.25

 

24 EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 31 (D.C. Cir. 

2012).

25 See, e.g., Memorandum from the Office of Air and Radiation former 

Assistant Administrator Gina McCarthy to the EPA Regions, “Next Steps 

for Pending Redesignation Requests and State Implementation Plan 

Actions Affected by the Recent Court Decision Vacating the 2011 CrossState Air Pollution Rule,” November 19, 2012; 78 FR 65559 (November 1, 

2013) (final action on Florida infrastructure SIP submission for 2008 
38

On January 23, 2013, the Supreme Court granted the EPA’s 

petition for certiorari.26 During 2013 and early 2014, as the EPA 

awaited a decision from the Supreme Court, the EPA initiated 

efforts and technical analyses aimed at identifying and 

quantifying state good neighbor obligations for the 2008 ozone 

NAAQS. As part of this effort, the EPA solicited stakeholder 

input and also provided states with, and requested input on, 

emissions inventories for 2011 (78 FR 70935, November 27, 2013) 

and inventory projections for 2018 (79 FR 2437, January 14, 

2014). 

On April 29, 2014, the Supreme Court reversed the D.C. 

Circuit’s EME Homer City opinion on CSAPR and held, among other 

things, that under the plain language of the CAA, states must 

submit SIPs addressing the good neighbor provision within 3 

years of promulgation of a new or revised NAAQS, regardless of 

whether the EPA first provides guidance, technical data, or 

rulemaking to quantify the state’s obligation.27 Thus, the 

Supreme Court affirmed that states have an obligation in the 

first instance to address the good neighbor provision after 

 

8-hour ozone NAAQS); 78 FR 14450 (March 6, 2013) (final action on 

Tennessee infrastructure SIP submissions for 2008 8-hour ozone NAAQS); 

Final Rule, Findings of Failure To Submit a Complete State 

Implementation Plan for Section 110(a) Pertaining to the 2008 Ozone 

National Ambient Air Quality Standard, 78 FR 2884 (January 15, 2013).

26 EPA v. EME Homer City Generation, L.P., 133 S. Ct. 2857 (2013) 

(granting the EPA’s and other parties’ petitions for certiorari).

27 EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1600-01 

(2014).
39

promulgation of a new or revised NAAQS, a holding that also 

applies to states’ obligation to address transport for the 2008 

ozone NAAQS.

The Supreme Court holding affirmed that states were 

required to submit SIPs addressing the good neighbor provision 

with respect to the 2008 ozone NAAQS by March 12, 2011. To the 

extent that states have failed to submit SIPs to meet this 

statutory obligation, then the EPA has not only the authority,

but the obligation, to promulgate FIPs to address the CAA 

requirement.

Following the remand of the case to the D.C. Circuit, the 

EPA requested that the court lift the CSAPR stay and toll the 

CSAPR compliance deadlines by three years. On October 23, 2014, 

the D.C. Circuit granted the EPA's request. The EPA issued an 

interim final rule to revise the regulatory deadlines in CSAPR 

to reflect the three-year delay in implementation. Accordingly, 

CSAPR phase 1 implementation began in 2015 and phase 2 will 

begin in 2017.28

On March 6, 2015, the EPA’s final 2008 Ozone NAAQS SIP 

Requirements Rule29 revised the attainment deadline for ozone 

nonattainment areas currently designated as moderate to July 

2018. In order to demonstrate attainment by the deadline, the 

 

28 79 FR 71663 (December 3, 2014).

29 80 FR 12264, 12268 (Mar. 6, 2015); 40 CFR 51.1103.
40

demonstration would have to be based on design values calculated 

using 2015 through 2017 ozone season data, since the July 2018 

deadline does not afford a full ozone season of measured data. 

The EPA established this deadline in the 2015 Ozone SIP 

Requirements Rule after previously establishing a deadline of 

December 31, 2018, that was vacated by the D.C. Circuit Court in 

Natural Resources Defense Council v. EPA.30

On July 28, 2015, the D.C. Circuit issued its opinion 

regarding CSAPR on remand from the Supreme Court, EME Homer City 

II, 795 F.3d 118. The court largely upheld CSAPR, but remanded 

to EPA without vacatur certain states’ emissions budgets for 

reconsideration. This proposal responds to the remand of certain 

CSAPR NOX ozone-season emissions budgets to the EPA for 

reconsideration; see section C below. Regarding the remand of 

CSAPR phase 2 SO2 annual emissions budgets as to four states, 

this proposal does not address that particular aspect of the 

D.C. Circuit opinion. The EPA intends to address the remand of 

the phase 2 SO2 annual emissions budgets separately.

B. Proposed Approach to Address Ozone Transport under the 2008 

Ozone NAAQS via FIPs

1. The CSAPR Framework

 

30 777 F.3d 456 (D.C. Cir. 2014).
41

CSAPR establishes a 4-step process to address the 

requirements of the good neighbor provision.31 The EPA proposes 

to follow the same steps for this rulerulemaking with respect to 

the 2008 ozone NAAQS. These steps are: (1) identifying downwind 

receptors that are expected to have problems attaining or 

maintaining clean air standards (i.e., NAAQS); (2) determining 

which upwind states contribute to these identified problems in 

amounts sufficient to “link” them to the downwind air quality 

problems; (3) for states linked to downwind air quality 

problems, identifying upwind emissions that significantly 

contribute to nonattainment or interfere with maintenance of a 

standard by quantifying available upwind emission reductions and 

apportioning upwind responsibility among linked states; and (4) 

for states that are found to have emissions that significantly 

contribute to nonattainment or interfere with maintenance of the 

NAAQS downwind, reducing the identified upwind emissions via 

regional emissions allowance trading programs.

Step 1 – In the original CSAPR, downwind air quality 

problems were assessed using modeled future air quality 

concentrations for a year aligned with attainment deadlines for 

the NAAQS considered in that rulemaking. The assessment of 

future air quality conditions generally accounts for on-the-

 

31 See CSAPR, Final Rule, 76 FR 48208 (August 8, 2011).
42

books emission reductions32 and the most up-to-date forecast of 

future emissions in the absence of the transport policy being 

evaluated (i.e., base case conditions). The locations of 

downwind air quality problems are identified as those with 

receptors that are projected to be unable to attain (i.e., 

nonattainment receptor) or maintain (i.e., maintenance receptor) 

the standard. This proposal follows this same general approach. 

However, the EPA also proposes to consider current monitored air 

quality data to further inform the projected identification of 

downwind air quality problems for this proposal. Further details 

and application of step one for this proposal are described in 

section V of this notice.

Step 2 – The original CSAPR used a screening threshold of 

one percent of the NAAQS to identify upwind states that were 

“linked” to downwind air pollution problems. States were 

identified as needing further evaluation for actions to address 

transport if their air quality impact33 was greater than or equal 

to the threshold for at least one downwind problem receptor 

(i.e., nonattainment or maintenance receptor identified in step 

1). We evaluated a given state’s contribution based on the 

average relative downwind impact calculated over multiple days. 

 

32 Since CSAPR was designed to replace CAIR, CAIR emissions reductions 

were not considered “on-the-books.”

33 For ozone the impacts would include those from volatile organic 

compounds (VOC) and NOX, and from all sectors. 
43

States whose air quality impacts to all downwind problem 

receptors were below this threshold did not require further 

evaluation for actions to address transport — that is, these 

states were determined to make insignificant contributions to 

downwind air quality problems and therefore have no emission 

reduction obligations under the good neighbor provision. The EPA 

used this threshold because much of the ozone nonattainment 

problem in the eastern half of the United States results from 

relatively small contributions from a number of upwind states. 

Use of the one percent threshold for CSAPR is discussed in the 

preambles to the proposed and final CSAPR rules. See 75 FR 45237 

(Aug. 2, 2010); 76 FR 48238, (Aug. 8, 2011). The EPA proposes to 

use this same approach for this rule. Application of step two 

for this proposal is described in section V of this notice.

Step 3 – For states that are linked in step 2 to downwind 

air quality problems, the original CSAPR used a multi-factor 

test to evaluate emission reductions available in upwind states 

by application of uniform cost thresholds. The EPA evaluated NOX

reductions that were available in upwind states by applying a 

marginal cost of NOX emissions to entities in these states. This 

approach, in essence, simulated placing an economic value on NOX

emissions and evaluated emission reduction potential that was

cost-effective under this constraint. The EPA evaluated NOX

reduction potential, cost, and downwind air quality improvements
44

available at several cost thresholds in the multi-factor test.

This evaluation quantified the magnitude of emissions that 

significantly contribute to nonattainment or interfere with 

maintenance of a NAAQS downwind and apportioned upwind 

responsibility among linked states, an approach upheld by the 

U.S. Supreme Court in EPA v. EME Homer City.34 The EPA proposes 

to apply this approach to identify NOX emission reductions 

necessary to reduce interstate transport for the 2008 ozone 

NAAQS, updated to also explicitly consider over-control. For 

this proposal, the multi-factor test is also used to evaluate 

possible over-control by evaluating if an upwind state is linked 

solely to downwind air quality problems that are resolved at a 

given cost threshold, or if upwind states would reduce their 

emissions at a given cost threshold to the extent that they 

would no longer meet or exceed the 1% air quality contribution 

threshold. This evaluation of cost, NOX reductions, and air 

quality improvements, including its consideration of potential 

over-control, results in the EPA’s determination of upwind 

emissions that significantly contribute to nonattainment or 

interfere with maintenance of the NAAQS downwind. Next, 

emissions budgets are determined. Emissions budgets are

remaining allowable emissions after the elimination of emissions 

 

34 EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1606-07 

(2014).
45

identified as significantly contributing to nonattainment or 

interfering with maintenance of the standard downwind. The EPA’s 

assessment of significant contribution to nonattainment and 

interference with maintenance and development of EGU NOX ozoneseason emissions budgets is described in section VI of this 

notice.

Step 4 – Finally, the original CSAPR used allowance trading 

programs to implement the necessary emission reductions.

Specifically, the emissions budgets identified in step 3 were 

implemented via a tradable allowance program. Emissions 

allowances were issued to units covered by the trading program 

and the allowances can be turned in at the close of each 

compliance period to account for a specified amount of ozone

season EGU NOX emissions. Additionally, the original CSAPR 

included variability limits, which define the amount by which 

collective emissions within a state may exceed the level of the 

budgets in a given year to account for variability in EGU 

operations. CSAPR set assurance levels equal to the sum of each 

state’s emissions budget plus its variability limit. The 

original CSAPR included assurance provisions that help to assure 

that state emissions remain below the assurance levels in each 

state by requiring additional allowance surrenders in the 

instance that emissions in the state exceed the state’s 

assurance level. This limited interstate trading approach is 
46

responsive to previous court decisions (see discussion in 

section IV of this preamble) and has been upheld in subsequent 

litigation regarding CSAPR. The EPA proposes to apply this 

approach to reduce interstate transport for the 2008 ozone 

NAAQS. Implementation using the CSAPR allowance trading program 

is described in section VII of this notice.

2. Partial versus Full Resolution of Transport Obligation

Given the unique circumstances surrounding the 

implementation of the 2008 ozone standard that have delayed 

state and EPA efforts to address interstate transport, at this 

time the EPA is focusing its efforts on the immediately 

available and cost-effective emission reductions that are 

achievable by the 2017 ozone season.

a. Partial Remedy under Proposed FIPs

This rulerulemaking proposes to establish (or revise 

currently established) FIPs for 23 eastern states under the good 

neighbor provision of the CAA. These FIPs contain requirements 

for EGUs in these states to reduce ozone season NOX emissions for 

the 2017 ozone season. As noted in section VI, the EPA has 

identified important EGU emission reductions that are achievable 

starting for the 2017 ozone season in each of the covered states 

through actions such as turning on and operating existing 

pollution controls. These readily available emission reductions 

will assist downwind states to attain and maintain the 2008 
47

ozone NAAQS and will provide human health and welfare benefits 

through reduced exposure to ozone pollution.

While these reductions are necessary to assist downwind 

states attain and maintain the 2008 ozone NAAQS and are 

necessary to address good neighbor obligations for these states, 

the EPA acknowledges that they may not be sufficient to fully 

address these states’ good neighbor obligations.35 With respect 

to the 2008 ozone standard, the EPA has generally not attempted 

to quantify the ozone season NOX reductions that may be necessary 

to eliminate all significant contribution to nonattainment and 

interference with maintenance in other states. Given the time 

constraints for implementing NOX reduction strategies, the EPA 

believes that implementation of a full remedy may not be 

achievable for 2017, even though a partial remedy is achievable. 

To evaluate full elimination of a state’s significant 

contribution to nonattainment and interference with maintenance, 

EGU and non-EGU ozone season NOX reductions should both be 

evaluated. However, the EPA is not proposing to quantify non-EGU 

emissions reductions to address interstate ozone transport for 

the 2008 ozone NAAQS at this time because: (1) there is greater 

uncertainty in the non-EGU emission inventory estimates than for 

EGUs; and (2) there appear to be few non-EGU reductions that 

 

35 The proposed requirements for one state, North Carolina, would fully 

eliminate that state’s significant contribution to downwind air quality 

problems.
48

could be accomplished by the beginning of the 2017 ozone season. 

This is discussed further in section VI of this proposal and in 

the Non-EGU NOX Mitigation Strategies TSD. We intend to continue 

to collect information and undertake analysis for potential 

future emissions reductions at non-EGUs that may be necessary to 

fully quantify states’ significant contributions in a future 

action.

Because the reductions proposed in this action are EGU-only 

and because EPA has focused the policy analysis for this 

proposal on reductions available by 2017, for most states they 

represent a first, partial step to addressing a given upwind 

state’s significant contribution to downwind air quality impacts 

for the 2008 ozone NAAQS. Generally, a final determination of 

whether the proposed EGU NOX reductions represent a full or 

partial elimination of a state’s good neighbor obligation for 

the 2008 NAAQS is subject to an evaluation of the contribution 

to interstate transport from additional emission sectors, such 

as non-EGUs. However, the EPA believes that it is beneficial to 

implement, without further delay, EGU NOX reductions that are 

achievable in the near term. The proposed NOX emission reductions 

are needed (although they may not be all that is needed) for 

these states to eliminate their significant contribution to 

nonattainment and interference with maintenance of the 2008 

ozone NAAQS. The EPA’s current statutory deadlines to promulgate 
49

FIPs extend until 2017 for most states, and the EPA will remain 

mindful of those deadlines as it evaluates what further steps 

may be necessary to address interstate transport for the 2008 

ozone NAAQS. The EPA seeks comment on possible future steps that 

may be necessary to resolve the remainder of the good neighbor 

obligation for the 2008 ozone standard.

The EPA has shared information with states to facilitate 

the development of the ozone transport SIPs.36 The EPA encourages 

state SIP development and will continue to assist states in 

developing transport SIPs regardless of whether they are covered 

by this proposed FIP. Where a state would be covered by this 

proposed FIP, the EPA may be able to partially approve SIPs that 

include controls on EGU emissions that achieve ozone season NOX

emission reductions and/or that establish EGU NOX ozone emissions 

budgets approximately equivalent to those identified in this 

proposal as achievable by 2017. (This is discussed in more 

detail in Section VII.) In these SIPS, states could also 

demonstrate that they are achieving the same level of emissions 

reductions through non-EGU source measures as they would achieve 

under the EGU budgets established in the FIP. For example, a

 

36 On January 22, 2015, the EPA issued a memo with preliminary air 

quality modeling data that characterized interstate ozone transport 

projected to 2018. On April 8, 2015, the EPA held a workshop that 

continued a discussion with states on the path forward for addressing 

interstate transport for the 2008 8-hour ozone NAAQS. On August 4, 

2015, we published a NODA with updated modeling that states could use 

to support development of transport SIPs.
50

SIP could set EGU budgets, but allow emission reductions from 

non-EGU sources as a compliance option. EPA also seeks comment 

on methods it can use to ensure that any non-EGU reductions are 

incremental to the base case, permanent, and enforceable.

b. Potential for Full Remedy under SIPs

The EPA also notes that many states have already submitted,

or are currently developing, SIP submittals to address the good 

neighbor provision of the CAA for the 2008 ozone standard, and 

expects that some may assert that the state plan fully addresses

the state’s good neighbor obligation. 

The EPA anticipates that those SIPs intending to fully 

address the state’s good neighbor obligations and for which the 

state is seeking approval may fall into one of two categories:

(1) The SIP concludes that the state is meeting its good 

neighbor obligation without need for additional NOX reductions. 

This SIP could include an adequate demonstration, using EPA or 

state-generated analytical results, which supports the state’s

conclusion that the state contributes insignificant amounts to 

downwind nonattainment or maintenance problems in other states. 

The EPA would generally expect to propose full approval of these 

SIPs.

(2) The SIP demonstrates that the state will timely achieve 

reductions that fully address its significant contribution to 

nonattainment or interference with maintenance in downwind 
51

states. This demonstration could include an assessment of how 

all emissions source sectors contribute to the state’s 

contribution and how these sectors are controlled in that state.

States wishing to seek full approval of good neighbor SIPs 

should contact their appropriate regional office. Guidance on 

developing such SIPs is outside the scope of this action, but 

the EPA intends to work closely with any state that is 

interested in pursuing this option.

3. Why We Focus on Eastern States

CSAPR and previous federal transport rules, such as the NOX

SIP Call and CAIR, were designed to address collective 

contributions of ozone pollution from states in the eastern 

U.S. These rules did not address contributions in the 11 

western contiguous United States.37 The EPA’s air quality 

modeling that supports this proposed rule includes data for the 

western states. This assessment shows that there are problem 

receptors in the West to which western states contribute 

amounts greater than or equal to the screening threshold used 

to evaluate transport across eastern states (i.e., 1 percent of 

the NAAQS). However, there may be additional criteria to 

evaluate regarding transported air pollution in the West when 

 

37 For the purpose of this action, the western U.S. (or the West) 

consists of the 11 western contiguous states of Arizona, California, 

Colorado, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, 

Washington, and Wyoming, and the eastern U.S. (or East) consists of 

the remaining states in the contiguous U.S.
52

evaluating upwind states’ contributions to downwind air quality 

impacts, such as those discussed in EPA-state meetings to 

discuss approaches for determining how emissions in upwind 

states impact air quality in downwind states.38 Given that the 

near-term 2017 implementation timeframe constrains the 

opportunity to conduct a further evaluation of western states, 

the EPA proposes to focus this rulemaking on eastern states. 

This focus would not relieve western states of obligations to 

address interstate transport under the Act. The EPA and states 

working together would continue to evaluate interstate 

transport in the western states on a case-by-case basis. The 

EPA would also continue to engage with western states on air 

quality modeling analyses and the implications of those 

analyses for interstate transport. 

While the EPA proposes to focus this rulemaking on eastern 

states, we seek comment on whether to include western states in 

this rule. The EPA notes that analyses developed to support 

this proposal, including air quality modeling and the EPA’s 

assessment of EGU NOX mitigation potential, contain data that 

could be useful for states in developing SIPs or could be used 

to develop FIPs, where necessary.

 

38 For example, EPA-State meetings held in Research Triangle Park, NC on April 

8, 2013 and Denver, Colorado on April 17, 2013.
53

The EPA seeks comment on the data provided for western 

states, including emissions inventories, ozone concentration 

modeling, contribution modeling, and EPA’s assessment of EGU NOX

reduction potential.39 These data are available in the docket for 

this proposal. The EPA also solicits comment on whether to 

promulgate FIPs to address interstate ozone transport for the 

2008 ozone NAAQS for western states, either in this rulemaking 

or in a subsequent rulemaking.

4. Short-Term NOX Emissions

In eastern states, the highest measured ozone days tend to 

occur within the hottest days, weeks, or months of the summer. 

On many high ozone days, there is higher demand for electricity 

(for instance, to run air conditioners). In general and 

technical discussions with representatives and officials of 

eastern states in April 2013 and April 2015, and in several 

letters to the EPA, officials from the Ozone Transport Region 

(OTR)40 states suggested that EGU emissions transported from 

 

39 On August 4, 2015, the EPA published a Notice of Data Availability (80 FR 

46271) requesting comment on the air quality modeling platform and air 

quality modeling results that are being used for this proposed rule. 

Specifically, in the NODA, the EPA requested comment on the data and 

methodologies related to the 2011 and 2017 emissions and the air quality 

modeling to project 2017 concentrations and contributions. Comments received 

on that data via the NODA will be considered for the final rule.

40 The OTR was established by the CAA amendments of 1990 to facilitate 

addressing the ozone problem on a regional basis and consists of the 

following states: Connecticut, Delaware, Maine, Maryland, 

Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, 

Rhode Island, Vermont, the District of Columbia and northern Virginia. 

42 U.S.C. 7511c, CAA section 184.
54

upwind states may disproportionally affect downwind ozone 

concentrations on peak ozone days in the eastern U.S. These 

representatives asked that the EPA consider additional “peak 

day” limits on EGU NOX emissions. 

Some states have also asked the EPA to consider whether 

existing emission controls are being turned off for short 

periods (e.g., multiple days) within the ozone season, for 

example during hot weeks. These states assert that emissions 

from short-term idling of controls may contribute to downwind 

ozone NAAQS exceedances in the eastern U.S. These states suggest 

that sub-seasonal limits on EGU NOX emissions would reduce ozone 

formation that might be attributable to short-term idling of NOX

controls.

The EPA seeks comment on whether or not short-term (e.g., 

peak-day) EGU NOX emissions disproportionately impact downwind 

ozone concentrations, and if they do, then what EGU emission 

limits (e.g., daily or monthly emission rates or differential 

allowance surrender ratios on high ozone days) would be 

reasonable complements to the proposed seasonal CSAPR 

requirement to mitigate this impact.

C. Responding to the Remand of CSAPR NOX Ozone-Season Emissions 

Budgets

As noted above, in EME Homer City II, the D.C. Circuit 

declared invalid the CSAPR phase 2 NOx ozone-season emissions 
55

budgets of 11 states, holding that those budgets over-control 

with respect to the downwind air quality problems to which those 

states were linked for the 1997 ozone NAAQS. 795 F.3d at 129-30, 

138. As to ten of these states, the court held that EPA’s 2014 

modeling conducted to support the RIA for CSAPR demonstrated 

that air quality problems at the downwind locations to which 

those states were linked would resolve by phase 2 of the CSAPR 

program without further transport regulation (either CAIR or 

CSAPR). Id. at 129-30. With respect to Texas, the court held 

that the record reflected that the ozone air quality problems to 

which the state was linked could be resolved at a lower cost 

threshold. Id. The court therefore remanded those budgets to EPA 

for reconsideration consistent with the court’s opinion. Id. at 

138. The court instructed the EPA to act “promptly” in 

addressing these issues on remand. Id. at 132.

The court’s decision explicitly applies to 11 state budgets 

involved in that litigation: Florida, Maryland, New Jersey, New 

York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, 

Virginia, and West Virginia. Id. at 129-30, 138. EPA is 

proposing in this rulerulemaking to promulgate FIPs for nine of 

those states to address interstate transport with respect to the 

2008 ozone NAAQS: Maryland, New Jersey, New York, North 

Carolina, Ohio, Pennsylvania, Texas, Virginia, and West 

Virginia. The proposed FIPs incorporate revised emissions 
56

budgets that would supplant and replace the budgets promulgated 

in the CSAPR rule to address the 1997 ozone NAAQS, the same 

budgets remanded by the D.C. Circuit for reconsideration.

Further, as proposed in this rule, these proposed budgets would 

be effective for the 2017 ozone season, the same period in which 

the phase 2 budgets that were invalidated by the court are 

currently scheduled to become effective. Therefore, this 

proposed action provides an appropriate and timely response to 

the court’s remand by replacing the budgets promulgated in the 

CSAPR to address the 1997 ozone NAAQS, which were declared 

invalid by the D.C. Circuit, with budgets developed to address 

the revised and more stringent 2008 ozone NAAQS.41

The EPA notes that it is able to propose addressing the 

D.C. Circuit’s remand of CSAPR NOX ozone-season emissions budgets 

because the agency was already performing analysis and policy 

development for this proposal, which is directly applicable to 

this aspect of the D.C. Circuit opinion.

Separately, various petitioners filed legal challenges in 

the D.C. Circuit to a supplemental rule that added five states 

to the CSAPR ozone-season trading program, 76 FR 80760 (Dec. 27, 

 

41 The methodology for developing the proposed budgets to address the 

2008 ozone NAAQS is described in more detail in Sections VI and VII 

below. Section VI also includes an evaluation, as instructed by the 

court in EME Homer City II, to affirm that the proposed budgets do not 

over-control with respect to downwind air quality problems identified 

in this rule. 795 F.3d at 127-28.
57

2011). See Public Service Company of Oklahoma v. EPA, No. 12-

1023 (D.C. Cir., filed Jan. 13, 2012). The case was held in 

abeyance during the pendency of the litigation in EME Homer 

City. The case remains pending in the D.C. Circuit as of the 

date of signature of this ruleproposed rulemaking.42 The EPA 

notes that this rulerulemaking also proposes to promulgate FIPs 

for all five states added to CSAPR in the supplemental rule: 

Iowa, Michigan, Missouri, Oklahoma, and Wisconsin. The proposed 

FIPs incorporate revised emissions budgets that would supplant 

and replace the budgets promulgated in the supplemental CSAPR 

rule to address the 1997 ozone NAAQS for these five states and 

would be effective for the 2017 ozone season.

For the two remaining ozone-season states affected by this 

portion of the EME Homer City II decision, Florida and South 

Carolina, the EPA is not proposing in this action to promulgate 

FIPs because the air quality modeling performed to support the 

proposal does not indicate that these states are linked to any 

identified downwind nonattainment or maintenance receptors with 

respect to the 2008 ozone standard. Inherently then, because the 

2008 ozone NAAQS is more stringent than the 1997 ozone NAAQS, 

 

42 In 2012, the EPA also finalized two rules making certain revisions to 

CSAPR. 77 FR 10324 (Feb. 21, 2012); 77 FR 34830 (June 12, 2012). Various 

petitioners filed legal challenges to these rules in the D.C. Circuit, and 

the cases were also held in abeyance pending the litigation in EME Homer 

City. See Wisconsin Public Service Corp. v. EPA, No. 12-1163 (D.C. Cir., 

filed Apr. 6, 2012); Utility Air Regulatory Group v. EPA, No. 12-1346 (D.C. 

Cir., filed Aug. 9, 2012). The cases currently remain pending in the D.C. 

Circuit.
58

this modeling also does not indicate that Florida or South 

Carolina are linked to any remaining air quality concerns with 

respect to the 1997 ozone standard for which the states were 

regulated in CSAPR.

Accordingly, in order to address the Court’s remand with 

respect to these two states’ interstate transport responsibility 

under the 1997 ozone standard, the EPA proposes to remove these 

states from the CSAPR ozone-season trading program beginning in 

2017 when the phase 2 ozone-season emissions budgets were 

scheduled to be implemented.

The EPA notes that because the proposed rule modeling was 

performed prior to the D.C. Circuit’s issuance of EME Homer City 

II, that modeling assumed in its baseline for all states the 

emission reductions associated with the CSAPR phase 2 ozoneseason budgets. In the final rule modeling, the EPA will make 

any additional changes to the emissions inventories or modeling 

platform as may be justified based on comments received on the 

modeling performed for the proposed rule. In the event that air 

quality modeling conducted for the final rule demonstrates that 

either Florida or South Carolina are projected to significantly 

(e.g., greater than or equal to 1% of the NAAQS) contribute to 

an air quality problem with respect to the 2008 ozone standard

in the absence of a CSAPR-related emissions budget in place for 

those states, the EPA instead proposes to finalize revised 
59

budgets (presented with this rulemaking for comment) for 

whichever of those states may be identified as linked to such 

air quality problems rather than remove those states from the 

CSAPR ozone-season trading program. The EPA has calculated 

emissions budgets for Florida and South Carolina that we are 

proposing to apply to those states if, and only if, the final 

rule air quality modeling identifies a linkage as just 

described. These proposed budgets are developed using the same 

methods applied to the 23 states that the EPA proposed to 

regulate in this action. These methods are described in section 

VI of this proposal and the methods and resulting emissions 

budgets are provided in the Ozone Transport Policy Analysis TSD.

The EPA seeks comment on this approach with respect to 

addressing the remand as to Florida and South Carolina, 

including the proposed budgets that would apply to those states 

if a linkage is identified, which are available in the docket.

Additionally, the EPA notes Florida and South Carolina may 

be relying upon emissions reductions that result from nowremanded emissions budgets in Florida and South Carolina to 

satisfy statutory obligations other than the interstate 

transport requirements. However, Florida and South Carolina may 

have an interest in submitting SIPs to continue their 

participation in the CSAPR NOX ozone-season trading program in 

order to meet other Clean Air Act requirements. Likewise, to 
60

the extent that the final modeling indicates that other states 

included in the remand of the CSAPR phase 2 NOX ozone-season 

emissions budgets are not linked to any identified downwind 

nonattainment or maintenance receptors with respect to the 2008 

ozone standard, they would not be included in the final FIPs but 

they may be interested in continuing to participate in the CSAPR 

NOX ozone-season trading program in order to meet other Clean Air 

Act requirements. The EPA seeks comment on whether to allow 

Florida, South Carolina, and other similarly situated states (if 

any) to continue their participation in the CSAPR NOX ozoneseason program through voluntary SIPs that would retain the 

CSAPR NOX ozone-season emissions budgets, contingent upon review 

and approval by the EPA.

The D.C. Circuit also remanded without vacatur the CSAPR SO2

annual emissions budgets for four states (Alabama, Georgia, 

South Carolina, and Texas) for reconsideration. 795 F.3d at 129, 

138. This proposal does not address the remand of these CSAPR 

phase 2 SO2 annual emissions budgets. The EPA intends to address 

the remand of the phase 2 SO2 annual emissions budgets 

separately. The existing CSAPR annual emissions budgets and 

implementation programs (CSAPR SO2 annual and NOX annual 

requirements), which address interstate transport for the 1997 

and 2006 PM2.5 NAAQS, continue to apply at this time.
61

D. Addressing Outstanding Transport Obligations for the 1997 

Ozone NAAQS

In the original CSAPR, the EPA noted that the reductions 

for 11 states may not be sufficient to fully eliminate all 

significant contribution to nonattainment or interference with 

maintenance for certain downwind areas with respect to the 1997 

ozone NAAQS.43 The 11 states are: Alabama, Arkansas, Georgia, 

Illinois, Indiana, Kentucky, Louisiana, Mississippi, Missouri, 

Tennessee, and Texas.44 In the original CSAPR, the EPA’s analysis 

projected continued nonattainment and maintenance problems at 

downwind receptors to which these upwind states were linked

after implementation of the CSAPR trading programs.

Specifically, the persistent ozone problems were expected in 

Baton Rouge, Louisiana; Houston, Texas; and Allegan, Michigan

according to the remedy case modeling conducted for the final 

rule. At that time the EPA did not address whether additional 

ozone season NOX emission reductions would be needed in these 

states to fully resolve the good neighbor obligation under the 

 

43 See CSAPR Final Rule, 76 FR at 48220, and the CSAPR Supplemental Rule, 76 

FR at 80760, December 27, 2011.

44 The EPA acknowledges that, despite its conclusion in CSAPR that the air 

quality problems to which Texas was linked in the original CSAPR were not 

fully resolved, the court concluded in EME Homer City II that the NOx ozoneseason emissions budget finalized for Texas resulted in over-control as to 

the ozone air quality problems to which the state was linked. 795 F.3d at 

129-30. As discussed below in section V, this rule proposes to respond to 

the remand of Texas’s NOx ozone-season emissions budget by promulgating a new 

budget to address the 2008 ozone NAAQS. The EPA has also evaluated Texas’s 

contribution to any remaining air quality problems with respect to the 1997 

ozone NAAQS. [Text may be revised to reflect ongoing litigation.]
62

CAA with respect to the 1997 ozone NAAQS beyond the EGU 

requirements promulgated in CSAPR.

To evaluate whether additional emission reductions would be 

needed in these 11 states to address the states’ full good 

neighbor obligation for the 1997 ozone NAAQS, the EPA reviewed 

the 2017 baseline air quality modeling conducted for this 

proposal, which includes emission reductions associated with the 

CSAPR phase 2 ozone-season budgets.

The updated 2017 air quality modeling shows that the 

predicted average DVs and maximum DVs for 2017 are below the 

level of the 1997 ozone NAAQS for the downwind receptors of 

concern that the 11 states were linked to in the original CSAPR 

for the 1997 ozone NAAQS. Further, the 2017 air quality modeling 

shows that there are no other nonattainment or maintenance 

receptors to which these areas would be linked with respect to 

the 1997 ozone NAAQS. This conclusion demonstrates that no 

further emission reductions are required to address the 

interstate transport obligations of these states with respect to 

the 1997 ozone NAAQS, and therefore EPA finds that the original 

CSAPR emissions budgets satisfy these states’ full obligation to 

address interstate ozone transport under the good neighbor 

provision of the CAA as to that NAAQS. Therefore, we propose to 

find that the original CSAPR FIPs fully satisfy those 11 states’

good neighbor CAA obligations regarding the emissions that 
63

contribute significantly to nonattainment or interfere with 

maintenance of the 1997 ozone NAAQS in other states.

IV. Legal Authority

A. EPA’s Authority for the Proposed Rule

1. Statutory Authority

The statutory authority for this proposed action is provided 

by the CAA as amended (42 U.S.C. 7401 et seq.). Specifically, 

sections 110 and 301 of the CAA provide the primary statutory 

bases for this proposal. The most relevant portions of section 

110 are subsections 110(a)(1), 110(a)(2), and 

110(a)(2)(D)(i)(I), and 110(c)(1).

Section 110(a)(1) provides that states must make SIP 

submissions “within 3 years (or such shorter period as the 

Administrator may prescribe) after the promulgation of a 

national primary ambient air quality standard (or any revision 

thereof),” and that these SIP submissions are to provide for the 

“implementation, maintenance, and enforcement” of such NAAQS.45

The statute directly imposes on states the duty to make these 

SIP submissions, and the requirement to make the submissions is 

not conditioned upon the EPA taking any action other than 

promulgating a new or revised NAAQS.46

 

45 42 U.S.C. 7410(a) (1).

46 See EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1601 

(2014).
64

The EPA has historically referred to SIP submissions made 

for the purpose of satisfying the applicable requirements of CAA 

sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” 

submissions. Section 110(a)(1) addresses the timing and general 

requirements for infrastructure SIP submissions, and section 

110(a)(2) provides more details concerning the required content 

of these submissions. It includes a list of specific elements 

that “[e]ach such plan” submission must address.47 All states, 

regardless of whether the state includes areas designated as 

nonattainment for the relevant NAAQS, must have SIPs that meet 

the applicable requirements of section 110(a)(2), including 

provisions of section 110(a)(2)(D)(i)(I) described further below 

and which are the focus of this proposal. 

Section 110(c)(1) requires the Administrator to promulgate a 

FIP at any time within 2 years after the Administrator: 1) finds 

that a state has failed to make a required SIP submission, 2) 

finds a SIP submission to be incomplete pursuant to CAA section 

110(k)(1)(C), or 3) disapproves a SIP submission, unless the 

state corrects the deficiency through a SIP revision that the 

Administrator approves before the FIP is promulgated.48 

 

47 EPA’s general approach to infrastructure SIP submissions is 

explained in greater detail in individual notices acting or proposing 

to act on state infrastructure SIP submissions and in guidance. See, 

e.g., Guidance on Infrastructure State Implementation Plan (SIP) 

Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2) (Sept. 

2013).

48 42 U.S.C. 7410(c) (1).
65

Section 110(a)(2)(D)(i)(I), also known as the “good neighbor 

provision,” provides the basis for this proposed action. It 

requires that each state SIP shall include provisions sufficient 

to “prohibit[] . . . any source or other type of emissions 

activity within the State from emitting any air pollutants in 

amounts which will — (I) contribute significantly to 

nonattainment in, or interfere with maintenance by, any other 

State with respect to any [NAAQS].”49

The EPA has previously issued three rules interpreting and 

clarifying the requirements of section 110(a)(2)(D)(i)(I) for 

states in the eastern half of the United States. These rules, 

and the associated court decisions addressing these rules, 

provide important guidance regarding the requirements of section 

110(a)(2)(D)(i)(I).

The NOX SIP Call, promulgated in 1998, addressed the good 

neighbor provision for the 1979 1-hour ozone NAAQS and the 1997 

8-hour ozone NAAQS.50 The rule required 22 states and the 

District of Columbia to amend their SIPs and limit NOX emissions 

that contribute to ozone nonattainment. The EPA set a NOX ozoneseason budget for each affected state, essentially a cap on 

ozone season NOX emissions in the state. Sources in the affected 

states were given the option to participate in a regional cap-

 

49 42 U.S.C. 7410(a)(2)(D)(i)(I).

50 63 FR 57356 (Oct. 27, 1998).
66

and-trade program, known as the NOX Budget Trading Program (NBP). 

This ruleThe NOX SIP Call was largely upheld by the D.C. Circuit

in Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), cert. denied, 

532 U.S. 904 (2001). 

The Clean Air Interstate Rule (CAIR), promulgated in 2005, 

addressed both the 1997 PM2.5 and ozone standards under the good 

neighbor provision.51 CAIR required SIP revisions in 28 states 

and the District of Columbia to ensure that certain emissions of 

sulfur dioxide (SO2) and/or NOX — important precursors of 

regionally transported PM2.5 (SO2 and NOX) and ozone (NOX) – were 

prohibited. Like the NOX SIP Call, states were given the option 

to participate in a regional cap-and-trade program to satisfy 

their SIP obligations. When the EPA promulgated the final CAIR 

in May 2005, the EPA also issued a national rule finding that 

states had failed to submit SIPs to address the requirements of 

CAA section 110(a)(2)(D)(i) with respect to the 1997 ozone and 

PM2.5 NAAQS, given that states were required by the CAA to have 

submitted section 110(a)(2)(D)(i)(I) SIPs for those standards by 

July 2000.52 This finding of failure to submit triggered a 2-year 

clock for the EPA to issue FIPs to address interstate transport, 

and on March 15, 2006, the EPA promulgated FIPs to ensure that 

 

51 70 FR 25162 (May 12, 2005).

52 70 FR 21147 (April 25May 12, 2005). 
67

the emission reductions required by CAIR would be achieved on 

schedule.53 CAIR was remanded to EPA by the D.C. Circuit in North 

Carolina, 531 F.3d 896 (D.C. Cir. 2008), modified on reh’g, 550 

F.3d 1176. For more information on the legal considerations of 

CAIR and the D.C. Circuit holding in North Carolina, refer to 

the preamble of the final CSAPR rule.54

In 2011, the EPA promulgated CSAPR to address the issues 

raised by the remand of CAIR and additionally to address the 

good neighbor provision for the 2006 PM2.5 NAAQS.55 CSAPR requires

28 states to reduce SO2 emissions, annual NOX emissions, and/or 

ozone season NOX emissions that significantly contribute to other 

states’ nonattainment or interfere with other states’ abilities 

to maintain these air quality standards. To accomplish 

implementation aligned with the applicable attainment deadlines, 

the EPA promulgated FIPs for each of the 28 states covered by 

CSAPR. The FIPs implement regional cap-and-trade programs to 

achieve the necessary reductions. States can submit good 

neighbor SIPs at any time that, if approved by the EPA, would 

replace the CSAPR FIP for that state. As discussed below, CSAPR 

was the subject of decisions by both the D.C. Circuit and the 

Supreme Court, which largely upheld the rule. 

 

53 71 FR 25328 (April 28, 2006).

54 76 FR 48208, 48217 (Aug. 8, 2011).

55 76 FR 48208.
68

On August 21, 2012, the D.C. Circuit issued a decision in 

EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 

2012), vacating CSAPR and holding, among other things, that 

states had no obligation to submit good neighbor SIPs until the 

EPA had first quantified each state’s good neighbor obligation.56

The implication of this decision was that the EPA did not have 

authority to promulgate FIPs as a result of states’ failure to 

submit or EPA’s disapproval of such SIPs. The EPA sought review, 

first with the D.C. Circuit en banc and then with the Supreme 

Court. While the D.C. Circuit declined to consider the EPA’s 

appeal en banc,57 on January 23, 2013, the Supreme Court granted 

the EPA’s petition for certiorari.58

On April 29, 2014, the Supreme Court issued a decision 

reversing the D.C. Circuit’s EME Homer City opinion on CSAPR and 

held, among other things, that under the plain language of the 

CAA, states must submit SIPs addressing the good neighbor 

provision within 3 years of promulgation of a new or revised 

NAAQS, regardless of whether the EPA first provides guidance, 

technical data or rulemaking to quantify the state’s 

 

56 EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 31 (D.C. Cir. 

2012).

57 EME Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. 

January 24, 2013), ECF No. 1417012 (denying the EPA’s motion for 

rehearing en banc).

58 EPA v. EME Homer City Generation, L.P., 133 S. Ct. 2857 (2013) 

(granting the EPA’s and other parties’ petitions for certiorari).
69

obligation.59 Thus, the Supreme Court affirmed that states have 

an obligation in the first instance to address the good neighbor 

provision after promulgation of a new or revised NAAQS, a 

holding that also applies to states’ obligation to address 

interstate transport for the 2008 ozone NAAQS. The Supreme Court 

remanded the litigation to the D.C. Circuit for further 

proceedings.

Finally, on July 28, 2015, the D.C. Circuit issued its 

opinion on CSAPR regarding the remaining legal issues raised by 

the Petitioners on remand from the Supreme Court, EME Homer City

II, 795 F.3d 118. This decision largely upheld EPA’s approach to 

addressing interstate transport in CSAPR, leaving the rule in 

place and affirming EPA’s interpretation of various statutory 

provisions and EPA’s technical decisions. The decision also 

remands the rule without vacatur for reconsideration of EPA’s 

emissions budgets for certain states. In particular and as 

discussed in more detail in section III, the court declared 

invalid the CSAPR phase 2 NOx ozone-season emissions budgets of 

11 states, holding that those budgets over-control with respect 

to the downwind air quality problems to which those states were 

linked for the 1997 ozone NAAQS. The court’s decision explicitly 

applies to 11 states: Florida, Maryland, New Jersey, New York, 

 

59 EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1600-01 

(2014).
70

North Carolina, Ohio, Pennsylvania, South Carolina, Texas,

Virginia, and West Virginia. Id. at 129-30, 138. The court also 

remanded without vacatur the SO2 annual emissions budgets for 

four states (Alabama, Georgia, South Carolina, and Texas) for 

reconsideration. Id. at 129, 138. The court instructed the EPA 

to act “promptly” in addressing these issues on remand. Id. at 

132. 

Section 301(a)(1) of the CAA also gives the Administrator of 

the EPA general authority to prescribe such regulations as are 

necessary to carry out her functions under the Act.60 Pursuant to 

this section, the EPA has authority to clarify the applicability 

of CAA requirements. In this action, among other things, the EPA 

is clarifying the applicability of section 110(a)(2)(D)(i)(I) by 

identifying NOX emissions in certain states that must be 

prohibited pursuant to this section with respect to the 8-hour 

ozone NAAQS promulgated in 2008.

In particular, the EPA is proposing to use its authority 

under sections 110 and 301 to promulgate FIPs that establish or 

revise EGU NOX ozone-season emissions budgets for 23 eastern 

states to mitigate their significant contribution to 

nonattainment or interference with maintenance in another state.

As described in more detail later in this notice, generally the 

 

60 42 U.S.C. 7601(a)(1).
71

EPA is proposing to update each affected state’s FIP, including 

revising the existing CSAPR budgets.61 The EPA is also proposing 

to respond to the court’s remand in EME Homer City II with 

respect to the remanded NOX ozone-season emissions budgets.

2. FIP Authority for Each State Covered by the Proposed 

Rule. 

a. Status of State Good Neighbor SIPs for the 2008 Ozone 

NAAQS

As discussed above, all states have an obligation to submit 

SIPs that address the requirements of CAA section 110(a)(2) 

within 3 years of promulgation of a new or revised NAAQS. With 

respect to the 2008 ozone NAAQS, states were required to submit 

SIPs addressing the good neighbor provision by March 12, 2011. 

If the EPA finds that a state has failed to submit a SIP to meet 

its statutory obligation to address section 110(a)(2)(D)(i)(I)

or if EPA disapproves a good neighbor SIP, then the EPA has not 

only the authority but the obligation, pursuant to section 

110(c)(1), to promulgate a FIP to address the CAA requirement 

within 2 years of the finding or disapproval.

On July 13, 2015, the EPA published a rule finding that 24

states failed to make complete submissions that address the 

requirements of section 110(a)(2)(D)(i)(I) related to the 

 

61 One state, Kansas, would have a new CSAPR ozone season requirement under 

this proposal. The remaining 22 states were included in the original CSAPR 

ozone-season program as to the 1997 ozone NAAQS.
72

interstate transport of pollution as to the 2008 ozone NAAQS. 

See 80 FR 39961 (July 13, 2015) (effective August 12, 2015). The 

finding action triggered a 2-year deadline for the EPA to issue 

FIPs to address the good neighbor provision for these states by 

August 12, 2017. The states included in this finding of failure 

to submit are: Alabama, Arkansas, California, Florida, Georgia, 

Iowa, Illinois, Kansas, Massachusetts, Maine, Michigan,

Minnesota, Mississippi, Missouri, New Hampshire, New Mexico, 

North Carolina, Oklahoma, Pennsylvania, South Carolina, 

Tennessee, Vermont, Virginia, and West Virginia.

Since the EPA issued the findings notice, EPA has received 

a SIP submission addressing the good neighbor provision for the 

2008 ozone NAAQS from the state of Maine on which the EPA has 

not yet proposed action.

Several additional states – Connecticut, Nebraska, North 

Dakota, Rhode Island, South Dakota, New York, Delaware, 

Maryland, Indiana, Kentucky, Louisiana, New Jersey, Ohio, Texas,

Wisconsin, and the District of Columbia – have previously

submitted SIPs to address the requirements of section 

110(a)(2)(D)(i)(I) for the 2008 ozone NAAQS. To the extent that 

the EPA has not finalized action on these submitted SIPs, these 

states can evaluate their submissions in light of this proposal 

and the actions we are taking to reduce interstate ozone 

transport for the 2008 ozone NAAQS. Pursuant to a judgment 
73

issued on May 15, 2015, the EPA is required to take final action 

on the interstate transport SIPs for Nebraska and North Dakota 

by January 29, 2016, and for Maryland, Texas, Ohio and Indiana 

by June 7, 2016.62 In the event that the EPA finalizes 

disapproval or partial disapproval of any of these SIPs, that 

action would trigger the EPA’s FIP authority to implement the 

requirements of the good neighbor provision for those states.

Alternatively, if any of these states withdraws its 2008 ozone 

interstate transport SIP submittal, the EPA plans to issue a 

separate notice of finding of failure to submit for these states 

and will finalize FIPs as appropriate.

On March 7, 2013, the EPA finalized action on the State of 

Kentucky’s SIP submission addressing, among other things, the 

good neighbor provision requirements for the 2008 ozone NAAQS.63

The EPA disapproved the submission as to the good neighbor 

requirements. In the notice, the EPA explained that the 

disapproval of the good neighbor portion of the state’s 

infrastructure SIP submission did not trigger a mandatory duty 

for the EPA to promulgate a FIP to address these requirements.64

Citing the D.C. Circuit’s decision EME Homer City Generation v. 

EPA, 696 F.3d 7 (2012), the EPA explained that the court 

 

62 See Judgment, Sierra Club v. McCarthy, Case 4:14-cv-05091-YGR (N.D. 

Cal. May 15, 2015). 

63 78 FR 14681 (March 7, 2013).

64 Id. at 14683.
74

concluded states have no obligation to make a SIP submission to 

address the good neighbor provision for a new or revised NAAQS 

until the EPA first defines a state’s obligations pursuant to 

that section.65 Therefore, because a good neighbor SIP addressing 

the 2008 ozone standard was not at that time required, the EPA 

indicated that its disapproval action would not trigger an 

obligation for the EPA to promulgate a FIP to address the 

interstate transport requirements.66

On April 30, 2013, the Sierra Club filed a petition for 

review of the EPA’s action based on the Agency’s conclusion that 

the FIP clock was not triggered by the disapproval of Kentucky’s 

good neighbor SIP.67 As described above, on April 29, 2014, the 

Supreme Court issued a decision reversing and vacating the D.C. 

Circuit’s decision in EME Homer City. Following the Supreme 

Court decision, the EPA requested, and the court granted,

vacatur and remand of the portion of the EPA’s final action that

determined that the FIP obligation was not triggered by the 

disapproval.68

In this notice, the EPA is proposing to correct the portion 

of the disapproval notice indicating that the FIP clock would 

 

65 Id.

66 Id.

67 Sierra Club v. EPA, Case No. 13-3546 (6th Cir., filed Apr. 30, 

2013).

68 Order, Sierra Club v. EPA, Case No. 13-3546, Document No. 74-1 (Mar. 

13, 2015).
75

not be triggered by the SIP disapproval. The EPA believes that 

the EPA’s obligation to develop a FIP was triggered on the date 

of the judgment issued by the Supreme Court in EPA v. EME Homer 

City, June 2, 2014, and the EPA is obligated to issue a FIP at 

any time within two years of that date. The EPA does not believe 

that the FIP obligation was triggered as of the date of the SIP 

disapproval because the controlling law as of that date was the 

D.C. Circuit decision in EME Homer City, which held that states 

had no obligation to submit a SIP and the EPA had no authority 

to issue a FIP until the EPA first quantified each state’s 

emission reduction obligation under the good neighbor provision. 

Accordingly, the most reasonable conclusion is that the EPA’s 

FIP obligation was triggered when the Supreme Court clarified 

the state and federal obligations with respect to the good 

neighbor provision. Thus, the EPA proposes to find that the FIP 

obligation was triggered as of June 2, 2014, and that the EPA is 

obligated to promulgate a FIP that corrects the deficiency by 

June 2, 2016.

b. States Submitting Transport SIPs before FIP Is Finalized

The EPA recognizes that some states are currently 

developing SIP submissions or revising their submitted SIPs to 

address the good neighbor provision of the CAA for the 2008 

ozone standard. The EPA encourages SIP development and will 

continue to assist states in developing transport SIPs. As noted 
76

above, the EPA is subject to a court order requiring final

action on certain state SIPs by January 29, and June 7, 2016.

The fact that the EPA is proposing a FIP for any state does 

not suggest that the EPA has determined that the state’s 

submittal is not approvable. If EPA finalizes approval of a 

state’s good neighbor SIP before the FIP is applied, the FIP 

that is now being proposed for that state would no longer be 

necessary.

Further, the EPA notes that the remedy being proposed in 

this notice are not the only means a state has to mitigate 

interstate ozone transport under the good neighbor provision. 

States could submit measures that strengthen their current SIPs 

and achieve reductions that are similar to, or more efficacious 

in eliminating significant transport than, those that would be 

achieved by the FIPs proposed in this action. The EPA strongly 

encourages such strengthening actions. If a state submits a SIP 

that is approved (in whole or in part) by the EPA via noticeand-comment rulemaking and that achieves ozone season NOX

emission reductions and/or establishes EGU NOX ozone emissions 

budgets approximately equivalent to those identified by EPA as 

achievable by 2017, the EPA does not anticipate subjecting the 

state to the EPA’s partial remedy in this FIP action.

V. Analyzing Downwind Air Quality and Upwind-State Contributions
77

In this section, we describe the air quality modeling 

performed to (1) identify locations where we expect there to be 

nonattainment or maintenance problems for 8-hour ozone for the 

2017 analytic year chosen for this proposal, and (2) quantify 

the contributions from anthropogenic emissions from upwind 

states to downwind ozone concentrations at monitoring sites 

projected to be in nonattainment or have maintenance problems in 

2017 for the 2008 ozone NAAQS. Air quality modeling to assess 

the health and welfare benefits of the emissions reductions 

expected to result from this proposal is described in section

VIII. 

This section includes information on the air quality 

modeling platform used in support of the proposed rule with a 

focus on the base year and future base case emission 

inventories. We also provide the projection of 2017 ozone 

concentrations and the interstate contributions for 8-hour 

ozone. The Air Quality Modeling Technical Support Document (AQM 

TSD) in the docket for this proposed rule contains more detailed 

information on the air quality modeling aspects of this 

rulerulemaking. 

On August 4, 2015, the EPA published a Notice of Data 

Availability (80 FR 46271) requesting comment on the air quality 

modeling platform and air quality modeling results that are 

being used for this proposed rule. Specifically, in the NODA, 
78

the EPA requested comment on the data and methodologies related 

to the 2011 and 2017 emissions and the air quality modeling to 

project 2017 concentrations and contributions. Comments received 

on that data via the NODA will be considered for the final rule.

A. Overview of Air Quality Modeling Platform

The EPA performed air quality modeling for three emissions 

scenarios: a 2011 base year, a 2017 baseline, and a 2017 

illustrative control case that reflects the emission reductions 

expected from the proposed rule.69 We selected 2011 as the base 

year to reflect the most recent National Emissions Inventory 

(NEI). In addition, the meteorological conditions during the 

summer of 2011 were generally conducive for ozone formation 

across much of the U.S., particularly the eastern U.S. For 

example, as described in the AQM TSD, an analysis of 

meteorological-adjusted trends in seasonal mean ozone for the 

period 2000 through 2012 indicates that, on a regional basis, 

the summer of 2011 was typical, in terms of the presence of 

conditions conducive to ozone formation, of high ozone years in 

the eastern U.S. Additional analyses of meteorological 

conditions during the summer of 2011 in comparison to conditions 

 

69 The 2017 illustrative control case is relevant to the EPA’s policy 

analysis discussed in section VI and to the benefits and costs 

assessment discussed in section VIII of this preamble. It is not used 

to identify nonattainment or maintenance receptors or quantify the 

contributions from upwind states to these receptors.
79

during several other recent years can be found in the AQM TSD.

The use of meteorological data representing conditions that are 

conducive for ozone formation is consistent with the EPA’s 

modeling guidance for attainment demonstrations.70 As noted 

above, we selected 2017 as the projected analysis year to 

coincide with the attainment date for moderate areas under the 

2008 ozone NAAQS. We used the 2017 baseline emissions in our air 

quality modeling to identify future nonattainment and 

maintenance locations and to quantify the contributions of 

emissions from upwind states to 8-hour ozone concentrations at 

downwind locations. We used the air quality modeling of the 2017 

baseline and 2017 illustrative control case emissions to 

estimate the air quality impacts and health benefits of this 

proposal.

The EPA used the Comprehensive Air Quality Model with 

Extensions (CAMx) version 6.1171 to simulate pollutant 

concentrations for the 2011 base year and the 2017 future year 

scenarios. CAMx is a grid cell-based, multi-pollutant 

photochemical model that simulates the formation and fate of 

 

70 “Modeling Guidance for Demonstrating Attainment of Air Quality Goals 

for Ozone, PM2.5, and Regional Haze” U.S. Environmental Protection 

Agency, Research Triangle Park, NC. December 2014.

http://www.epa.gov/ttn/scram/guidance/guide/Draft_O3-PMRH_Modeling_Guidance-2014.pdf.

71 Comprehensive Air Quality Model with Extensions Version 6.11 User’s 

Guide. Environ International Corporation. Novato, CA. December, 2014.
80

ozone and fine particles in the atmosphere. The CAMx model 

contains certain probing tools including source apportionment 

techniques that are designed to quantify the contribution of 

emissions from various sources and areas to ozone in other 

downwind locations. The CAMx model applications were performed 

for a modeling region (i.e., modeling domain) that covers the 

contiguous 48 states, the District of Columbia, and adjacent 

portions of Canada and Mexico using a horizontal resolution of 

12 x 12 km. A map of the air quality modeling domain is provided 

in the AQM TSD.

The 2011-based air quality modeling platform includes 2011 

base year emissions and future year projections of these 

emissions and 2011 meteorology for air quality modeling with 

CAMx. In the remainder of this section, we provide an overview 

of (1) the 2011 and 2017 emissions inventories, (2) the methods

for projecting future nonattainment and maintenance along with a 

list of 2017 baseline nonattainment and maintenance receptors in 

the eastern U.S., (3) the approach to developing metrics to 

measure interstate contributions to 8-hour ozone, and (4) the 

predicted interstate contributions to downwind nonattainment and 

maintenance in the eastern U.S. We also identify which predicted 

interstate contributions are at or above the CSAPR screening 

threshold, which we are proposing to apply for regulation of 
81

interstate transport of ozone for purposes of the 2008 ozone 

standard.

B. Emission Inventories

The EPA developed emission inventories for this proposal 

including emission estimates for EGUs, non-EGU point sources, 

stationary nonpoint sources, onroad mobile sources, nonroad 

mobile sources, wild fires, prescribed fires, and for biogenic 

emissions that are not the result of human activities. The EPA’s 

air quality modeling relies on this comprehensive set of 

emission inventories because emissions from multiple source 

categories are needed to model ambient air quality and to

facilitate comparison of model outputs with ambient 

measurements. 

To prepare the emission inventories for air quality 

modeling, the EPA processed the emission inventories using the 

Sparse Matrix Operator Kernel Emissions (SMOKE) Modeling System 

version 3.6.5 to produce the gridded, hourly, speciated, modelready emissions for input to the CAMx air quality model. 

Additional information on the development of the emission 

inventories and on data sets used during the emissions modeling 

process are provided in the TSD “Preparation of Emissions 

Inventories for the Version 6.2, 2011 Emissions Modeling 

Platform,” hereafter known as the “Emissions Modeling TSD.” This 
82

TSD is available in the docket for this proposed rule and at 

http://www.epa.gov/ttn/chief/emch/index.html#2011.

The EPA published Federal Register notices on November 27, 

2013 (78 FR 70935), and January 14, 2014 (79 FR 2437), to take 

comment on the 2011 and 201872 emission modeling platforms,

including data and documentation on the methods used to prepare 

the emission inventories for air quality modeling. Comments were 

collected for the 2011 and 2018 emissions modeling platforms 

under the dockets EPA-HQ-OAR-2013-0743 and EPA-HQ-OAR-2013-0809, 

respectively. Comments from those notices that were accepted by 

the EPA have been incorporated into the emission modeling data 

and procedures for this proposal as documented in the Emissions 

Modeling TSD. As indicated above, the updated emission 

inventories, methodologies, and data were provided in a Notice 

of Data Availability published in the Federal Register on August 

4, 2015 (80 FR 46271). Comments received on the proposal data 

will be considered for the final rule.

1. Foundation Emission Inventory Data Sets

 

72 During the 2013 and 2014 pre-proposal comment periods for the 

modeling platforms, the attainment deadline for the downwind areas was 

established by regulation as December 2018. The 2008 Ozone NAAQS SIP 

Requirements Rule revised the attainment deadline for ozone 

nonattainment areas currently designated as Moderate from December 

2018 to July 2018, which means attainment determinations have to be 

based on design values calculated using 2015 through 2017 ozone season 

data. Therefore, in its July 2015 NODA and in this proposal, the EPA 

has adjusted the future year modeling to be for the year 2017 rather 

than 2018.
83

The EPA developed emission data representing the year 2011 

to support air quality modeling of a base year from which future 

air quality could be forecasted. The EPA used the 2011 National 

Emission Inventory (NEI) version 2 (2011NEIv2), released in 

March 2015, as the primary basis for the U.S. inventories 

supporting the 2011 air quality modeling. Documentation on the 

2011NEIv2 is available in the 2011 National Emissions Inventory, 

version 2 TSD available in the docket for this proposed rule and 

at 

http://www.epa.gov/ttn/chief/net/2011inventory.html#inventorydoc

. The future base case scenario modeled for 2017 includes a 

representation of changes in activity data and of predicted 

emission reductions from on-the-books actions, including planned 

emission control installations and promulgated federal measures

that affect anthropogenic emissions.73

2. Development of Emission Inventories for EGUs

Annual NOX and SO2 emissions for EGUs in the 2011NEIv2 are 

based primarily on data from continuous emission monitoring 

systems (CEMS), with other EGU pollutants estimated using 

emission factors and annual heat input data reported to the EPA. 

For EGUs without CEMS, the EPA used data submitted to the NEI by 

 

73 Biogenic emissions and emissions from wild fires and prescribed fires were 

held constant between 2011 and 2017 since (1) these emissions are tied to the 

2011 meteorological conditions and (2) the focus of this rule is on the 

contribution from anthropogenic emissions to projected ozone nonattainment 

and maintenance. 
84

the states. For more information on the details of how the 2011 

EGU emissions were developed and prepared for air quality 

modeling, see the Emissions Modeling TSD.

The EPA projected future 2017 baseline EGU emissions using 

version 5.14 of the Integrated Planning Model (IPM) 

(http://www.epa.gov/powersectormodeling). IPM, developed by ICF 

Consulting, is a state-of-the-art, peer-reviewed, multiregional, dynamic, deterministic linear programming model of the 

contiguous U.S. electric power sector. It provides forecasts of 

least cost capacity expansion, electricity dispatch, and 

emission control strategies while meeting energy demand and 

environmental, transmission, dispatch, and reliability 

constraints. EPA has used IPM for over two decades to better 

understand power sector behavior under future business-as-usual 

conditions and to evaluate the economic and emission impacts of 

prospective environmental policies. The model is designed to 

reflect electricity markets as accurately as possible. The EPA 

uses the best available information from utilities, industry 

experts, gas and coal market experts, financial institutions, 

and government statistics as the basis for the detailed power 

sector modeling in IPM. The model documentation provides 
85

additional information on the assumptions discussed here as well 

as all other model assumptions and inputs.74

The IPM version 5.14 base case accounts for comments 

received as a result of the NODAs released in 2013 and 2014 

(including control configuration) as well as updated 

environmental regulations. This projected base case accounts for 

the effects of the finalized MATS75 and CSAPR rules, New Source 

Review settlements, and on-the-books state rules through 201476

impacting SO2, NOX, directly emitted particulate matter, and CO2, 

and final actions the EPA has taken to implement the Regional 

Haze Rule. The EPA’s IPM base case also includes two federal 

non-air rules affecting EGUs: the Cooling Water Intake Structure

(Clean Water Act section 316(b)) rule and the Coal Combustion 

Residuals (CCR) rule. Documentation of IPM version 5.14 is in 

the docket and available online at

www.epa.gov/powersectormodeling.

 

74 Detailed information and documentation of EPA’s Base Case, including 

all the underlying assumptions, data sources, and architecture 

parameters can be found on EPA’s website at: 

www.epa.gov/airmarkets/powersectormodeling.

75 In Michigan v. EPA, the Supreme Court reversed on narrow grounds a portion 

of the D.C. Circuit decision upholding the MATS rule, finding that EPA erred 

by not considering cost when determining that regulation of EGUs was 

"appropriate" pursuant to CAA section 112(n)(1). 135 S.Ct. 192 (2015). The 

case was remanded to the D.C. Circuit for further proceedings, and the MATS 

rule currently remains in place. 

76 For any specific version of IPM there is a cutoff date after which 

it is no longer possible to incorporate updates into the input 

databases. For version 5.14, that cutoff date was November 2014. 
86

After the receptor and contribution analyses for this 

proposal were underway, the EPA released an updated IPM base 

case, version 5.15, and the final Clean Power Plan (CPP).77 In 

order to reflect all on-the-books policies as well as the most 

current power sector modeling data, the EPA performed an 

assessment, described in section V-D below, to reflect inclusion 

of IPM 5.15 with the CPP in the base case for this proposal. The 

EPA willplans to use this base case, including the final CPP,

for its modeling analysis for the final rule.

AdditionallyHowever, EPA’s analysis for the final rule may 

include updated or different assumptions about the inclusion of 

the CPP and the CSAPR phase 2 NOX ozone-season or SO2 annual 

emissions budgets for those states with budgets that were 

declared invalid and remanded to the EPA by the D.C. Circuit’s 

decision in EME Homer City II.

In projecting future 2017 baseline EGU emissions, the EPA 

adjusted the 2018 IPM version 5.14 base case results to account 

for three categories of differences between 2017 and 2018. The 

categories are: 1) adjusting NOX emissions for units with SCRs in 

2018 but that are assumed not to operate or be installed in 

2017; 2) adding NOX emissions for units that are retiring in 2018 

but are projected to operate in 2017; and 3) adjusting NOX

 

77 [Placeholder for CPP reference once published] Carbon Pollution Emission 

Guidelines for Existing Stationary Sources: Electric Utility Generating 

Units, 80 FR 64662 (Oct. 23, 2015). 
87

emissions for coal-fired units that are projected to convert to 

natural gas (i.e., “coal-to-gas”) in 2018, but are still 

projected to burn coal in 2017. These adjustments were only made 

to the air quality flat file outputs of IPM and are discussed in 

greater detail in the IPM documentation found in the docket for 

this proposed rule.

3. Development of Emission Inventories for Non-EGU Point Sources

The 2011 non-EGU point sources in the 2011 base case 

inventory match those in the 2011NEIv2. Details on the 

development of the 2011 emission inventories can be found in the 

2011NEIv2 TSD. Prior to air quality modeling, the emission 

inventories must be processed into a format that is appropriate 

for the air quality model to use. Details on the processing of 

the emissions for 2011 and on the development of the 2017 nonEGU emission inventories are available in the Emissions Modeling

TSD. Projection factors and percent reductions in this proposal 

reflect comments received as a result of the NODAs in 2013 and 

2014, along with emission reductions due to national and local 

rules, control programs, plant closures, consent decrees and 

settlements. Reductions from several Maximum Achievable Control 

Technology (MACT) and National Emission Standards for Hazardous 

Air Pollutants (NESHAP) standards are included. Projection 

approaches for corn ethanol and biodiesel plants, refineries and 
88

upstream impacts represent requirements pursuant to the Energy 

Independence and Security Act of 2007 (EISA). 

For aircraft emissions at airports, the EPA developed 

projection factors based on activity growth projected by the 

Federal Aviation Administration Terminal Area Forecast (TAF) 

system, published in March 2013. 

Point source and nonpoint oil and gas emissions are 

projected to 2018 using regional projection factors by product 

type using Annual Energy Outlook (AEO) 2014 projections to year 

2017. NOX and VOC reductions that are co-benefits to the NESHAP 

and New Source Performance Standards (NSPS) for Stationary 

Reciprocating Internal Combustion Engines (RICE) are reflected 

for select source categories. In addition, Natural Gas Turbines 

and Process Heaters NSPS NOX controls and NSPS Oil and Gas VOC 

controls are reflected for select source categories. 

4. Development of Emission Inventories for Onroad Mobile Sources

The EPA developed the onroad mobile source emissions for 

states other than California using the EPA’s Motor Vehicle 

Emissions Simulator (MOVES) 2014. We computed the emissions 

within SMOKE by multiplying emission factors developed using 

MOVES with the appropriate activity data. We also used MOVES 

emission factors to estimate emissions from refueling. The 2011 

onroad mobile source emissions used in the inventory for this 

rule are similar but not identical to the 2011NEIv2 emissions 
89

due to a more detailed treatment of E-85 emissions in the 2011 

emission modeling platform used for this rule. Additional 

information on the approach for generating the onroad mobile 

source emissions is available in the Emissions Modeling TSD. 

Onroad mobile source emissions for California are consistent 

with the emissions submitted by the state as reflected in the 

2011NEIv2.

In the future-year modeling for mobile sources, we included 

all national measures known at the time of modeling. The future 

scenarios for mobile sources reflect projected changes to fuel 

usage and onroad mobile control programs finalized as of the 

date of the model run. Finalized rules that are incorporated 

into the mobile source emissions include: Tier 3 Standards 

(March 2014), the Light-Duty Greenhouse Gas Rule (March 2013), 

Heavy (and Medium)-Duty Greenhouse Gas Rule (August 2011), the 

Renewable Fuel Standard (February 2010), the Light Duty 

Greenhouse Gas Rule (April 2010), the Corporate-Average Fuel 

Economy standards for 2008-2011 (April 2010), the 2007 Onroad 

Heavy-Duty Rule (February 2009), and the Final Mobile Source Air 

Toxics Rule (MSAT2) (February 2007). Impacts of rules that were 

in effect in 2011 are reflected in the 2011 base year emissions

at a level that corresponds to the extent to which each rule had 

penetrated into the fleet and fuel supply by the year 2011. 

Local control programs such as the California LEV III program
90

are included in the onroad mobile source emissions. Activity 

data for onroad mobile sources was projected using AEO 2014. 

Because EPA changed the model year from 2018 to 2017 between its 

pre-proposal modeling and the modeling conducted for this 

proposal (see footnote 64), and due to the substantial amount of 

lead time required to generate emission factors with MOVES, the 

EPA was unable to directly generate emission factors for 2017

prior to the modeling used to support this proposed rule.

Therefore, for this proposal, future year onroad mobile source 

emissions were computed for 2018 and adjusted to 2017 levels 

using adjustment factors derived from national MOVES runs for 

2017 and 2018. Emission factors will be generated directly for 

2017 prior to air quality modeling for the final rule. 

5. Development of Emission Inventories for Commercial Marine 

Category 3 (Vessel)

The commercial marine category 3 vessel (“C3 marine”) 

emissions in the 2011 base case emission inventory for this 

proposed rule are consistent with those in the 2011NEIv2. These 

emissions reflect reductions associated with the Emissions 

Control Area proposal to the International Maritime Organization 

control strategy (EPA-420-F-10-041, August 2010); reductions of 

NOX, VOC, and CO emissions for new C3 engines that went into 

effect in 2011; and fuel sulfur limits that went into effect as 

early as 2010. The cumulative impacts of these rules through 
91

2017 are incorporated in the 2017 projected emissions for C3 

marine sources.

6. Development of Emission Inventories for Other Nonroad Mobile 

Sources

To develop the nonroad mobile source emission inventories

other than C3 marine for the modeling platform, the EPA used

monthly, county, and process level emissions output from the 

National Mobile Inventory Model (NMIM) (see 

http://www.epa.gov/otaq/nmim.htm). State-submitted emissions 

data for nonroad sources were used for Texas and California. 

These emissions are consistent with those in the 2011NEIv2.

The EPA also used NMIM to project nonroad mobile emissions 

for future years. Development of the future year nonroad 

emissions require a substantial amount of lead time and the 

emissions were prepared for the year 2018 before the model year 

was changed to 2017 when the attainment date was revised in the 

2008 Ozone NAAQS SIP Requirements Rule. To develop a 2017 

nonroad emissions inventory for this proposal that accounted for 

the difference between 2017 and 2018 emissions levels, we 

calculated the nonroad emissions for 2018, and then adjusted 

those emissions to 2017 levels using national adjustment factors 

derived from national NMIM runs for 2017 and 2018. Emissions 

specific to 2017 will be developed for the modeling that will 

support the final rule. The nonroad mobile emission control 
92

programs include reductions to locomotives, diesel engines and 

marine engines, along with standards for fuel sulfur content and 

evaporative emissions. A comprehensive list of control programs 

included for mobile sources is available in the Emissions

Modeling TSD.

7. Development of Emission Inventories for Nonpoint Sources

The emissions for stationary nonpoint sources in our 2011 

base case emission inventory are largely consistent with those 

in the 2011NEIv2. For more information on the nonpoint sources 

in the 2011 base case inventory, see the Emissions Modeling TSD 

and the 2011NEIv2 TSD.

Where states provided EPA with information about projected 

control measures or changes in nonpoint source emissions, the 

EPA incorporated those inputs in its projections. We included 

adjustments for state fuel sulfur content rules for fuel oil in 

the Northeast. Projected emissions for portable fuel containers

reflect the impact of projection factors required by the final 

Mobile Source Air Toxics (MSAT2) rule and the EISA, including 

updates to cellulosic ethanol plants, ethanol transport working 

losses, and ethanol distribution vapor losses. 

The EPA developed regional projection factors for nonpoint 

oil and gas sources by product type based on Annual Energy 

Outlook (AEO) 2014 projections to year 2018. We reflected

criteria air pollutant (CAP) co-benefit reductions resulting 
93

from the National Emission Standards for Hazardous Air 

Pollutants (NESHAP) for Reciprocating Internal Combustion 

Engines (RICE) and NSPS rules and Oil and Gas NSPS VOC controls 

for select source categories. Additional details on the 

projections are available in the Emissions Modeling TSD.

C. Air Quality Modeling to Identify Nonattainment and 

Maintenance Receptors

In this section, we describe the air quality modeling 

performed to identify locations where we expect there to be 

nonattainment or maintenance problems for the 2008 8-hour ozone 

NAAQS in the 2017 analytic future year chosen for this proposal.

We then describe how we factored current monitored data into the 

identification of sites as having either nonattainment or 

maintenance concerns for the purposes of this rulemaking. These 

sites are used as the “receptors” for quantifying the 

contributions of emissions in upwind states to nonattainment and 

maintenance concerns in downwind locations. 

In this proposed rule, the EPA is relying on CSAPR’s 

approach to identify separate nonattainment and maintenance 

receptors in order to give independent effect to both the 

“contribute significantly to nonattainment” and the "interfere 

with maintenance" prongs of section 110(a)(2)(D)(i)(I), 
94

consistent with the D.C. Circuit’s direction in North Carolina.78

In its decision on remand from the Supreme Court, the D.C. 

Circuit confirmed that EPA’s approach to identifying maintenance 

receptors in CSAPR comported with the court’s prior instruction 

to give independent meaning to the “interfere with maintenance” 

prong in the good neighbor provision. EME Homer City II, 795 

F.3d at 136. 

In CSAPR, the EPA identified nonattainment receptors as 

those monitoring sites that are projected to have average design 

values that exceed the NAAQS. The EPA separately identified 

maintenance receptors as those receptors that would have 

difficulty maintaining the relevant NAAQS in a scenario that 

takes into account historical variability in air quality at that 

receptor. The CSAPR approach for identifying nonattainment and 

maintenance receptors relied only upon air quality model 

projections of measured design values. In CSAPR, if the average 

design value in the analysis year was projected to exceed the 

NAAQS, then the monitoring site is identified as a nonattainment 

receptor without consideration of whether the monitoring site is 

currently measuring “clean data” (i.e., design values below the 

NAAQS based on the most recent three years of measured data). In 

prior transport rulemakings, such as the NOX SIP Call and CAIR, 

 

78 531 F.3d at 910-911 (holding that the EPA must give “independent 

significance” to each prong of CAA section 110(a)(2)(D)(i)(I)).
95

the EPA defined nonattainment receptors as those areas that both 

currently monitor nonattainment and that the EPA projects will

be in nonattainment in the future compliance year.79 We explained 

that we had the most confidence in our projections of 

nonattainment for those counties that also measure nonattainment 

for the most recent period of available ambient data. In CSAPR, 

we were compelled to deviate from this practice of incorporating 

monitored data into EPA’s evaluation of projected nonattainment 

receptors because the most recent monitoring data then available 

reflected large emission reductions from CAIR, which CSAPR was 

designed to replace. As recently affirmed by the D.C. Circuit, 

it was therefore reasonable for the EPA to decide not to compare 

monitored data reflecting CAIR emissions reductions to its 

modeling projections that instead excluded CAIR from its 

baseline.80

As the EPA is not replacing an existing transport program 

in this rulerulemaking proposal, we are proposing to consider 

current monitored data as part of the process for identifying 

projected nonattainment receptors for this rulemaking. 

Accordingly, in this rulerulemaking, the EPA is proposing to 

return to our prior practice of comparing our modeled 

 

79 63 FR at 57375, 57377; (Oct. 27, 1998); 70 FR at 25241. (May 12, 

2005). See also North Carolina, 531 F.3d at 913-914 (affirming as 

reasonable EPA’s approach to defining nonattainment in CAIR).

80 EME Homer City II, 795 F.3d at 135-36; see also 76 FR at 48230-31.
96

nonattainment projections to current monitored air quality. For 

the purposes of this rulemaking, the EPA proposes to identify as 

nonattainment receptors those monitors that both currently 

measure nonattainment and that the EPA projects will be in 

nonattainment in 2017. 

As noted above, in CSAPR the EPA identified maintenance 

receptors as those receptors that would have difficulty 

maintaining the relevant NAAQS in a scenario that takes into 

account historical variability in air quality at that receptor. 

The variability in air quality was determined by evaluating the 

“maximum” future design value at each receptor based on a 

projection of the maximum measured design value over the 

relevant period. 

The EPA interprets the projected maximum future design 

value to be a potential future air quality outcome consistent 

with the meteorology that yielded maximum measured 

concentrations in the ambient data set analyzed for that 

receptor. The EPA also recognizes that previously experienced 

meteorological conditions (e.g., dominant wind direction, 

temperatures, air mass patterns) promoting ozone formation that 

led to maximum concentrations in the measured data may reoccur 

in the future. The maximum design value gives a reasonable 

projection of future air quality at the receptor under a 

scenario in which such conditions do, in fact, reoccur. The 
97

projected maximum design value is used to identify upwind 

emissions that, under those circumstances, could interfere with 

the downwind area's ability to maintain the NAAQS. Therefore, 

the EPA assesses the magnitude of the maximum projected design 

value for 2017 at each receptor in relation to the 2008 ozone 

NAAQS and, where such a value exceeds the NAAQS, EPA determines 

that receptor to be a “maintenance” receptor for purposes of 

defining interference with maintenance in this proposal, 

consistent with the method used in CSAPR and upheld by the D.C. 

Circuit in EME Homer City II.81 That is, monitoring sites with a

maximum design value that exceeds the NAAQS are projected to 

have a maintenance problem in 2017. 

Consistent with the CSAPR methodology, monitoring sites 

with a projected maximum design value that exceeds the NAAQS, 

but with a projected average design value that is below the 

NAAQS, are identified as maintenance-only receptors. In 

addition, those sites that are currently measuring clean data, 

but are projected to be nonattainment based on the average 

design value and that, by definition, are projected to have a 

maximum design value above the standard are also identified as 

maintenance-only receptors. We are not proposing that monitored 

data have any effect on the EPA’s determination of maintenance 

 

81 See 795 F.3d at 136.
98

receptors using the CSAPR method since even those receptor sites 

that are not currently monitoring violations are still subject 

to conditions that may allow violations to reoccur and therefore 

have future maintenance concerns. 

The following is a brief summary of the procedures for 

projecting future-year 8-hour ozone average and maximum design 

values to 2017. Consistent with the EPA’s modeling guidance we 

use the air quality modeling results in a “relative” sense to 

project future concentrations. That is, the ratios of future 

year model predictions to base year model predictions are used 

to adjust ambient ozone design values82 up or down depending on 

the relative (percent) change in model predictions for each 

location. The modeling guidance recommends using measured ozone 

concentrations for the 5-year period centered on the base year 

as the air quality data starting point for future year 

projections. This average design value is used to dampen the 

effects of inter-annual variability in meteorology on ozone 

concentrations and to provide a reasonable projection of future 

air quality at the receptor under "average" conditions. Because 

the base year for this proposal is 2011, we are using the base 

period 2009-2013 ambient ozone design value data in order to 

 

82 The ozone design value at a particular monitoring site is the 3-year 

average of the annual 4th highest daily maximum 8-hour ozone 

concentration at that site. 
99

project 2017 average design values in a manner consistent with 

the modeling guidance. 

The approach for projecting future ozone design values 

involved the projection of an average of up to 3 design value 

periods, which include the years 2009-2013 (design values for 

2009-2011, 2010-2012, and 2011-2013). The 2009–2011, 2010-2012, 

and 2011-2013 design values are accessible at 

www.epa.gov/airtrends/values.html. The average of the 3 design 

values creates a “5-year weighted average” value. The 5-year 

weighted average values were then projected to 2017. To project 

8-hour ozone design values we used the 2011 base year and 2017 

future base-case model-predicted ozone concentrations to 

calculate relative reduction factors (RRFs) for the location of 

each monitoring site. The RRFs were applied to the 2009-2013 

average ozone design values and the individual design values for 

2009-2011, 2010-2012, and 2011-2013 through the following steps:

Step 1: For each monitoring site, we calculate the average 

concentration across the 10 days with the 10 highest 8-hour 

daily maximum ozone predictions in the 2017 baseline83 using the 

predictions in the nine grid cells that include or surround the 

 

83 As specified in the attainment demonstration modeling guidance, if 

there are fewer than 10 modeled days greater than or equal to (>=) 70 

ppb, then the threshold is lowered in 1 ppb increments (to as low as 

60 ppb) until there are 10 days. If there are fewer than 5 days >= 60 

ppb, then an RRF calculation is not completed for that site. 
100

location of the monitoring site. The RRF for a site is the ratio 

of the mean prediction in the future year to the mean prediction 

in the 2011 base year. The RRFs were calculated on a site-bysite basis.84

Step 2: The RRF for each site is then multiplied by the 2009-

2013 5-year weighted average ambient design value for that site, 

yielding an estimate of the future average design value at that 

particular monitoring location. 

Step 3: We calculate the maximum future design value by 

multiplying the RRF for each site by the three base periods 

(2009-2011, 2010-2012, and 2011-2013) separately. The highest of 

the three future values is the projected maximum design value. 

Consistent with the truncation and rounding procedures for the 

8-hour ozone NAAQS, the projected design values are truncated to 

integers in units of ppb.85

Projected design values that are greater than or equal to 

76 ppb are considered to be violating the NAAQS in 2017. For 

those sites that are projected to be violating the NAAQS based 

on the average design values in 2017, we examined measured 

design values for the period 2012-2014, which is the most recent 

available measured design values at the time of this proposal. 

 

84 Sites with insufficient valid design values were not included in the 

calculation. In addition, sites with fewer than 5 days with predicted 

8-hour ozone >= 60 ppb in 2018 were dropped from the analysis.

85 40 CFR Part 50, Appendix P to Part 50 – Interpretation of the Primary and 

Secondary National Ambient Air Quality Standards for Ozone.
101

As noted above, we are proposing to identify nonattainment 

receptors in this rulemaking as those sites that are violating 

the NAAQS based on current measured air quality and also have 

projected average design values of 76 ppb or greater. 

Maintenance-only receptors therefore include both (1) those 

sites with projected average design values above the NAAQS that 

are currently measuring clean data and (2) those sites with 

projected average design values below the level of the NAAQS, 

but with projected maximum design values of 76 ppb or greater. 

In addition to the maintenance-only receptors, the 2017 ozone 

nonattainment receptors are also maintenance receptors because 

the maximum design values for each of these sites is always 

greater than or equal to the average design value. The 

monitoring sites that we project to be nonattainment and 

maintenance receptors for the ozone NAAQS in the 2017 baseline

are used for assessing the contribution of emissions in upwind 

states to downwind nonattainment and maintenance of ozone NAAQS 

as part of this proposal. 

Table V.C-1 contains the 2009-2013 base period average and 

maximum 8-hour ozone design values, the 2017 baseline average 

and maximum design values, and the 2012-2014 design values for 

the 8 sites in the eastern U.S. projected to be 2017 

nonattainment receptors. Table V.C-2 contains this same 

information for the 6 maintenance-only sites in the eastern U.S. 
102

that are projected nonattainment but currently measuring clean 

data. Table V.C-3 contains this same information for the 23 

maintenance-only sites in the eastern U.S. that are projected to 

have average design values below the NAAQS, but maximum design 

values above the NAAQS. The design values for all monitoring 

sites in the U.S. are provided in docket item EPA-HQ-OAR-2015-

0500-0006. Additional details on the approach for projecting 

average and maximum design values are provided in the modeling 

guidance, Model Attainment Test Software86 documentation, and the 

AQM TSD. The EPA is seeking comment on the proposed methods for 

determining projected nonattainment and maintenance receptors.

Table V.C-1. Average and Maximum 2009-2013 and 2017 Baseline 8-

Hour Ozone Design Values and 2012-2014 Design Values (ppb) at 

Projected Nonattainment Sites in the Eastern U.S. (Nonattainment 

Receptors)

Monitor 

ID State County

Average 

Design 

Value 

2009-

2013

Maximum 

Design 

Value 

2009-

2013

Average 

Design 

Value 

2017

Maximum 

Design 

Value 

2017

2012-

2014 

Design 

Value

90013007 Connecticut Fairfield 84.3 89.0 77.1 81.4 84.0

90019003 Connecticut Fairfield 83.7 87.0 78.0 81.1 85.0

90099002 Connecticut New Haven 85.7 89.0 77.2 80.2 81.0

480391004 Texas Brazoria 88.0 89.0 81.4 82.3 80.0

481210034 Texas Denton 84.3 87.0 76.9 79.4 81.0

484392003 Texas Tarrant 87.3 90.0 79.6 82.1 77.0

484393009 Texas Tarrant 86.0 86.0 78.6 78.6 80.0

551170006 Wisconsin Sheboygan 84.3 87.0 77.0 79.4 81.0

 

86 Abt Associates, 2014. User’s Guide: Modeled Attainment Test 

Software. http://www.epa.gov/scram001/modelingapps_mats.htm
103

Table V.C-2. Average and Maximum 2009-2013 and 2017 Baseline 8-

Hour Ozone Design Values and 2012-2014 Design Values (ppb) at 

Sites in the Eastern U.S. that are Projected Nonattainment but 

Currently Measuring Clean Data (Maintenance-Only Receptors)

Monitor 

ID State County

Average 

Design 

Value 

2009-

2013

Maximum 

Design 

Value 

2009-

2013

Average 

Design 

Value 

2017

Maximum 

Design 

Value 

2017

2012-

2014 

Design 

Value

240251001 Maryland Harford 90.0 93.0 81.3 84.0 75.0

360850067 New York Richmond 81.3 83.0 76.3 77.8 73.0

361030002 New York Suffolk 83.3 85.0 79.2 80.8 73.0

390610006 Ohio Hamilton 82.0 85.0 76.3 79.1 75.0

482011034 Texas Harris 81.0 82.0 76.8 77.8 72.0

482011039 Texas Harris 82.0 84.0 78.2 80.2 72.0

Table V.C-3. Average and Maximum 2009-2013 and 2017 Baseline 8-

Hour Ozone Design Values and 2012-2014 Design Values (ppb) at 

Projected Maintenance Sites in the Eastern U.S. Based on the 

CSAPR Methodology (Maintenance-Only Receptors)
104

Monitor 

ID State County

Average 

Design 

Value 

2009-

2013

Maximum 

Design 

Value 

2009-

2013

Average 

Design 

Value 

2017

Maximum 

Design 

Value 

2017

2012-2014 

Design 

Value

90010017 Connecticut Fairfield 80.3 83.0 75.8 78.4 82.0

211110067 Kentucky Jefferson 82.0 85.0 75.8 78.6

Incomplete 

Data

211850004 Kentucky Oldham 82.0 86.0 73.7 77.3 74.0

240053001 Maryland Baltimore 80.7 84.0 73.2 76.2 72.0

260050003 Michigan Allegan 82.7 86.0 75.5 78.5 83.0

261630019 Michigan Wayne 78.7 81.0 74.0 76.2 74.0

340071001 New Jersey Camden 82.7 87.0 74.2 78.1 76.0

340150002 New Jersey Gloucester 84.3 87.0 75.1 77.5 76.0

340230011 New Jersey Middlesex 81.3 85.0 73.0 76.3 74.0

340290006 New Jersey Ocean 82.0 85.0 73.9 76.6 75.0

360810124 New York Queens 78.0 80.0 75.7 77.6 72.0

420031005 Pennsylvania Allegheny 80.7 82.0 75.3 76.5 77.0

421010024 Pennsylvania Philadelphia 83.3 87.0 75.1 78.4 75.0

480850005 Texas Collin 82.7 84.0 74.9 76.0 78.0

481130069 Texas Dallas 79.7 84.0 74.0 78.0 78.0

481130075 Texas Dallas 82.0 83.0 75.8 76.7 77.0

481211032 Texas Denton 82.7 84.0 75.1 76.3 79.0

482010024 Texas Harris 80.3 83.0 75.9 78.5 72.0

482010026 Texas Harris 77.3 80.0 73.5 76.1 67.0

482010055 Texas Harris 81.3 83.0 75.4 77.0 75.0

482011050 Texas Harris 78.3 80.0 74.6 76.2 72.0

484390075 Texas Tarrant 82.0 83.0 75.5 76.4 79.0

484393011 Texas Tarrant 80.7 83.0 74.5 76.6 75.0

D. Pollutant Transport from Upwind States

1. Air Quality Modeling to Quantify Upwind State Contributions

This section documents the procedures the EPA used to 

quantify the impact of emissions from specific upwind states on 

2017 8-hour design values for identified downwind nonattainment 

and maintenance receptors. The EPA used CAMx photochemical 
105

source apportionment modeling to quantify the impact of 

emissions in specific upwind states on downwind nonattainment 

and maintenance receptors for 8-hour ozone. CAMx employs 

enhanced source apportionment techniques that track the 

formation and transport of ozone from specific emissions sources 

and calculates the contribution of sources and precursors to 

ozone for individual receptor locations. The strength of the 

photochemical model source apportionment technique is that all 

modeled ozone at a given receptor location in the modeling 

domain is tracked back to specific sources of emissions and 

boundary conditions to fully characterize culpable sources.

The EPA performed nationwide, state-level ozone source 

apportionment modeling using the CAMx Ozone Source Apportionment 

Technology/Anthropogenic Precursor Culpability Analysis 

(OSAT/APCA) technique87 to quantify the contribution of 2017 

baseline NOX and VOC emissions from all sources in each state to 

projected 2017 ozone concentrations at air quality monitoring 

sites. In the source apportionment model run, we tracked the 

ozone formed from each of the following contribution categories 

(i.e., “tags”):

 

87 As part of this technique, ozone formed from reactions between 

biogenic VOC and NOx with anthropogenic NOx and VOC are assigned to the 

anthropogenic emissions.
106

 States – anthropogenic NOX and VOC emissions from each state 

tracked individually (emissions from all anthropogenic 

sectors in a given state were combined);

 Biogenics – biogenic NOX and VOC emissions domain-wide 

(i.e., not by state);

 Boundary Concentrations – concentrations transported into 

the modeling domain;

 Tribes – the emissions from those tribal lands for which we 

have point source inventory data in the 2011 NEI (we did 

not model the contributions from individual tribes); 

 Canada and Mexico – anthropogenic emissions from sources in 

the portions of Canada and Mexico included in the modeling 

domain (we did not model the contributions from Canada and 

Mexico separately);

 Fires – combined emissions from wild and prescribed fires

domain-wide (i.e., not by state); and

 Offshore – combined emissions from offshore marine vessels 

and offshore drilling platforms.

The contribution modeling provided contributions to ozone from 

anthropogenic NOX and VOC emissions in each state, individually. 

The contributions to ozone from chemical reactions between 

biogenic NOX and VOC emissions were modeled and assigned to the 

“biogenic” category. The contributions from wild fire and 
107

prescribed fire NOX and VOC emissions were modeled and assigned 

to the “fires” category. That is, the contributions from the 

“biogenic” and “fires” categories are not assigned to individual 

states nor are they included in the state contributions.

The CAMx OSAT/APCA model run was performed for the period 

May 1 through September 30 using the projected 2017 baseline

emissions and 2011 meteorology for this time period. The hourly 

contributions88 from each tag were processed to obtain the 8-hour 

average contributions corresponding to the time period of the 8-

hour daily maximum concentration on each day in the 2017 model 

simulation. This step was performed for those model grid cells 

containing monitoring sites in order to obtain 8-hour average 

contributions for each day at the location of each site. The 

model-predicted contributions were then applied in a relative 

sense to quantify the contributions to the 2017 average design 

value at each site. The resulting 2017 contributions from each 

tag to each monitoring site in the eastern and western U.S. 

along with additional details on the source apportionment 

modeling and the procedures for calculating contributions can be 

found in the AQM TSD. The EPA is seeking comment on the 

methodologies for calculating ozone contributions.

 

88 Contributions from anthropogenic emissions under “NOX-limited” and 

“VOC-limited” chemical regimes were combined to obtain the net 

contribution from NOX and VOC anthropogenic emissions in each state.
108

The average contribution metric is intended to provide a 

reasonable representation of the contribution from individual 

states to the projected 2017 design value, based on modeled 

transport patterns and other meteorological conditions generally 

associated with modeled high ozone concentrations at the 

receptor. An average contribution metric constructed in this 

manner is beneficial since the magnitude of the contributions is 

directly related to the magnitude of the design value at each 

site. 

The largest contribution from each state in the East to 8-

hour ozone nonattainment receptors in downwind states is 

provided in Table V.D-1. The largest contribution from each 

state in the East to 8-hour ozone maintenance-only receptors in 

downwind states is also provided in Table V.D-1.

Table V.D-1. Largest Contribution to Downwind 8-Hour Ozone 

Nonattainment and Maintenance Receptors for Each State in the 

Eastern U.S.

Upwind 

State

Largest 

Downwind 

Contribution 

to 

Nonattainment

Receptors for 

Ozone (ppb)

Largest 

Downwind 

Contribution 

to 

Maintenance

Receptors 

for Ozone 

(ppb

AL 0.79 1.28

AR 0.98 2.15

CT 0.00 0.46

DE 0.37 2.23

DC 0.06 0.73

FL 0.54 0.72

GA 0.47 0.58
109

Upwind 

State

Largest 

Downwind 

Contribution 

to 

Nonattainment

Receptors for 

Ozone (ppb)

Largest 

Downwind 

Contribution 

to 

Maintenance

Receptors 

for Ozone 

(ppb

IL 17.48 23.17

IN 6.24 14.95

IA 0.61 0.85

KS 0.80 1.03

KY 0.75 11.17

LA 3.09 4.23

ME 0.00 0.08

MD 2.07 7.11

MA 0.10 0.37

MI 2.69 1.79

MN 0.40 0.47

MS 0.78 1.48

MO 1.63 3.69

NE 0.24 0.36

NH 0.02 0.07

NJ 8.84 12.38

NY 16.96 17.21

NC 0.55 0.93

ND 0.11 0.28

OH 2.18 7.92

OK 1.70 2.46

PA 9.39 15.93

RI 0.02 0.08

SC 0.16 0.21

SD 0.08 0.12

TN 0.51 1.67

TX 2.44 2.95

VT 0.01 0.05

VA 1.87 5.29

WV 0.95 3.11

WI 0.34 2.59
110

2. Application of Screening Threshold

The EPA then evaluated the magnitude of the contributions 

from each upwind state to downwind nonattainment and maintenance 

receptors. In this proposal, the EPA uses an air quality 

screening threshold to identify upwind states that contribute to 

downwind ozone concentrations in amounts sufficient to “link” 

them to these to downwind nonattainment and maintenance 

receptors.

As discussed above in section III, the EPA is proposing to 

establish the air quality screening threshold calculated as one 

percent of the NAAQS. Specifically for this rule, we propose 

calculating an 8-hour ozone value for this air quality threshold 

of 0.75 ppb as the quantification of one percent of the 2008 

ozone NAAQS. 

States in the East89 whose contributions to a specific 

receptor meet or exceed the screening threshold are considered 

linked to that receptor; those states’ ozone contributions and 

emissions (and available emission reductions) are analyzed 

 

89 As discussed in section III this assessment shows that there are 

problem receptors in the West where western states contribute amounts 

greater than or equal to the screening threshold used to evaluate 

eastern states (i.e., 1 percent of the NAAQS). However, there may be 

additional criteria to evaluate regarding transported air pollution in 

the West and upwind state obligations. The EPA proposes to focus this 

rulemaking on eastern states, but seeks comment on whether to include 

western states in this rule.
111

further, as described in section VI, to determine whether and 

what emissions reductions might be required from each state. 

States in the East whose contributions are below the 

threshold are not included in the proposed rule and are 

considered to make insignificant contributions to projected 

downwind air quality problems. However, for eastern states for 

which the EPA is not proposing FIPs in this action, the EPA 

notes that updates to the modeling for the final rule could 

change the analysis as to which states have contributions that 

meet or exceed the screening threshold. In the event that air 

quality modeling conducted for the final rule demonstrates that 

states that contribute amounts below the threshold in the 

proposal are projected to contribute amounts greater than or 

equal to the threshold in the final rule modeling, the EPA 

instead proposes to finalize revised budgets (presented with 

this rulemaking for comment) for whichever of those states may 

be identified as linked to such air quality problems. The EPA 

has calculated emissions budgets for all eastern states that we 

are proposing to apply to those states if, and only if, the 

final rule air quality modeling identifies a linkage as just 

described. These budgets are available in the Ozone Transport 

Policy Analysis TSD.

Based on the maximum downwind contributions in Table V.D-1, 

the following states contribute at or above the 0.75 ppb 
112

threshold to downwind nonattainment receptors: Alabama, 

Arkansas, Illinois, Indiana, Kansas, Kentucky, Louisiana, 

Maryland, Michigan, Mississippi, Missouri, New Jersey, New York, 

Ohio, Oklahoma, Pennsylvania, Texas, Virginia, and West 

Virginia. Based on the maximum downwind contributions in Table 

V.D-1, the following states contribute at or above the 0.75 ppb 

threshold to downwind maintenance-only receptors: Alabama, 

Arkansas, Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, 

Louisiana, Maryland, Michigan, Mississippi, Missouri, New 

Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, 

Tennessee, Texas, Virginia, West Virginia, and Wisconsin. The 

linkages between each upwind state and downwind nonattainment 

receptors and maintenance-only receptors in the eastern U.S. are 

provided in Table V.D-2 and Table V.D-3, respectively.

Table V.D-2. Linkages between Each Upwind State and Downwind 

Nonattainment Receptors in the Eastern U.S.

Upwind 

State

Downwind Nonattainment Receptors

AL Tarrant Co, TX 

(484392003)

AR Brazoria Co, TX 

(480391004)

Tarrant Co, TX 

(484392003)

Tarrant Co, TX 

(484393009)

IL Brazoria Co, TX 

(480391004)

Sheboygan Co, WI 

(551170006)

IN Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)

Sheboygan Co, WI 

(551170006)

KS Sheboygan Co, WI 

(551170006)

KY Sheboygan Co, WI 

(551170006)
113

Upwind 

State

Downwind Nonattainment Receptors

LA

Brazoria Co, TX 

(480391004)

Denton Co, TX 

(481210034)

Tarrant Co, TX 

(484392003)

Tarrant Co, TX 

(484393009)

Sheboygan Co, WI 

(551170006)

MD Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)

New Haven Co, CT 

(90099002)

MI

Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)

New Haven Co, CT 

(90099002)

Sheboygan Co, WI 

(551170006)

MS Brazoria Co, TX 

(480391004)

MO Brazoria Co, TX 

(480391004)

Sheboygan Co, WI 

(551170006)

NJ Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)

New Haven Co, CT 

(90099002)

NY Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)

New Haven Co, CT 

(90099002)

OH

Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)

New Haven Co, CT 

(90099002)

Sheboygan Co, WI 

(551170006)

OK

Denton Co, TX 

(481210034)

Tarrant Co, TX 

(484392003)

Tarrant Co, TX 

(484393009)

Sheboygan Co, WI 

(551170006)

PA Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)

New Haven Co, CT 

(90099002)

TX Sheboygan Co, WI 

(551170006)

VA Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)

New Haven Co, CT 

(90099002)

WV Fairfield Co, CT 

(90013007)

Fairfield Co, CT 

(90019003)
114

Table V.D-3. Linkages between Each Upwind States and Downwind 

Maintenance-Only Receptors in the Eastern U.S.

Upwind 

State

Downwind Maintenance Nonattainment Receptors

AL Hamilton Co, OH 

(390610006)

Harris Co, TX 

(482010055)

AR

Oldham Co, KY 

(211850004)

Allegan Co, MI 

(260050003)

Dallas Co, TX 

(481130069)

Dallas Co, TX 

(481130075)

Harris Co, TX 

(482010026)

Harris Co, TX 

(482010055)

Harris Co, TX 

(482011039)

Harris Co, TX 

(482011050)

Tarrant Co, TX 

(484390075)

Tarrant Co, TX 

(484393011)

DE

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Ocean Co, NJ 

(340290006)

Philadelphia Co, 

PA (421010024)

IL

Jefferson Co, KY 

(211110067)

Oldham Co, KY 

(211850004)

Allegan Co, MI 

(260050003)

Wayne Co, MI 

(261630019)

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Suffolk Co, NY 

(361030002)

Hamilton Co, OH 

(390610006)

Allegheny Co, PA 

(420031005)

Harris Co, TX 

(482010026)

Harris Co, TX 

(482011039)

IN

Jefferson Co, KY 

(211110067)

Oldham Co, KY 

(211850004)

Baltimore Co, MD 

(240053001)

Harford Co, MD 

(240251001)

Allegan Co, MI 

(260050003)

Wayne Co, MI 

(261630019)

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Middlesex Co, NJ 

(340230011)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

Hamilton Co, OH 

(390610006)

Allegheny Co, PA 

(420031005)

Philadelphia Co, 

PA (421010024)
115

Upwind 

State

Downwind Maintenance Nonattainment Receptors

IA Allegan Co, MI 

(260050003)

KS Allegan Co, MI 

(260050003)

Tarrant Co, TX 

(484390075)

Tarrant Co, TX 

(484393011)

KY

Baltimore Co, MD 

(240053001)

Harford Co, MD 

(240251001)

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Middlesex Co, NJ 

(340230011)

Ocean Co, NJ 

(340290006)

Richmond Co, NY 

(360850067)

Hamilton Co, OH 

(390610006)

Allegheny Co, PA 

(420031005)

Philadelphia Co, 

PA (421010024)

LA

Collin Co, TX 

(480850005)

Dallas Co, TX 

(481130069)

Dallas Co, TX 

(481130075)

Denton Co, TX 

(481211032)

Harris Co, TX 

(482010024)

Harris Co, TX 

(482010026)

Harris Co, TX 

(482010055)

Harris Co, TX 

(482011034)

Harris Co, TX 

(482011039)

Harris Co, TX 

(482011050)

Tarrant Co, TX 

(484390075)

Tarrant Co, TX 

(484393011)

MD

Fairfield Co, CT 

(90010017)

Gloucester Co, 

NJ (340150002)

Middlesex Co, NJ 

(340230011)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

Philadelphia Co,

PA (421010024)

MI

Fairfield Co, CT 

(90010017)

Jefferson Co, KY 

(211110067)

Oldham Co, KY 

(211850004)

Harford Co, MD 

(240251001)

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

Hamilton Co, OH 

(390610006)

Allegheny Co, PA 

(420031005)

MS Harris Co, TX 

(482010055)

Harris Co, TX 

(482011039)

MO

Oldham Co, KY 

(211850004)

Allegan Co, MI 

(260050003)

Camden Co, NJ 

(340071001)

Hamilton Co, OH 

(390610006)

Harris Co, TX 

(482010026)

Harris Co, TX 

(482010055)
116

Upwind 

State

Downwind Maintenance Nonattainment Receptors

Harris Co, TX 

(482011039)

Harris Co, TX 

(482011050)

NJ

Fairfield Co, CT 

(90010017)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

Philadelphia Co, 

PA (421010024)

NY

Fairfield Co, CT 

(90010017)

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Middlesex Co, NJ 

(340230011)

Ocean Co, NJ 

(340290006)

NC Baltimore Co, MD 

(240053001)

OH

Fairfield Co, CT 

(90010017)

Jefferson Co, KY 

(211110067)

Oldham Co, KY 

(211850004)

Baltimore Co, MD 

(240053001)

Harford Co, MD 

(240251001)

Wayne Co, MI 

(261630019)

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Middlesex Co, NJ 

(340230011)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

Allegheny Co, PA 

(420031005)

Philadelphia Co, 

PA (421010024)

OK

Allegan Co, MI 

(260050003)

Hamilton Co, OH 

(390610006)

Dallas Co, TX 

(481130069)

Dallas Co, TX 

(481130075)

Denton Co, TX

(481211032)

Harris Co, TX 

(482010026)

Harris Co, TX 

(482011034)

Harris Co, TX 

(482011039)

Tarrant Co, TX 

(484390075)

Tarrant Co, TX 

(484393011)

PA

Fairfield Co, CT 

(90010017)

Baltimore Co, MD 

(240053001)

Harford Co, MD 

(240251001)

Camden Co, NJ

(340071001)

Gloucester Co, 

NJ (340150002)

Middlesex Co, NJ 

(340230011)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

TN Hamilton Co, OH 

(390610006)

Philadelphia Co, 

PA (421010024)
117

Upwind 

State

Downwind Maintenance Nonattainment Receptors

TX

Baltimore Co, MD 

(240053001)

Harford Co, MD 

(240251001)

Allegan Co, MI 

(260050003)

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

Hamilton Co, OH 

(390610006)

Allegheny Co, PA 

(420031005)

Philadelphia Co, 

PA (421010024)

VA

Fairfield Co, CT 

(90010017)

Baltimore Co, MD 

(240053001)

Harford Co, MD 

(240251001)

Gloucester Co, 

NJ (340150002)

Middlesex Co, NJ 

(340230011)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

Philadelphia Co, 

PA (421010024)

WV

Baltimore Co, MD 

(240053001)

Harford Co, MD 

(240251001)

Camden Co, NJ 

(340071001)

Gloucester Co, 

NJ (340150002)

Middlesex Co, NJ 

(340230011)

Ocean Co, NJ 

(340290006)

Queens Co, NY 

(360810124)

Richmond Co, NY 

(360850067)

Suffolk Co, NY 

(361030002)

Hamilton Co, OH 

(390610006)

Allegheny Co, PA 

(420031005)

Philadelphia Co, 

PA (421010024)

WI Allegan Co, MI 

(260050003)

Wayne Co, MI 

(261630019)

As discussed previously, after the receptor and 

contribution analyses for this proposal were underway, the EPA 

released an updated IPM base case, version 5.15, and the final 

CPP. In order to reflect all on-the-books policies as well as 

the most current power sector modeling data, the EPA performed 

an assessment to reflect inclusion of IPM 5.15 with the CPP in 

an ”adjusted” base case for this proposal. All references below 
118

to the “adjusted base case” refer to the 2017 air quality 

modeling base case which has been adjusted to account for the 

revised IPM 5.15 with CPP emissions. This assessment method 

relied on the EPA’s air quality modeling contribution data as 

well as projected ozone concentrations from an illustrative EGU 

NOX mitigation scenario. For more information about these 

methods, refer to the Ozone Transport Policy Analysis Technical 

Support Document.

This assessment shows that two receptors -- Hamilton County 

Ohio (390610006) and Richmond County New York (360850067) -–

that were projected to have average design values exceeding the 

NAAQS in the modeled 2017 baseline, are expected to have average 

design values below the NAAQS with the adjusted base case.

However, these receptors are still expected to have maximum 

design values exceeding the NAAQS with the adjusted base case.

Because both of these receptors are also considered maintenance 

receptors for the purposes of this proposal, their status as 

identified air quality concerns and the status of states linked 

to these receptors is unchanged by the adjusted base case.

This assessment also shows that four receptors – Allegheny 

County Pennsylvania (420031005), Collin County Texas 

(480850005), Wayne County Michigan (261630019), and Middlesex 

County New Jersey (340230011) -– that were projected to have 

maximum design values exceeding the NAAQS in the modeled base 
119

case, are expected to have maximum design values below the NAAQS 

with the adjusted base case. With the adjusted base case, these 

sites would not be considered nonattainment or maintenance 

receptors for the purposes of this proposal. However, because no 

state is linked solely to any one of these sites, changing the

status of these receptors does not impact the scope of states 

linked to downwind nonattainment or maintenance receptors for 

this proposal.

In addition to evaluating the status of downwind receptors 

identified for this proposal, the EPA evaluated whether the 

adjusted base case would reduce ozone contributions from upwind 

states to the extent that a previously linked state would have a 

maximum contribution less than the 1% threshold. This assessment 

shows that in the adjusted base case, all states are expected to 

remain linked (i.e., contribute greater than or equal to 1% of 

the NAAQS) to at least one downwind nonattainment or maintenance 

receptor. Therefore, using the adjusted base case for this 

proposal does not impact the scope of states linked to downwind 

nonattainment or maintenance receptors relative to the modeled 

base case.

The analyses that EPA uses in section VI to quantify EGU NOX

ozone-season emissions budgets for this proposal also rely on 

the adjusted base case.
120

The EPA seeks comment on this analysis, but notes that for 

the final rule,its assessment of the EPA intendsimpacts of 

relying on the adjusted base case for these purposes, and on

EPA’s intention to rely on full air quality and IPM modeling of 

the adjusted base case to identify nonattainment and maintenance 

receptors and to inform the analysis of interstate ozone 

transport for the 2008 ozone NAAQS.

The analyses that EPA uses in section VI to quantify EGU NOX

ozone-season emissions budgets for this proposal rely on the 

adjusted base case.

VI. Quantifying Upwind-State EGU NOX Reduction Potential to 

Reduce Interstate Ozone Transport for the 2008 NAAQS

A. Introduction

This section describes the EPA’s proposed quantification of 

near-term EGU NOX reductions that are necessary to fulfill (at 

least in part) the Clean Air Act requirement to address 

interstate ozone transport for the 2008 NAAQS. This section also

describes the EPA’s proposal to translate these reductions into 

EGU NOX ozone-season emissions budgets. Section VII describes the

EPA’s proposal to implement these proposed emissions budgets via 

updates to the existing CSAPR NOX ozone-season trading program. 

As described in section V, the EPA separately identified 

nonattainment receptors and maintenance receptors. The EPA 
121

proposes to apply a single approach for quantifying an upwind 

state’s ozone transport obligation to both nonattainment and 

maintenance receptors. It is reasonable to apply the same 

approach to quantify upwind-state reduction requirements with 

respect to both nonattainment and maintenance because the 

structure of the problems is the same — emissions from sources 

in upwind states contributing to downwind ozone concentrations 

that put the downwind receptor at risk of nonattainment with 

respect to the EPA’s clean air standards. Moreover, as all 

nonattainment receptors are also maintenance receptors because 

the maximum design value will always be equal to or exceed the 

average design value, it is reasonable to control all sites 

consistent with the level of control necessary to reduce 

maintenance concerns.

As described in section III of this preamble, due to the 

impending July 2018 moderate area attainment date, the EPA is 

proposing, as a first step, to quantify near-term EGU NOX ozoneseason emission reductions to reduce interstate ozone transport 

for the 2008 ozone NAAQS. For this section, this means that the 

EPA is proposing to quantify ozone season EGU NOX reductions

achievable for the 2017 ozone season (i.e., the last full ozone

season prior to the July 2018 attainment date).

The EPA’s assessment of upwind state obligations in this 

proposal reflects application of a multi-factor test that 
122

considers cost, available emission reductions, and air quality. 

This is the same multi-factor test used in the original CSAPR. 

This multi-factor test considers increasing levels of uniform 

control stringency, where each level is represented by cost, to 

determine the appropriate magnitude of pollution reduction that 

would reduce the impacts of interstate transport on downwind 

states and to apportion that reduction responsibility among 

collectively-contributing upwind states. This approach to 

quantifying upwind state emission reduction obligations was 

reviewed by the Supreme Court in EPA v. EME Homer City 

Generation, which held that using such an approach to apportion 

reduction responsibilities among upwind states that are 

collectively responsible for downwind air quality impacts “is an 

efficient and equitable solution to the allocation problem the 

Good Neighbor Provision requires the Agency to address.” 134 

S.Ct. at 1607.

There are three steps in developing and applying the multifactor test to quantify upwind state emission reductions as to 

the 2008 ozone NAAQS: (1) identify NOX mitigation strategies, 

focusing on those that can be in place for the 2017 ozone 

season; (2) develop uniform EGU NOX cost thresholds based on 

these NOx mitigation strategies; (3) assess EGU NOX mitigation 

potential that is achievable for 2017 and assess corresponding 

air quality improvements resulting from the application of each 
123

uniform cost threshold, including to check for over-control. 

This multi-factor evaluation informs the EPA’s determination of 

appropriate ozone season EGU NOX reductions necessary to reduce 

significant contribution to nonattainment and interference with 

maintenance of the 2008 ozone NAAQS for the proposed 2017 

compliance year. These steps are discussed in further detail in 

the following sections.

This proposal evaluates a range of uniform EGU NOX costs 

from $500 per ton to $10,000 per ton. This range, and the 

intermediate uniform NOX cost thresholds evaluated within that 

range, were selected based on the cost thresholds at which 

various EGU NOX control technologies are widely available, the 

use of certain EGU NOX cost thresholds in previous rules to 

address ozone transport, and EGU NOX cost thresholds incorporated 

into state requirements to address ozone nonattainment.

TheIn this proposal, the EPA evaluated the emission 

reduction potential in each upwind state at each uniform NOX cost 

threshold using the adjusted IPM base case 5.15. In this case, 

the EPA limited IPM’s evaluation of NOX mitigation strategies to 

those that can be implemented for the 2017 ozone season, which 

is the proposed compliance timing for this rulerulemaking, as

described in section VI.B below.

B. NOX Mitigation Strategies
124

The following sub-sections describe the EPA’s assessment of 

EGU and non-EGU point source NOX mitigation strategies. For more 

details on these assessments, refer to the EGU NOX Mitigation 

Strategies TSD and the Update to Non-EGU Emission Reductions 

Cost and Potential for States with Potentially Significant 

Contributions under the 2008 Ozone Standard TSD in the docket 

for this proposed rule.

1. EGU NOX Mitigation Strategies

In developing this proposed rule, the EPA considered all 

widely used EGU NOX control strategies: fully operating existing 

Selective Catalytic Reduction (SCR) and Selective Non-Catalytic 

Reduction (SNCR) – including optimizing NOX removal by existing, 

operational SCRs and SNCRs and turning on and optimizing 

existing idled SCRs and SNCRs; installation of (or upgrading to) 

state-of-the-art NOX combustion controls; shifting generation to 

units with lower NOX emission rates within the same state; and 

installing new SCRs and SNCRs. Although this proposal does not 

require or impose any specific technology standards to 

demonstrate compliance, EPA determined that certain technologies 

would be available by the 2017 timeframe when assessing 

potential reductions in the region.

For the reasons explained below, the EPA determined that the 

power sector could implement all of these NOX mitigation 

strategies, except installation of new SCRs or SNCRs, between 
125

finalization of this proposal in summer of 2016 and the 2017 

ozone season. As to the installation of new SCRs or SNCRs, the 

amount of time from contract award through commissioning for 

retrofit with new SCR or SNCR exceeds 18 and 12 months, 

respectively. For both technologies, conceptual design, 

permitting, financing, and bid review require additional time. 

It would therefore not be feasible to retrofit new SCR or SNCR 

to achieve EGU NOX reductions in the 2017 ozone season. See EGU 

NOX Mitigation Strategies TSD for discussion of feasibility of 

EGU NOX controls for the 2017 ozone season. Therefore, the EPA 

analyzed the remaining strategies for purposes of quantifying 

upwind state obligations in this rule. Exclusion of new SCR and 

SNCR installation from this analysis reflects a determination 

only that these strategies are infeasible by 2017, not a 

determination that they are infeasible or inappropriate for 

consideration of cost-effective NOX reduction potential over a 

longer timeframe. The EPA requests comment on what EGU NOX

mitigation strategies are feasible for the 2017 ozone season.

a. Fully Operating Existing SCRs and SNCRs

Fully operating existing SCR and SNCRs can significantly 

reduce EGU NOX emissions quickly, using investments that have 

already been made. SCRs can achieve up to 90 percent reduction 

in EGU NOX (with sufficient installed catalyst), while SNCRs can 

achieve 20-30 percent reduction in EGU NOX, beyond the reductions 
126

from combustion controls. These controls are in widespread use 

across the U.S. power sector. In the east, approximately 64 

percent of coal-fired EGU capacity and 75 percent of natural gas 

combined cycle (NGCC) EGU capacity is equipped with SCR or SNCR. 

Recent power sector data reveal that some SCR and SNCR controls 

are being underused.90 In some cases, controls are not fully 

operating (i.e., the controls could be operated at a higher NOX

removal rate). In other cases, controls have been idled for 

years. Fully operating existing SCR and SNCR would be a costeffective and readily available approach for EGUs to reduce NOX

emissions and the EPA evaluated this NOX mitigation strategy in 

quantifying EGU NOX obligations for this proposal.

For existing SCRs and SNCRs that are operating to some 

extent, but not at their full pollution control capability, the 

EPA’s analysis determined that $500 per ton represents the costs 

reflective of fully operating these systems. Because the SCR or 

SNCR is already installed and is at least to some extent 

operating, the EPA assumes that additional reagent (i.e., 

ammonia or urea) is the only significant cost required for full 

operation. We observe that urea can cost on the order of $300

per metric ton. The cost for anhydrous ammonia is around $750

 

90 This assessment is available in the EGU NOX Mitigation Strategies 

TSD.
127

per ton.91 In our assessment, we assume that a 50 percent

solution is used in removing an equivalent amount of NOX. Thus, 

we estimate that sufficient reagent could be purchased at a cost 

of $500 per ton of NOX removed to achieve full operation for most 

SCRs and SNCRs. For more details on this assessment, refer to 

the EGU NOX Mitigation Strategies TSD in the docket for this 

proposed rule. The proposal seeks comment on this assessment.

The operational difference between not fully operating and 

fully operating existing SCRs and SNCRs is increasing reagent 

(i.e., ammonia or urea) flow rate and ensuring sufficient 

reagent exists to sustain higher flow operations. Therefore, 

increasing NOX removal from these controls can be implemented by 

procuring more reagent. Stocking-up additional reagent for 

sustaining increased NOX removal could be done in a one or two 

weeks.92

For existing SCRs and SNCRs that have been idled for years, 

unit operators may need to restart payment of some fixed and 

 

91 Schnitkey, G. "Nitrogen Fertilizer Prices and 2015 Planting 

Decisions." farmdoc daily (4):195, Department of Agricultural and 

Consumer Economics, University of Illinois at Urbana-Champaign, 

October 9, 2014.

Permalink URL http://farmdocdaily.illinois.edu/2014/10/nitrogenfertilizer-prices-and-2015-planting-decisions.html

92 This assessment is available in the EGU NOX Mitigation Strategies 

TSD.
128

variable costs associated with that control. Fixed and variable 

costs include labor, maintenance and repair, reagent, parasitic 

load, and ammonia or urea. As further detailed in the EGU NOX

Mitigation Strategies TSD, which is found in the docket for this 

proposed rule, the EPA performed an in-depth cost assessment for 

all coal-fired units with SCRs, finding that 90 percent of the 

units had total SCR operation costs of $1,300 per ton of NOX

removed, or less.

Based on this assessment, the EPA proposes that turning on 

and fully operating idled SCRs is widely available at a uniform

cost of $1,300 per ton of NOX removed. For more details on this 

assessment, refer to the EGU NOX Mitigation Strategies TSD in the 

docket for this proposed rule. The proposal seeks comment on 

this assessment.

The EPA performed a similar assessment for fully operating 

existing idled SNCR systems, finding that the majority of the 

total fixed and variable operating cost for SNCR is related to 

the cost of the reagent used (e.g., ammonia or urea) and that 

the resulting cost per ton of NOX reduction is sensitive to the 

NOX rate of the unit prior to SNCR operation. Based on the 

results of this analysis, and in order to represent a broad 

range of unit-level NOX rates before SNCR operation, the EPA 

proposes that turning on and fully operating idled SNCRs is 

widely available at a uniform cost of $3,400 per ton of NOX
129

removed. For more details on this assessment, refer to the EGU 

NOX Mitigation Strategies TSD in the docket for this proposed 

rule. The proposal seeks comment on this assessment and on 

higher cost thresholds that would require some installation of 

new SCRs/SNCRs and the appropriate timetable or phase-in needed 

to accommodate those technologies.

The EPA also evaluated the feasibility of turning on idled 

SCR and SNCR for the 2017 ozone season. Based on past practice 

and the possible effort to restart the controls (e.g., 

stockpiling reagent, bringing the system out of protective layup, performing inspections, etc.), returning these idled 

controls to operation should be available in equal to or less 

than 3 months.93 The proposal seeks comment on this assessment.

b. State-of-the-art NOX Combustion Controls

State-of-the-art combustion controls such as low-NOX burners 

(LNB) and/or over-fire air (OFA) are cost-effective, can be 

installed quickly, and can significantly reduce EGU NOX

emissions. Ninety-nine percent of coal-fired EGU capacity in the 

East is equipped with some form of combustion control.

Combustion controls alone can achieve NOX emission rates of 0.15 

to 0.50 lb/mmBtu. Once installed, combustion controls reduce NOX

emissions at all times of EGU operation. State-of-the-art 

 

93 This assessment is available in the EGU NOX Mitigation Strategies 

TSD.
130

combustion controls would be a cost-effective, timely, and 

readily available approach for EGUs to reduce NOX emissions and 

the EPA included this NOX mitigation strategy in quantifying EGU 

NOX reductions for this proposal. 

The cost of state-of-the-art combustion controls per ton of 

NOX reduced is dependent on the combustion control type and unit 

type. We estimate the cost per ton of state-of-the-art 

combustion controls to be $500 per ton to $1,200 per ton of NOX

removed. To be conservative, the EPA proposes that installation 

of (or upgrading to) state-of-the-art NOX combustion controls is 

widely available at $1,300 per ton of NOX removed. 

As described in CSAPR the EPA has observed that upgrade, 

replacement, or installation of combustion controls has been 

demonstrated to be achievable within the timeframe provided for 

by this rulemaking and its compliance dates.94 The EPA revisited 

this analysis with data specific to this proposal and proposes 

that a 2017 compliance timeframe is feasible for this EGU NOX

mitigation strategy. These controls are fully proven, widely 

used, and with a reasonable effort can be procured, designed, 

installed, tested and be in operation on any coal-steam EGU 

consistent with the compliance timeframe provided for this 

rulemaking. The EPA proposes that this will be feasible for the 

 

94 “Installation Timing for Low NOx Burners (LNB)”, Docket ID No. 

EPA-HQ-OAR-2009-0491-0051
131

2017 ozone season. The proposal seeks comment on additional EGU 

NOx mitigation strategies that may be feasible for the 2017 

ozone season.

For more details on this assessment, refer to the EGU NOX

Mitigation Strategies TSD in the docket for this proposed rule. 

The proposal seeks comment on this assessment.

c. Shifting Generation to Lower NOX-emitting EGUs

Shifting generation to lower NOX-emitting EGUs, similar to 

operating existing post-combustion controls, uses investments 

that have already been made, can be done quickly, and can 

significantly reduce EGU NOX emissions.

Since CSAPR was promulgated, electricity generation has 

trended toward lower NOX-emitting generation due to market 

conditions (e.g., low natural gas prices) and state and federal 

environmental policies. For example, new NGCC facilities, which 

represented 45% of new 2014 capacity, can achieve NOX emission 

rates of 0.0095 lb/mmBtu, compared to existing coal steam 

facilities, which emitted at an average rate across the 23 

states included in this proposal of 0.18 lbs/mmBtu of NOX in

2014. This substantial difference in NOX emission performance 

between existing coal steam and new NGCC generation is due both 

to higher nitrogen content in coal compared to natural gas, as 

well as to the substantially lower generating efficiency of 

steam combustion technology compared to combined cycle 
132

combustion technology. Shifting generation to lower NOX-emitting 

EGUs would be a cost-effective, timely, and readily available 

approach for EGUs to reduce NOX emissions and the EPA included

this NOX mitigation strategy in quantifying EGU NOX obligations

for this proposal.

Shifting generation to lower NOX-emitting EGUs occurs on a 

continuum in response to economic factors such as fuel costs and 

uniform NOX cost thresholds, including those evaluated for this 

proposal (i.e., relatively lower uniform NOX cost thresholds 

incentivize relatively fewer EGU NOX reductions resulting from 

shifting generation, while relatively higher uniform NOX cost 

thresholds encourage more EGU NOX reductions driven by shifting 

generation). As a result, the EPA quantified reduction potential 

from this EGU NOX mitigation strategy at each cost level 

identified that represents the availability of other pollution 

control measures evaluated in our assessment of uniform NOX cost 

thresholds described in section VI.C.

In this analysis, the EPA assumed shifting generation to 

units with lower NOX emission rates could occur within the same 

state by the near-term 2017 implementation timing for this 

proposed rule when assessing state emission reduction potential 

for emissions budget purposes. This conservative approach does 

not capture emission reductions that would occur if generation 

was shifted more broadly among units in different states, which 
133

the EPA believes is feasible over time but which may be subject 

to out-of-merit order dispatch constraints in the near term. 

Limiting such generation shifting potential to units within each 

state is not a reflection of how generation shifting works in 

practice (given that the grid crosses state boundaries); 

instead, it is an analytic proxy designed to respect the 

feasibility of near-term generation shifting in light of these 

potential near-term out-of-merit order dispatch constraints. 

The EPA seeks comment on this assessment and on this limitation 

in quantifying EGU NOX reduction potential for the 2017 ozone 

season.

2. Non-EGU NOX Mitigation Strategies 

The EPA is not proposing to address non-EGU emission 

reductions in its efforts to reduce interstate ozone transport 

for the 2008 ozone NAAQS at this time. Compared to EGUs, there 

are relatively more non-EGU point sources and these sources on 

average are smaller than EGUs. The implication of these fleet 

characteristics is that there are more individual sources to 

control and there are relatively fewer emission reductions 

available from each source. Given the proposed 2017 

implementation timing for this rulerulemaking, we are uncertain 

that significant aggregate NOX mitigation is achievable from nonEGU point sources for 2017. Moreover, there is greater 

uncertainty in the EPA’s assessment of non-EGU point-source NOX
134

mitigation potential (see below). The EPA requests comment on 

these issues, including how non-EGU reductions should be 

addressed and considered in fulfilling upwind states’ good 

neighbor obligations under the 2008 ozone standard in the 

future, as the control of non-EGUs may be a necessary part of 

addressing states’ full transport obligation. States can always 

choose to reduce non-EGU emissions via good neighbor SIPs.

The EPA has evaluated the potential for ozone season NOX

reductions from non-EGU sources. A detailed discussion of this 

assessment is provided in the Non-EGU NOX Mitigation Potential 

TSD, located in the docket for this proposed rule. This TSD 

discusses non-EGU source category emissions, EPA tools for 

estimating emission reductions from non-EGU categories, and 

efforts, to date, to review and refine our estimates for certain 

states. In addition, the TSD contains brief discussions of 

available controls, costs, and potential emission reductions for 

a few specific source categories. The EPA views this non-EGU 

assessment as an initial step in future efforts to evaluate nonEGU categories that may be necessary to fully quantify upwind 

states’ significant contribution to nonattainment and 

interference with maintenance. The EPA seeks comment on its 

assessment that non-EGU controls are not feasible by the 2017 

ozone-season. It also seeks comment on its broader non-EGU NOX

mitigation assessment and the availability of non-EGU NOX
135

emission reductions to mitigate interstate ozone transport in 

years following 2017.

Although EPA did not find non-EGU reductions feasible by 2017 

in this proposal, it is taking comment on that assessment. 

Future EPA rulemakings or guidance could revisit the potential 

for reductions from non-EGU sources. Under such a scenario, EPA 

could use a similar approach of identifying appropriate cost 

thresholds for non-EGUs and EGUs alike, and then identify 

potential emission reductions and corresponding emission 

budgets. Under this scenario, an emission budget could be 

established for all covered sources (e.g., EGUs and non-EGUs 

alike) with fungible allowances. EPA is taking comment on the 

potential to combine EGUs and non-EGUs into a single trading 

program to resolve the remaining non-attainment and maintenance 

issues at a later date.

C. Uniform EGU Cost Thresholds for Assessment

As discussed above, the multi-factor test used here 

considers increasing levels of uniform control stringency, where 

each level is represented by cost, in combination with 

consideration of NOX reduction potential and corresponding air 

quality improvements. To determine which cost thresholds to use 

to assess upwind state NOX mitigation potential, the EPA 

evaluated EGU NOX control costs that represent the thresholds at 

which various control technologies are widely available 
136

(described previously in section VI.B), the use of certain cost 

thresholds in previous rules to address ozone transport, and 

cost thresholds incorporated into state requirements to address 

ozone nonattainment.

The EPA began by determining the appropriate range of costs 

to evaluate. The lower end of the range is informed by a 

confluence of considerations. In CSAPR, $500 per ton was the EGU 

NOX cost threshold relied upon to partially address ozone 

transport for the less stringent 1997 standard. It is also the 

lowest marginal cost where EPA expects NOX reduction to be cost 

effective, based on our assessment of EGU NOX mitigation 

strategies (see section B). Specifically, the cost of this 

approach to NOX reduction is the marginal cost of running 

currently operating SCR and SNCR systems at higher levels of NOX

removal than they are currently achieving. The EPA has not 

identified a discrete NOX pollution control measure that would 

achieve sufficient emission reductions to address relevant air 

quality impacts at an estimated cost of less than $500 per ton; 

as a result, the EPA has not included a representation of such a 

cost level in this proposal’s analyses.95

 

95 Additionally, the EPA notes that, as discussed in more detail below, no 

identified air quality problems were resolved at the $500 per ton cost 

threshold. Accordingly, it would not be practical for the EPA to evaluate 

emission reductions achieved at cost thresholds below $500 per ton.
137

The EPA then evaluated EGU NOX cost thresholds to determine 

an appropriate upper bound for our assessment. The EPA 

identified $10,000 per ton as an upper bound, exceeding the 

costs of operating existing or installing new EGU NOX controls.

The EPA seeks comment on whether $500 per ton is an 

appropriate minimum and $10,000 per ton is an appropriate 

maximum uniform cost threshold to evaluate for the purpose of 

quantifying EGU NOX reductions to reduce interstate ozone

transport for the 2008 ozone NAAQS.

The EPA then determined appropriate EGU NOX cost thresholds 

to evaluate within the range of $500 per ton to $10,000 per ton. 

As described above, these cost thresholds are informed by our 

assessment of the costs at which EGU NOX control strategies are 

widely available. While the EPA could evaluate additional cost 

thresholds in between those selected, this would not yield 

meaningful insights as to NOX reduction potential. The EPA has 

identified cost thresholds where control technologies are widely 

available and thereby where the most significant incremental 

emission reduction potential is expected. Analyzing costs 

between these cost thresholds is not expected to reveal 

significant incremental emission reduction potential that isn’t 

already anticipated at the analyzed cost thresholds. Table VI.C1 lists the EGU NOX cost thresholds evaluated and the NOX
138

reduction strategy or policy used to identify each cost 

threshold.

Table VI.C-1

EGU NOX Cost Threshold

$500/ton CSAPR ozone season NOX cost 

threshold; fully operating 

post-combustion controls that 

are already running.

$1,300/ton Widespread availability of 

restarting idled SCRs and 

state of the art combustion 

controls

$3,400/ton NOX SIP Call ozone season NOX

cost threshold, adjusted to 

2014$; Widespread availability 

of restarting idled SNCRs

$5,000/ton Widespread availability of new 

SCRs96

$6,400/ton Widespread availability of new 

SNCRs97

$10,000/ton Upper bound

The EPA proposes that this range and selection of interim 

uniform cost thresholds are appropriate to evaluate potential 

EGU NOX reduction obligations to address interstate ozone 

transport for the 2008 ozone NAAQS. Because these cost 

thresholds are linked to costs at which EGU NOX mitigation 

strategies become widely available in each state, the cost 

 

96 The cost assessment for new SCR is available in the EGU NOX

Mitigation Strategies TSD. While chosen to define a cost-threshold, new 

SCRs were not considered a feasible control on the compliance timeframe being 

proposed for this rule.

97 The cost assessment for new SNCR is available in the EGU NOX

Mitigation Strategies TSD. While chosen to define a cost-threshold, new 

SNCRs were not considered a feasible control on the compliance timeframe 

being proposed for this rule.
139

thresholds represent the break points at which the most 

significant step-changes in EGU NOX mitigation are expected. The 

EPA seeks comment on the appropriateness of evaluating these 

uniform cost thresholds for the purpose of quantifying EGU NOX

reductions to reduce interstate ozone transport for the 2008 

ozone NAAQS.

D. Assessing Cost, EGU NOX Reductions, and Air Quality 

The EPA analyzed ozone season NOX emission reductions 

available from the power sector in each state using IPM.98 The 

agency analyzed levels of uniform control stringency, where each 

level is represented by uniform EGU NOX cost thresholds listed in 

Table VI.C-1 above and repeated here: $500 per ton; $1,300 per 

ton; $3,400 per ton; $5,000 per ton; $6,400 per ton; and $10,000 

per ton. The EPA limited IPM’s NOX mitigation strategies to those 

that could be implemented for 2017, as described in section 

VI.B.

The analysis applied these uniform EGU NOX cost thresholds 

to EGUs in the 48 contiguous United States and the District of 

Columbia, starting in 2017. The analysis covered EGUs with a 

capacity (electrical output) greater than 25 MW to make the 

analysis similar to previous analyses done for interstate 

 

98 IPM version 5.14 is discussed in preamble section IV.B., and as 

noted in preamble section V, for purposes of this quantification 

analysis EPA used an adjusted base case reflecting IPM version 5.15, 

including the Clean Power Plan. IPM documentation is in the docket and 

available at www.epa.gov/powersectormodeling.
140

transport purposes. The EGU Emission Reduction Cost Analysis 

TSD, which is in the docket for this proposed rule, provides 

further details of EPA’s analysis of ozone season NOX emission 

reductions occurring at the representative EGU NOx cost 

thresholds analyzed for the 2017 ozone season. 

Table VI.D-1 shows the 2017 baseline EGU emissions and 

ozone season NOX reduction potential in each state corresponding 

to the uniform cost levels. 

Table VI.D-1. EGU Ozone Season NOX Emission Reductions (Tons)

State

2017 

Emissions 

(short 

tons)

Reduction Potential (short 

tons) at Various Representative 

Marginal Costs per Ton (in 

2011$)

Base Case $500/ton $1,300/ton $3,400/ton

Alabama 13,289 1,729 3,582 3,670 

Arkansas 6,224 13 104 859 

Illinois 10,021 395 472 546 

Indiana 41,748 6,611 12,173 12,989 

Iowa 7,911 186 423 717 

Kansas 11,332 428 438 465 

Kentucky 27,141 3,608 11,896 12,382 

Louisiana 10,897 64 117 400 

Maryland 6,470 1,028 1,026 1,164 

Michigan 20,049 403 3,033 3,528 

Mississippi 7,871 82 297 893 

Missouri 17,050 934 996 1,152 

New Jersey 3,302 370 372 378 

New York 4,948 115 284 359 

North Carolina 14,435 1,922 1,922 3,526 

Ohio 27,795 5,746 9,646 9,666 

Oklahoma 19,593 703 2,170 3,169 

Pennsylvania 41,533 2,210 26,759 26,791 

Tennessee 5,554 74 113 146 

Texas 58,199 685 3,610 5,810 

Virginia 7,196 423 539 1,587 

West Virginia 25,384 592 10,908 12,014 

Wisconsin 5,257 5 36 107 
141

Total 393,198 28,325 90,916 102,318 

Table VI.D-1 (continued). EGU Ozone Season NOX Emission 

Reductions (Tons)

State

Reduction Potential (short tons) 

at Various Representative Marginal 

Costs per Ton (in 2011$)

$5,000/ton $6,400/ton $10,000/ton

Alabama 4,780 5,418 5,840

Arkansas 1,147 1,242 1,935

Illinois 622 640 761

Indiana 13,770 13,437 17,109

Iowa 717 717 1,317

Kansas 677 838 1,150

Kentucky 12,473 13,456 14,503

Louisiana 461 467 706

Maryland 1,176 1,369 1,369

Michigan 3,756 3,889 4,411

Mississippi 1,165 1,479 2,208

Missouri 1,298 1,930 2,775

New Jersey 381 384 465

New York 370 661 906

North Carolina 3,626 4,415 4,643

Ohio 9,773 10,078 10,231

Oklahoma 3,821 5,702 6,609

Pennsylvania 26,913 26,932 27,091

Tennessee 224 241 285

Texas 6,940 7,772 8,380

Virginia 3,104 3,560 3,610

West Virginia 12,211 12,243 12,243

Wisconsin 131 276 618

Total 109,535 117,145 129,166

Next, the EPA performed a combined multi-factor assessment 

of costs (i.e., the uniform cost thresholds evaluated), EGU NOX

reductions (i.e., the reductions in Table VI.D-1), and 

corresponding improvements in downwind ozone concentrations. For 

this assessment, the EPA used simplifying assumptions regarding 

the relationship between EGU NOX emissions and corresponding 
142

ozone concentrations at nonattainment and maintenance receptors 

of concern. For more information about how this assessment was 

performed, refer to the Ozone Transport Policy Analysis 

Technical Support Document.

For each nonattainment or maintenance receptor identified 

for this proposal, the EPA evaluated the air quality improvement 

at that receptor that is expected from progressively more 

stringent upwind EGU NOX reductions in states that are linked to 

that receptor. For example, the EPA evaluated the Harford County

Maryland receptor with all linked states controlling their 

emissions at $500 per ton. This assessment showed a 0.35 ppb 

reduction in expected ozone design values at $500 per ton. The

residual design values at this site are still expected to exceed 

the 2008 ozone NAAQS with an average design value of 81.2 ppb 

and a maximum design value of 83.9 ppb. Next, the EPA evaluated 

this receptor with all linked states controlling their emissions 

at $1,300 per ton. This assessment showed a 0.94 ppb reduction 

in expected ozone design values. At a cost threshold of $1,300 

per ton, the residual design values at this site are expected to 

continue to exceed the 2008 ozone NAAQS with an average design 

value of 80.6 ppb and a maximum design value of 83.3 ppb. With 

respect to this receptor, the EPA then evaluated each 

progressively more stringent uniform control stringency (i.e. 

$3,400 per ton; $5,000 per ton; $6,400 per ton; and $10,000 per 
143

ton). Generally, the EPA evaluated the air quality improvements 

at each monitoring site for each progressively more stringent 

uniform EGU NOX control level. This information is available in 

the Ozone Transport Policy Analysis TSD.

This approach evaluates interstate ozone transport for each 

receptor independently. Also, by evaluating the downwind ozone 

impact of upwind reductions that are made in all linked states 

at the same uniform control stringency, this approach provides 

equitable treatment of all upwind states as to their 

contribution to each downwind receptor to which they are linked.

The EPA aggregates the relevant data (i.e., cost of 

control, EGU NOX reduction potential, and downwind ozone 

reduction metrics) in a multi-factor test that allows the EPA to 

evaluate the cost-effectiveness of various levels of emission 

reductions and the resulting improvements in downwind ozone 

concentrations. 

This evaluation shows that meaningful EGU NOX reductions are 

available at reasonable cost and that these reductions can 

provide meaningful improvements in downwind ozone concentrations 

at the identified nonattainment and maintenance receptors for 

this proposal. For example, the combined downwind ozone 

improvement across nonattainment and maintenance receptors is 

approximately 19 ppb at the $1,300 per ton level. See Figure 

VI.1.
144

Figure VI.1. EGU Ozone season NOX Reduction Potential in 24 

linked states and Corresponding Total Reduction in Downwind 

Ozone Concentrations at Nonattainment and Maintenance Receptors 

for each Uniform NOX Cost Evaluated 

Combining costs, EGU NOX reductions, and corresponding 

improvements in downwind ozone concentrations results in a “knee 

in the curve” at $1,300 per ton. This uniform cost of reduction 

represents the threshold at which EGU NOX reduction potential and 

corresponding downwind ozone air quality improvements are 

maximized with respect to marginal cost. That is, the ratio of 

emission reductions to marginal cost and the ratio of ozone 

improvements to marginal cost are maximized relative to the 

0

6

12

18

24

30

 -

 30,000

 60,000

 90,000

 120,000

 150,000

$0 $2,000 $4,000 $6,000 $8,000 $10,000

Total Ozone Improvement at 

Nonattainment and Maintenance 

Receptors (ppb) 

EGU Ozone

-season NOX Reduction 

Potential (tons)

Uniform NOx Cost Thresholds

NOX Reduction Potential Ozone Improvement
145

other uniform cost thresholds evaluated. Further, at higher cost 

thresholds, as a result of this analysis we do not anticipate 

significant additional reductions that would justify these 

higher costs.

As part of this analysis, the EPA evaluates potential overcontrol with respect to whether (1) the expected ozone

improvements would be sufficient or greater than necessary to

resolve the downwind ozone pollution problem (i.e., resolving 

nonattainment or maintenance problems) or (2) the expected ozone

improvements would reduce upwind state ozone contributions to 

below the screening threshold (i.e., 1% of the NAAQS).

In EME Homer City, the Supreme Court held that EPA cannot 

“require[] an upwind State to reduce emissions by more than the 

amount necessary to achieve attainment in every downwind State 

to which it is linked.” 134 S.Ct. at 1608. On remand from the 

Supreme Court, the D.C. Circuit held that this means that EPA 

might overstep its authority “when those downwind locations 

would achieve attainment even if less stringent emissions limits 

were imposed on the upwind States linked to those locations.”

EME Homer City II, 795 F.3d at 127. The D.C. Circuit qualified 

this statement by noting that this “does not mean that every 

such upwind State would then be entitled to less stringent 

emission limits. Some of those upwind States may still be 

subject to the more stringent emissions limits so as not to 
146

cause other downwind locations to which those States are linked 

to fall into nonattainment.” Id. at 14-15.

Consistent with these instructions from the Supreme Court 

and the D.C. Circuit, the EPA evaluated whether reductions 

quantified under the evaluated cost thresholds can be 

anticipated to resolve any downwind nonattainment or maintenance 

problems (as defined in section V) and by how much. 

The EPA’s assessment shows that the uniform control 

stringency represented by $500 per ton would resolve the 

maintenance problem at two downwind maintenance receptors --

Ocean County New Jersey (maximum design value of 75.9 ppb) and 

Oldham County Kentucky (maximum design value of 75.8 ppb). 

Because no state is linked solely to one of these maintenance 

receptors, resolving these downwind air quality impact does not 

fully address any individual upwind state’s good neighbor 

obligation.

This assessment shows that the uniform control stringency 

represented by $1,300 per ton would resolve maintenance problems 

at three additional downwind maintenance receptors –- Baltimore 

County Maryland (maximum design value of 75.6 ppb), Hamilton 

County Ohio (maximum design value of 75.1 ppb), and Gloucester 

County New Jersey (maximum design value of 75.8 ppb). The EPA’s 

assessment shows that this control level does resolve the only 

identified nonattainment or maintenance problem to which North 
147

Carolina is linked for this proposal – the Baltimore County 

Maryland maintenance receptor. The EPA therefore proposes that 

this EGU control level would fully address North Carolina’s good 

neighbor obligation with respect to the 2008 ozone NAAQS. The 

EPA seeks comment on this determination.

The EPA also proposes that, based on the information 

supporting this proposal, this level of EGU NOX control for North 

Carolina would not constitute over-control as to the Baltimore 

County receptor. The level of the 2008 ozone standard NAAQS is 

75 ppb. At the uniform $1,300 per ton cost threshold, EPA’s 

assessment demonstrates that the receptor would just be 

maintaining the standard, with a maximum design value of 75.6 

ppb. Therefore, the emissions reductions that would be achieved 

at the $1,300 per ton cost threshold would not result in air 

quality improvements at the Baltimore County receptor 

significantly better than the standard such the emission 

reductions might constitute over-control as to that receptor. 

On the contrary, the emission reductions achieved in upwind 

states at the $1,300 per ton cost threshold are necessary to 

bring the maximum design value at the Baltimore County receptor 

into alignment with the standard. The EPA also seeks comment on 

this determination. 

For the remainder of the states for which the EPA is 

proposing FIPs in this action, none of these states are linked 
148

solely to one of these maintenance receptors with air quality 

resolved at the $1,300 per ton cost threshold. Therefore, 

resolving these downwind air quality impacts does not fully 

address any other individual upwind state’s good neighbor 

obligation.

As noted above the EPA is proposing that the $1,300 per ton 

EGU control level would fully address North Carolina’s good 

neighbor obligation with respect to the 2008 ozone NAAQS. As 

such, based on the data supporting this proposal, North Carolina 

was excluded from assessment of air quality improvements at more 

stringent uniform EGU NOX control levels.

The EPA’s assessment shows that the uniform control 

stringency represented by $3,400 per ton would resolve the 

maintenance problem at two additional downwind maintenance 

receptors -- Denton County Texas (481211032)(maximum design 

value of 75.9 ppb) and Harris County Texas (482011050) (maximum 

design value of 75.9 ppb). Because no state is linked solely to 

one of these maintenance receptors, resolving these downwind air 

quality impacts does not fully address any individual upwind 

state’s good neighbor obligation.

The EPA provides this summary of the evaluation for the 

$500 per ton; $1,300 per ton; and $3,400 per ton uniform cost 

thresholds because, as described below, the EPA is proposing to 

use the $1,300 per ton level and is taking comment on using the 
149

$500 per ton level or $3,400 per ton level to quantify ozone

season EGU NOX requirements to reduce interstate ozone transport 

for the 2008 ozone NAAQS. Further information on the EPA’s 

evaluation of these cost thresholds as well as additional cost 

thresholds ($5,000 per ton; $6,400 per ton; and $10,000 per ton) 

are provided in the Ozone Transport Policy Analysis Technical 

Support Document. Additionally, Table VI.D-2 provides a summary 

of the expected number of nonattainment and maintenance-only 

receptors at the adjusted base case and cost thresholds.

Table VI.D-2 Number of Nonattainment or Maintenance Receptors 

after EGU NOX Mitigation

Cost Threshold

Nonattainment 

Receptors

Maintenance-Only

Receptors

Base Case (IPM 5.15 w/CPP) 12 21

$500 per ton 12 19

$1,300 per ton 12 14

$3,400 per ton 12 13

$5,000 per ton 12 13

$6,400 per ton 12 13

$10,000 per ton 12 12

In EME Homer City, the Supreme Court also held that “EPA 

cannot require a State to reduce its output of pollution . . . 

at odds with the one-percent threshold the Agency has set.” 134 

S.Ct. at 1608. The Court explained that “EPA cannot demand 

reductions that would drive an upwind State’s contribution to 

every downwind State to which it is linked below one percent of 

the relevant NAAQS.” Id. Accordingly, the EPA also evaluated the 

potential for over-control with respect to the 1% threshold 
150

proposed to be applied in this rulerulemaking at each relevant 

cost threshold. Specifically, the EPA evaluated whether the

uniform cost thresholds would reduce upwind EGU emissions to a 

level where the contribution from each upwind state would be 

below the 1% threshold that linked the upwind state to the 

downwind receptors. If the EPA found that any state’s reduction 

obligation at the applied cost threshold decreased its 

contribution to every downwind receptor to which it is linked 

below the 1% threshold, we would need to adjust the state’s 

reduction obligation accordingly. The EPA’s assessment reveals 

that there is not over-control with respect to the 1% threshold 

at any of the evaluated uniform costs in any upwind state; in 

fact, even at the highest uniform cost threshold evaluated 

(e.g., $10,000 per ton), all upwind states that contributed 

greater than or equal to the 1% threshold in the base case

continued to contribute greater than or equal to 1% of the NAAQS 

to at least one downwind nonattainment or maintenance receptor.99

Therefore, the EPA does not expect any of the uniform cost 

thresholds evaluated to result in over-control relative to the 

1% threshold. For more information about this assessment, refer 

 

99 As discussed above, North Carolina would not be regulated at any level 

higher than $1300/ton and at that level, there’s no over-control as to the 1% 

threshold. In fact, while the receptor to which North Carolina is linked 

resolves its maintenance problem at the $1,300/ton level, North Carolina 

would continue to contribute equal to or greater than 1% to that air quality 

monitor.
151

to the Ozone Transport Policy Analysis Technical Support 

Document.

The EPA proposes to determine ozone season EGU NOX control 

requirements for upwind states to reduce interstate ozone 

transport for the 2008 ozone NAAQS based on the reduction 

potential quantified from pollution control measures that are 

cost-effective at the $1,300 per ton level. The EPA seeks 

comment on potentially basing these ozone season NOX control 

requirements on uniform cost levels that are less stringent 

($500 per ton) or more stringent ($3,400 per ton), including 

comments on the proposed approach to addressing a state like 

North Carolina in such a situation, which is explained below..

The EPA notes that the evaluation of cost, NOX reductions, 

and ozone improvements for the final rule could show different 

results for different states. For example, one or more states 

could fully address their good neighbor obligation based on 

ozone season NOX control requirements represented by one cost 

level while one or more other states would not fully address 

their good neighbor obligation at that level and would have 

ozone season NOX control requirements based on a more stringent 

cost level in order to fully address or make further progress 

toward partially addressing their good neighbor obligation. In 

this situation, the EPA proposes that it would quantify 

requirements for these different groups of states based on 
152

different uniform control stringencies. This could be similar to 

EPA’s establishing two different SO2 groups under the original 

CSAPR as to addressing PM2.5 transport. The EPA seeks comment on 

this proposed approach for quantifying requirements.

The EPA also seeks comment on implementation of the 

resulting emissions budgets. The EPA proposes that if there are 

groups of states with ozone season NOX control requirements based 

on different cost levels, we would nevertheless finalize FIPs 

for the states in these groups of states that incorporate 

participation in a trading program that allows them to trade 

allowances with each other subject to limitations described in 

section VII of this proposal. 

By way of example and as noted above, the EPA is also 

seeking comment on potentially basing ozone season NOX control 

requirements on the $3,400 per ton uniform cost levels. If the 

EPA were to finalize ozone season NOX control requirements based 

on this level, given the specific data informing this proposal, 

then the EPA would set North Carolina’s requirements based on 

the less stringent $1,300 per ton level because, as discussed 

above, the sole receptor to which North Carolina is linked for 

this proposal is resolved at the $1,300 per ton level with a 

maximum design value of 75.6 ppb. Therefore, because the $1,300 

per ton level fully addresses North Carolina’s good neighbor 

obligation, if EPA were to determine ozone season NOX control 
153

requirements based on the $3,400 per ton level for the remainder 

of states, the EPA would finalize good neighbor requirements for 

these two groups of states using different uniform control 

stringencies. The EPA proposes that it would finalize FIPs for 

the states that incorporate participation in a trading program 

that allows them to trade allowances with each other subject to 

limitations described in section VII of this proposal. 

The EPA’s selection of reductions for this proposed rule is 

specific to, and appropriate for, defining near-term achievable 

upwind obligations with respect to the 2008 ozone NAAQS in 

states where a FIP is necessary. We do not intend – nor do we 

believe we would be justified in doing so in any event – that 

the cost-level-based determinations in this proposed rule impose 

a constraint for selection of cost levels in addressing 

transported pollution with respect to future NAAQS and/or any 

revisions to these FIPs for any other future transport rules 

that the EPA may develop to address any potential remaining 

obligation as to the current NAAQS, for which different cost 

levels may be appropriate.

As described above, the EPA is proposing that the NOX

emission reductions associated with uniform control stringency 

represented by $1,300 per ton would not result in over-control 

at any of the identified non-attainment or maintenance receptors 
154

and it is reasonable to require such reductions from upwind 

states.

The EPA requests comment on its proposal to quantify ozone 

season EGU NOX reductions to reduce interstate transport with 

respect to the 2008 ozone NAAQS using the $1,300 per ton uniform 

cost threshold.

Note that our assessment of EGU NOX reduction potential 

shows zero reductions available in Delaware in 2017 at any 

evaluated cost threshold. At this time, because the assessment 

shows no EGU NOX reduction potential within Delaware up to 

$10,000 per ton and because Delaware does not currently 

participate in the original CSAPR NOX ozone-season allowance 

trading program, the EPA is not proposing to promulgate a FIP 

for Delaware to be included in this rule. However, as this 

assessment has only considered reductions available at EGUs by 

2017, the EPA cannot at this time conclude that Delaware does 

not have reductions available on a longer timeframe or from 

other emission sectors. Accordingly, the EPA cannot conclude at 

this time that Delaware does not significantly contribute to 

nonattainment or interfere with maintenance at downwind 

receptors to which it is linked. The EPA will evaluate 

additional reduction potential from Delaware in a future 

rulemaking to address the 2008 ozone standard. The EPA seeks 

comment on not including Delaware in the proposed FIPs.
155

The EPA’s EGU NOX reduction assessment also shows nearly

zero reductions available in Wisconsin in 2017 at the proposed 

$1,300 per ton cost threshold. However, Wisconsin currently 

participates in the original CSAPR NOX ozone-season emissions 

trading program and Wisconsin’s original CSAPR NOX ozone 

emissions budget is greater than its projected base case 

emissions. The EPA proposes to update Wisconsin’s emissions 

budgets because not doing so would mean that Wisconsin, which is 

found to contribute above 1% to downwind ozone problems, could 

increase emissions above its base case level. The EPA proposes 

to determine ozone season NOX control requirements for Wisconsin 

to reduce interstate ozone transport for the 2008 ozone NAAQS 

based on the reduction potential quantified from pollution 

control measures that are cost-effective at the $1,300 per ton 

level. For Wisconsin, based on modeling for this proposal, this 

level is similar to its projected base-case level. The EPA seeks 

comment on the proposed FIP for Wisconsin.

The EPA also requests comment as to whether the EPA should 

treat Delaware and Wisconsin in the same manner with respect to 

their inclusion or exclusion from the ozone-season trading 

program with respect to the 2008 ozone NAAQS. For example, the 

EPA requests comment as to whether both Delaware and Wisconsin 

should be included in the ozone-season trading program with 

budgets on the reduction potential quantified from pollution 
156

control measures that are cost-effective at $1,300 per ton,. 

EPA also requests comment as to whether both states should 

instead be excluded from the ozone-season trading program.

E. Quantifying State Emissions Budgets

The proposed emissions budgets reflect remaining EGU 

emissions after upwind states achieve the emission reduction 

obligations defined in section VI of this proposal. 

In the original CSAPR proposal, the EPA set proposed

emissions budgets by using an approach that considered monitored 

state-level heat input and modeled state-level emissions rates. 

However, for the CSAPR final rule, the EPA set budgets using 

only the modeling results from CSAPR’s uniform cost assessment. 

For this rule, the EPA proposes to set emissions budgets by 

considering monitored heat input and modeled emissions rates, 

similar to the original CSAPR proposal. The EPA seeks comment on 

all aspects of quantifying state emissions budgets reflecting 

upwind obligations, including alternative metrics to heat input,

such as generation

The EPA proposes to quantify state emissions budgets using 

the minimum of calculated EGU emissions budgets using the statelevel EGU NOX emission rates that correspond to the upwind state 

reductions identified above using a uniform cost threshold of 

$1,300 per ton or 2014 monitored historic emissions. 
157

The proposed approach for translating this EGU NOX reduction 

potential into emissions budgets is a four step process. First, 

the EPA would use the resulting 2018 state-level modeled EGU NOX

emissions rate (lbs/mmBtu) from the IPM $1,300 per ton uniform 

cost assessment. The state-level rate is calculated as the total 

emissions from affected sources within the state, divided by the 

total heat input from these sources. Second, the EPA proposes to 

multiply this modeled state-level emissions rate by 2014 

monitored historic state-level heat input. Multiplying the 

projected state-level emissions rate by historical heat input 

yields state-specific ozone season EGU NOX emissions for 2018. 

Third, the EPA proposes to add an adjustment to account for 

differences in unit availability between the IPM 2018 run year 

and 2017, yielding state-specific ozone season EGU NOX emissions 

for 2017. Finally, the EPA then proposes EGU emissions budgets 

as the minimum of this calculated 2017 emission level or 2014 

historic monitored emissions. 

This proposed approach reflects the EGU NOX reduction 

potential described above and grounds the EPA’s quantification 

of emissions budgets in historical data. The proposed EGU NOx 

ozone-season emissions budgets calculated using this approach 

can be found in Table VI.E-1. Tables VI.E-2 and VI.E-3 provide 

the EGU NOX ozone-season emissions budgets reflecting EGU NOX
158

mitigation available for 2017 at $500 per ton and $3,400 per 

ton, respectively.

Table VI.E-1. Proposed EGU NOX Ozone-Season Emissions budgets, 

Reflecting EGU NOX mitigation Available for 2017 at $1,300 per 

ton

State

2014 

Emissions 

(tons)

2018 

$1,300/ton 

Emission 

Rate 

(lbs/MMBtu)

2014 Heat 

Input(MMBtu)

2017 

Adjustment 

(tons)100

2017 EGU 

NOx

OzoneSeason

Emissions 

budget

(tons)

Alabama 21,075 0.049 410,477,094 0 9,979

Arkansas 18,135 0.074 185,511,093 51 6,949

Illinois 17,520 0.062 388,382,456 9 12,078

Indiana 40,247 0.126 447,417,615 0 28,284

Iowa 13,857 0.11 151,989,571 0 8,351

Kansas 12,297 0.12 154,921,650 0 9,272

Kentucky 33,896 0.102 380,694,315 2,169 21,519

Louisiana 18,278 0.097 326,662,000 17 15,807

Maryland 4,026 0.05 86,239,563 2,669 4,026

Michigan 25,065 0.112 307,723,171 1,836 19,115

Mississippi 10,229 0.069 172,406,970 0 5,910

Missouri 31,235 0.086 330,006,788 1,210 15,323

New Jersey 2,746 0.036 112,887,439 0 2,015

New York 5,547 0.038 235,619,397 0 4,450

North 

Carolina 16,759 0.078 315,255,877 0 12,275

Ohio 32,181 0.073 457,251,027 0 16,660

Oklahoma 16,215 0.144 236,715,186 154 16,215

Pennsylvania 44,551 0.057 508,608,673 0 14,387

Tennessee 8,057 0.056 196,132,311 0 5,481

Texas 58,492 0.079 1,474,773,212 33 58,002

Virginia 9,695 0.076 179,324,728 0 6,818

West 

Virginia 29,420 0.084 317,087,558 0 13,390

Wisconsin 9,087 0.054 205,305,933 0 5,561

 

100 The entire 2017 Adjustment listed is not used in calculating for Maryland 

and Oklahoma because it would push their budget above their 2014 emissions. 
159

23 State 

Region 478,610 7,581,393,627 311,867

Table VI.E-2. Proposed EGU NOX Ozone-Season Emissions budgets, 

Reflecting EGU NOX mitigation Available for 2017 at $500 per ton

State

2014 

Emissions 

(tons)

2018 

$500/ton 

Emission 

Rate 

(lbs/MMBtu)

2014 Heat 

Input(MMBtu)

2017 

Adjustment 

(tons)101

2017 EGU 

NOx 

OzoneSeason 

Emissions 

budget

(tons)

Alabama 21,075 0.058 410,477,094 0 11,886

Arkansas 18,135 0.075 185,511,093 51 7,038

Illinois 17,520 0.062 388,382,456 23 12,144

Indiana 40,247 0.15 447,417,615 0 33,483

Iowa 13,857 0.113 151,989,571 0 8,614

Kansas 12,297 0.12 154,921,650 0 9,278

Kentucky 33,896 0.149 380,694,315 4,463 32,783

Louisiana 18,278 0.097 326,662,000 17 15,861

Maryland 4,026 0.05 86,239,563 2,672 4,026

Michigan 25,065 0.131 307,723,171 1,836 22,022

Mississippi 10,229 0.071 172,406,970 0 6,083

Missouri 31,235 0.086 330,006,788 1,123 15,380

New Jersey 2,746 0.036 112,887,439 0 2,016

New York 5,547 0.039 235,619,397 0 4,607

North 

Carolina 16,759 0.078 315,255,877 0 12,278

Ohio 32,181 0.088 457,251,027 0 20,194

Oklahoma 16,215 0.156 236,715,186 154 16,215

Pennsylvania 44,551 0.15 508,608,673 0 38,270

Tennessee 8,057 0.056 196,132,311 0 5,520

Texas 58,492 0.083 1,474,773,212 0 58,492

Virginia 9,695 0.078 179,324,728 0 6,955

West 

Virginia 29,420 0.145 317,087,558 0 22,932

Wisconsin 9,087 0.054 205,305,933 0 5,588

 

101 The entire 2017 Adjustment listed is not used in calculating for Maryland, 

Oklahoma, and Texas because it would push their budget above their 2014 

emissions.
160

23 State 

Region 478,610 7,581,393,627 371,665

Table VI.E-3. Proposed EGU NOX Ozone-Season Emissions budgets, 

Reflecting EGU NOX mitigation Available for 2017 at $3,400 per 

ton

State

2014 

Emissions 

(tons)

2018 

$3,400/ton 

Emission 

Rate 

(lbs/MMBtu)

2014 Heat 

Input(MMBtu)

2017 

Adjustment 

(tons)102

2017 EGU 

NOx 

OzoneSeason 

Emissions 

budget

(tons)

Alabama 21,075 0.048 410,477,094 0 9,931

Arkansas 18,135 0.065 185,511,093 51 6,101

Illinois 17,520 0.062 388,382,456 0 11,992

Indiana 40,247 0.123 447,417,615 0 27,585

Iowa 13,857 0.107 151,989,571 0 8,118

Kansas 12,297 0.12 154,921,650 0 9,259

Kentucky 33,896 0.099 380,694,315 2,169 20,945

Louisiana 18,278 0.094 326,662,000 17 15,378

Maryland 4,026 0.05 86,239,563 2,523 4,026

Michigan 25,065 0.108 307,723,171 1,978 18,624

Mississippi 10,229 0.064 172,406,970 0 5,487

Missouri 31,235 0.083 330,006,788 1,500 15,240

New Jersey 2,746 0.036 112,887,439 0 2,011

New York 5,547 0.037 235,619,397 0 4,391

North 

Carolina 16,759 0.068 315,255,877 0 10,705

Ohio 32,181 0.073 457,251,027 0 16,637

Oklahoma 16,215 0.137 236,715,186 146 16,215

Pennsylvania 44,551 0.056 508,608,673 0 14,358

Tennessee 8,057 0.056 196,132,311 0 5,449

Texas 58,492 0.076 1,474,773,212 100 55,864

Virginia 9,695 0.065 179,324,728 0 5,834

West 

Virginia 29,420 0.078 317,087,558 0 12,367

Wisconsin 9,087 0.054 205,305,933 0 5,511

 

102 The entire 2017 Adjustment listed is not used in calculating for Maryland 

and Oklahoma because it would push their budget above their 2014 emissions.
161

23 State 

Region 478,610 7,581,393,627 302,028

VII. Implementation Using the Existing CSAPR NOX Ozone-Season 

Allowance Trading Program and Relationship to Other Rules

A. Background

This section describes implementing and enforcing the 

budgets quantified in section VI. In the 4-step CSAPR 

methodology previously described, once emission reduction 

potential is quantified into emissions budgets, the remaining 

step is to identify an approach for ensuring that such 

reductions occur and are enforceable. As discussed previously, 

EPA is proposing implement the budgets to address the 2008 ozone 

NAAQS using the existing CSAPR trading program that allows 

limited interstate trading among states participating in the 

ozone-season trading program. The EPA proposes to revise the 

existing budgets, developed to address transport as to the 1997 

ozone NAAQS, where necessary to reflect the additional 

reductions that the EPA identified as necessary to address 

transport as to the 2008 NAAQS. The EPA will implement the 

trading program in each affected state through the issuance of a 

FIP.

In electing to propose to implement these near-term EGU 

reductions for the 2008 ozone standard using the existing CSAPR 
162

trading infrastructure, the EPA considered the many significant 

advantages of continuing to use the existing CSAPR program, 

including the ease of transition to the new budgets, the 

economic and administrative efficiency of trading approaches,

and the flexibility afforded to sources regarding compliance.

The EPA also considered views expressed by some 

stakeholders that a complementary short-term (e.g., 30-day) 

rate-based limit would ensure that control measures adopted to 

meet the revised budgets continue to operate over time. Some 

stakeholders have observed, for example, that some existing SCR 

and SNCR units may not have operated in recent years because 

CAIR allowance prices are below the operating costs of the 

controls. The EPA notes that in such cases, the CAIR emissions 

budgets that states were required to meet to address significant 

contribution for the 1997 NAAQS were in fact still being met.

The EPA will also evaluate power sector behavior for 2015, the 

first year of CSAPR implementation, and provide that assessment 

for the final rule. The EPA expects that certain aspects of this 

proposal will alleviate some of these concerns. In particular, 

this proposal is aimed at establishing new, lower emissions 

budgets that are calculated based on a uniform cost that is 

reflective of, among other things, operating those controls. 

Furthermore, as described later in this notice, we are proposing 

adjustments to the CSAPR regulations that, if adopted, would 
163

address the role that the banked allowances may play in 

allowance prices. For these reasons, the EPA does not believe 

that including a short-term complementary rate-based limit in 

the proposed FIPs is necessary. Nevertheless, we invite comment 

on the need for such an approach and, from commenters arguing 

that it is needed, we invite suggestions for calculating it.

As explained in greater detail in section IV, under CAA 

sections 110(a)(1) and 110(a)(2), each state is required to 

submit a SIP that provides for the implementation, maintenance, 

and enforcement of each primary or secondary NAAQS. According to 

section 110(a)(2)(D)(i)(I), the SIP for each state, regardless 

of a state’s designation status for the relevant NAAQS, must 

prohibit sources or other types of emissions activity from 

emitting any air pollutant in amounts that will "contribute 

significantly to nonattainment" of the standard in a downwind 

state or "interfere with maintenance" of the standard in a 

downwind state. Section IV also explains in detail that the EPA 

is obligated to promulgate FIPs when we find that a state fails 

to submit a complete SIP or the EPA disapproves a SIP submittal.

The EPA recognizes that several states included in this 

proposal have submitted transport SIPs to address the 2008 ozone 

standard that the EPA is reviewing, and it is possible that 

additional states may submit SIPs in the future. As explained in 

section IV above, the EPA may only finalize FIPs for states 
164

where FIP authority exists; that is, for states where either the 

EPA found that the state failed to submit a complete transport 

SIP or where the EPA has disapproved a transport SIP submittal 

for that state. The EPA intends to finalize these proposed FIPs 

together in a single action and, to the greatest extent 

possible, the EPA intends to take final action on SIP submittals 

currently before the agency prior to finalizing this proposal.

In the event that a state plans to revise its SIP or submit a 

SIP prior to any final rule, contact your regional office to 

alert the EPA.

By this action, the EPA is proposing federal implementation 

plans with respect to the 2008 ozone NAAQS for each state 

potentially covered by this rule. Section VI above describes the 

EPA’s approach to defining state-level EGU emissions budgets 

that represent the EGU emissions remaining after reducing that 

state’s significant contribution to downwind nonattainment 

and/or interference with maintenance. The EPA is proposing to 

implement these EGU emissions budgets in the FIPs through the 

CSAPR EGU NOX ozone-season trading program.

When the EPA finalized CSAPR in 2011 under the good 

neighbor provision of the CAA to reduce emissions of SO2 and NOX

from power plants in eastern states, the rule put in place 

regional trading programs to quickly and cost-effectively

address pollution that affects air quality in downwind states. 
165

The EPA envisioned that the methodology could be used to address 

transport concerns under other existing NAAQS and future NAAQS 

revisions. See 76 FR 48211 and 48246, August 8, 2011. 

Accordingly, the EPA proposes to use the CSAPR ozone-season 

trading program and related provisions as codified under 40 CFR 

Part 97, Subpart BBBBB and section 52.38, as amended in this 

proposal, to implement the proposed EGU NOX ozone-season 

emissions budgets for the 2008 ozone NAAQS. This program will be 

initially implemented in each state through a FIP.

In this notice, the EPA proposes that the first control 

period for the requirements is the 2017 ozone season. A covered 

state would be required to demonstrate compliance with FIP 

requirements for each subsequent ozone season until it submits, 

and the EPA approves, a SIP or the EPA promulgates another 

federal rule replacing the FIP.

The EPA notes that the compliance flexibility provided by 

the CSAPR NOX ozone-season trading program allows sources to 

demonstrate compliance by holding allowances and does not 

prescribe unit-specific and technology-specific NOX mitigation.

In other words, while the EPA quantified EGU NOX reductions 

resulting from mitigation strategies such as operating or 

installing (or upgrading to) state-of-the-art combustion 

controls, no particular reduction strategy is required for any 

specific unit because the Act only requires that an upwind 
166

state’s aggregate emissions neither significantly contribute to 

nonattainment nor interfere with maintenance of the NAAQS in a 

downwind state.

In practice, the EGU emissions budgets that the EPA is 

proposing in this action are achievable for each of the 23 

states through operating existing SCR and SNCR controls, 

installing or upgrading to state-of-the-art combustion controls, 

or shifting generation to low-NOX emitting units. The EPA 

believes that this proposed rule provides sufficient lead time 

to implement these control strategies by the 2017 ozone season.

For the EPA’s assessment of the feasibility of controls for 

2017, refer to section VI above and the EGU NOX Reduction TSD in 

the docket for this proposal.103

In this section of the preamble, the following topics are 

addressed: FIP requirements and key elements of the CSAPR 

trading programs; participation in the CSAPR NOX ozone-season 

trading program with a new budget; source monitoring and 

reporting; replacing the FIP with a SIP; title V permitting; and 

the relationship of this proposed rule to existing programs (NOX

SIP Call, CSAPR trading programs, Clean Power Plan (CPP), and 

other ozone transport programs).

 

103 The EPA notes that a state can instead require non-EGU NOX emission 

reductions through a SIP, if they choose to do so.
167

B. FIP Requirements and Key Elements of the CSAPR Trading 

Programs

The original CSAPR establishes an NOX ozone-season allowance

trading program that allows covered sources within each state to 

trade allowances with other sources within the same trading 

group. Pursuant to the CSAPR NOX ozone-season trading program, 

sources are required to hold one allowance for each ton of NOX

emitted during the ozone season. We propose to use that same 

regional trading program, with adjusted budgets and certain 

additional revisions described below, as the compliance remedy 

for the proposed FIPs to address the 2008 ozone NAAQS. The first 

control period for this updated CSAPR NOX ozone-season trading 

program is proposed to begin with the 2017 ozone season, on May 

1, 2017.

In this section, the EPA is proposing to use the existing 

NOX ozone-season allowance trading system that was established 

under CSAPR in 40 CFR Part 97, Subpart BBBBB, to implement the 

emission reductions identified and quantified in the FIPs for 

this action. 

1. Applicability 

In this proposed rule, the EPA would maintain the 

applicability provisions in the final CSAPR rule for the NOX

ozone-season trading program (see 40 CFR 97.504).
168

Under the general applicability provisions of the CSAPR 

final rule, a covered unit is any stationary fossil-fuel-fired 

boiler or combustion turbine serving at any time on or after 

January 1, 2005, a generator with nameplate capacity exceeding 

25 MW producing electricity for sale, with the exception of 

certain cogeneration units and solid waste incineration units 

(see 76 FR 48273, August 8, 2011, for a discussion on 

applicability in the final CSAPR rule). The EPA is not proposing 

any changes to this provision.

2. State Budgets

This proposal includes revisions to 40 CFR Part 97.510 to 

reflect new budgets for states covered under this proposal as 

delineated in section VI above. This includes the NOX ozoneseason trading budgets, new unit set-asides, and Indian country 

new unit set-asides for 2017 and beyond, described in further 

detail below.

For states already covered by the original CSAPR ozoneseason program, the EPA proposes to update CSAPR EGU NOX ozoneseason budgets to reflect obligations to reduce interstate 

transport to address the 2008 ozone standard. For states that 

are newly brought into the CSAPR ozone-season program because 

emissions from the states significantly contribute to 

nonattainment or interfere with maintenance of the 2008 ozone 

NAAQS in a downwind state (i.e., Kansas based on information 
169

used to develop this proposal), the proposal includes an EGU NOX

ozone-season emissions budget. For states currently in the CSAPR 

ozone-season trading program, but not identified as contributing 

to interstate ozone transport for the 2008 NAAQS (i.e., Georgia

based on information used to develop this proposal), 

participation in CSAPR would continue unchanged pursuant to 

their previously-defined obligation (budget) with respect to the 

1997 ozone NAAQS.

The EPA proposes to establish reduced or new ozone-season

emissions budgets for the 23 eastern states affected by the 

transport rule for the 2008 ozone NAAQS. The EPA proposes to 

implement these emissions budgets by allocating allowances to 

sources in those states equal to the proposed budgets for 

compliance starting in 2017. The EPA will establish allowance 

allocations for the existing units in each state through this 

rulemaking. Portions of the state budgets will be set aside for 

new units, and the EPA will use the existing processes set forth 

in the CSAPR regulations to annually allocate allowances to the 

new units in each state from the new unit set-asides. For states 

that are currently in the CSAPR ozone-season program, but are 

not affected under this proposed transport rule for the 2008 

ozone NAAQS (i.e., Georgia based on information used to develop 

this proposal), the EPA will maintain the state’s budget as 

finalized in the original CSAPR rulemakings.
170

3. Allocations of Emission Allowances

Pursuant to the CSAPR trading program regulations, a 

covered source is required to hold sufficient allowances to 

cover the emissions from all covered units at the source during 

the control period for the NOX ozone season. The EPA assesses 

compliance with these allowance-holding requirements at the 

source (i.e., facility) level.

This section explains that the EPA proposes to allocate a 

state’s budget to existing units and new units in that state by

applying the same allocation approach as finalized in CSAPR, 

based on a unit’s historical heat input and its maximum 

historical emissions (see 76 FR 48284, August 8, 2011). This 

section also describes allocation for Tribes, the new unit setasides and Indian country new unit set-asides in each state, 

allocations to units that are not operating; and the recordation 

of allowance allocations in source compliance accounts.

A. Allocations for Existing Units

The EPA proposes to implement each state’s EGU NOX ozone-season 

emissions budget in the trading program by allocating the number 

of emission allowances to sources within that state, equivalent 

to the tonnage of that specific state budget, as shown in 

section VI. For these 23 states, the EPA would allocate 

allowances under each state’s budget to covered units in that 

state. The portion of a state budget allocated to existing units 
171

in that state is the state budget minus the new unit set-aside 

and minus the Indian country new unit set-aside. The new unit 

set-asides are portions of each budget reserved for new units 

that might locate in each state or in Indian country in the 

future. For the existing source level allocations, see the TSD 

called, “Existing Source Level Allocations for the 2008 NOX

Ozone-season Rule FIPs,” in the docket for this rulemaking. The 

methodology used to allocate allowances to individual units in a 

particular state has no impact on that state’s budget. 

For the purpose of allocations, an “existing unit” in CSAPR 

is one that commenced commercial operation prior to January 1, 

2010. For the 23 states included in this proposed rulemaking for 

the 2008 ozone NAAQS, the EPA proposes to identify an “existing 

unit” as one that commenced commercial operation prior to 

January 1, 2015. EPA has updated information on affected units 

that have commenced commercial operation prior to January 1, 

2015 (currently defined either as existing units or as new units 

pursuant to the current CSAPR regulations) that would allow 

these units to be considered existing units for purposes of 

allocations and would allow new unit set-asides to be fully 

reserved for any future new units in affected states or Indian 

country. The EPA is not proposing to change the January 1, 2010 

date for states that remain in the original CSAPR and are not 

affected by the changes proposed here (i.e., Georgia with 
172

respect to the CSAPR NOX ozone-season allowances and all states 

with respect to CSAPR SO2 or NOX annual allowances); thus, the 

only allowance allocations that are proposed to be changed in 

this rulerulemaking for any units under any of the CSAPR trading 

programs are allocations of NOX ozone-season allowances from 

budgets that are proposed to be revised in this proposed rule.

The EPA proposes to follow the original CSAPR methodology 

for distributing, or allocating, emission allowances to existing 

units based on the unit’s share of the state’s heat input, 

limited by the unit’s maximum historical emissions. This 

approach uses the highest three of the last five years to 

establish the heat input baseline for each unit, and constrains 

the unit-level allocations so as not to exceed the maximum 

historical baseline emissions during 2007-2014. As discussed in 

the original CSAPR final rule (see 76 FR 48288-9, August 8, 

2011), the EPA finds no advantage or disadvantage in this 

approach that would penalize those units that have already 

invested in cleaner fuels or other pollution reduction measures. 

The EPA considers this allocation approach to be fuel-neutral, 

control-neutral, transparent, based on reliable data, and 

similar to allocation methodologies previously used in the NOX

SIP Call and Acid Rain Program. The EPA requests comments on 

following the CSAPR approach for existing unit allocations in 

states covered by this proposed rule as to the 2008 ozone NAAQS.
173

For states that have EPA-approved abbreviated SIP revisions 

adopting a different allocation methodology for sources located 

within the state for CSAPR for the 2017 ozone season and beyond, 

those provisions would address the allocation of revised NOX

ozone-season emissions budgets established under this proposed 

rule, provided that the SIP revision includes not only specific 

allocations given the total state budget expected at the time of 

the SIP revision, but also a methodology for determining 

allocations from any given total state budget. For states that 

have EPA-approved full SIP revisions, the EPA proposes to use 

the EPA-approved allocation provisions of the state’s SIP 

revision to allocate allowances to sources in that particular 

state using the revised emissions budget proposed to address 

interstate ozone transport for the 2008 NAAQS, again provided 

that the SIP includes not only specific allocations but a 

methodology for determining allocations from any given total 

state budget. 

Further, where the state regulation approved as a full or 

abbreviated SIP revision does not contain an allocation 

methodology but the materials submitted by the state to support 

EPA’s approval of that regulation as a SIP revision contain the 

state’s allocation method, described in an unambiguous manner, 

the EPA seeks comment on using that state-approved methodology 

to determine the allocations of allowances to sources in the 
174

state under the FIPs established in this proposed rule. These 

possible approaches could prevent a state from needing to submit 

another SIP revision to implement the same allocation provisions 

under this proposed rule that the state has already implemented 

under CSAPR before adoption of this proposed rule. 

For all other states, the EPA proposes to use the 

allocation method previously finalized in the final CSAPR 

rulemaking as discussed above in this section. These provisions 

would not prevent any state (one with an EPA-approved SIP 

revision or without) from submitting an alternative allocation 

methodology under thethis proposed rule for later compliance 

years. EPA requests comment on this modified allocation approach 

for states with EPA-approved SIP revisions under the current 

rule.

b. Allocations for New Units

For the purpose of allocations, CSAPR identifies a “new 

unit” as one that commenced commercial operation on or after 

January 1, 2010, and provides a methodology for allocating 

emission allowances to new units from new unit set-asides in 

each state and to new units that locate in Indian country. See 

76 FR 48290-48294 (Aug. 8, 2011), for more information. The FIPs 

that EPA is proposing will incorporate a trading program in 

which EPA is proposing to define a covered unit as a “new unit” 

if it commences commercial operation on or after January 1, 
175

2015; if it becomes covered by meeting applicability criteria 

subsequent to January 1, 2015; if it relocates into a different 

state covered by this FIP; or if it was an “existing” covered 

unit that stopped operating for 2 consecutive years but resumes 

commercial operation at some point thereafter. To the extent 

that states seek approval of SIPs with different allocation 

provisions than EPA, these SIPs may seek to define new units

differently. 

The EPA further proposes that its trading program will make 

allocations to each state for new units (the new unit set-aside) 

equal to a basic minimum 2 percent of the total state budget, 

plus the projected amount of emissions from planned units in 

that state (for instance, if planned units in state A are 

projected to emit 3 percent of the state’s NOX ozone-season 

emissions budget, then the new unit set-aside for the state 

would be set at 5 percent, consisting of the basic minimum 2 

percent plus an additional 3 percent for planned units). See 76 

FR 48292. New units may receive allocations starting with the 

first year they are subject to the allowance-holding 

requirements of the rule. If unallocated to new units, setasides are redistributed to unretired existing units before the 

compliance deadline. The EPA requests comments on following the 

CSAPR approach for new unit allocations under this proposal. 
176

(For more detail on the CSAPR new unit set-aside provisions, see 

40 CFR 97.511(b) and 97.512.)

The EPA notes that applying the CSAPR approach using the 

data for this proposal results in a new-unit set-aside for New 

Jersey that is greater than 50% of the total proposed EGU NOX

ozone-season emissions budget for the state. This result is 

influenced by the EPA’s projected emissions rates for new units 

that are anticipated to come online within states. The EPA seeks 

comment on these data, which are available in the IPM 

documentation in the docket for this proposal. Further, the EPA 

seeks comment on whether additional data should be considered—

for example, reported NOX emission rates of recently constructed 

new NGCC units in each state.

Table VII.B-1. Proposed EGU NOX Ozone-Season New-unit Set-aside 

Amounts, Reflecting Proposed EGU Emissions Budgets (tons)

State

Proposed EGU 

NOX Emissions 

Budgets 

(tons)

New-unit 

set-aside 

amount 

(percent)

New-unit 

set-aside 

amount 

(tons)

Indian 

country setaside amount

(tons)

Alabama 9,979 2% 205

Arkansas 6,949 2% 141

Illinois 12,078 5% 591

Indiana 28,284 2% 565

Iowa 8,351 5% 419 8

Kansas 9,272 3% 281 9

Kentucky 21,519 3% 647

Louisiana 15,807 4% 628 16

Maryland 4,026 12% 485

Michigan 19,115 2% 382 19

Mississippi 5,910 10% 590 6

Missouri 15,323 2% 314

New Jersey 2,015 57% 1,151

New York 4,450 2% 93 4
177

North Carolina 12,275 2% 248 12

Ohio 16,660 2% 337

Oklahoma 16,215 2% 325 16

Pennsylvania 14,387 7% 1,017

Tennessee 5,481 2% 109

Texas 58,002 5% 2,910 58

Virginia 6,818 27% 1,844

West Virginia 13,390 2% 268

Wisconsin 5,561 2% 121 6

23 State Region 311,867 13,671 154

c. Allocations for Tribes and New Units in Indian Country

Tribes are not required to submit tribal implementation 

plans. However, as explained in the EPA’s regulations outlining 

Tribal Clean Air Act authority, the EPA is authorized to 

promulgate FIPs for Indian country as necessary or appropriate 

to protect air quality if a tribe does not submit and get EPA 

approval of a tribal implementation plan. See 40 CFR 49.11(a); 

see also 42 U.S.C. 7601(d)(4). For this proposed ozone rule, 

there are no existing affected units in Indian country in the 

states affected by this rule.

Under the current rule, allowances to possible future new 

units locating in Indian country are allocated by the EPA from 

an Indian country new unit set-aside established for each state 

with Indian country. (See 40 CFR 97.511(b)(2) and 97.512(b).) 

Because states generally have no SIP authority in reservation 

areas of Indian country and other areas of Indian country over 

which a tribe or EPA has demonstrated that a tribe has 
178

jurisdiction, the EPA continues to allocate such allowances to 

sources locating in such areas of Indian country within a state 

even if the state submits a SIP to replace the FIP. (40 CFR 

52.38(b)(5)(v) and (vi) and 52.38(b)(6).) The EPA reserves 0.1 

percent of the total state budget for new units in Indian 

country within that state (5 percent of the basic 2 percent new 

unit set-aside prior to any increase in a state’s new unit setaside amount for planned units). Unallocated allowances from a 

state’s Indian country new unit set-aside are returned to the 

state’s new unit set-aside and allocated according to the 

methodology described above. The EPA requests comment on 

following the CSAPR approach for new unit allocations in such 

areas of Indian country under the transport rule for the 2008 

ozone NAAQS.

d. Units that do not operate and the new unit set-aside

The EPA proposes to continue to apply for purposes of this

proposed rule the existing CSAPR provision under which a covered 

unit that does not operate for a period of two consecutive years 

will receive allowance allocations for a total of up to five 

years of non-operation. 40 CFR 97.511(a)(2). Starting in the 

fifth year after the first year of non-operation, allowances 

allocated to such units will instead be allocated to the new 

unit set-aside for the state in which the non-operating unit is 

located. This approach allows the new unit set-asides to grow 
179

over time. The EPA requests comment on retaining this timeline 

for allowance allocation for non-operating units or changing the 

allowance allocation for non-operating units to, for instance, 

two years or three years, in which case allowances would revert 

to the new unit set-aside in the second or third year after the 

first of two consecutive years of non-operation of a unit.

4. Variability Limits, Assurance Levels, and Penalties

In the original CSAPR, the EPA developed assurance 

provisions, including variability limits and assurance levels 

(with associated compliance penalties), to assure that each 

state will meet its pollution control obligations and to 

accommodate inherent year-to-year variability in state-level EGU 

operations. 

The original CSAPR budgets, and the updated CSAPR emissions 

budgets proposed in this notice, reflect EGU operations in an 

“average year.” However, year-to-year variability in EGU 

operations occurs due to the interconnected nature of the power 

sector and from changing weather patterns, demand growth, or 

disruptions in electricity supply from other units or from the 

transmission grid. Recognizing this, the FIP includes 

variability limits, which define the amount by which state 

emissions may exceed the level of the budgets in a given year to 

account for this variability in EGU operations. A state’s budget 

plus its variability limit equals a state’s assurance level, 
180

which acts as a cap on each state’s NOX emissions during a 

control period (that is, during the May-September ozone season 

in the case of this rule).

To establish the variability limits in the original CSAPR, 

the EPA analyzed historical state-level heat input variability 

as a proxy for emissions variability, assuming constant emission 

rates. (See 76 FR 48265, August 8, 2011.) The variability limits

for ozone-season NOX in the original CSAPR were calculated as 21 

percent of each state’s budget, and these variability limits 

were then codified in 40 CFR 97.510 along with the state 

budgets. Applying the CSAPR approach, the EPA proposes to set 

new variability limits applying the same 21 percent figure as 

determined in the original CSAPR to this proposed rule’s 

budgets. The EPA proposes that the same 21% figure is 

appropriate to use because variability in state-level heat input 

across a multi-year period is expected to be relatively 

consistent around long-term trends. The EPA seeks comment on 

this approach. Table VII.B-2 shows the proposed EGU NOX ozoneseason emissions budgets, variability limits, and assurance 

levels for each state.

Table VII.B-2. Proposed EGU NOX Ozone-Season Emissions budgets

Reflecting EGU NOX mitigation Available for 2017 at $1,300 per 

ton, Variability Limits, and Assurance Levels (Tons)

State

EGU NOx OzoneSeason 

Emissions 

budgets

Variability 

Limits

EGU NOx OzoneSeason Assurance 

Levels
181

Alabama 9,979 2,096 12,075

Arkansas 6,949 1,459 8,408

Illinois 12,078 2,536 14,614

Indiana 28,284 5,940 34,224

Iowa 8,351 1,754 10,105

Kansas 9,272 1,947 11,219

Kentucky 21,519 4,519 26,038

Louisiana 15,807 3,319 19,126

Maryland 4,026 845 4,871

Michigan 19,115 4,014 23,129

Mississippi 5,910 1,241 7,151

Missouri 15,323 3,218 18,541

New Jersey 2,015 423 2,438

New York 4,450 935 5,385

North Carolina 12,275 2,578 14,853

Ohio 16,660 3,499 20,159

Oklahoma 16,215 3,405 19,620

Pennsylvania 14,387 3,021 17,408

Tennessee 5,481 1,151 6,632

Texas 58,002 12,180 70,182

Virginia 6,818 1,432 8,250

West Virginia 13,390 2,812 16,202

Wisconsin 5,561 1,168 6,729

Region cap 311,867 65,493

The assurance provisions include penalties that are 

triggered when the state emissions as a whole exceed its 

assurance level. The original CSAPR provided that a state that 

exceeds its assurance level in a given year is assessed a total 

of 3-to-1 allowance surrender on the excess tons. Each excess 

ton above the assurance level must be met with one allowance for 

normal compliance plus two additional allowances to satisfy the 

penalty. The penalty is designed to deter state-level emissions 

from exceeding assurance levels. This was referred to in the 
182

original CSAPR as air quality-assured trading that accounts for 

variability in the electricity sector but also ensures that the 

necessary emission reductions occur within each covered state. 

If a state does not exceed its assurance level, no penalties are 

incurred by any source. Establishing assurance levels with 

compliance penalties therefore responds to the court’s holding 

in North Carolina requiring the EPA to assure that sources in 

each state were required to eliminate emissions that 

significantly contribute to nonattainment and interfere with 

maintenance of the NAAQS in another state.104

To assess the penalty under the assurance provisions, the 

EPA evaluates whether any state’s total EGU emissions in a 

control period exceeded the state’s assurance level, and if so, 

the EPA then determines which owners and operators of units in 

the state will be subject to an allowance surrender requirement 

based on each source’s emissions as compared to its unit-level 

assurance level. Since a single designated representative (DR) 

often represents multiple sources, the EPA evaluates which 

groups of units at the common DR level had emissions exceeding 

the respective common DR’s share of the state assurance level, 

regardless of whether the individual source had enough 

allowances to cover its emissions during the control period. 

 

104 531 F.3d at 908.
183

This provision is triggered only if two criteria are met: (1) 

the group of sources and units with a common DR are located in a 

state where the total state EGU emissions for a control period 

exceed the state assurance level; and (2) that group with the 

common DR had emissions exceeding the respective DR’s share of 

the state assurance level.

For more information on the CSAPR assurance provisions see 

76 FR 48294 (August 8, 2011). 

5. Implementation Approaches for Transitioning the Existing 

CSAPR NOX Ozone-season Program to Address Transport for a Newer 

NAAQS 

Consistent with the original CSAPR approach, EPA proposes 

that in this updated rulemaking, EGUs would be able to trade NOX

ozone-season emission allowances among units within the state 

and across state boundaries, with emissions and use of 

allowances limited by the assurance provisions. The following 

sections describe approaches to transition the existing CSAPR 

program designed for the 1997 ozone NAAQS to address interstate 

ozone transport for the 2008 ozone NAAQS.

A primary focus of this section is the extent to which 

allowances created to address interstate transport with respect 

to the 1997 ozone NAAQS, reflecting emissions budgets at $500 

per ton, are fungible with allowances created under this 

proposal to address interstate transport for the 2008 ozone 
184

NAAQS, reflecting emissions budgets at $1,300 per ton. The EPA 

proposes that these implementation tools are not presumptively 

equivalent, given that they were developed to address ozone 

transport under different NAAQS and using different cost 

thresholds. However, as further discussed below, the EPA is 

proposing approaches under which allowances allocated under 

budgets established to address the 1997 NAAQS could be used for 

compliance for addressing interstate transport for the 2008 

NAAQS, subject to specific limitations. The EPA is also taking 

comment on several other approaches for addressing the 

transition from a program in which all budgets were established 

based on an integrated analysis using a single control cost 

threshold to address the 1997 NAAQS to a program with a mix of 

budgets established in independent analyses using different 

control cost thresholds, in some cases to address the 1997 NAAQS 

and in other cases to address the 2008 NAAQS.

a. Use of CSAPR Ozone-season Trading Program Bank in the 

Transport Rule for the 2008 Ozone NAAQS Trading Program

Since CSAPR was promulgated in 2011, the U.S. electric 

sector has undergone considerable transformation primarily due 

to economic and market forces precipitated by the natural gas 

boom. For example, Henry Hub natural gas prices reached below 

$2.00 per million BTU in 2012 and were in the $2.00-$3.00 range 

for most of 2012. These prices are below the level initially 
185

anticipated when establishing the phase 1 and 2 budgets, and 

have made the operation of lower emitting units more 

competitive, putting more downward pressure on emissions. There 

has also been turnover in the power generation fleet as newer, 

lower emitting sources replace older, higher emitting sources, 

putting further downward pressure on emissions. Approximately 

28.5 GW of coal units retired from the fleet between 2012 and 

June of 2015. In addition, demand growth has slowed; a majority 

of U.S. states have implemented renewable portfolio standards 

and other energy efficiency programs; and high-efficiency 

building designs, residential energy conservation, roof-top 

solar, and other forms of distributed generation have grown. In 

combination, these factors have significantly reduced EGU NOX

emissions between 2012 and 2015. 

As a result of protracted litigation, CSAPR implementation 

was delayed by three years, from 2012 to 2015. Due to this 

delay, combined with the market forces and changes that took 

place during that timeframe, expectations are that total banked 

allowances for the CSAPR ozone-season trading program could be 

in excess of 210,000 tons by the start of the 2017 ozone-season

compliance period, which is more than twice the emission 

reduction potential estimated at the $1,300 per ton control 

level described in section VI above. This number was estimated

by comparing recent measured emission levels to the original 
186

CSAPR NOX ozone-season phase 1 emissions budgets, assuming EGU 

emissions in CSAPR NOX ozone-season states for 2015 and 2016 

would continue at 2014 levels.105

The use of allowance banks generally provide a glide path 

for sources required to meet more stringent emission limits in 

later years and accommodate year-to-year variability in 

operation. However, allowing unrestricted use of the large 

number of banked allowances for compliance with this newproposed

rule could result in regional 2017 ozone season NOX emissions 

that exceed the collective state budgets quantified in this 

rulerulemaking to address transported air pollution with respect 

to the 2008 ozone standard. While the assurance provisions 

included in CSAPR do limit the ultimate amount of pollution that 

may occur in these states in 2017 (i.e., no matter how large an 

allowance bank may exist, only a portion of that bank may be 

used in a state in any given year without exceeding the 

assurance levels and incurring penalties), unrestricted use of 

the bank in this situation could allow emissions to exceed the 

state budgets, up to the assurance level, year after year.

As described in CSAPR, the flexibility provided by the 

assurance provisions is not designed to be used repeatedly, year 

after year. Rather, the use of banked allowances is intended to 

 

105 This data analysis relies on 40 CFR Part 75 emissions reporting data as 

available in EPA Air Markets Program Data available at 

http://ampd.epa.gov/ampd/
187

be limited by binding emissions budgets such that drawing down 

the bank in one year is only possible because of actions taken 

to build up the bank in a previous year. Moreover, a relatively 

large allowance bank that enables emissions budgets to be 

exceeded year after year may encourage sources to postpone 

emission reductions that would be more timely in the 2017 

timeframe in order to align reductions with the downwind area 

attainment dates for the 2008 ozone NAAQS.

The EPA is proposing and taking comment on a range of 

options for how to treat the use of banked 2015 and 2016 CSAPR 

NOX ozone-season allowances by units in the 23 states with new or 

updated budgets in this proposal. The use of banked allowances 

by states that are not included in the proposed FIPs to address 

ozone transport under the 2008 NAAQS (i.e., Georgia for CSAPR NOX

ozone-season program and all states for CSAPR SO2 and NOX annual 

programs) would not be affected by these options. 

The EPA is proposing that allowances issued for compliance 

in 2015 and 2016 under CSAPR may be used for compliance under 

the updated CSAPR from 2017 forward in order to smooth 

implementation in the first few years under the new budgets. 

However, the EPA is proposing to impose certain limits on the 

use of these banked allowances starting in 2017. Specifically, 

the EPA is proposing that sources in the 23 states with new or 

updated budgets in this proposal may use all of their banked 
188

allowances, but at a tonnage authorization level significantly 

lower than one ton per allowance. This would be realized 

through a surrender ratio greater than one pre-2017 allowances 

(vintage 2015 or 2016) to cover one ton of NOX emitted in 2017 

and each year thereafter. The surrender ratio, such as fourfor-one or two-for-one, would require more than one pre-2017 

banked allowance to be used for each ton of ozone season NOx 

emitted in 2017 and beyond. This would have the dual effect of 

carrying over the banked allowances into the new program to 

promote program continuity, while also recognizing the 

environmental objectives of the updated ozone NAAQS for 2008 and 

the corresponding new state emission budgets designed to help 

move air quality towards compliance with that NAAQS standard. A 

surrender ratio would respect the flexibility of sources to 

operate at their assurance levels in the program’s early years, 

but would reduce the ability for the collective EGU fleet to 

repeatedly exceed the emissions budget year after year.

Finally, EPA believes a surrender ratio is appropriate as 

it reflects the fact that tighter budgets will put upward 

pressure on allowance value in the future. Therefore, fewer 

allowances will be needed to reach the same value of a current 

allowance holding, making a surrender ratio a natural complement 

to carrying over the value of the banked allowances in a program 
189

where more stringent emission budgets are replacing less 

stringent emission budgets.

EPA is proposing a surrender ratio greater than one-forone, such as two-for-one or four-for-one. For analytic purposes 

in this rulemaking, it reflects the four-for-one surrender ratio 

to illustrate one potential surrender ratio. However, in the 

final rule, EPA would update this assumption to reflect the 

surrender ratio finalized.

This ratio of four or two banked allowances to one ton of 

emissions is derived from the ratio of the anticipated allowance 

bank in 2017 (approximately 210,000 allowances) to the ozone 

season variability limit (i.e., the difference between the sum 

of the emissions budgets for all 23 states and the sum of the 

assurance levels for all 23 states; approximately 60,000 tons)

or the ozone season variability limit multiplied by two (120,000 

tons), rounded to the nearest whole number. The EPA identified

this approach to limit the emissions impact of using banked 

allowances to the magnitude of all states emitting up to their

assurance levels for one or two years. The variability limit 

respects the upper bound variation in emissions and load EPA 

would expect in any given year. Thus, the carryover of banked 

allowances equal to one or two years’ worth of variability 

limits provides the affected fleet with the ability to 

accommodate potential variation from the mean in its load and 
190

emission patterns in the first years of the program, while 

balancing the need to ensure that emissions are reduced, on 

average, to the level of the budgets and within the assurance 

levels in subsequent years.

The EPA believes that a surrender ratio approach provides a 

means for the existing CSAPR EGU NOX ozone-season allowances to 

retain some value, while appropriately mitigating the potential 

adverse impact of the allowance bank on the emission-reducing 

actions needed from affected units in states with obligations to 

address interstate transport for the 2008 ozone NAAQS. The EPA 

seeks comment on a surrender ratio approach and on the use of a 

ratio, such as two-for-one or four-for-one, and whether an 

alternative ratio would be appropriate.

The EPA is also soliciting comment on another approach that 

we believe could achieve these same goals (i.e., valuing the 

anticipated CSAPR allowance bank while promoting near-term

emission reductions). Under this alternative approach, the EPA 

would issue fewer allowances than the tons quantified in state 

budgets for the 23 states affected by this rulemaking in the 

first three years of program implementation (i.e. 2017, 2018, 

and 2019). This approach recognizes that 2015 and 2016 

allowances are available to sources for compliance and would 

allow use of those banked CSAPR NOX ozone allowances at a one-toone turn-in ratio (i.e., one allowance is surrendered for one 
191

ton of emissions). By reducing overall allocations for a period 

of time, the impact of states using those banked allowances on 

emission levels would be mitigated.

The EPA seeks comment on what percentage (below 100 

percent) of allowances to issue, and over what number of years,

under this alternative approach. As a specific example, the EPA 

seeks comment on implementing this approach in a manner such 

that the EPA would issue allowances to sources within each of 

the 23 states with updated budgets under this proposal at a 

level of 85 percent of the proposed emissions budgets for the 

first three years that the new budgets are effective. Using the 

proposed EGU NOX ozone-season emissions budget of 9,979 tons for 

Alabama as an example, this would mean issuing approximately 

8,482 allowances for each of the 2017 through 2019 (inclusive) 

control periods (and the full budget for each subsequent control

period). Applying this approach to all 23 states with updated 

budgets under this proposal (which sum to 312,824 allowances) 

would mean that EPA would issue approximately 266,900 allowances 

across those states in each of the 2017, 2018, and 2019 control 

periods. EGUs in those states would be able to use allowances 

from the anticipated 210,000 allowance bank in addition to 

allowances issued for these years in order to comply with the 

updated CSAPR emission requirements. Allocating approximately 

266,900 allowances for the first three years of the updated 
192

requirements would, based on current estimates, result in 

approximately 47,000 banked allowances used for compliance each 

year. This would leave approximately 70,000 banked allowances, 

which is roughly equivalent to the regional variability limit 

(i.e., the difference between the states’ collective emissions 

budgets and their collective assurance levels). As under the 

illustrative four-for-one surrender ratio option, the remaining 

amount of banked allowances that would remain after using this 

initial reduced allocation is approximately the amount of banked 

allowances that would allow all states to emit up to their 

assurance levels for one year.

The EPA also seeks comment on what other percentages of the 

budget and time-frames could be appropriately used to implement 

this alternative approach. As in the specific example above, the 

EPA would seek a combination of time and recordation percentage 

such that the ultimate influence of the anticipated allowance 

bank is limited to approximately the regional variability limit 

(i.e., the difference between the collective emissions budgets 

and the collective assurance levels).

Under either approach, the EPA would conduct unit-level 

allowance allocations in the same manner as described above, 

such that each unit’s share of its state’s total allowances 

issued is determined by that allocation approach whether the EPA 

issues allowances in the full amount of the state budget with a 
193

surrender ratio for banked allowances or in a lesser amount to 

address the potential effect of the allowance bank (as 

entertained in this alternative on which we are inviting 

comment). In other words, the effect of this alternative 

approach would be to reduce unit-level allowance allocations in 

those years in a proportional manner (e.g., all unit-level 

allowance allocations would decrease by the same percentage as 

the reduction in total allowances issued below that state’s 

budget).

Additionally, the EPA is soliciting comment on less and 

more restrictive approaches to address use of the CSAPR EGU NOX

ozone allowance bank. Specifically, the EPA seeks comment on: 

(1) allowing banked 2015 and 2016 CSAPR NOX ozone allowances to 

be used for compliance with the proposed budgets for the 2008 

ozone NAAQS starting in 2017 at a 1-to-1 ratio, or (2) 

completely disallowing the use of banked 2015 and 2016 CSAPR NOX

ozone allowances for compliance with the proposed budgets for 

the 2008 ozone NAAQS starting in 2017. The EPA is also 

soliciting comment on whether and how the assurance provision 

penalty might be increased, in conjunction with any of the above 

approaches, to address the relationship of the allowance bank to 

emissions occurring under this revised program from 2017 onward.
194

B. Use of CSAPR NOX Ozone-season Allowances from States 

Addressing the 1997 Ozone NAAQS for Compliance in 

States Addressing the 2008 Ozone NAAQS

Consistent with the original CSAPR, EGUs covered by the 

seasonal NOX budget trading program that will be incorporated 

into these proposed FIPs are able to trade NOX ozone-season 

emission allowances among units within the state and across 

state boundaries, with emissions and the use of allowances 

limited by the assurance provisions. 

The EPA is considering how to transition allowance trading 

between the group of states that are in the CSAPR NOX ozoneseason program with respect to the 1997 ozone NAAQS but will not 

have updated emissions budgets proposed in this action (e.g., 

Georgia based on this proposal) and the group of states for 

which the EPA is proposing to establish new or lower budgets to 

address the 2008 ozone NAAQS in this action. 

The EPA believes that, where appropriate and feasible,

continuity of programs is important, particularly for marketbased and other power sector regulations, as this sector makes 

long-term investment and operational decisions. However, CSAPR 

allowances issued under budgets established to address the 1997 

ozone NAAQS using a $500 per ton cost threshold in one state may 

not be appropriately valued to reduce interstate ozone transport 

in another state for the 2008 NAAQS under this proposal where 
195

budgets are being established using a $1,300 per ton cost 

threshold. In the original CSAPR rulemaking, the EPA discussed 

the concern that allowing unrestricted trading between groups of 

states whose budgets were established using different cost 

thresholds would impact whether the necessary emission 

reductions would be achieved within each state.106 The assurance 

provisions used in CSAPR provide some assurance that emission 

reductions will occur within each state, but in the CSAPR 

rulemaking the EPA acknowledged concerns that the assurance 

provisions alone may not be sufficient. Consistent with those 

previously acknowledged concerns, the EPA is proposing in this 

rulerulemaking not to allow these two groups of states to trade 

without some additional assurances that the emission reductions 

will be appropriately achieved within each state.

However, because of the relatively small size of the group 

of states with budgets set using the $500 per ton cost 

threshold, the EPA is not proposing to prohibit altogether 

trading between the two groups in this instance. The EPA does 

not expect that a single state (i.e., Georgia) would drastically 

influence emission reductions in the other 23 states covered by 

this proposed rule. EPA is instead proposing to permit trading 

between the two groups of ozone states subject to certain 

 

106 76 FR at 48263-64.
196

restrictions on trading. In particular, the EPA is proposing to 

require that sources in states addressing the 2008 ozone NAAQS 

under this proposal may use allowances issued in states only 

addressing the 1997 ozone NAAQS via the CSAPR trading programs 

(e.g., Georgia) at a rate of 2.5 allowances for each ton of NOX

emitted. The EPA proposes a ratio of 2.5-to-1 in order to align 

with the ratio of the cost of ozone season EGU NOX reduction 

promulgated in the original CSAPR (i.e., $500 per ton) to the 

cost proposed for this rulerulemaking (i.e., $1,300 per ton).

The EPA proposes this restriction as sufficient, in conjunction 

with the assurance provisions, to protect the needed reductions 

in the 23 states addressing interstate transport for the 2008 

ozone NAAQS. The EPA requests comments on this approach. The EPA 

also seeks comment on using a different ratio than 2.5-to-1, and 

on using the same ratio as the ratio for the use of banked 

allowances, whether that ratio is 4-to-1 as proposed or a 

different ratio.

The EPA is also seeking comment on allowing trading without 

distinction between the particular NAAQS (1997 ozone NAAQS or 

2008 ozone NAAQS) for which an upwind state has obligations to 

reduce transported pollution, and subject only to the 

constraints of the CSAPR assurance provisions with no additional 

restrictions. The EPA is soliciting comment on whether and how 
197

the assurance provision penalty might be increased in 

conjunction with this approach.

Alternatively, the EPA is seeking comment on separating 

compliance between groups of upwind states under each NAAQS, 

whereby the use of NOX ozone-season emission allowances from one 

group (e.g., sources in states only covered for the 1997 ozone 

NAAQS) would be disallowed for compliance use by units in the 

other group (e.g., sources in states covered for the 2008 ozone 

NAAQS), similar to the existing separation between the CSAPR SO2

Group 1 and CSAPR SO2 Group 2 programs.

C. Use of CSAPR NOX Ozone-season Allowances between States 

with Different Control Stringencies Addressing the 

2008 Ozone NAAQS 

As discussed in Section VI of this proposal, the EPA notes 

that the evaluation of EGU NOX requirements for the final rule 

could show one or more states fully addressing their good 

neighbor obligation based on ozone season NOX control 

requirements represented by one cost level while one or more 

other states have ozone season NOX control requirements based on 

a more stringent cost level. In this situation, the EPA proposes 

that it would quantify requirements for these different groups 

of states based on different uniform control stringencies. 

However, CSAPR allowances issued under budgets established using 

a one cost threshold (e.g., $1,300 per ton) in one state may not 
198

be appropriately valued to reduce interstate ozone transport in 

another state where budgets might be established using different 

cost threshold (e.g., $3,400 per ton). Consistent with the 

previous discussion (regarding allowances issued in states 

continuing to address the 1997 ozone NAAQS under budgets 

established using $500 per ton threshold), the EPA is proposing 

to permit trading between these groups of states subject to 

certain restrictions on trading. In particular, the EPA is 

proposing to require that sources in states with emissions 

budgets established using the more stringent cost thresholds 

(e.g., $3,400 per ton) may use allowances issued in states with 

emissions budgets established using the less stringent cost 

thresholds (e.g., $1,300 per ton) at a rate of allowances for 

each ton of NOX emitted based on the ratio of these cost 

thresholds. For example, states with emissions budgets 

established using $3,400 per ton could use allowances at a rate 

of approximately 2.5-to-1 in order to align with the ratio of 

the relevant cost thresholds. The EPA requests comments on 

allowing the states to trade with the proposed restrictions on 

the use of allowances by sources in states controlled using the 

more stringent cost threshold.

The EPA is also seeking comment on allowing trading without 

distinction between the particular cost thresholds for which an 

upwind state has obligations to reduce transported pollution, 
199

and subject only to the constraints of the CSAPR assurance 

provisions with no additional restrictions. The EPA is also 

soliciting comment on whether and how the assurance provision 

penalty might be increased in conjunction with this approach.

Alternatively, the EPA is seeking comment on separating 

compliance between groups of upwind states under each cost 

threshold, whereby the use of NOX ozone-season emission 

allowances from one group (e.g., sources in states with 

allowances issued using the more stringent cost threshold) would 

be disallowed for compliance use by units in the other group, 

similar to the existing separation between the CSAPR SO2 Group 1 

and CSAPR SO2 Group 2 programs.

D. Summary of Proposed Allowance Surrender Ratios

As discussed in sections a. and b. above, the EPA proposes 

that in this updated rulemaking, EGUs would be able to trade NOX

ozone-season emission allowances among units within the state 

and across state boundaries, with emissions and use of 

allowances limited by the assurance provisions. However, the EPA 

is proposing to impose certain additional limits on the use of 

allowances starting in 2017 for EGUs in the 23 states with 

updated budgets in this proposal. Table VII-2 summarizes the 
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limits on the proposed use for CSAPR NOX ozone-season 

allowances.107

Table VII.B-2. Proposed Use of CSAPR NOX Ozone-Season Allowances 

for 2015, 2016, 2017, and Later Allowance Vintages (Tons)

Compliance Period and Unit Location of 

Allowance Use

Used for 2015 

or 2016 

Compliance –

any state 

Used for 2017 

or later 

compliance -

unit in states 

with updated 

budget for 2008 

ozone NAAQS

Used for 2017 

or later 

compliance –

states with 

original 

CSAPR 

emissions 

budget

Vintage Year and State of Allowance Issuance

2015 or 2016 

vintage – any 

state

1 for 1 4 for 1 1 for 1

2017 or later 

vintage –

states with 

updated budget 

for 2008 ozone 

NAAQS

Not Applicable 1 for 1 1 for 1

2017 or later 

vintage –

states with 

original CSAPR 

emissions 

budget

Not Applicable 2.5 for 1 1 for 1

 

107 In the regulatory text revisions for this proposal, the proposed 

limits discussed here are described in terms of the “tonnage 

equivalent” of an allowance. In the case of 2015 or 2016 vintage 

allowances used for compliance in a control period in 2017 or later, 

where 4 allowances would be needed for each ton of emissions, each 

such allowance would have a tonnage equivalent of 0.25 tons per 

allowance (1/4 = 0.25). In the case of 2017 or later allowances from a 

state with an original CSAPR budget used for compliance by a unit in a 

state with an updated budget based on the 2008 ozone NAAQS, where 2.5 

allowances would be needed for each ton of emissions, each such 

allowance would have a tonnage equivalent of 0.40 tons per allowance 

(1/2.5 = 0.40). In a case where one allowance is needed for each ton 

of emissions, such allowances would have a tonnage equivalent of one 

ton per allowance. See proposed 40 CFR 97.524(f) in the regulatory 

text for this proposal.
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6. Compliance Deadlines

As discussed above atin sections II.A., III.B., and IV.A., 

the proposed rule would require NOX reductions from sources 

starting May 1, 2017, to ensure that reductions are made as 

expeditiously as practicable to assist downwind states’ 

attainment and maintenance of the 2008 ozone NAAQS. The 

compliance deadline is coordinated with the attainment deadline 

for the relevant NAAQS and, as discussed above, the proposed

rule includes provisions to assure that all necessary reductions 

occur at sources within each individual state.

In section VI above, the EPA explains that this is an 

adequate and reasonable time for sources to plan for compliance 

and operate necessary controls.

For states for which EPA has already established a FIP 

requiring their units to participate in the CSAPR NOX ozoneseason trading program because of transport obligations under 

the 1997 ozone NAAQS, no CFR changes are necessary to 

accommodate this compliance deadline. The EPA proposes to amend 

the regulatory text in 40 CFR section 97.506(c)(3) to reflect 

the 2017 start of compliance obligations for units in states 

that were not previously subject to the CSAPR NOX ozone-season 

trading program (e.g., Kansas). The EPA also proposes to amend 

various FIP provisions in 40 CFR Partpart 52 to indicate the 
202

start and end of compliance obligations under the FIPs for 

sources in states added to the trading program under this 

proposed rule (e.g., Kansas) or removed from the trading program 

in response to the D.C. Circuit’s remand of certain NOX ozoneseason emissions budgets (e.g., Florida and South Carolina). 

These revisions are shown in the proposed regulatory text at the 

end of this preamble.

7. Monitoring and Reporting and the Allowance Management 

System

Monitoring and reporting in accordance with the provisions 

of 40 CFR Partpart 75 are required for all units subject to the 

CSAPR NOX ozone-season trading programs and would also be 

required for all units covered under the proposed transport rule 

for the 2008 ozone NAAQS requirements. The EPA proposes that the 

monitoring certification deadline by which monitors are 

installed and certified for compliance use generally would be 

May 1, 2017, the beginning of the first compliance period 

proposed in this rule, with potentially later deadlines for 

units that commence commercial operation after July 1, 2016. 

Similarly, the EPA proposes that the first calendar quarter in 

which quarterly emission reporting is required would generally 

be the quarter including May 1, 2017. These deadlines are 

analogous to the current deadlines under CSAPR but are delayed 

by two years to reflect the fact that this rule’s initial 
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implementation year would be two years later than the existing 

CSAPR programs’ initial implementation year.

Under Partpart 75, a unit has several options for 

monitoring and reporting, namely the use of a CEMS; an excepted 

monitoring methodology based in part on fuel flow metering for 

certain gas- or oil-fired peaking units; low-mass emissions 

monitoring for certain non-coal-fired, low emitting units; or an 

alternative monitoring system approved by the Administrator 

through a petition process. In addition, sources can submit 

petitions to the Administrator for alternatives to specific 

CSAPR and Partpart 75 monitoring, recordkeeping, and reporting 

requirements. Each CEMS must undergo rigorous initial 

certification testing and periodic quality assurance testing 

thereafter, including the use of relative accuracy test audits 

(RATAs) and 24-hour calibrations. In addition, when a monitoring 

system is not operating properly, standard substitute data 

procedures are applied and result in a conservative estimate of 

emissions for the period involved.

Further, Partpart 75 requires electronic submission of a 

quarterly emissions report to the Administrator, and in a format 

prescribed by the Administrator. The report would contain all of 

the data required concerning ozone season NOX emissions. 

Units currently subject to CSAPR NOX ozone-season or CSAPR 

NOX annual trading program requirements monitor and report NOX
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emissions in accordance with Partpart 75, so most sources would 

not have to make any changes to monitoring and reporting 

practices. In fact, only units in Kansas currently subject to 

the CSAPR NOX annual trading program but not the CSAPR NOX ozoneseason trading program would need to start newly reporting ozone

season NOX mass emissions. These emissions are already measured 

under the annual program, so the change would be a minor 

reporting modification. Units in the following states monitor 

and report NOX emissions under the CSAPR NOX ozone-season trading 

program and would continue to do so without change under the 

CSAPR ozone update for the 2008 NAAQS: Alabama, Arkansas, 

Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, 

Michigan, Mississippi, Missouri, New Jersey, New York, North 

Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, 

Virginia, West Virginia, and Wisconsin. 

8. Recordation of Allowances

The EPA proposes to update the deadlines by which EPA would 

record allowances for the CSAPR NOX ozone-season trading program 

for the compliance periods in the years from 2017 through 2022.

The proposed new dates would amend the recordation deadlines in 

40 CFR 97.521 as shown in the proposed regulatory text 

amendments at the end of this proposal. The existing recordation 

provisions require EPA to record either FIP-based (i.e., 

governed by part 97) or SIP-based allocations for 2017 and 2018 
205

by July 1, 2016. The EPA proposes to delay this deadline to 

December 1, 2016. The extension would allow EPA to finalize any 

changes to the state budgets for the 2017 compliance period 

before recording 2017 allowances. This would prevent the need 

to take back allowances that were recorded under existing 

budgets in cases where state budgets are reduced. The extended 

deadline would still allow allocations to be recorded five 

months prior to the start of the 2017 compliance period, giving 

affected units time to make compliance plans. Compliance true-up 

for the 2017 ozone season occurs after December 1, 2017, so 

affected sources would have more than a year from the extended 

recordation deadline to ensure they hold enough allowances for 

2017 ozone season compliance. The EPA is taking comment on this 

new deadline for 2017 and 2018 allowance allocation recordation.

The EPA is also taking comment on whether the provision to delay 

2017 and 2018 allocation recordation should be finalized ahead 

of final action on this full proposal if this proposal is not 

finalized before July 1, 2016.

The EPA is also proposing to extend the existing deadlines 

for recording CSAPR NOX ozone-season allowances for the 2019 and 

2020 compliance periods and for the 2021 and 2022 compliance 

periods each by one year, to July 1, 2018, and July 1, 2019, 

respectively. The purpose of these proposed deadline extensions 

is to provide time for states to submit SIP revisions to modify 
206

or replace the FIPs proposed in this rulerulemaking on schedules 

comparable to the schedules for the SIP revision options that 

the states have under the current CSAPR regulations. The EPA 

seeks comment on extending these recordation deadlines as 

discussed.

C. Submitting a SIP

As noted earlier in this section VIII, states may replace 

the FIP with a SIP at any time if approved by the EPA. 

“Abbreviated” and “full” SIP options continue to be available.

An “abbreviated SIP” allows a state to submit a SIP that would 

modify allocation provisions in the NOx budget trading program 

that is incorporated into FIP to allow the state to substitute 

its own allocation provisions. A second approach, referred to as 

a full SIP, allows a state to adopt a trading program meeting 

certain requirements that would allow sources in the state to 

continue to use the EPA-administered trading program through an 

approved SIP, rather than a FIP. In addition, as under CSAPR, 

EPA proposes to provide states with an opportunity to adopt 

state-determined allowance allocations for existing units for 

the second compliance period under this proposed rule – in this 

case, the 2018 compliance period – through streamlined SIP 

revisions. See 76 FR 48326-48332 (Aug. 8, 2011) for additional 
207

discussion on full and abbreviated SIP options and 40 CFR 

52.38(b).

1. 2018 SIP Option

As under CSAPR, the EPA proposes to allow a state to 

submit a SIP revision establishing allowance allocations for 

existing units for the second year of the new requirements, 

2018, to replace the FIP-based allocations. The process would be 

the same as under the current rule with deadlines shifted 

roughly 2 years — i.e., a state would submit a letter to EPA by 

November 15, 2016 indicating its intent to submit a complete SIP 

revision by April 1, 2017. The SIP would provide in an EPAprescribed format a list of existing units and their allocations 

for the 2018 control period. If a state does not submit a letter 

of intent to submit a SIP revision, FIP allocations would be 

recorded by December 1, 2016. If a state submits a timely letter 

of intent but fails to submit a SIP revision, FIP allocations 

would be recorded by April 1, 2017. If a state submits a timely 

letter of intent followed by a timely SIP revision that is 

approved, the approved SIP allocations would be recorded by 

October 1, 2017.

2. 2019 and Beyond SIP Option

For the 2019 control period and later, EPA proposes that 

the SIP submittal deadline be delayed one year, until December 

1, 2017, from the current deadline. The deadline to then submit 
208

state allocations for 2019 and 2020 would be June 1, 2018 and 

the deadline to record those allocations would be July 1, 2018.

Under the proposed new deadlines, a state could submit a SIP 

revision for 2021 and beyond control periods by December 1, 

2018, with state allocations due June 1, 2019, and allocation 

recordation by July 1, 2019. For 2019 control period and later, 

SIPs can be full or abbreviated SIPs. An allocation methodology 

approved in an abbreviated SIP submitted for 2017 under the 

existing CSAPR regulations could also apply under the proposed 

new rule in 2017 and 2018. See abovesection III of this preamble

and 76 FR 48326-48332 (Aug. 8, 2011) for additional discussion 

on full and abbreviated SIP options and 40 CFR 52.38(b).

3. SIP Revisions that Do Not Use the CSAPR Trading Program

For a transport SIP revision that does not use the CSAPR NOX 

ozone-season trading program, EPA would evaluate the transport 

SIP based on the particular control strategies selected and 

whether the strategies as a whole provide adequate and 

enforceable provisions ensuring that the emission reductions 

will be achieved. The SIP revision at a minimum should include 

the following general elements: (1) a comprehensive baseline 

2017 statewide NOX emission inventory (which includes growth and 

existing control requirements), which should be consistent with 

the 2017 emission inventory the EPA would use when finalizing 

this rulemaking to calculate the required state budget; (2) a 
209

list and description of control measures to satisfy the state 

emission reduction obligation and a demonstration showing when 

each measure would be in place to meet the 2017 compliance date; 

(3) fully-adopted state rules providing for such NOX controls

during the ozone season; (4) for EGUs greater than 25 MWe and 

large boilers and combustion turbines with a rated heat input 

capacity of 250 mmBtu per hour or greater, Part 75 monitoring,

and for other units, monitoring and reporting procedures 

sufficient to demonstrate that sources are complying with the 

SIP; and (5) a projected inventory demonstrating that state 

measures along with federal measures will achieve the necessary 

emission reductions in time to meet the 2017 compliance 

deadline.108 The SIPs must meet the requirements for public 

hearing, be adopted by the appropriate board or authority, and 

establish by a practically enforceable regulation or permit a 

schedule and date for each affected source or source category to 

achieve compliance. Once the state has made a SIP submission, 

the EPA will evaluate the submission(s) for completeness. The 

EPA's criteria for determining completeness of a SIP submission 

are codified at 40 CFR part 51, appendix V. 

For further information on replacing a FIP with a SIP, see

the discussion in the final CSAPR rulemaking (76 FR 48326, 

 

108 The EPA notes that the SIP is not required to include modeling.
210

August 8, 2011). The EPA requests comment on what types of 

additional information and guidance would be helpful and stands 

ready to assist states in SIP development.

4. Submitting a SIP to Participate in CSAPR for States Not 

Included in this Proposal

The EPA believes that there could be circumstances where a 

state that is not obligated to reduce NOX emissions in order to 

eliminate significant contribution to nonattainment or 

interference with maintenance of ozone standards in another 

state (such as Florida or South Carolina for purposes of this 

proposal) may wish to participate in the NOX ozone-season trading 

program in order to serve a different regulatory purpose. For 

example, the state may have a pending request for redesignation 

of an area to attainment that relies on participation in the 

trading program as part of the state’s demonstration that 

emissions will not exceed certain levels, or the state may wish 

to rely on participation in the trading program for purposes of 

a SIP revision to satisfy certain obligations under the Regional 

Haze Rule. The EPA seeks comment on whether the EPA should 

revise the CSAPR regulations to allow the EPA to approve a SIP 

revision in which a state seeks to participate in the NOX ozoneseason trading program for a purpose other than addressing ozone 

transport obligations.
211

Further, the EPA seeks comment on the conditions that 

should apply to any such approval in order to ensure that the 

state’s participation is consistent with the trading program’s 

ability to achieve the program’s objectives with respect to 

interstate transport of ozone pollution. The EPA believes that 

the primary conditions for consideration in this circumstance 

would be the level of the state emissions budget and what, if 

any, limitations would be placed on the use of allowances issued 

to the sources in that state by sources in other states.

The EPA specifically seeks comment on whether a presumption 

of approvability of such a SIP revision should arise, without 

limitations on the use of corresponding allowances for 

compliance by sources within that state or in other states, if 

the state would adopt as part of the SIP revision a NOX ozoneseason emissions budget no higher than the emissions budgets 

that the EPA finalizes under this rule. For example, based on 

this proposal, an emissions budget that reflects EGU NOX

mitigation strategies represented by a uniform cost of $1,300 

per ton. The EPA notes that such emissions budgets could be 

developed using the data and analysis used to establish the 

emissions budgets for this rule.

EPA also specifically seeks comment on whether a 

presumption of approvability of such a SIP revision should 

arise, with limitations on the use of allowances issued to the 
212

state’s sources analogous to the limitations proposed for 

allowances issued to Georgia’s units in this proposed rule, if

the state would adopt as part of the SIP revision a NOX ozoneseason emissions budget no higher than the base case ozone 

season NOX emissions that EPA projected for the state in the 

analysis used to establish the emissions budgets for this

proposed rule.

The EPA also specifically seeks comment on whether, in the 

case of a state previously subject to the CSAPR NOX ozone-season 

trading program (e.g., Florida or South Carolina), a presumption 

of approvability of such a SIP revision should arise at an 

emissions level higher than the state’s base case emissions in 

the analysis used to establish the emissions budgets for this 

proposed rule – for example, an emissions level equal to the 

state’s previously promulgated CSAPR budget – subject to the 

imposition of trading limitations on allowances issued to the 

state’s units analogous to the limitations proposed for 

allowances issued to Georgia’s units in this proposal. 

Finally, the EPA also seeks comment on whether a state 

whose allowances would otherwise be subject to limitations on 

use analogous to the limitations proposed for allowances issued 

to Georgia’s units in this proposed rule could avoid those 

limitations by adopting in a SIP revision a more stringent 

budget reflecting emission levels at higher dollar per ton 
213

emission reduction costs comparable to the dollar per ton 

emission reduction costs used to establish the budgets for other 

states in this proposed rule.

D. Title V Permitting

TheThis proposed rule, like CSAPR, does not establish any 

permitting requirements independent of those under title V of 

the CAA and the regulations implementing title V, 40 CFR 

Partsparts 70 and 71.109 All major stationary sources of air 

pollution and certain other sources are required to apply for 

title V operating permits that include emission limitations and 

other conditions as necessary to assure compliance with the 

applicable requirements of the CAA, including the requirements 

of the applicable State Implementation Plan. CAA sections 502(a) 

and 504(a), 42 U.S.C. 7661a(a) and 7661c(a). The ‘‘"applicable 

requirements’’requirements" that must be addressed in title V 

permits are defined in the title V regulations (40 CFR 70.2 and 

71.2 (definition of ‘‘"applicable

requirement’’)).requirement")).

The EPA anticipates that, given the nature of the units 

subject to this transport rule and given that many of the units 

covered here are already subject to CSAPR, most of the sources 

 

109 Part 70 addresses requirements for state title V programs, and 

Partpart 71 governs the federal title V program.
214

at which the units are located are already subject to title V 

permitting requirements. For sources subject to title V, the 

interstate transport requirements for the 2008 ozone NAAQS that 

would be applicable to them under the final FIPs will be 

‘‘"applicable requirements’’requirements" under title V and 

therefore will need to be addressed in the title V permits. For 

example, requirements concerning designated representatives, 

monitoring, reporting, and recordkeeping, the requirement to 

hold allowances covering emissions, the assurance provisions, 

and liability will be ‘‘"applicable requirements’’requirements"

to be addressed in the permits.

Title V of the CAA establishes the basic requirements for 

state title V permitting programs, including, among other 

things, provisions governing permit applications, permit 

content, and permit revisions that address applicable 

requirements under final FIPs in a manner that provides the 

flexibility necessary to implement market-based programs such as 

the trading programs established by CSAPR and updated by this 

proposed ozone interstate transport rule. 42 U.S.C. 7661a(b). 

In CSAPR, EPA established standard requirements governing 

how sources covered by the rule would comply with title V and 
215

its regulations.110 40 CFR 97.506(d). Under this proposed rule, 

EPA proposes that those same requirements would continue to 

apply to sources already in the CSAPR NOX Ozone-season Trading 

Program and to any newly covered sources that have been added to 

address interstate transport of the 2008 ozone NAAQS. For 

example, the title V regulations provide that a permit issued 

under title V must include “[a] provision stating that no permit 

revision shall be required under any approved . . . emissions 

trading and other similar programs or processes for changes that 

are provided for in the permit.” 40 CFR 70.6(a)(8) and 

71.6(a)(8). Consistent with these provisions in the title V 

regulations, in CSAPR, EPA included a provision stating that no 

permit revision is necessary for the allocation, holding, 

deduction, or transfer of allowances. 40 CFR 97.506(d)(1). This 

provision is also included in each title V permit for a covered 

source. The EPA proposes to maintain its approach under CSAPR

that allowances can be traded (or allocated, held, or deducted) 

without a revision to the title V permit of any of the sources 

involved.

Similarly, the EPA is also proposing to maintain that 

sources in the CSAPR NOx Ozone-season Trading Program can 

 

110 EPA also issued a guidance document and template that includes 

instructions describing how to incorporate the CSAPR applicable 

requirements into a source’s title V permit. 

http://www.epa.gov/airtransport/CSAPR/pdfs/CSAPR_Title_V_Permit_Guidan

ce.pdf
216

continue to use the title V minor modification procedure to 

change their approach for monitoring and reporting emissions, in 

certain circumstances. Specifically, sources may use the minor 

modification procedure so long as the new monitoring and 

reporting approach is one of the prior-approved approaches under 

CSAPR (i.e., approaches using a continuous emission monitoring 

system, an excepted monitoring system under appendices D and E 

to Partpart 75, a low mass emissions excepted monitoring 

methodology under 40 CFR 75.19, or an alternative monitoring 

system under subpart E of Partpart 75), and the permit already 

includes a description of the new monitoring and reporting 

approach to be used. See 40 CFR 97.506(d)(2); 40 CFR 

70.7(e)(2)(i)(B) and 40 CFR 71.7(e)(1)(i)(B). As described in 

our 2015 guidance, we suggest in our template that sources may 

comply with this requirement by including a table of all of the 

approved monitoring and reporting approaches under the rule, and 

the applicable requirements governing each of those approaches. 

Inclusion of the table in a source’s title V permit therefore 

allows a covered unit that seeks to change or add to their 

chosen monitoring and recordkeeping approach to easily comply 

with the regulations governing the use of the title V minor 

modification procedure. 

Parts XXX and XXX [CITE GUIDANCE DOCUMENT] set forth in 

detail the approaches previously discussed that are available 
217

for covered units to use for monitoring and reporting emissions, 

and provide reference to the relevant provisions in Part 75.

Under CSAPR, in order to changeemploy a monitoring or reporting 

approach different from the prior-approved approaches discussed 

above, unit owners and operators must submit monitoring system 

certification applications to the EPA establishing the 

monitoring and reporting approach actually to be used by the 

unit, or, if the owners and operators choose to employ an 

alternative monitoring system, to submit petitions for that 

alternative to the EPA. These applications and petitions are 

subject to EPA review and approval to ensure consistency in 

monitoring and reporting among all trading program participants. 

The EPA’s responses to any petitions for alternative monitoring 

systems or for alternatives to specific monitoring or reporting 

requirements are to be posted on the EPA’s website111. EPA 

proposes to maintain the same approach in this proposed rule.

Consistent with the EPA’s approach under CSAPR, the 

applicable requirements resulting from this proposed FIP would 

be incorporated into covered sources’ existing title V permits 

either pursuant to the provisions for reopening for cause (40 

CFR 70.7(f) and 40 CFR 71.7(f)) or the standard permit renewal 

 

111

http://www.epa.gov/airmarkets/participants/monitoring/petitions.html

http://www2.epa.gov/airmarkets/part-75-petition-responses.
218

provisions (40 CFR 70.7(c) and 71.7(c)).112 For sources newly 

subject to title V that will also be covered sources under the 

final FIPs, the initial title V permit issued pursuant to 40 CFR 

70.7(a) should address the final FIP requirements.

As in CSAPR, the approach to title V permitting under the 

proposed FIPs imposes no independent permitting requirements and 

should reduce the burden on sources already required to be 

permitted under title V and on permitting authorities. 

E. Relationship to Other Emission Trading and Ozone Transport 

Programs

1. Interactions with Existing CSAPR113 Annual Programs, Title IV 

Acid Rain Program, NOX SIP Call, Section 176A Petition, and Other 

State Implementation Plans

a. CSAPR Annual Programs

Nothing in this proposal affects any CSAPR NOX annual or 

CSAPR SO2 Group 1 or CSAPR SO2 Group 2 requirements. The CSAPR 

annual requirements were premised on the 1997 and 2006 PM2.5 NAAQS 

that are not being addressed in this rulemaking. The CSAPR NOX

 

112 A permit is reopened for cause if any new applicable requirements 

(such as those under a FIP) become applicable to a covered source with 

a remaining permit term of 3 or more years. If the remaining permit 

term is less than 3 years, such new applicable requirements will be 

added to the permit during permit renewal. See 40 CFR 70.7(f)(1)(I) 

and 71.7(f)(1)(I).

113 The CSAPR Annual Programs are referred to in regulations as the 

Transport Rule NOX Annual Trading Program (40 CFR 97.401-97.435), the 

Transport Rule SO2 Group 1 Trading Program (40 CFR 97.601-97.635) and 

the Transport Rule SO2 Group 2 Trading Program (40 CFR 97.701-97.735).
219

annual trading program and the CSAPR SO2 Group 1 and Group 2 

trading programs remain in place and will continue to be 

administered by the EPA.

The EPA acknowledges that, in addition to the ozone budgets 

discussed above, the D.C. Circuit has remanded for 

reconsideration the CSAPR SO2 budgets for Alabama, Georgia, South 

Carolina, and Texas. EME Homer City II, 795 F.3d at 138. This 

proposal does not address the remand of these CSAPR phase 2 SO2

emissions budgets. The EPA intends to address the remand of the 

phase 2 SO2 annual emissions budgets separately.

b. Title IV Interactions

This proposed rule if adopted would not affect any Acid 

Rain Program requirements. Any Title IV sources that are subject 

to provisions of this proposed rule would still need to continue 

to comply with all Acid Rain provisions. Acid Rain Program SO2

and NOX requirements are established independently in Title IV of 

the Clean Air Act, and will continue to apply independently of 

this proposed rule’s provisions. Acid Rain sources will still be 

required to comply with Title IV requirements, including the 

requirement to hold Title IV allowances to cover SO2 emissions at 

the end of a compliance year.

c. NOX SIP Call Interactions

States affected by both the NOX SIP Call and any final CSAPR 

ozone update for the 2008 NAAQS will be required to comply with 
220

the requirements of both rules. This proposed rule requires NOX

ozone season emission reductions from EGUs greater than 25 MW in 

nearly all NOX SIP Call states and at levels greater than 

required by the NOX SIP Call. Therefore, this proposed rule would 

satisfy the requirements of the NOX SIP Call for these large EGU 

units.

The NOX SIP Call states used the NOX Budget Trading Program 

to comply with the NOX SIP Call requirements for EGUs serving a 

generator with a nameplate capacity greater than 25 MW and large 

non-EGUs with a maximum rated heat input capacity greater than 

250 MMBTU/hr. (In some states, EGUs smaller than 25 MW were also 

part of the NBP as a carryover from the Ozone Transport 

Commission NOX Budget Trading Program.) When the EPA promulgated 

CAIR, it allowed states to modify that program and include all 

NOX Budget Trading Program units in the CAIR NOX Ozone-season

Trading Program as a way to continue to meet the requirements of 

the NOX SIP Call for these sources.

In CSAPR, however, the EPA allowed states to expand 

applicability of the trading program to EGUs smaller than 25 MW 

but did not allow the expansion of applicability to include

large non-EGU sources. The reason for excluding large non-EGU 

sources was largely that emissions from these sources were 

generally much lower than the budget amount and there was 

concern that surplus allowances created as a result of an 
221

overestimation of baseline emissions and subsequent shutdowns 

(since 1999 when the NOX SIP Call was promulgated) would prevent

needed reductions by the EGUs to address significant 

contribution to downwind air quality impacts.

Since then, states have had to find appropriate ways to 

continue to show compliance with the NOX SIP Call, particularly 

for large non-EGUs.114 Most states that included such sources in 

CAIR are still working to find suitable solutions.115

Therefore, the EPA is taking comment on whether to allow

any NOX SIP Call state affected by this proposed rule to 

voluntarily submit a SIP revision at a budget level that is 

environmentally neutral to address the state’s NOX SIP Call 

requirement for ozone season NOX reductions. The SIP revision 

could include a rule to expand the applicability of the CSAPR NOX

ozone-season trading program to include all NOX Budget Trading 

Program units. Analysis shows that these units (mainly large 

non-EGU boilers, combustion turbines, and combined cycle units 

with a maximum rated heat input capacity greater than 250 

mmBtu/hr) continue to emit well below their portion of the NOX

 

114 CSAPR generally satisfies NOX SIP Call requirements for EGUs in most 

affected states because the CSAPR cap is lower than the EGU portion of 

the NOX SIP Call emission levels.

115 Affected sources continue to report ozone season emissions using 

part 75 as required by the NOX SIP Call and emissions in most states 

cannot (or are not likely to) exceed NOX SIP Call non-EGU budget 

levels.
222

SIP Call budget. In order to ensure that the necessary amount of 

EGU emission reductions occur for this proposed rule, the 

corresponding state ozone-season emissions budget amount could 

be increased by the lesser of the highest ozone season NOX

emissions (in the last 3 - 5 years)116 from those units or the 

relevant non-EGU budget under the NOX SIP Call, and this small 

group of non-EGUs could participate in the CSAPR ozone-season

trading program. The environmental impact would be neutral using 

this approach, and hourly reporting of emissions under part 75 

would continue. This approach would address requests by states 

for help in determining an appropriate way to address the 

continuing NOX SIP Call requirement as to non-EGU sources. EPA 

proposes that if this option is finalized that the variability 

limits established for EGUs be unchanged as a result of 

including these non-EGUs. The assurance provisions would apply 

to EGUs, and emissions from non-EGUs would not affect the 

assurance levels.

The NOX SIP Call generally requires that states choosing to 

rely on large EGUs and large non-EGUs for meeting NOX SIP Call 

emission reduction requirements must establish a NOX mass 

emissions cap on each source and require Partpart 75, subpart H 

monitoring. As an alternative to source-by-source NOX mass 

 

116 EPA requests comment on the appropriate time period for this 

determination.
223

emission caps, a state may impose NOX emission rate limits on 

each source and use maximum operating capacity for estimating NOX

mass emissions or may rely on other requirements that the state 

demonstrates to be equivalent to either the NOX mass emission 

caps or the NOX emission rate limits that assume maximum 

operating capacity. Collectively, the caps or their alternatives 

cannot exceed the portion of the state budget for those sources. 

See 40 CFR 51.121(f)(2) and (i)(4). If the EPA were to allow a 

state to expand the applicability of this proposed rule to 

include all the NOX Budget Trading Program units in the CSAPR NOX

ozone-season trading program, the cap requirement would be met 

through the new budget and the monitoring requirement would be 

met through the trading program provisions, which require part 

75 monitoring. Whether this option is finalized or not, the EPA 

will work with states to ensure that NOX SIP Call obligations 

continue to be met. The EPA requests comment on the voluntary 

inclusion of NOX SIP Call non-EGUs in this 2008 ozone-season

proposed rule.

d. CAA Section 176A Petition to Expand the OTR

On December 9, 2013, the EPA received a CAA section 176A 

petition from the states of Connecticut, Delaware, Maryland, 

Massachusetts, New Hampshire, New York, Rhode Island, and 

Vermont. The petition was amended on December 12, 2013 to add 

the state of Pennsylvania as a petitioning state. The petition 
224

requests that the EPA add 8 states and the remainder of the 

Commonwealth of Virginia to the current Ozone Transport Region 

that was established under CAA section 184.117 The EPA will 

address this petition at a future date.

e. Other State Implementation Plans

In this proposal, the EPA has not conducted any technical 

analysis to determine whether compliance with the proposed rule 

would satisfy other requirements for EGUs in any attainment or 

nonattainment areas (e.g., RACT or BART). For that reason, the 

EPA is not now making determinations nor establishing any 

presumptions that compliance with the proposed rule satisfies 

any other requirements for EGUs. Based on analyses that states 

conduct on a case-by-case basis, states may be able to conclude 

that compliance with the proposed rule for certain EGUs fulfills 

other SIP requirements.

2. Other Federal Rulemakings

a. Clean Power Plan

On August 3, 2015, President Obama and EPA announced the 

Clean Power Plan – a historic and important action on emissions 

that contribute to climate change. The CPP reduces carbon 

 

117 The named 8 states are: Illinois, Indiana, Kentucky, Michigan, 

North Carolina, Ohio, Tennessee, and West Virginia. Currently, the 

portion of the Commonwealth of Virginia in the OTR is in the 

consolidated metropolitan statistical area that includes the District 

of Columbia and northern Virginia.
225

pollution from the power sector. With strong but achievable 

standards for power plants, and customized goals for states to 

cut the carbon pollution (CO2) that is driving climate change, 

the Clean Power Plan (CPP) provides national consistency, 

accountability and a level playing field while reflecting each 

state’s energy mix. 

The Clean Air Act – under section 111(d) – creates a 

partnership between EPA, states, tribes and U.S. territories –

with EPA setting a goal and states and tribes choosing how they 

will meet it. The CPP follows that approach. The CPP establishes

interim and final CO2 emission performance rates and statewide 

goals. States then develop and implement plans that ensure that 

the power plants in their state – either individually, together 

or in combination with other measures – achieve these rates or 

goals. States will be required to submit a state plan, or an 

initial submittal with an extension request, by September 6, 

2016. Complete state plans must be submitted no later than 

September 6, 2018. The interim rates and goals are assessed over 

the years 2022 to 2029 and the final CO2 emission performance 

rates, rate-based goals, or mass-based goals are assessed for 

2030 and after.

Because the final deadline for states to submit complete 

plans under the CPP is September 2018 and because mandatory CPP 

reductions do not begin until the interim period (i.e., starting 
226

in 2022), the EPA does not anticipate significant interactions 

with the CPP and the near-term (i.e., starting in 2017) ozone

season EGU NOX emission reduction requirements under this 

proposal.

However the EPA notes that actions taken to reduce CO2

emissions (e.g., deployment of zero-emitting generation) may 

also reduce ozone season NOX emissions. To the extent that states 

or electric utilities consider emission reduction strategies to 

meet these two separate requirements – CPP and interstate ozone 

transport – in a coordinated manner, they may find efficiency 

gains in that actions to meet the CPP goals may also help meet 

interstate ozone transport requirements.

The EPA believes that timing flexibility provided in the 

CPP offers significant benefits that allow states to develop 

plans that will help achieve a number of goals, including, but 

not limited to: reducing cost, addressing reliability concerns, 

addressing concerns about stranded assets, and facilitating the 

integration of meeting the emission guidelines and compliance by 

affected EGUs with other air quality and pollution control 

obligations on the part of both states and affected EGUs.

The EPA is also cognizant of the potential influence of 

addressing interstate ozone transport on the CPP. As states and 

utilities undertake the near- and longer-term planning that will 

be needed for the CPP, they will have the opportunity to 
227

consider how compliance with this proposed rule can anticipate, 

or be consistent with, expected compliance strategies for the 

CPP. While some EGU NOX mitigation strategies, most notably 

shifting generation from higher-NOX emitting coal-fired units to 

lower NOX emitting NGCC units, can potentially also reduce CO2

emissions, the EGU emissions analysis performed for this 

interstate transport action does not results in a notable 

difference in CO2 emissions. However, EPA’s results do not 

preclude states and utilities from considering these programs 

together. And, as the EPA has structured the interstate 

transport obligations that would be established by this proposal 

as requirements to limit aggregate affected EGU emissions and 

the EPA is not proposing to enforce source-specific emission 

reduction requirements, EGU owners have the flexibility to plan 

for compliance with the interstate ozone transport requirements 

in ways that are consistent with state and EGU strategies to 

reduce CO2 emissions for the Clean Power Plan.

With respect to concerns about potentially stranded 

investments118 in NOX control equipment, the EPA’s budget-setting 

approach quantifies NOX reductions from upgrading combustion 

controls at coal-fired units. However, CSAPR’s flexible 

compliance does not require that specific NOX controls be 

 

118 A potential stranded investment is an investment in an EGU NOX reduction 

strategy (e.g., combustion controls) for which the affected EGU retires 

before the investment is fully depreciated.
228

installed at any specific facilities, and we would not expect 

such controls to be installed on units that may not be economic 

to operate in the future.

b. 2015 Ozone Standard

On October 1, 2015, the EPA strengthened the ground-level 

ozone NAAQS to 70 ppb, based on extensive scientific evidence 

about ozone’s effects on public health and welfare. This 

proposed rule to update CSAPR to address interstate emissions 

transport with respect to the 2008 ozone NAAQS is a separate and 

distinct regulatory action and is not meant to address the CAA’s 

good neighbor provision with respect to the strengthened 2015 

ozone NAAQS.

The EPA is mindful of the need to address ozone transport 

for the 2015 ozone NAAQS. The statutory deadline for the EPA to 

finalize area designations is October 1, 2017. Further, good 

neighbor SIPs from states are due on October 1, 2018. The steps 

taken under this proposal to reduce interstate ozone transport, 

when finalized, will help states attain and maintain the 2015 

ozone NAAQS. Moreover, to facilitate the implementation of the 

CAA good neighbor provision the EPA intends to provide 

information regarding steps 1 and 2 of the CSAPR framework in 

the fall of 2016. In particular, the EPA expects to conduct 

modeling necessary to identify projected nonattainment and 
229

maintenance receptors and identify the upwind states that 

contribute significantly to these receptors. 

VIII. Costs, Benefits, and Other Impacts of the Proposed 

Rule

The EPA evaluated the costs, benefits, and impacts of 

compliance with the proposed EGU NOX ozone-season emissions 

budgets that reflect uniform NOX costs of $1,300 per ton (see 

proposed emissions budgets in table VI.1). In addition, the EPA 

also assessed compliance with other more and less stringent 

alternative EGU NOX ozone-season emissions budgets, reflecting 

uniform NOX costs of $3,400 per ton and $500 per ton, 

respectively (see alternative emissions budgets in tables VI.2 

and VI.3). The EPA evaluated the impact of implementing these 

emissions budgets to reduce interstate transport for the 2008 

ozone NAAQS in 2017. More details for this assessment can be 

found in the Regulatory Impact Analysis in the docket for this 

proposed rule.

The EPA notes that its analysis of the regulatory control 

scenarios (i.e., the proposal and more and less stringent 

alternatives) is illustrative in nature, in part because the EPA 

proposes to implement the proposed EGU NOX emissions budgets via 

a regional NOX ozone-season allowance trading program. This 

implementation approach provides utilities with the flexibility 

to determine their own compliance path. The EPA’s assessment 
230

develops and analyzes one possible scenario for implementing the 

NOX budgets proposed by this action and one possible scenario for 

implementing the more and less stringent alternatives.

Table VIII.1 provides the projected 2017 EGU emissions 

reductions for the evaluated regulatory control scenarios.

Table VIII.1 - Projected 2017 Emissions Reductions of NOx, SO2, 

and CO2 with the Proposed NOx Emissions Budgets and More or Less 

Stringent Alternatives (Tons)1

Proposal

More Stringent 

Alternative

Less Stringent 

Alternative

NOX (annual) 89,969 92,582 23,686

NOX (ozone season) 84,856 83,680 25,051

SO2 (annual) 383 425 301

CO2 (annual) 610,092 614,385 719,760

1 NOx and SO2 emissions are reported in English (short) tons; CO2

is reported in metric tons.

The EPA estimates the costs associated with compliance with 

the illustrative proposed regulatory control alternative to be

approximately $93 million annually. These costs represent the 

private compliance cost of reducing NOX emissions to comply with 

the proposal and include monitoring, recordkeeping, and 

reporting costs. Table VIII.2 provides the estimated costs for 

the evaluated regulatory control scenarios, including the 

proposal and more and less stringent alternatives. Estimates are 

in 2011 dollars. 
231

Table VIII.2 – Cost Estimates for Compliance with the Proposed 

NOX Emissions Budgets and More and Less Stringent Alternatives 

(2011$)1

Proposal

More Stringent 

Alternative

Less Stringent 

Alternative

Costs $93 $96 $4.7

1 Levelized annualized costs over the period 2016 through 2040, 

discounted using the 4.77 discount rate used in IPM’s objective 

function of minimizing the net present value of the stream of 

total costs of electricity generation.

In this analysis, the EPA monetized the estimated benefits 

associated with reducing population exposure to ozone and PM2.5 

and co-benefits of decreased emissions of CO2, but was unable to 

monetize the co-benefits associated with reducing exposure to 

mercury, carbon monoxide, and NO2, as well as ecosystem effects 

and visibility impairment. In addition, the EPA expects positive 

health and welfare impacts associated with reduced levels of 

hydrogen chloride, but could not quantify these impacts. Among 

the benefits it could quantify, the EPA estimated combinations 

of health benefits at discount rates of 3 percent and 7 percent 

(as recommended by the EPA’s Guidelines for Preparing Economic 

Analyses [U.S. EPA, 2014] and OMB’s Circular A-4 [OMB, 2003]) 

and climate co-benefits at discount rates of 5 percent, 3 

percent, 2.5 percent, and 3 percent (95th percentile) (as 

recommended by the interagency working group). The EPA estimates 
232

the monetized ozone-related benefits119 of the proposal to be 

$490 million to $790 million (2011$) in 2017 and the PM2.5-

related co-benefits120 of the proposal to be $190 million to $430 

million (2011$) using a 3% discount rate and $170 million to 

$380 million (2011$) using a 7% discount rate. Further, the EPA 

estimates CO2-related co-benefits of $6.5 to $66 million (2011$). 

Additional details on this analysis are provided in the RIA for 

this proposal. Tables VIII.3 and VIII.5 summarize the quantified 

monetized human health and climate benefits of the proposal and 

the more and less stringent control alternatives. Table VIII.4 

summarizes the estimated avoided ozone- and PM2.5-related health 

incidences for the proposal and the more and less stringent 

control alternatives.

Table VIII.3 Estimated Health Benefits of Projected 2017 

Emissions Reductions for the Proposal and More or Less Stringent 

Alternatives (millions of 2011$)1

Proposal

More Stringent

Alternative

Less Stringent 

Alternative

NOX (as ozone) $490 to $790 $500 to $820 $140 to $220

NOX (as PM2.5)

 3% Discount Rate

 7% Discount Rate

$190 to $430

$170 to $380

$190 to $440

$170 to $390

$49 to $110

$45 to $100

Total

 3% Discount Rate

 7% Discount Rate

$670 to $1,200

$650 to $1,200

$690 to $1,300

$670 to $1,200

$190 to $340

$180 to $330

 

119 The ozone-related health benefits range is based on applying different 

adult mortality functions (i.e., Smith et al. (2009) and Zanobetti and 

Schwartz (2008)).

120 The PM2.5-related health co-benefits range is based on applying different 

adult mortality functions (i.e., Krewski et al. (2009) and Lepeule et al. 

(2012)).
233

1 The health benefits range is based on adult mortality functions 

(e.g., from Krewski et al. (2009) with Smith et al. (2009) to 

Lepeule et al. (2012) with Zanobetti and Schwartz (2008)).

Table VIII.4 Summary of Estimated Avoided Ozone-Related and 

PM2.5-Related Health Incidences from Projected 2017 Emissions 

Reductions for the Proposal and More or Less Stringent 

Alternatives1
234

Ozone-related Health Effects

Proposal More 

Stringent 

Alternative

Less 

Stringent 

Alternative

Avoided Premature Mortality

Smith et al. (2009) (all ages) 48 50 14

Zanobetti and Schwartz (2008) 

(all ages) 

81 83 23

Avoided Morbidity

Hospital admissions—respiratory 

causes (ages > 65) 

79 81 22

Emergency room visits for 

asthma (all ages)

320 330 90

Asthma exacerbation (ages 6-18) 93,000 95,000 26,000

Minor restricted-activity days 

(ages 18-65) 

240,000 240,000 67,000

School loss days (ages 5-17) 77,000 79,000 22,000

PM2.5-related Health Effects

Avoided Premature Mortality

Krewski et al. (2009) (adult) 21 22 5.6

Lepeule et al. (2012) (adult) 48 50 13

Woodruff et al. (1997) (infant) <1 <1 <1

Avoided Morbidity

Emergency department visits for 

asthma (all ages)

12 12 3.1

Acute bronchitis (age 8–12) 31 32 8.1

Lower respiratory symptoms (age 

7–14)

390 400 100

Upper respiratory symptoms 

(asthmatics age 9–11)

560 570 150

Minor restricted-activity days 

(age 18–65)

16,000 16,000 4,200

Lost work days (age 18–65) 2,700 2,700 700

Asthma exacerbation (age 6–18) 580 600 150

Hospital admissions—respiratory 

(all ages)

6.4 6.57 1.72

Hospital admissions—

cardiovascular (age > 18)

7.8 8.0 2.1

Non-Fatal Heart Attacks (age 

>18)

Peters et al. (2001) 25 26 6.67

Pooled estimate of 4 studies 2.73 2.83 0.71

1 All estimates are rounded to whole numbers with two significant 

figures. 
235

Table VIII.5 Estimated Global Climate Co-benefits of CO2

Reductions for the Proposal and More or Less Stringent 

Alternatives (millions of 2011$)1

Discount rate and 

statistic Proposal

More 

Stringent

Alternative

Less 

Stringent 

Alternative

5% (average) $6.5 $6.5 $7.6

3% (average) $23 $23 $27

2.5% (average) $35 $35 $41

3% (95th percentile) $66 $66 $78

1 The social cost of carbon (SC-CO2) values are dollar-year and 

emissions-year specific. SC-CO2 values represent only a partial 

accounting of climate impacts.

The EPA combined this information to perform a benefit-cost 

analysis for this proposal (shown in table VIII.6 and for the 

more and less stringent alternatives—shown in the RIA in the 

docket for this proposed rule).

Table VIII.6 Total Costs, Total Monetized Benefits, and Net 

Benefits of the Proposal in 2017 for U.S. (millions of 2011$)

Climate Co-Benefits $23

Air Quality Health 

Benefits

$670 to $1200

Total Benefits $700 to $1200

Annualized 

Compliance Costs

$93

Net Benefits $600 to $1100 10

Non-Monetized 

Benefits

Non-monetized climate benefits

Reductions in exposure to ambient NO2 and 

Reductions in mercury deposition SO2

Ecosystem benefits assoc. with reductions 

in emissions of NOx, SO Visibility impairment 2, and PM

There are additional important benefits that the EPA could 

not monetize. Due to current data and modeling limitations, our 

estimates of the co-benefits from reducing CO2 emissions do not 

include important impacts like ocean acidification or potential 

tipping points in natural or managed ecosystems. Unquantified 
236

benefits also include climate co-benefits from reducing 

emissions of non-CO2 GHGs (e.g., nitrous oxide and methane) and 

co-benefits from reducing direct exposure to SO2, NOX, and 

hazardous air pollution (e.g., mercury), as well as from 

reducing ecosystem effects and visibility impairment. Based upon 

the foregoing discussion, it remains clear that the benefits of

this proposed action are substantial, and far exceed the costs. 

Additional details on benefits, costs, and net benefits 

estimates are provided in the RIA for this proposal.

For this proposed rule, the EPA analyzed the costs to the 

electric power sector using IPM. The IPM is a dynamic linear 

programming model that can be used to examine the economic 

impacts of air pollution control policies for SO2 and NOX

throughout the contiguous United States for the entire power 

system. Documentation for IPM can be found in the docket for 

this rulemaking or at www.epa.gov/powersectormodeling.

The EPA provides a qualitative assessment of economic 

impacts associated with electricity price changes to consumers 

that may result from this proposed rule. This assessment can be 

found in the RIA for this proposed rule.

Executive Order 13563 directs federal agencies to consider 

the effect of regulations on job creation and employment. 

According to the Executive Order, “our regulatory system must 
237

protect public health, welfare, safety, and our environment 

while promoting economic growth, innovation, competitiveness, 

and job creation. It must be based on the best available 

science” (Executive Order 13563, 2011). Although standard 

benefit-cost analyses have not typically included a separate 

analysis of regulation-induced employment impacts, employment 

impacts are of particular concern and questions may arise about 

their existence and magnitude. 

States have the responsibility and flexibility to implement 

policies and practices as part of developing SIPs for compliance 

with the emissions budgets found in this proposed rule. Given 

the wide range of approaches that may be used and industries 

that could be affected, quantifying the associated employment 

impacts is difficult.

IX. Summary of Proposed Changes to the Regulatory Text for the 

CSAPR FIPs and CSAPR Trading Programs

This section describes proposed amendments to the 

regulatory text in the Code of Federal Regulations (CFR)CFR for 

the CSAPR FIPs and the CSAPR NOX Ozone-Season Trading Program 

related to the findings and remedy discussed throughout this 

preamble. This section also describes other minor proposed 

corrections to the existing CFR text for the CSAPR FIPs and the 

CSAPR trading programs more generally.
238

The proposed regulatory text amendments related to the 

CSAPR FIPs and the CSAPR NOX Ozone-Season Trading Program would 

be made in parts 52, 78, and 97 of title 40 of the CFR. Proposed 

changes to update the list of states that would be subject to 

FIPs to address obligations related to transported ozone 

pollution are in section §§ 52.38(b)(2) (summarizing all states 

subject to FIPs), 52.540 (ending FIP for Florida), 52.882 

(establishing FIP for Kansas), and 52.2140 (ending FIP for South 

Carolina). Section 97.510 contains the proposed changes 

establishing or revising the amounts of NOX Ozone-Season trading 

budgets, new unit set-asides (NUSAs), Indian country NUSAs, and 

variability limits for states whose sources participate in the 

CSAPR NOX Ozone-Season Trading Program. Additional proposed 

changes to accommodate trading program participation by sources 

whose coverage starts in different years are in sections 

§§ 97.506(c)(3) (compliance deadlines), 97.512 (NUSA allowance 

allocation procedures), 97.530(b) (monitor certification 

deadlines), and 97.534(d) (reporting deadlines). 

Proposed changes to section § 52.38(b)(3) through (5) would 

update states’ options to submit SIP revisions which, upon 

approval by the EPA, would modify certain CSAPR trading program 

provisions as applied to those states or replace the states’ 

FIPs with SIPs – options that correspond closely to states’ SIP 

revision options under CSAPR as initially promulgated. Proposed 
239

changes in section § 97.521 (allowance recordation) delay the 

deadlines for recording CSAPR NOX Ozone-Season allowances for the 

control periods in 2018 through 2022 in order to coordinate with 

the proposed updated submission deadlines for the optional SIP 

revisions. A similar proposed delay in the deadline for 

recording allowances for the control period in 2017 would 

provide time to finalize this rulerulemaking and would thereby 

allow the EPA to record allocations of 2017 allowances based on 

the final revised budgets instead of recording allocations based 

on existing budgets that are proposed to be superseded.

The proposed limitations on the use of emission allowances 

issued for a compliance period before 2017 or from the state NOX

Ozone-Season trading budget for Georgia are implemented by 

redefining sources’ obligations under the trading program in 

terms of “tonnage equivalents” of allowances rather than in 

terms of nominal quantities of allowances. Section 97.502 

contains a proposed new definition of “tonnage equivalent” and 

related proposed modifications to the definitions of “CSAPR NOX

Ozone-Season allowance” and “CSAPR NOX Ozone-Season emissions 

limitation.” A new section § 97.524(f) sets out the proposed 

procedures for determining the tonnage equivalent of an 

allowance. Additional proposed changes to reflect the use of 

allowances based on their tonnage equivalents (rather than their 

nominal numbers) to meet various obligations are contained in 
240

sections §§ 97.506(c) (standard requirements relating to NOX

emissions), 97.511(c) (corrections of incorrect allowance 

allocations), 97.524 (compliance with emissions limitations and 

excess emissions provisions), and 97.525 (compliance with 

assurance provisions). A proposed change to section § 78.1 would 

make EPA’s determinations of the tonnage equivalents of 

particular allowance holdings subject to the administrative 

appeal procedures set forth in part 78. 

In addition to the proposed CFR changes described above, 

this proposal also includes other minor amendments throughout 

the sections of parts 52, 78, and 97 implementing CSAPR, 

including sections implementing CSAPR’s other three emissions 

trading programs. The most common category of these minor 

changes consists of proposed corrections to cross-references. 

Some cross-references would change as a result of this proposal 

and corrections of those cross-references are therefore related 

to the changes described above, while other cross-references as 

originally published indicated incorrect locations because of 

typographical errors or indicated correct locations but did not 

use the correct CFR format. In virtually all cases, the intended 

correct cross-reference can be determined from context, but the 

corrections clarify the regulations. 

Besides the proposed corrections to cross-references, most 

of the remaining proposed corrections address other 
241

typographical errors. However, a small number of the proposed 

CFR changes correct errors that are not cross-references or 

obviously typographical errors. While the EPA views all of these 

proposed corrections as noncontroversial, a few merit a short 

explanation. 

First, the phrase “with regard to the State” or “the State 

and” would be added in a number of locations in sections 

§§ 52.38 and 52.39 where it was inadvertently omitted. The added 

phrase clarifies that when the EPA approves a state’s SIP 

revision as modifying or replacing provisions in a CSAPR trading 

program, the modification or replacement is effective only with 

regard to that particular state. Correcting the omissions of 

these phrases would make the language concerning SIP revisions 

consistent for all the types of SIP revisions under all the 

CSAPR trading programs.

Second, the phrase “in part” would be removed from the 

existing FIP language in various sections of part 52 for certain 

states with Indian country to clarify that in order to replace a 

CSAPR FIP affecting the sources in these states, a SIP revision

must fully, not “in part,” correct the SIP deficiency identified 

by the EPA as the basis for the FIP. The intended purpose of the 

words “in part” – specifically, to indicate that approval of a 

state’s SIP revision would not relieve any sources in Indian 

country within the borders of the state from obligations under 
242

the FIP – is already served by other language in those FIPs. 

The proposed corrections would make the language in these CSAPR 

FIPs consistent with the FIP language for the remaining CSAPR 

FIPs that address states with Indian country. Analogous proposed 

changes to the general CSAPR FIP language in sections 

§§ 52.38(a)(5) and (6) and (b)(5) and (6) and 52.39(f), (i), and 

(j) would remove the phrase “in whole or in part” (referencing 

states without Indian country and states with Indian country, 

respectively) while adding language distinguishing the effect 

that the EPA’s approval of a SIP revision would have on sources 

in the state from the lack of effect on any sources in Indian 

country within the borders of the state. 

Third, language would be added to section § 78.1 clarifying 

that determinations by the EPA Administrator under the CSAPR 

trading programs that are subject to the part 78 administrative 

appeal procedures are subject to those procedures whether the 

source in question participates in a CSAPR trading program under 

a FIP or under an approved SIP revision. This approach is 

consistent with the approach taken under CAIR FIPs and SIPs and 

with the EPA’s intent in CSAPR, as evidenced by the lack of any 

proposal or discussion in the CSAPR rulemaking regarding 

deviation from the historical approach. This approach is also 

consistent with provisions in sections §§ 52.38 and 52.39 

prohibiting approvable SIP revisions from altering certain 
243

provisions of the CSAPR trading programs, including the 

provisions specifying that administrative appeal procedures for 

determinations of the EPA Administrator under the trading 

programs are set forth in part 78. 

Fourth, the phrase “steam turbine generator” would be 

changed to “generator” in the list of required equipment in the 

definition of a “cogeneration system” in sections §§ 97.402, 

97.502, 97.602, and 97.702. Absent this correction, a combustion 

turbine in a facility that uses the combustion turbine in 

combination with an electricity generator and heat recovery 

steam generator, but no steam turbine, to produce electricity 

and useful thermal energy would not meet the definition of a 

“cogeneration unit.” The proposed correction would clarify that 

a combustion turbine in such a facility should be able to 

qualify as a “cogeneration unit” (assuming it meets other 

relevant criteria) under the CSAPR trading programs, as it could 

under the CAIR trading programs. The consistency of this 

approach with the EPA’s intent in the CSAPR rulemaking is 

evidenced by the lack of any proposal or discussion in that 

rulemaking regarding the concept of narrowing the set of 

facilities qualifying for an applicability exemption as 

cogeneration units. To the contrary, as discussed in the 

preamble to the CSAPR proposal (75 FR 45307, Aug. 2, 2010), the 

definition of “cogeneration system” was created in CSAPR to 
244

potentially broaden the set of facilities qualifying for the 

exemption, specifically by facilitating qualification as 

“cogeneration units” for certain units that might not meet the 

required levels of efficiency on an individual basis but that 

operate as components of multi-unit “cogeneration systems” that 

do meet the required levels of efficiency.

Fifth, the deadline for recording certain allowance 

allocations under sections §§ 97.421(j), 97.521(j), 97.621(j), 

and 97.721(j) would be changed from the “date on which” the EPA 

receives the necessary allocation information to the date “15 

days after the date on which” the EPA receives the information. 

The EPA’s lack of intention in the CSAPR rulemaking to establish 

the deadline as defined prior to the correction is evidenced by 

the impracticability of complying with such a deadline. 

Sixth, a proposed change to a description of a required 

notice under the assurance provisions in sections 

§§ 97.425(b)(2)(iii)(B), 97.525(b)(2)(iii)(B), 

97.625(b)(2)(iii)(B), and 97.725(b)(2)(iii)(B) would modify the 

phrase “any adjustments” to the phrase “calculations 

incorporating any adjustments” in order to clarify that the 

required notice will identify not only any adjustments made to 

previously noticed calculations, but also the complete 

calculations with (or without) such adjustments. The intended 

meaning is clear from the subsequent provisions that use this 
245

notice as the point of reference for the complete calculations 

used in the succeeding administrative procedures.

Finally, the EPA notes that the proposed amendments include 

updating the name of the rulenomenclature in the CFR from its 

name as initially proposed – “Transport Rule” or “TR” – to its 

name as finalized – “Cross-State Air Pollution Rule” or “CSAPR.” 

This update is intended to reduce confusion and simplify 

communications regarding the ruleregulations by allowing a 

single name to be used in all contexts.

The EPA invites comment on the proposed regulatory text 

amendments described above and shown at the end of this notice.

X. Statutory and Executive Order Reviews

Additional information about these statutes and Executive 

Orders can be found at http://www2.epa.gov/lawsregulations/laws-and-executive-orders. 

A. Executive Order 12866: Regulatory Planning and Review 

and Executive Order 13563: Improving Regulation and Regulatory 

Review

This action is an economically significant regulatory 

action that was submitted to the Office of Management and Budget 

(OMB) for review. Any changes made in response to OMB 

recommendations have been documented in the docket. The EPA 

prepared an analysis of the potential costs and benefits 
246

associated with this action. This analysis, which is contained 

in the “Regulatory Impact Analysis for the Proposed Cross-State 

Air Pollution Rule Update for the 2008 Ozone NAAQS” [EPA-452/R15-009], is available in the docket and is briefly summarized in 

section VIII of this preamble. 

Consistent with Executive Order (EO)Orders 12866 and EO

13563, the EPA estimated the costs and benefits for three 

regulatory control alternatives: the proposed EGU NOX ozoneseason emissions budgets and more and less stringent 

alternatives. This proposed action would reduce ozone season NOX

emissions from EGUs in 23 eastern states. Actions taken to 

comply with the proposed EGU NOX ozone-season emissions budgets 

would also reduce emissions of other criteria air pollution and 

hazardous air pollution emissions, including annual NOX, and CO2. 

The benefits associated with these co-pollutant reductions are 

referred to as co-benefits, as these reductions are not the 

primary objective of this proposed rule.

The RIA for this proposal analyzed illustrative compliance 

approaches for implementing the proposed FIPs. This proposal 

would establish EGU NOX ozone-season emissions budgets for 23 

states and implement these budgets via the existing CSAPR NOX

ozone-season allowance trading program. 

The EPA evaluated the costs, benefits, and impacts of 

implementing the proposed EGU NOX ozone-season emissions budgets 
247

that reflect uniform NOX costs of $1,300 per ton (see proposed 

emissions budgets in table VI.1). In addition, the EPA also 

assessed implementation of other more and less stringent 

alternative EGU NOX ozone-season emissions budgets, reflecting 

uniform NOX costs of $3,400 per ton and $500 per ton, 

respectively (see alternative emissions budgets in tables VI.2 

and VI.3). The EPA evaluated the impact of implementing these 

emissions budgets to reduce interstate transport for the 2008 

ozone NAAQS in 2017. More details for this assessment can be 

found in the Regulatory Impact Analysis in the docket for this 

proposed rule.

The EPA notes that its analysis of the regulatory control 

scenarios (i.e., the proposal and more and less stringent 

alternatives) is illustrative in nature, in part because the EPA 

proposes to implement the proposed EGU NOX emissions budgets via 

a regional NOX ozone-season allowance trading program. This 

implementation approach provides utilities with the flexibility 

to determine their own compliance path. The EPA’s assessment 

develops and analyzes one possible scenario for implementing the 

NOX budgets proposed by this action and one possible scenario for 

implementing the more and less stringent alternatives.

The EPA estimates the costs associated with compliance with 

the illustrative proposed regulatory control alternative to be 
248

approximately $93 million (2011$) annually. These costs 

represent the private compliance cost of reducing NOX emissions 

to comply with the proposal. 

In this analysis, the EPA monetized the estimated benefits 

associated with the reduced exposure to ozone and PM2.5 and cobenefits of decreased emissions of CO2, but was unable to 

monetize the co-benefits associated with reducing exposure to 

mercury, carbon monoxide, and NO2, as well as ecosystem effects 

and visibility impairment. In addition, there are expected to be 

unquantified health and welfare impacts associated with changes 

in hydrogen chloride. Specifically, the EPA estimated 

combinations of health benefits at discount rates of 3 percent 

and 7 percent (as recommended by the EPA’s Guidelines for 

Preparing Economic Analyses [U.S. EPA, 2014] and OMB’s Circular 

A-4 [OMB, 2003]) and climate co-benefits at discount rates of 5 

percent, 3 percent, 2.5 percent, and 3 percent (95th percentile) 

(as recommended by the interagency working group). The EPA 

estimates the monetized ozone-related benefits121 of the proposal 

to be $490 million to $790 million (2011$) in 2017 and the 

PM2.5-related co-benefits122 of the proposal to be $190 million 

 

121 The ozone-related health benefits range is based on applying different 

adult mortality functions (i.e., Smith et al. (2009) and Zanobetti and 

Schwartz (2008)).

122 The PM2.5-related health co-benefits range is based on applying different 

adult mortality functions (i.e., Krewski et al. (2009) and Lepeule et al. 

(2012)).
249

to $430 million (2011$) using a 3% discount rate and $170 

million to $380 million (2011$) using a 7% discount rate. 

Further, the EPA estimates CO2-related co-benefits of $6.5 to $66 

million (2011$). Additional details on this analysis are 

provided in the RIA for this proposal. Tables X.A-1, X.A-2, and 

X.A-3 summarize the quantified human health and climate benefits 

and the costs of the proposal and the more and less stringent 

control alternatives.

Table X.A-1 Estimated Health Benefits of Projected 2017 

Emissions Reductions for the Proposal and More or Less Stringent 

Alternatives (millions of 2011$)1

Proposal More Stringent Less Stringent

NOX (as ozone) $490 to $790 $500 to $820 $140 to $220

NOX (as PM2.5)

 3% Discount Rate

 7% Discount Rate

$190 to $430

$170 to $380

$190 to $440

$170 to $390

$49 to $110

$45 to $100

Total

 3% Discount Rate

 7% Discount Rate

$670 to $1,200

$650 to $1,200

$690 to $1,300

$670 to $1,200

$190 to $340

$180 to $330

1 The health benefits range is based on adult mortality functions 

(e.g., from Krewski et al. (2009) with Smith et al. (2009) to 

Lepeule et al. (2012) with Zanobetti and Schwartz (2008)).

Table X.A-2 Estimated Global Climate Co-benefits of CO2

Reductions for the Proposal and More or Less Stringent 

Alternatives (millions of 2011$)1

Discount rate and 

statistic Proposal

More 

Stringent

Less 

Stringent

5% (average) $6.5 $6.5 $7.6

3% (average) $23 $23 $27

2.5% (average) $35 $35 $41

3% (95th percentile) $66 $66 $78

1 The social cost of carbon (SC-CO2) values are dollar-year and 

emissions-year specific. SC-CO2 values represent only a partial 

accounting of climate impacts.
250

The EPA combined this information to perform a benefit-cost 

analysis for this proposal (shown in table VIII.6 and for the 

more and less stringent alternatives—shown in the RIA in the 

docket for this proposed rule).

Table X.A-3 Total Costs, Total Monetized Benefits, and Net 

Benefits of the Proposal in 2017 for U.S. (millions of 2011$)

Climate Co-Benefits $23

Air Quality Health 

Benefits

$670 to $1200

Total Benefits $700 to $1200

Annualized Costs

Compliance Costs

$93

Net Benefits $600 to $1100 10

Non-Monetized 

Benefits

Non-monetized climate benefits

Reductions in exposure to ambient NO2 and 

Reductions in mercury deposition SO2

Ecosystem benefits assoc. with reductions 

in emissions of NOx, SO Visibility impairment 2, and PM

There are additional important benefits that the EPA could 

not monetize. Due to current data and modeling limitations, our 

estimates of the co-benefits from reducing CO2 emissions do not 

include important impacts like ocean acidification or potential 

tipping points in natural or managed ecosystems. Unquantified 

benefits also include climate co-benefits from reducing 

emissions of non-CO2 GHGs (e.g., nitrous oxide and methane) and 

co-benefits from reducing direct exposure to SO2, NOX, and 

hazardous air pollution (e.g., mercury), as well as from 

reducing ecosystem effects and visibility impairment. Based upon 

the foregoing discussion, it remains clear that the benefits of 

this proposed action are substantial, and far exceed the costs. 
251

Additional details on benefits, costs, and net benefits 

estimates are provided in the RIA for this proposal.

B. Paperwork Reduction Act (PRA)

The information collection activities in this proposed rule 

have been submitted for approval to the Office of Management and 

Budget (OMB) under the Paperwork Reduction Act (PRA), 44 U.S.C. 

3501 et seq. The Information Collection Request (ICR) document 

that the EPA prepared has been assigned EPA ICR number 

2527.012391.04. You can find a copy of the ICR in the docket for 

this proposed rule, and it is briefly summarized here. 

The information generated by information collection 

activities under CSAPR is used by the EPA to ensure that 

affected facilities comply with the emission limits and other 

requirements. Records and reports are necessary to enable EPA or 

states to identify affected facilities that may not be in 

compliance with the requirements. The recordkeeping requirements 

require only the specific information needed to determine 

compliance. These recordkeeping and reporting requirements are 

established pursuant to CAA sections 110(a)(2)(D) and (c) and 

301(a) (42 U.S.C. 7410(a)(2)(D) and (c) and 7601(a)) and are 

specifically authorized by CAA section 114 (42 U.S.C. 7414). 

Reported data may also be used for other regulatory and 

programmatic purposes. All information submitted to the EPA for 
252

which a claim of confidentiality is made will be safeguarded 

according to EPA policies in 40 CFR part 2, subpart B, 

Confidentiality of Business Information. 

All of the EGUs that would be subject to changed 

information collection requirements under this proposed rule are 

already subject to information collection requirements under 

CSAPR. Most of these EGUs also are already subject to 

information collection requirements under the Acid Rain Program 

(ARP) established under Title IV of the 1990 Clean Air Act 

Amendments. Both CSAPR and the ARP have existing approved ICRs: 

EPA ICR Number 2391.03/OMB Control Number 2060-0667 (CSAPR) and 

EPA ICR Number 1633.16/OMB Control Number 2060-0258 (ARP). The 

burden and costs of the information collection requirements 

covered under the CSAPR ICR are estimated as incremental to the 

information collection requirements covered under the ARP ICR. 

Most of the information used to estimate burden and costs in 

this ICR was developed for the existing CSAPR and ARP ICRs. 

This proposed rule would change the universe of sources 

subject to certain information collection requirements under 

CSAPR but would not change the substance of any CSAPR 

information collection requirements. The burden and costs 

associated with the proposed changes in the reporting universe 

are estimated as reductions from the burden and costs under the 

existing CSAPR ICR. (This proposed rule would not change any 
253

source’s information collection requirements with respect to the 

ARP.) The EPA intends to incorporate the burden and costs 

associated with the proposed changes in the reporting universe 

under this rulerulemaking into the next renewal of the CSAPR 

ICR.

Respondents/affected entities: Entities potentially 

affected by this proposed action are EGUs in the states of 

Florida, Kansas, and South Carolina that meet the applicability 

criteria for the CSAPR NOX Ozone-Season Trading Program in 40 CFR 

97.404. 

Respondent’s obligation to respond: Mandatory (sections 

110(a) and 301(a) of the Clean Air Act).

Estimated number of respondents: 116 sources in Florida, 

Kansas, and South Carolina with one or more EGUs.

Frequency of response: Quarterly, occasionally. 

Total estimated burden: reduction of 14,064 hours (per 

year). Burden is defined at 5 CFR 1320.3(b).

Total estimated cost: reduction of $1,472,047 (per year), 

includes reduction of $450,951 operation and maintenance costs. 

The burden and cost estimates above reflect the reduction 

in burden and cost for Florida sources with EGUs that would no 

longer be required to report NOX mass emissions and heat input 

data for the ozone season to the EPA under the proposed rule and 

that are not subject to similar information collection 
254

requirements under the Acid Rain Program. Because these EGUs 

would no longer need to collect NOX emissions or heat input data 

under 40 CFR part 75, the estimates above also reflect the 

reduction in burden and cost to collect and quality assure these 

data and to maintain the associated monitoring equipment. 

The EPA estimates that the proposed rule would cause no 

change in information collection burden or cost for EGUs in 

Kansas that would be required to report NOX mass emissions and 

heat input data for the ozone season to the EPA or for EGUs in 

South Carolina that would no longer be required to report NOX

emissions and heat input data for the ozone season to the EPA. 

The EGUs in both Kansas and South Carolina already are and would 

remain subject to requirements to report NOX mass emissions and 

heat input data for the entire year to the EPA under the CSAPR 

NOX Annual Trading Program, and the requirements related to ozone 

season reporting are a subset of the requirements related to 

annual reporting. Similarly, the EPA estimates that the proposed 

rule would cause no change in information collection burden or 

cost for EGUs in Florida that are subject to the Acid Rain 

Program because of the close similarity between the information 

collection requirements under CSAPR and under the Acid Rain 

Program.

More information on the ICR analysis is included in the 

docket for this rule.
255

An agency may not conduct or sponsor, and a person is not 

required to respond to, a collection of information unless it 

displays a currently valid OMB control number. The OMB control 

numbers for the EPA’s regulations in 40 CFR are listed in 40 CFR 

part 9. 

Submit your comments on the Agency’s need for this 

information, the accuracy of the provided burden estimates and 

any suggested methods for minimizing respondent burden to the 

EPA using the docket identified at the beginning of this 

proposed rule. You may also send your ICR-related comments to 

OMB’s Office of Information and Regulatory Affairs via email to 

oria_submissions@omb.eop.gov, Attention: Desk Officer for the 

EPA. Because OMB is required to make a decision concerning the 

ICR between 30 and 60 days after receipt, OMB must receive 

comments no later than [INSERT DATE 30 DAYS AFTER DATE OF 

PUBLICATION IN THE FEDERAL REGISTER]. The EPA will respond to 

any ICR-related comments in the final rule. The information 

collection requirements in the proposed rule have been submitted 

for approval to OMB under the PRA. The information collection 

requirements are not enforceable until OMB approves them. The 

information collection activities in this proposed rule include 

monitoring and the maintenance of records. 
256

E. Regulatory Flexibility Act (RFA)

I certify that this action will not have a significant 

economic impact on a substantial number of small entities under 

the RFA. The small entities subject to the requirements of this 

action are small businesses, small organizations, and small 

governmental jurisdictions. 

The EPA has lessened the impacts for small entities by 

excluding all units smaller than 25 MWe. This exclusion, in 

addition to the exemptions for cogeneration units and solid 

waste incineration units, eliminates the burden of higher costs 

for a substantial number of small entities located in the 23 

states for which the EPA is proposing FIPs.

Within these states, the EPA identified a total of 318 

potentially affected EGUs (i.e., greater than 25 MWe) warranting 

examination in its RFA analysis. Of these, EPA identified 16 

potentially affected EGUs that are owned by 7 entities that met 

the Small Business Administration’s criteria for identifying 

small entities. The EPA estimated the annualized net compliance 

cost to these 7 small entities to be approximately -$38.3 

million in 2017, or savings of $38.3 million. The fact that the 

net compliance costs for all entities are actually net savings 

does not mean that each small entity would benefit from the 

proposal to update CSAPR. The net savings are driven by entities 

that are able to increase their revenues by increasing 
257

generation. Of the 7 small entities considered in this analysis, 

1 entity may experience compliance costs greater than 1 or 3 

percent of generation revenues in 2017. Since this entity is not 

projected to operate in the base case, we are unable to compare 

the estimated compliance costs to base case generation revenues. 

However, we note that this entity is located in a cost of 

service market, where typically we expect entities should be 

able to recover all of their costs of complying with the 

proposal. 

EPA has concluded that there is no significant economic 

impact on a substantial number of small entities (No SISNOSE) 

for this rule. Details of this analysis are presented in the 

RIA, which is in the public docket.

F. Unfunded Mandates Reform Act (UMRA)

This action does not contain an unfunded mandate of $100 

million or more as described in UMRA, 2 U.S.C. 1531–1538, and 

does not significantly or uniquely affect small governments. 

However, the EPA analyzed the economic impacts of the proposal 

on government entities. According to EPA’s analysis, the total 

net economic impact on government owned entities (state- and 

municipality-owned utilities and subdivisions) is expected to be 

negative (i.e., cost savings) in 2014. Note that we expect the 

proposal to potentially have an impact on only one category of 

government-owned entities (municipality-owned entities). This 
258

analysis does not examine potential indirect economic impacts 

associated with the proposal, such as employment effects in 

industries providing fuel and pollution control equipment, or 

the potential effects of electricity price increases on 

government entities. For more information on the estimated 

impact on government entities, refer to the RIA, which is in the 

public docket.

E. Executive Order 13132: Federalism

This action does not have federalism implications. 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 Coordination with 

Indian Tribal Governments

This action has tribal implications. However, it will 

neither impose substantial direct compliance costs on federally 

recognized tribal governments, nor preempt tribal law.

This action proposes to implement EGU NOX ozone season 

emissions reductions in 23 eastern states. However, at this 

time, none of the existing or planned EGUs affected by this 

proposed rule are owned by tribes or located in Indian country.

This action may have tribal implications if a new affected EGU 
259

is built in Indian country. Additionally, tribes have a vested 

interest in how this proposed rule would affect air quality.

In developing CSAPR, which was promulgated on July 6, 2011 

to address interstate transport of ozone pollution under the 

1997 ozone NAAQS,123 the EPA consulted with tribal officials 

under the EPA Policy on Consultation and Coordination with 

Indian Tribes early in the process of developing that regulation 

to permit them to have meaningful and timely input into its 

development. A summary of that consultation is provided in 76 FR 

48346 (August 8, 2011). 

EPA received comments from several tribal commenters 

regarding the availability of CSAPR allowance allocations to new 

units in Indian country. EPA responded to these comments by 

instituting Indian country new unit set-asides in the final 

CSAPR. In order to protect tribal sovereignty, these set-asides 

are managed and distributed by the federal government regardless 

of whether CSAPR in the adjoining or surrounding state is 

implemented through a FIP or SIP. While there are no existing 

affected EGUs in Indian country covered by this proposal, the 

Indian country set-asides will ensure that any future new units 

built in Indian country will be able to obtain the necessary 

allowances. This proposal maintains the Indian country new unit 

 

123 CSAPR also addressed interstate transport of fine particulate matter 

(PM2.5) under the 1997 and 2006 PM2.5 NAAQS.
260

set-aside and adjusts the amounts of allowances in each setaside according to the same methodology of the original CSAPR 

rule. 

The EPA has informed tribes of our development of this 

proposal through a National Tribal Air Association – EPA air 

policy conference call (January 29, 2015). The EPA plans to 

further consult with tribal officials under the EPA Policy on 

Consultation and Coordination with Indian Tribes early in the 

process of developing this regulation to permit them to have 

meaningful and timely input into its development. The EPA will 

facilitate this consultation before finalizing this proposed 

rule.

As required by section 7(a), the EPA’s Tribal Consultation 

Official has certified that the requirements of the executive 

order have been met in a meaningful and timely manner. A copy of 

the certification is included in the docket for this action.

G. Executive Order 13045: Protection of Children from 

Environmental Health Risks and Safety Risks

The EPA interprets EOExecutive Order 13045 (62 FR 19885, 

April 23, 1997) as applying to those regulatory actions that 

concern health or safety risks, such that the analysis required 

under section 5–501 of the Order has the potential to influence 

the regulation. This action is not subject to EOExecutive Order
261

13045 because it does not involve decisions on environmental 

health or safety risks that may disproportionately affect 

children. The EPA believes that the ozone-related benefits, 

PM2.5-related co-benefits, and CO2-related co-benefits would 

further improve children’s health. 

H. Executive Order 13211: Actions Concerning Regulations That 

Significantly Affect Energy Supply, Distribution or Use

This action, which is a significant regulatory action under 

EOExecutive Order 12866, is likely to have a significant effect 

on the supply, distribution, or use of energy. The EPA notes 

that one aspect of this proposal that may affect energy supply, 

disposition or use is the EPA’s proposing and taking comment on 

a range of options with respect to use of 2015 vintage and 2016 

vintage CSAPR NOX ozone-season allowances for compliance with 

2017 and later ozone season requirements. The EPA has prepared a 

Statement of Energy Effects for the proposed regulatory control 

alternative as follows. We estimate a much less than 1 percent 

change in retail electricity prices on average across the 

contiguous U.S. in 2017, and a much less than 1 percent 

reduction in coal-fired electricity generation in 2017 as a 

result of this rule. The EPA projects that utility power sector 

delivered natural gas prices will change by less than 1 percent 

in 2017. For more information on the estimated energy effects, 

refer to the RIA, which is in the public docket.
262

I. National Technology Transfer and Advancement Act (NTTAA)

This rulemaking does not involve 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 environmental risk 

addressed by this action will not have potential 

disproportionately high and adverse human health or 

environmental effects on minority, low-income or indigenous 

populations.

The EPA notes that this action proposes to update CSAPR to 

reduce interstate ozone transport with respect to the 2008 ozone 

NAAQS. This proposed rule uses EPA’s authority in CAA section 

110(a)(2)(d) to reduce (nitrogen oxides) NOX pollution that 

significantly contributes to downwind ozone nonattainment or 

maintenance areas. As a result, the proposed rule will reduce 

exposures to ozone in the most-contaminated areas (i.e., areas 

that are not meeting the 2008 ozone National Ambient Air Quality 

Standards (NAAQS)). In addition, thethis proposed rule 

separately identifies both nonattainment areas and maintenance 

areas. This requirement reduces the likelihood that areas close 

to the level of the standard will exceed the current healthbased standards in the future. The EPA proposes to implement 
263

these emission reductions using the CSAPR EGU NOX ozone-season 

emissions trading program with assurance provisions.

EPA recognizes that many environmental justice communities 

have voiced concerns in the past about emission trading and the 

potential for any emission increases in any location. The EPA 

believes that CSAPR mitigated these concerns and that this 

proposal, which applies the CSAPR framework to reduce interstate 

ozone pollution and implement these reductions, will also 

minimize community concerns. The EPA seeks comment from 

communities on this proposal.

Ozone pollution from power plants have both local and 

regional components: part of the pollution in a given location—

even in locations near emission sources—is due to emissions from 

nearby sources and part is due to emissions that travel hundreds 

of miles and mix with emissions from other sources.

It is important to note that the section of the Clean Air 

Act providing authority for this proposed rule, section 

110(a)(2)(D), unlike some other provisions, does not dictate 

levels of control for particular facilities. CSAPR allows 

sources to trade allowances with other sources in the same or 

different states while firmly constraining any emissions 

shifting that may occur by requiring a strict emission ceiling 

in each state (the assurance level). In addition, assurance 

provisions in the ruleexisting CSAPR regulations that will 
264

remain in place under this proposal outline the allowance 

surrender penalties for failing to meet the assurance level; 

there are additional allowance penalties as well as financial 

penalties for failing to hold an adequate number of allowances 

to cover emissions. 

This approach reduces EGU emissions in each state that 

significantly contribute to downwind nonattainment or 

maintenance areas, while allowing power companies to adjust 

generation as needed and ensure that the country’s electricity 

needs will continue to be met. EPA maintains that the existence 

of these assurance provisions, including the penalties imposed 

when triggered, will ensure that state emissions will stay below 

the level of the budget plus variability limit. 

In addition, all sources must hold enough allowances to 

cover their emissions. Therefore, if a source emits more than 

its allocation in a given year, either another source must have 

used less than its allocation and be willing to sell some of its 

excess allowances, or the source itself had emitted less than 

its allocation in one or more previous years (i.e., banked 

allowances for future use). 

In summary, the CSAPR minimizes community concerns about 

localized hot spots and reduces ambient concentrations of 

pollution where they are most needed by sensitive and vulnerable 

populations by: considering the science of ozone transport to 
265

set strict state emissions budgets to reduce significant 

contributions to ozone nonattainment and maintenance (i.e., the 

most polluted) areas; implementing air quality-assured trading;

requiring any emissions above the level of the allocations to be 

offset by emission decreases; and imposing strict penalties for 

sources that contribute to a state’s exceedance of its budget 

plus variability limit. In addition, it is important to note 

that nothing in this finalproposed rule allows sources to 

violate their title V permit or any other federal, state, or 

local emissions or air quality requirements.

In addition, it is important to note that CAA section 

110(a)(2)(d), which addresses transport of criteria pollutants 

between states, is only one of many provisions of the CAA that 

provide EPA, states, and local governments with authorities to 

reduce exposure to ozone in communities. These legal authorities 

work together to reduce exposure to these pollutants in 

communities, including for minority, low-income, and tribal 

populations, and provide substantial health benefits to both the 

general public and sensitive sub-populations.

The EPA has informed communities of our development of this 

proposal through an Environmental Justice community call 

(January 28, 2015) and a National Tribal Air Association – EPA 

air policy conference call (January 29, 2015). The EPA plans to 
266

further consult with communities early in the process of 

developing this regulation to permit them to have meaningful and 

timely input into its development. The EPA will facilitate this 

engagement before finalizing this proposed rule.

K. Determinations Under Section 307(b)(1) and (d)

Section 307(b)(1) of the CAA indicates which Federal Courts 

of Appeal have venue for petitions of review of final actions by 

EPA. This section provides, in part, that petitions for review 

must be filed in the Court of Appeals for the District of 

Columbia Circuit if (i) the agency action consists of 

“nationally applicable regulations promulgated, or final action 

taken, by the Administrator,” or (ii) such action is locally or 

regionally applicable, if “such action is based on a 

determination of nationwide scope or effect and if in taking 

such action the Administrator finds and publishes that such 

action is based on such a determination.”

The EPA proposes to find that any final action related to 

this rulemaking is “nationally applicable” or of “nationwide 

scope and effect” within the meaning of section 307(b)(1). 

Through this rulemaking action, the EPA interprets section 110 

of the CAA, a provision which has nationwide applicability. In 

addition, the proposed rule would apply to 23 States. The 

proposed rule is also based on a common core of factual findings 

and analyses concerning the transport of pollutants between the 
267

different states subject to it. For these reasons, the 

Administrator proposes to determine that any final action 

related to the proposed rule is of nationwide scope and effect 

for purposes of section 307(b)(1). Thus, pursuant to section 

307(b) any petitions for review of any final actions regarding 

the rulemaking would be filed in the Court of Appeals for the 

District of Columbia Circuit within 60 days from the date any 

final action is published in the Federal Register. 

In addition, pursuant to sections 307(d)(1)(C) and 307(d)(1)(V) 

of the CAA, the Administrator proposes to determine that this 

action is subject to the provisions of section 307(d). CAA 

section 307(d)(1)(B) provides that section 307(d) applies to, 

among other things, to “the promulgation or revision of an 

implementation plan by the Administrator under CAA section 

110(c).” 42 U.S.C. 7407(d)(1)(B). Under section 307(d)(1)(V), 

the provisions of section 307(d) also apply to “such other 

actions as the Administrator may determine.” 42 U.S.C. 

7407(d)(1)(V). The Agency has complied with procedural 

requirements of CAA section 307(d) during the course of this 

rulemaking.
268

Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, 

Proposed Rule

Page 267 of 347

List of Subjects in 40 CFR Parts 52, 78, and 97.

Environmental protection, Administrative practice and 

procedure, Air pollution control, Electric power plants, 

Incorporation by reference, Nitrogen oxides, Reporting and 

record keeping requirements.

Dated: November 16, 2015.

Gina McCarthy,

Administrator.
269

For the reasons stated in the preamble, parts 52, 78, and 

97 of chapter I of title 40 of the Code of Federal Regulations

are proposed to be amended as follows:

PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

1. The authority citation for part 52 continues to read as 

follows:

Authority: 42 U.S.C. 7401 et seq.

§§ 52.38, 52.39, 52.54, 52.55, 52.184, 52.540, 52.584, 52.585, 

52.731, 52.732, 52.789, 52.790, 52.840, 52.841, 52.882, 52.883, 

52.940, 52.941, 52.984, 52.1084, 52.1085, 52.1186, 52.1187, 

52.1240, 52.1241, 52.1284, 52.1326, 52.1327, 52.1428, 52.1429, 

52.1584, 52.1585, 52.1684, 52.1685, 52.1784, 52.1785, 52.1882, 

52.1883, 52.1930, 52.2040, 52.2041, 52.2140, 52.2141, 52.2240, 

52.2241, 52.2283, 52.2284, 52.2440, 52.2441, 52.2540, 52.2541, 

52.2587, and 52.2588 [Amended]

2. Sections 52.38, 52.39, 52.54, 52.55, 52.184, 52.540, 

52.584, 52.585, 52.731, 52.732, 52.789, 52.790, 52.840, 52.841, 

52.882, 52.883, 52.940, 52.941, 52.984, 52.1084, 52.1085, 

52.1186, 52.1187, 52.1240, 52.1241, 52.1284, 52.1326, 52.1327, 

52.1428, 52.1429, 52.1584, 52.1585, 52.1684, 52.1685, 52.1784, 

52.1785, 52.1882, 52.1883, 52.1930, 52.2040, 52.2041, 52.2140, 

52.2141, 52.2240, 52.2241, 52.2283, 52.2284, 52.2440, 52.2441, 

52.2540, 52.2541, 52.2587, and 52.2588 are amended by removing 

“TR Federal Implementation Plan” wherever it appears and adding 
270

in its place “CSAPR Federal Implementation Plan”, by removing 

“TR NOX” wherever it appears and adding in its place “CSAPR NOX”, 

and by removing “TR SO2” wherever it appears and adding in its 

place “CSAPR SO2”.

§§ 52.540, 52.840, 52.841, 52.882, 52.883, 52.984, 52.1186, 

52.1187, 52.1240, 52.1241, 52.1284, 52.1428, 52.1429, 52.1684, 

52.1685, 52.1784, 52.1785, 52.2140, 52.2141, 52.2283, 52.2284, 

52.2587, and 52.2588 [Amended]

3. Sections 52.540, 52.840, 52.841, 52.882, 52.883, 52.984, 

52.1186, 52.1187, 52.1240, 52.1241, 52.1284, 52.1428, 52.1429, 

52.1684, 52.1685, 52.1784, 52.1785, 52.2140, 52.2141, 52.2283, 

52.2284, 52.2587, and 52.2588 are amended by removing 

“correcting in part the SIP's deficiency that is the basis for 

the CSAPR Federal Implementation Plan” wherever it appears and 

adding in its place “correcting the SIP’s deficiency that is the 

basis for the CSAPR Federal Implementation Plan”.

Subpart A—General Provisions

§ 52.36 [Amended]

4. Section 52.36 is amended in paragraph (e)(1)(i) by 

removing “paragraphs (a) through (e)” and adding in its place 

“paragraphs (a) through (c)”.

5. Section 52.38 is amended by:

a. Revising the section heading;
271

b. In paragraph (a)(2), by removing “the sources in the 

following States” and adding in its place “sources in each of 

the following States”;

c. In paragraph (a)(3)(ii), by adding “the” before “CSAPR 

NOX Annual trading budget”;

d. In paragraph (a)(3)(v)(A), by removing “paragraph”

(a)(3)(i) through (iv)” and adding in its place “paragraphs”;

(a)(3)(i) through (iv)”;

e. In the table in paragraph (a)(4)(i)(B), by removing 

“annual” and adding in its place “Annual”, and by removing 

“administrator” and adding in its place “the Administrator”;

f. In paragraph (a)(4)(ii), by removing “for the first 

control period” and adding in its place “applicable to the first 

control period”;

g. In paragraph (a)(5) introductory text, by removing “in 

whole or in part, as appropriate,”,”, and by removing 

“paragraphs (a)(1) through (4) of this section” and adding in 

its place “paragraphs (a)(1) through (4) of this section with 

regard to sources in the State but not sources in any Indian 

country within the borders of the State”;

h. In the table in paragraph (a)(5)(i)(B), by removing 

“annual” and adding in its place “Annual”, and by removing 

“administrator” and adding in its place “the Administrator”;
272

i. In paragraph (a)(5)(iv), by adding after “97.412(b)” the 

words “of this chapter”;

j. In paragraph (a)(5)(v), by removing “97.425, and” and 

adding in its place “and 97.425 of this chapter and”, and by 

adding after “other provisions” the words “of subpart AAAAA of 

part 97 of this chapter”;

k. In paragraph (a)(5)(vi), by removing “paragraphs 

(a)(5)(i) and (ii)” and adding in its place “paragraph 

(a)(5)(i)”;

l. In paragraph (a)(6), by removing “in whole or in part, 

as appropriate,”, by removing “described in paragraphs (a)(1) 

through (5)” and adding in its place “set forth in paragraphs 

(a)(1) through (4)”, and by removing “the sources” and adding in 

its place “sources”;

m. In paragraph (a)(7), by removing “a State” and adding in 

its place “the State”;

n. In paragraph (b)(1), by adding “subpart BBBBB of” before 

“part 97”;

o. Revising paragraph (b)(2);

p. Redesignating paragraph (b)(3) as paragraph (b)(3)(i); 

in redesignated paragraph (b)(3)(i), by further redesignating 

paragraphs (i) through (v) as paragraphs (A) through (E); and in 

redesignated paragraph (b)(3)(i)(E), by further redesignating 

paragraphs (A) and (B) as paragraphs (1) and (2); 
273

q. In newly redesignated paragraph (b)(3)(i) introductory 

text, by removing “paragraph (b)(2)” and adding in its place 

“paragraph (b)(2)(i) or (ii)”;

r. In newly redesignated paragraph (b)(3)(i)(B), by adding 

“the” before “CSAPR NOX Ozone Season trading budget”;

s. In newly redesignated paragraph (b)(3)(i)(E)(1), by 

removing “paragraph (b)(3)(i) through (iv)” and adding in its 

place “paragraphs (b)(3)(i)(A) through (D)”;

t. In newly redesignated paragraph (b)(3)(i)(E)(2), by 

removing “paragraph (b)(3)(v)(A)” and adding in its place 

“paragraph (b)(3)(i)(E)(1)”;

u. Adding a new paragraph (b)(3)(ii);

v. In paragraph (b)(4) introductory text, by removing 

“paragraph (b)(2)” and adding in its place “paragraph (b)(2)(ii) 

or (iii)”;

w. In paragraph (b)(4)(i), by removing “§§” and adding in 

its place “§”, by adding after “chapter” the words “with regard 

to the State”, and by removing “whenever” and adding in its 

place “wherever”;

x. Revising paragraph (b)(4)(ii) introductory text;

y. In paragraph (b)(4)(ii)(B), by revising the table;

z. In paragraph (b)(5) introductory text, by removing 

“paragraph (b)(2)” and adding in its place “paragraph (b)(2)(ii) 

or (iii)”, by removing “in whole or in part, as appropriate,”, 
274

and by removing “paragraphs (b)(1) through (4) of this section” 

and adding in its place “paragraphs (b)(1) through (4) of this 

section with regard to sources in the State but not sources in 

any Indian country within the borders of the State”;

aa. In paragraph (b)(5)(i), by removing “§§” and adding in 

its place “§”, by adding after “chapter” the words “with regard 

to the State”, and by removing “whenever” and adding in its 

place “wherever”;

bb. Revising paragraph (b)(5)(ii) introductory text;

cc. In paragraph (b)(5)(ii)(B), by removing “auction of 

CSAPR” and adding in its place “auctions of CSAPR”, and by 

revising the table;

dd. In paragraph (b)(5)(ii)(C), by removing “any control 

period” and adding in its place “any such control period”;

ee. In paragraph (b)(5)(iii), by adding a comma after “May 

adopt”;

ff. In paragraph (b)(5)(v), by adding after “97.512(b)” the 

words “of this chapter”;

gg. In paragraph (b)(5)(vi), by removing “97.525, and” and 

adding in its place “and 97.525 of this chapter and”, and by 

adding after “other provisions” the words “of subpart BBBBB of 

part 97 of this chapter”;

hh. In paragraph (b)(5)(vii), by removing “paragraph 

(b)(5)(i) through (v)” and adding in its place “paragraph 
275

(b)(5)(i) or (ii) of this section and paragraphs (b)(5)(iii) 

through (v)”, by removing “paragraphs (5)(ii)(B) and (C)” and 

adding in its place “paragraphs (b)(5)(ii)(B) and (C)”, and by 

removing “paragraphs (b)(5)(ii) and (iii)” and adding in its 

place “paragraph (b)(5)(i) or (ii)”;

ii. In paragraph (b)(6), by removing “in whole or in part, 

as appropriate,”, and by removing “paragraphs (b)(1) through 

(5)” and adding in its place “paragraphs (b)(1) through (4)”; 

and

jj. In paragraph (b)(7), by removing “a State” and adding 

in its place “the State”;”.

toThe additions and revisions read as follows:

§ 52.38 What are the requirements of the Federal Implementation 

Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) 

relating to emissions of nitrogen oxides?

* * * * *

(b) * * *

(2) The provisions of subpart BBBBB of part 97 of this 

chapter apply to sources in each of the following States and 

Indian country located within the borders of such States with 

regard to emissions in the following years: 

(i) With regard to emissions in 2015 and 2016 only, Florida 

and South Carolina;
276

(ii) With regard to emissions in 2015 and each subsequent 

year, Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, 

Kentucky, Louisiana, Maryland, Michigan, Mississippi, Missouri, 

New Jersey, New York, North Carolina, Ohio, Oklahoma, 

Pennsylvania, Tennessee, Texas, Virginia, West Virginia, and 

Wisconsin; and

(iii) With regard to emissions in 2017 and each subsequent 

year, Kansas. 

(3) * * *

(ii) Notwithstanding the provisions of paragraph (b)(1) of 

this section, a State other than Georgia listed in paragraph 

(b)(2)(ii) or (iii) of this section may adopt and include in a 

SIP revision, and the Administrator will approve, as CSAPR NOX

Ozone Season allowance allocation provisions replacing the 

provisions in § 97.511(a) of this chapter with regard to the 

State and the control period in 2018, a list of CSAPR NOX Ozone 

Season units and the amount of CSAPR NOX Ozone Season allowances 

allocated to each unit on such list, provided that the list of 

units and allocations meets the following requirements:

(A) All of the units on the list must be units that are in 

the State and commenced commercial operation before January 1, 

2015;

(B) The total amount of CSAPR NOX Ozone Season allowance 

allocations on the list must not exceed the amount, under 
277

§ 97.510(a) of this chapter for the State and the control period 

in 2018, of the CSAPR NOX Ozone Season trading budget minus the 

sum of the new unit set-aside and Indian country new unit setaside;

(C) The list must be submitted electronically in a format 

specified by the Administrator; and

(D) The SIP revision must not provide for any change in the 

units and allocations on the list after approval of the SIP 

revision by the Administrator and must not provide for any

change in any allocation determined and recorded by the 

Administrator under subpart BBBBB of part 97 of this chapter;

(E) Provided that:

(1) By November 15, 2016, the State must notify the 

Administrator electronically in a format specified by the 

Administrator of the State's intent to submit to the 

Administrator a complete SIP revision meeting the requirements 

of paragraphs (b)(3)(ii)(A) through (D) of this section by April 

1, 2017; and

(2) The State must submit to the Administrator a complete 

SIP revision described in paragraph (b)(3)(ii)(E)(1) of this 

section by April 1, 2017.

(4) * * *

(ii) The State may adopt, as CSAPR NOX Ozone Season 

allowance allocation or auction provisions replacing the 
278

provisions in §§ 97.511(a) and (b)(1) and 97.512(a) of this 

chapter with regard to the State and the control period in 2017 

or any subsequent year or, for Kansas, 2019 or any subsequent 

year, any methodology under which the State or the permitting 

authority allocates or auctions CSAPR NOX Ozone Season allowances 

and may adopt, in addition to the definitions in § 97.502 of 

this chapter, one or more definitions that shall apply only to 

terms as used in the adopted CSAPR NOX Ozone Season allowance 

allocation or auction provisions, if such methodology—

* * * * *

(B) * * *

Year of the control period for 

which CSAPR NOX Ozone Season 

allowances are allocated or 

auctioned

Deadline for submission of 

allocations or auction results 

to the Administrator

2017 November 1, 2016.

2018 November 1, 2016.

2019 June 1, 2018.

2020 June 1, 2018.

2021 June 1, 2019.

2022 June 1, 2019.

2023 and any year thereafter June 1 of the fourth year 

before the year of the control 

period.

* * * * *

(5) * * *

(ii) May adopt, as CSAPR NOX Ozone Season allowance 

allocation provisions replacing the provisions in §§ 97.511(a) 

and (b)(1) and 97.512(a) of this chapter with regard to the 

State and the control period in 2019 or any subsequent year or, 
279

for Georgia, 2017 or any subsequent year, any methodology under 

which the State or the permitting authority allocates or 

auctions CSAPR NOX Ozone Season allowances and that—

* * * * *

(B) * * *

Year of the control period for 

which CSAPR NOX Ozone Season 

allowances are allocated or 

auctioned

Deadline for submission of 

allocations or auction results 

to the Administrator

2017 November 1, 2016.

2018 November 1, 2016.

2019 June 1, 2018.

2020 June 1, 2018.

2021 June 1, 2019.

2022 June 1, 2019.

2023 and any year thereafter June 1 of the fourth year 

before the year of the control 

period.

* * * * *

§ 52.39 What are the requirements of the Federal Implementation 

Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) 

relating to emissions of sulfur dioxide?

6. Section 52.39 is amended by:

a. Revising the section heading as set forth above;

b. In paragraph (d)(2), by adding “the” before “CSAPR SO2

Group 1 trading budget”;

c. In paragraph (d)(5)(i), by removing “paragraph (d)(1) 

through (4)” and adding in its place “paragraphs (d)(1) through 

(4)”;
280

d. In paragraph (e)(1) introductory text, by adding after 

“with regard to” the words “the State and”;

e. In paragraph (e)(1)(ii), by removing “auction of CSAPR” 

and adding in its place “auctions of CSAPR”, and by removing in 

the table “administrator” and adding in its place “the 

Administrator”;

f. In paragraph (f) introductory text, by removing “in 

whole or in part, as appropriate,”, and by removing “paragraphs 

(a), (b), (d), and (e) of this section” and adding in its place 

“paragraphs (a), (b), (d), and (e) of this section with regard 

to sources in the State but not sources in any Indian country 

within the borders of the State”;

g. In paragraph (f)(1) introductory text, by adding after 

“with regard to” the words “the State and”, and by removing “and 

any subsequent year” and adding in its place “or any subsequent 

year”;

h. In paragraph (f)(1)(i), by removing “for such control 

period” and adding in its place “for any such control period”;

i. In paragraph (f)(1)(ii), by removing “auction of CSAPR” 

and adding in its place “auctions of CSAPR”, and by removing in 

the table “administrator” and adding in its place “the 

Administrator”;
281

j. In paragraph (f)(1)(iv), by removing “paragraphs 

(f)(2)(ii) and (iii)” and adding in its place “paragraphs 

(f)(1)(ii) and (iii)”;

k. In paragraph (f)(4), by adding after “97.612(b)” the 

words “of this chapter”;

l. In paragraph (f)(5), by removing “97.625, and” and 

adding in its place “and 97.625 of this chapter and”, and by 

adding after “other provisions” the words “of subpart CCCCC of 

part 97 of this chapter”;

m. In paragraph (f)(6), by removing “hold an auction under 

paragraph (f)(1)(ii) and (iii)” and adding in its place “hold an 

auction under paragraph (f)(1)”;

n. In paragraph (g) introductory text, by adding after 

“with regard to” the words “the State and”;

o. In paragraph (g)(2), by adding “the” before “CSAPR SO2

Group 2 trading budget”;

p. In paragraph (g)(5)(i), by removing “paragraph (g)(1) 

through (4)” and adding in its place “paragraphs (g)(1) through 

(4)”;

q. In paragraph (h)(1) introductory text, by adding after 

“with regard to” the words “the State and”, and by removing “and 

any subsequent year” and adding in its place “or any subsequent 

year”;
282

r. In paragraph (h)(1)(ii), by removing “auction of CSAPR” 

and adding in its place “auctions of CSAPR”, and by removing in 

the table “administrator” and adding in its place “the 

Administrator”;

s. In paragraph (h)(2), by removing “hold an auction under 

paragraph (h)(1)(ii) and (iii)” and adding in its place “hold an 

auction under paragraph (h)(1)”;

t. In paragraph (i) introductory text, by removing “in 

whole or in part, as appropriate,”, and by removing “paragraphs 

(a), (c), (g), and (h) of this section” and adding in its place 

“paragraphs (a), (c), (g), and (h) of this section with regard 

to sources in the State but not sources in any Indian country 

within the borders of the State”;

u. In paragraph (i)(1) introductory text, by adding after 

“with regard to” the words “the State and”, and by removing 

“and any subsequent year” and adding in its place “or any 

subsequent year”;

v. In paragraph (i)(1)(ii), by removing “auction of CSAPR” 

and adding in its place “auctions of CSAPR”, and by removing in 

the table “administrator” and adding in its place “the 

Administrator”;

w. In paragraph (i)(4), by adding after “97.712(b)” the 

words “of this chapter”;
283

x. In paragraph (i)(5), by removing “97.725, and” and 

adding in its place “and 97.725 of this chapter and”, and by 

adding after “other provisions” the words “of subpart DDDDD of 

part 97 of this chapter”;

y. In paragraph (i)(6), by removing “hold an auction under 

paragraphs (i)(1)(ii) and (iii)” and adding in its place “hold 

an auction under paragraph (i)(1)”;

z. In paragraph (j), by removing “in whole or in part, as 

appropriate,”, by adding after “CSAPR Federal Implementation 

Plan” the words “set forth in paragraphs (a), (b), (d), and (e) 

of this section or paragraphs (a), (c), (g), and (h) of this 

section, as applicable”, and by removing “paragraph (b) and (c)” 

and adding in its place “paragraph (b) or (c)”; and

aa. In paragraph (k), by removing “a State” and adding in 

its place “the State”.

Subpart B—Alabama

§ 52.54 [Amended]

7. Section 52.54 is amended in paragraph (b)(2) by removing 

“the” before “Alabama’s SIP revision”.

Subpart K—Florida

8. Section 52.540 is amended by adding a new paragraph (c) 

to read as follows:

§ 52.540 Interstate pollutant transport provisions; What are the 

FIP requirements for decreases in emissions of nitrogen oxides?
284

* * * * *

(c) Notwithstanding paragraph (a) of this section, no 

source or unit located in the State of Florida or Indian country 

within the borders of the State shall be required under 

paragraph (a) of this section to comply with the requirements 

set forth under the CSAPR NOX Ozone Season Trading Program in 

subpart BBBBB of part 97 of this chapter with regard to 

emissions after 2016.

Subpart R—Kansas

9. Section 52.882 is amended by revising paragraph (b) to 

read as follows:

§ 52.882 Interstate pollutant transport provisions; What are 

the FIP requirements for decreases in emissions of nitrogen 

oxides?

* * * * *

(b)(1) The owner and operator of each source and each unit 

located in the State of Kansas and Indian country within the 

borders of the State and for which requirements are set forth 

under the CSAPR NOX Ozone Season Trading Program in subpart BBBBB 

of part 97 of this chapter must comply with such requirements. 

The obligation to comply with such requirements with regard to 

sources and units in the State will be eliminated by the 

promulgation of an approval by the Administrator of a revision 

to Kansas' State Implementation Plan (SIP) as correcting the 
285

SIP's deficiency that is the basis for the CSAPR Federal 

Implementation Plan under § 52.38(b), except to the extent the 

Administrator's approval is partial or conditional. The 

obligation to comply with such requirements with regard to 

sources and units located in Indian country within the borders 

of the State will not be eliminated by the promulgation of an 

approval by the Administrator of a revision to Kansas' SIP.

(2) Notwithstanding the provisions of paragraph (b)(1) of 

this section, if, at the time of the approval of Kansas' SIP 

revision described in paragraph (b)(1) of this section, the 

Administrator has already started recording any allocations of 

CSAPR NOX Ozone Season allowances under subpart BBBBB of part 97 

of this chapter to units in the State for a control period in 

any year, the provisions of subpart BBBBB of part 97 of this 

chapter authorizing the Administrator to complete the allocation 

and recordation of CSAPR NOX Ozone Season allowances to units in 

the State for each such control period shall continue to apply, 

unless provided otherwise by such approval of the State's SIP 

revision.

Subpart X—Michigan

§ 52.1187 [Amended]

10. Section 52.1187 is amended in paragraph (c)(2) by 

removing “Maryland’s SIP revision” and adding in its place 

“Michigan’s SIP revision”.
286

Subpart PP—South Carolina

11. Section 52.2140 is amended by adding a new paragraph 

(b)(3) to read as follows:

§ 52.2140 Interstate pollutant transport provisions; What are 

the FIP requirements for decreases in emissions of nitrogen 

oxides?

* * * * *

(b) * * *

(3) Notwithstanding paragraph (b)(1) of this section, no 

source or unit located in the State of South Carolina or Indian 

country within the borders of the State shall be required under 

paragraph (b)(1) of this section to comply with the requirements 

set forth under the CSAPR NOX Ozone Season Trading Program in 

subpart BBBBB of part 97 of this chapter with regard to 

emissions after 2016.

PART 78—APPEAL PROCEDURES

12. The authority citation for part 78 continues to read as 

follows:

Authority: 42 U.S.C. 7401, 7403, 7410, 7411, 7426, 7601,

and 7651, et seq.

§§ 78.1 and 78.4 [Amended]

13. Sections 78.1 and 78.4 are amended by removing “TR NOX” 

wherever it appears and adding in its place “CSAPR NOX”, and by 
287

removing “TR SO2” wherever it appears and adding in its place 

“CSAPR SO2”.

14. Section 78.1 is amended by:

a. In paragraph (a)(1), by adding after “part 97 of this 

chapter” the words “or State regulations approved under 

§ 52.38(a)(4) or (5) or (b)(4) or (5) of this chapter or 

§ 52.39(e), (f), (h), or (i) of this chapter”, and by adding a 

new third sentence at the end of the paragraph; 

b. Adding a new paragraph (b)(14)(viii); and

c. In paragraphs (b)(16)(ii), (iii), and (v), by removing 

“SO2 Group 1” and adding in its place “SO2 Group 2”;”.

toThe additions read as follows:

§ 78.1 Purpose and scope.

(a)(1) * * * All references in paragraph (b) of this 

section and in § 78.3 to subpart AAAAA of part 97 of this 

chapter, subpart BBBBB of part 97 of this chapter, subpart CCCCC 

of part 97 of this chapter, and subpart DDDDD of part 97 of this 

chapter shall be read to include the comparable provisions in 

State regulations approved under § 52.38(a)(4) or (5) of this 

chapter, § 52.38(b)(4) or (5) of this chapter, § 52.39(e) or (f) 

of this chapter, and § 52.39(h) or (i) of this chapter, 

respectively.

* * * * * 

(b) * * *
288

(14) * * *

(viii) The determination of the tonnage equivalent of a 

CSAPR NOX Ozone Season allowance under § 97.524(f) of this 

chapter. 

* * * * * 

§ 78.4 [Amended]

15. Section 78.4 is amended in paragraph (a)(1)(i) by 

removing “a affected” and adding in its place “an affected”, by 

adding “or” before “CSAPR SO2 Group 2 unit”, and by removing “, 

or a unit for which a TR opt-in application is submitted and not 

withdrawn”.

PART 97—FEDERAL NOX BUDGET TRADING PROGRAM, CAIR NOX AND SO2

TRADING PROGRAMS, AND CSAPR NOX AND SO2 TRADING PROGRAMS

16. The heading of part 97 is revised to read as set forth 

above.

17. The authority citation for part 97 continues to read as 

follows:

Authority: 42 U.S.C. 7401, 7403, 7410, 7426, 7601, and 

7651, et seq.

§§ 97.401 through 97.735 [Amended]

18. Sections 97.401 through 97.735 are amended by removing 

“Transport Rule (TR)“)” wherever it appears and adding in its 

place “Cross-State Air Pollution Rule (CSAPR)”, by removing “TR 

NOX” wherever it appears and adding in its place “CSAPR NOX”, and 
289

by removing “TR SO2” wherever it appears and adding in its place 

“CSAPR SO2”.

Subpart AAAAA—CSAPR NOX Annual Trading Program

19. The heading of subpart AAAAA of part 97 is revised to 

read as set forth above.

§ 97.402 [Amended]

20. Section 97.402 is amended by:

a. Relocating all definitions beginning with “CSAPR” to 

their alphabetical locations in the list of definitions;

b. In the definition of “Cogeneration system”, by removing 

“steam turbine generator” and adding in its place “generator”;

c. In the definition of “Commence commercial operation”, in 

paragraph (2) introductory text, by adding after “defined in” 

the word “the”;

d. In the definition of “CSAPR NOX Annual allowances held or 

hold TR NO4 Annual allowances”, by removing “TR NO4” and adding 

in its place “CSAPR NOX”;

e. In the definition of “CSAPR SO2 Group 2 Trading Program”, 

by removing “52.39(a)” and adding in its place “§ 52.39(a)”;

f. In the definition of “Fossil fuel”, by removing “§§” and 

adding in its place §”;

g. In the definition of “Owner”, by removing the paragraph 

designator “3)” and adding in its place the paragraph designator 

“(3)”; and
290

h. In the definition of “Sequential use of energy”, in 

paragraph (2), by adding after “from” the word “a”.

§ 97.404 [Amended]

21. Section 97.404 is amended inby:

a. In paragraph (b)(2)(ii)), by removing “paragraph 

(b)(1)(i)” and adding in its place “paragraph (b)(2)(i)”.)”; and

§b. Italicizing the headings of paragraphs (c)(1) and (2).

§ 97.406 [Amended]

22. Section 97.406 is amended inby:

a. Italicizing the headings of paragraphs (c)(1) and (2) 

and (c)(4) through (7), and 

b. In the heading of paragraph (c)(4)), by adding “CSAPR NOX

Annual” before “allowances”.

§ 97.410 State NOX Annual trading budgets, new unit set-asides, 

Indian country new unit set-asides, and variability limits.

23. Section 97.410 is amended by:

a. Revising the heading as set forth above;

b. Removing “NOX annual trading budget” wherever it appears 

and adding in its place “NOX Annual trading budget”;

c. Removing “NOX annual new unit set-aside” wherever it 

appears and adding in its place “new unit set-aside”;

d. Removing “NOX annual Indian country new unit set-aside” 

wherever it appears and adding in its place “Indian country new 

unit set-aside”;
291

e. Removing “NOX annual variability limit” wherever it 

appears and adding in its place “variability limit”;

f. In paragraph (a) introductory text, by removing “new 

unit-set aside” and adding in its place “new unit set-aside”;

g. Adding and reserving paragraphs (a)(11)(vi) and 

(a)(16)(vi); and

h. In paragraph (c), by adding after “Each” the word 

“State”, by removing “identified”, and by removing “set aside” 

wherever it appears and adding in its place “set-aside”.

§ 97.411 [Amended]

24. Section 97.411 is amended by:

a. InItalicizing the headings of paragraphs (b)(1)(iii) and 

(b)(2)(iii), by adding after “November 30 of” the word “the”;);

b.b. In paragraphs (b)(1)(iii) and (b)(2)(iii), by 

adding after “November 30 of” the word “the”;

c. In paragraph (c)(1)(ii), by removing “§ 52.38(a)(3), 

(4), or (5)” and adding in its place “§ 52.38(a)(4) or (5)”;

cd. In paragraph (c)(5)(i)(B), by adding after 

“§ 52.38(a)(4) or (5)” the words “of this chapter”;

de. In paragraph (c)(5)(ii) introductory text, by removing 

“of this paragraph” and adding in its place “of this section”;

ef. In paragraph (c)(5)(ii)(B), by adding after 

“§ 52.38(a)(4) or (5)” the words “of this chapter”; and
292

fg. In paragraph (c)(5)(iii), by removing “of this 

paragraph” and adding in its place “of this section”.

§ 97.412 [Amended]

25. Section 97.412 is amended by:

a. In paragraph (a)(2), by removing “§§” and adding in its 

place “§”;

b. In paragraph (a)(4)(i), by removing “paragraph (a)(1)(i) 

through (iii)” and adding in its place “paragraphs (a)(1)(i) 

through (iii)”;

c. In paragraph (a)(4)(ii), by adding after “paragraph 

(a)(4)(i)” the words “of this section”;

d. In paragraph (a)(9)(i), by adding after “November 30 of” 

the word “the”;

e. In paragraph (b)(4)(ii), by adding after “paragraph 

(b)(4)(i)” the words “of this section”;

f. In paragraph (b)(9)(i), by adding after “November 30 of” 

the word “the”; and

g. In paragraph (b)(10)(ii), by adding after “§ 52.38(a)(4) 

or (5)” the words “of this chapter”.

§ 97.421 [Amended]

26. Section 97.421 is amended by:

a. In paragraphs (c), (d), and (e), by removing “period” 

and adding in its place “periods”; and
293

b. In paragraph (j), by removing “the date” and adding in 

its place “the date 15 days after the date”.

§ 97.425 [Amended]

27. Section 97.425 is amended by:

a. In paragraph (b)(2)(iii) introductory text, by removing 

“paragraph (b)(1)(i)” and adding in its place “paragraph 

(b)(1)(ii)”;

b. In paragraph (b)(2)(iii)(B), by adding “the calculations 

incorporating” before “any adjustments”;

c. In paragraph (b)(4)(i), by removing “the” before “them”; 

and 

d. In paragraph (b)(6)(iii)(B), by removing after 

“appropriate” the word “at”.

§ 97.426 [Amended]

28. Section 97.426 is amended in paragraph (b) by removing 

“97.427, or 97.428” and adding in its place “§ 97.427, or 

§ 97.428”.

§ 97.428 [Amended]

29. Section 97.428 is amended in paragraph (b) by removing 

“paragraph (a)(1)” and adding in its place “paragraph (a)”.

§ 97.430 [Amended]

30. Section 97.430 is amended by:

a. In paragraph (b) introductory text, by adding after 

“operator” the words “of a CSAPR NOX Annual unit”, by adding “the 
294

later of” before “the following dates” each time it appears, and 

by removing the final period and adding in its place a colon;

b. Removing paragraphs (b)(1) and (b)(2) introductory text;

c. Redesignating paragraphs (b)(2)(i) and (ii) as 

paragraphs (b)(1) and (2);

d. In newly redesignated paragraph (b)(2), by removing the 

final semicolon and adding in its place a period;

e. In paragraph (b)(3) introductory text, by removing “§§” 

and adding in its place “§”; and

f. In paragraph (b)(3)(iii), by adding after “§ 75.66” the 

words “of this chapter”.

§ 97.431 [Amended]

31. Section 97.431 is amended inby:

a. Italicizing the headings of paragraphs (d)(1) through 

(3), (d)(3)(i) through (iv), (d)(3)(iv)(A) through (D), and 

(d)(3)(v); and

b. In paragraph (d)(3) introductory text, by removing “§§” 

and adding in its place “§”.

§ 97.434 [Amended]

32. Section 97.434 is amended by:

a. In paragraph (b)), by adding “the” before 

“requirements”;
295

b. In paragraph (d)(1) introductory text, by removing “the 

CSAPR” and adding in its place “a CSAPR”, and by adding “the 

later of” before the final colon;

c. In paragraph (d)(1)(i), by removing “For a unit that 

commences commercial operation before July 1, 2014, the” and 

adding in its place “The”; and

d. In paragraph (d)(1)(ii), by removing “For a unit that 

commences commercial operation on or after July 1, 2014, the” 

and adding in its place “The”, and by removing “, unless that 

quarter is the third or fourth quarter of 2014, in which case 

reporting shall commence in the quarter covering January 1, 2015 

through March 31, 2015”.

Subpart BBBBB—CSAPR NOX Ozone Season Trading Program

33. The heading of subpart BBBBB of part 97 is revised to 

read as set forth above.

34. Section 97.502 is amended by:

a. Relocating all definitions beginning with “CSAPR” to 

their alphabetical locations in the list of definitions;

b. In the definition of “Cogeneration system”, by removing 

“steam turbine generator” and adding in its place “generator”;

c. In the definition of “Commence commercial operation”, in 

paragraph (2) introductory text, by adding after “defined in” 

the word “the”;
296

d. Revising the definitions of “CSAPR NOX Ozone Season 

allowance” and “CSAPR NOX Ozone Season emissions limitation”;

e. In the definitions of “CSAPR SO2 Group 1 Trading Program” 

and “CSAPR SO2 Group 2 Trading Program”, by removing “52.39(a)” 

and adding in in its place “§ 52.39(a)”;

f. In the definition of “Fossil fuel”, by removing “§§” and 

adding in its place §”;

g. In the definition of “Sequential use of energy”, in 

paragraph (2), by adding after “from” the word “a”; and

h. Adding, in alphabetical order, a new definition of 

“Tonnage equivalent”;”.

toThe additions and revisions read as follows:

§ 97.502 Definitions.

* * * * * 

CSAPR NOX Ozone Season allowance means a limited 

authorization under the CSAPR NOX Ozone Season Trading Program 

issued and allocated or auctioned to a CSAPR NOX Ozone Season 

unit in a State (or Indian country within the borders of such 

State) by the Administrator under this subpart, or by the State 

or permitting authority under a SIP revision approved by the 

Administrator under § 52.38(b)(3), (4), or (5) of this chapter, 

to emit either:

(1) One ton of NOX in the State (or Indian country located 

within the borders of such State) during a control period of the 
297

specified calendar year for which the authorization is allocated 

or auctioned; or

(2) As determined under § 97.524(f), up to one ton of NOX in 

another State (or Indian country located within the borders of 

another State) or during a control period after the specified 

calendar year for which the authorization is allocated or 

auctioned.

* * * * * 

CSAPR NOX Ozone Season emissions limitation means, for a 

CSAPR NOX Ozone Season source, the tonnage of NOX emissions 

authorized in a control period in a given year by the tonnage 

equivalent of CSAPR NOX Ozone Season allowances available for 

deduction for the source under § 97.524(a) for such control 

period.

* * * * * 

Tonnage equivalent means, with regard to a specific 

individual CSAPR NOX Ozone Season allowance held or deducted for 

an identified purpose, the portion of one ton represented by the 

CSAPR NOX Ozone Season allowance as determined under § 97.524(f) 

or, with regard to a specific group of CSAPR NOX Ozone Season 

allowances held or deducted for a common identified purpose, the 

unrounded sum of the tonnage equivalents of the individual CSAPR 

NOX Ozone Season allowances comprising the group.

* * * * * 
298

§ 97.504 [Amended]

35. Section 97.504 is amended inby:

a. In paragraph (b)(2)(ii)), by removing “paragraph 

(b)(1)(i)” and adding in its place “paragraph (b)(2)(i)”, and by 

removing “TR NOX" and adding in its place “CSAPR NOX”.”; and

b. Italicizing the headings of paragraphs (c)(1) and (2).

36. Section 97.506 is amended by:

a. a. Italicizing the headings of paragraphs (c), (c)(1) 

and (2), and (c)(4) through (7);

b. Revising paragraphs (c)(1)(i), (c)(2)(i) introductory 

text, and (c)(2)(v)(B);

bc. Redesignating paragraph (c)(3)(i) as paragraph 

(c)(3)(i)(A), and by revising the redesignated paragraphit;

cd. Adding a new paragraph (c)(3)(i)(B); 

de. In the heading of paragraph (c)(4), by adding “CSAPR NOX

Ozone Season” before “allowances”; and

ef. Revising paragraph (c)(6) introductory text; .

toThe revisions and additions read as follows:

§ 97.506 Standard requirements.

* * * * *

(c) * * *

(1) * * * 

(i) As of the allowance transfer deadline for a control 

period in a given year, the owners and operators of each CSAPR 
299

NOX Ozone Season source and each CSAPR NOX Ozone Season unit at 

the source shall hold, in the source's compliance account, CSAPR 

NOX Ozone Season allowances available for deduction for such 

control period under § 97.524(a) with a tonnage equivalent not 

less than the tons of total NOX emissions for such control period 

from all CSAPR NOX Ozone Season units at the source.

* * * * *

(2) * * *

(i) If total NOX emissions during a control period in a 

given year from all CSAPR NOX Ozone Season units at CSAPR NOX

Ozone Season sources in a State (and Indian country within the 

borders of such State) exceed the State assurance level, then 

the owners and operators of such sources and units in each group 

of one or more sources and units having a common designated 

representative for such control period, where the common 

designated representative's share of such NOX emissions during 

such control period exceeds the common designated 

representative's assurance level for the State and such control 

period, shall hold (in the assurance account established for the 

owners and operators of such group) CSAPR NOX Ozone Season 

allowances available for deduction for such control period under 

§ 97.525(a) with a tonnage equivalent not less than two times 

the product (rounded to the nearest whole number), as determined 
300

by the Administrator in accordance with § 97.525(b), of 

multiplying—

* * * * *

(v) * * *

(B) Each ton of the tonnage equivalent of CSAPR NOX Ozone 

Season allowances that the owners and operators fail to hold for 

such control period in accordance with paragraphs (c)(2)(i) 

through (iii) of this section and each day of such control 

period shall constitute a separate violation of this subpart and 

the Clean Air Act. 

(3) * * *

(i)(A) Except as provided in paragraph (c)(3)(i)(B) of this 

section, a CSAPR NOX Ozone Season unit shall be subject to the 

requirements under paragraph (c)(1) of this section for the 

control period starting on the later of May 1, 2015 or the 

deadline for meeting the unit's monitor certification 

requirements under § 97.530(b) and for each control period 

thereafter.

(B) A CSAPR NOX Ozone Season unit in the State of Kansas (or 

Indian country within the borders of the State) that is not a 

CSAPR NOX Ozone Season unit in another State (or Indian country 

within the borders of another State) during any portion of a 

control period in 2015 or 2016 shall be subject to the 

requirements under paragraph (c)(1) of this section for the 
301

control period starting on the later of May 1, 2017 or the 

deadline for meeting the unit's monitor certification 

requirements under § 97.530(b) and for each control period 

thereafter.

* * * * *

(6) Limited authorization. A CSAPR NOX Ozone Season 

allowance is a limited authorization to emit up to one ton of NOX

during the control period in one year as determined under 

§ 97.524(f). Such authorization is limited in its use and 

duration as follows: 

* * * * *

37. Section 97.510 is revised to read as follows:

§ 97.510 State NOX Ozone Season trading budgets, new unit setasides, Indian country new unit set-asides, and variability 

limits.

(a) The State NOX Ozone Season trading budgets, new unit 

set-asides, and Indian country new unit set-asides for 

allocations of CSAPR NOX Ozone Season allowances for the control 

periods in 2015 and thereafter are as follows:

(1) Alabama. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 31,746 tons.

(ii) The new unit set-aside for 2015 and 2016 is 635 tons.

(iii) [Reserved]
302

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 9,979 tons.

(v) The new unit set-aside for 2017 and thereafter is 205

tons.

(vi) [Reserved]

(2) Arkansas. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 15,110 tons.

(ii) The new unit set-aside for 2015 and 2016 is 756 tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 6,949 tons.

(v) The new unit set-aside for 2017 and thereafter is 141

tons.

(vi) [Reserved]

(3) Florida. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 28,644 tons.

(ii) The new unit set-aside for 2015 and 2016 is 544 tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 29 tons.

(iv) [Reserved]

(v) [Reserved]

(vi) [Reserved]

(4) Georgia. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 27,944 tons.
303

(ii) The new unit set-aside for 2015 and 2016 is 559 tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 24,041 tons.

(v) The new unit set-aside for 2017 and thereafter is 481 

tons.

(vi) [Reserved]

(5) Illinois. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 21,208 tons.

(ii) The new unit set-aside for 2015 and 2016 is 1,697 

tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 12,078 tons.

(v) The new unit set-aside for 2017 and thereafter is 591

tons.

(vi) [Reserved]

(6) Indiana. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 46,876 tons.

(ii) The new unit set-aside for 2015 and 2016 is 1,406 

tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 28,284 tons.
304

(v) The new unit set-aside for 2017 and thereafter is 565 

tons.

(vi) [Reserved]

(7) Iowa. (i) The NOX Ozone Season trading budget for 2015 

and 2016 is 16,532 tons.

(ii) The new unit set-aside for 2015 and 2016 is 314 tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 17 tons.

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 8,351 tons.

(v) The new unit set-aside for 2017 and thereafter is 411 

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 8 tons.

(8) Kansas. (i) [Reserved]

(ii) [Reserved]

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 9,272 tons.

(v) The new unit set-aside for 2017 and thereafter is 272 

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 9 tons.
305

(9) Kentucky. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 36,167 tons.

(ii) The new unit set-aside for 2015 and 2016 is 1,447 

tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 21,519 tons.

(v) The new unit set-aside for 2017 and thereafter is 647

tons.

(vi) [Reserved]

(10) Louisiana. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 18,115 tons.

(ii) The new unit set-aside for 2015 and 2016 is 344 tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 18 tons.

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 15,807 tons.

(v) The new unit set-aside for 2017 and thereafter is 612 

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 16 tons.

(11) Maryland. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 7,179 tons.

(ii) The new unit set-aside for 2015 and 2016 is 144 tons.
306

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 4,026 tons.

(v) The new unit set-aside for 2017 and thereafter is 485

tons.

(vi) [Reserved]

(12) Michigan. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 28,041 tons.

(ii) The new unit set-aside for 2015 and 2016 is 533 tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 28 tons.

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 19,115 tons.

(v) The new unit set-aside for 2017 and thereafter is 363

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 19 tons.

(13) Mississippi. (i) The NOX Ozone Season trading budget 

for 2015 and 2016 is 12,429 tons.

(ii) The new unit set-aside for 2015 and 2016 is 237 tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 12 tons.

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 5,910 tons.
307

(v) The new unit set-aside for 2017 and thereafter is 584

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 6 tons.

(14) Missouri. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 22,788 tons.

(ii) The new unit set-aside for 2015 is 684 tons and for 

2016 is 1,367 tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 15,323 tons.

(v) The new unit set-aside for 2017 and thereafter is 314

tons.

(vi) [Reserved]

(15) New Jersey. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 4,128 tons.

(ii) The new unit set-aside for 2015 and 2016 is 83 tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 2,015 tons.

(v) The new unit set-aside for 2017 and thereafter is 1,151

tons.

(vi) [Reserved]
308

(16) New York. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 10,369 tons.

(ii) The new unit set-aside for 2015 and 2016 is 197 tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 10 tons.

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 4,450 tons.

(v) The new unit set-aside for 2017 and thereafter is 89 

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 4 tons.

(17) North Carolina. (i) The NOX Ozone Season trading budget 

for 2015 and 2016 is 22,168 tons.

(ii) The new unit set-aside for 2015 and 2016 is 1,308 

tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 22 tons.

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 12,275 tons.

(v) The new unit set-aside for 2017 and thereafter is 236 

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 12 tons.
309

(18) Ohio. (i) The NOX Ozone Season trading budget for 2015 

and 2016 is 41,284 tons.

(ii) The new unit set-aside for 2015 and 2016 is 826 tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 16,660 tons.

(v) The new unit set-aside for 2017 and thereafter is 337 

tons.

(vi) [Reserved]

(19) Oklahoma. (i) The NOX Ozone Season trading budget for 

2015 is 36,567 tons and for 2016 is 22,694 tons.

(ii) The new unit set-aside for 2015 is 731 tons and for 

2016 is 454 tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 16,215 tons.

(v) The new unit set-aside for 2017 and thereafter is 309

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 16 tons.

(20) Pennsylvania. (i) The NOX Ozone Season trading budget 

for 2015 and 2016 is 52,201 tons.

(ii) The new unit set-aside for 2015 and 2016 is 1,044 

tons.
310

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 14,387 tons.

(v) The new unit set-aside for 2017 and thereafter is 1,017

tons.

(vi) [Reserved]

(21) South Carolina. (i) The NOX Ozone Season trading budget 

for 2015 and 2016 is 13,909 tons.

(ii) The new unit set-aside for 2015 and 2016 is 264 tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 14 tons.

(iv) [Reserved]

(v) [Reserved]

(vi) [Reserved]

(22) Tennessee. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 14,908 tons.

(ii) The new unit set-aside for 2015 and 2016 is 298 tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 5,481 tons.

(v) The new unit set-aside for 2017 and thereafter is 109 

tons.

(vi) [Reserved]
311

(23) Texas. (i) The NOX Ozone Season trading budget for 2015 

and 2016 is 65,560 tons.

(ii) The new unit set-aside for 2015 and 2016 is 2,556 

tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 66 tons.

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 58,002 tons.

(v) The new unit set-aside for 2017 and thereafter is 2,852

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 58 tons.

(24) Virginia. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 14,452 tons.

(ii) The new unit set-aside for 2015 and 2016 is 723 tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 6,818 tons.

(v) The new unit set-aside for 2017 and thereafter is 1,844

tons.

(vi) [Reserved]

(25) West Virginia. (i) The NOX Ozone Season trading budget 

for 2015 and 2016 is 25,283 tons.
312

(ii) The new unit set-aside for 2015 and 2016 is 1,264 

tons.

(iii) [Reserved]

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 13,390 tons.

(v) The new unit set-aside for 2017 and thereafter is 268 

tons.

(vi) [Reserved]

(26) Wisconsin. (i) The NOX Ozone Season trading budget for 

2015 and 2016 is 14,784 tons.

(ii) The new unit set-aside for 2015 and 2016 is 872 tons.

(iii) The Indian country new unit set-aside for 2015 and 

2016 is 15 tons.

(iv) The NOX Ozone Season trading budget for 2017 and 

thereafter is 5,561 tons.

(v) The new unit set-aside for 2017 and thereafter is 115 

tons.

(vi) The Indian country new unit set-aside for 2017 and 

thereafter is 6 tons.

(b) The States' variability limits for the State NOX Ozone 

Season trading budgets for the control periods in 2017 and 

thereafter are as follows:

(1) The variability limit for Alabama is 2,096 tons.

(2) The variability limit for Arkansas is 1,459 tons.
313

(3) [Reserved]

(4) The variability limit for Georgia is 5,049 tons.

(5) The variability limit for Illinois is 2,536 tons.

(6) The variability limit for Indiana is 5,940 tons.

(7) The variability limit for Iowa is 1,754 tons.

(8) The variability limit for Kansas is 1,947 tons.

(9) The variability limit for Kentucky is 4,519 tons.

(10) The variability limit for Louisiana is 3,319 tons.

(11) The variability limit for Maryland is 845 tons.

(12) The variability limit for Michigan is 4,014 tons.

(13) The variability limit for Mississippi is 1,241 tons.

(14) The variability limit for Missouri is 3,218 tons.

(15) The variability limit for New Jersey is 423 tons.

(16) The variability limit for New York is 935 tons.

(17) The variability limit for North Carolina is 2,578 

tons.

(18) The variability limit for Ohio is 3,499 tons.

(19) The variability limit for Oklahoma is 3,405 tons.

(20) The variability limit for Pennsylvania is 3,021 tons.

(21) [Reserved]

(22) The variability limit for Tennessee is 1,151 tons.

(23) The variability limit for Texas is 12,180 tons.

(24) The variability limit for Virginia is 1,432 tons.

(25) The variability limit for West Virginia is 2,812 tons.
314

(26) The variability limit for Wisconsin is 1,168 tons.

(c) Each State NOX Ozone Season trading budget in this 

section includes any tons in a new unit set-aside or Indian 

country new unit set-aside, but does not include any tons in a 

variability limit.

38. Section 97.511 is amended by:

a. Italicizing the headings of paragraphs (b)(1) and (2); 

b. In paragraphs (b)(1)(iii) and (b)(2)(iii), by adding 

after “August 31 of” the word “the”;

bc. In paragraph (b)(2)(iv)(B), by adding a paragraph break 

after the end of the second sentence and before the paragraph 

designator “(v)” for the following paragraph (b)(2)(v);

c. d. In paragraph (c)(1)(ii), by removing 

“§ 52.38(b)(3), (4), or (5)” and adding in its place 

“§ 52.38(b)(4) or (5)”, and by removing “January 1” and adding 

in its place “May 1”;

e. d. Revising paragraph (c)(3);

ef. In paragraph (c)(5)(i)(B), by adding after 

“§ 52.38(b)(4) or (5)” the words “of this chapter”;

fg. In paragraph (c)(5)(ii) introductory text, by removing

“of this paragraph” and adding in its place “of this section”;

gh. In paragraph (c)(5)(ii)(B), by adding after 

“§ 52.38(b)(4) or (5)” the words “of this chapter”; and
315

hi. In paragraph (c)(5)(iii), by removing “of this 

paragraph” and adding in its place “of this section”;”.

ToThe revisions read as follows:

§ 97.511 Timing requirements for CSAPR NOX Ozone Season allowance 

allocations.

* * * * *

(c) * * *

(3) If the Administrator already recorded such CSAPR NOX

Ozone Season allowances under § 97.521 and if the Administrator 

makes the determination under paragraph (c)(1) of this section 

before making deductions for the source that includes such 

recipient under § 97.524(b) for such control period, then the 

Administrator will deduct from the account in which such CSAPR 

NOX Ozone Season allowances were recorded CSAPR NOX Ozone Season 

allowances allocated for the same or a prior control period 

until the tonnage equivalent of the CSAPR NOX Ozone Season 

allowances deducted under this paragraph equals or exceeds the 

tonnage equivalent of such already recorded CSAPR NOX Ozone 

Season allowances, making all such deductions in whole CSAPR NOX

Ozone Season allowances. The authorized account representative 

shall ensure that there are CSAPR NOX Ozone Season allowances in 

such account with a tonnage equivalent sufficient for completion 

of the deduction.

* * * * *
316

39. Section 97.512 is amended by:

a. Revising paragraph (a) introductory text;

b. In paragraph (a)(4)(i), by removing “paragraph (a)(1)(i) 

through (iii)” and adding in its place “paragraphs (a)(1)(i) 

through (iii)”;

c. In paragraph (a)(2), by removing “§§” and adding in its 

place “§”;

d. In paragraph (a)(4)(ii), by adding after “paragraph 

(a)(4)(i)” the words “of this section”;

e. In paragraph (a)(9)(i), by adding after “August 31 of” 

the word “the”;

f. Revising paragraph (b) introductory text;

g. In paragraph (b)(4)(ii), by adding after “paragraph 

(b)(4)(i)” the words “of this section”;

h. In paragraph (b)(9)(i), by adding after “August 31 of” 

the word “the”; and

i. In paragraph (b)(10)(ii), by adding after “§ 52.38(b)(4) 

or (5)” the words “of this chapter”;”.

ToThe revisions read as follows:

§ 97.512 CSAPR NOX Ozone Season allowance allocations to new 

units.

(a) For each control period in 2015 and thereafter and for 

the CSAPR NOX Ozone Season units in each State for which a new 

unit set-aside is set forth in § 97.510 for that control period, 
317

the Administrator will allocate CSAPR NOX Ozone Season allowances 

to the CSAPR NOX Ozone Season units as follows:

* * * * *

(b) For each control period in 2015 and thereafter and for 

the CSAPR NOX Ozone Season units located in Indian country within 

the borders of each State for which an Indian country new unit 

set-aside is set forth in § 97.510 for that control period, the 

Administrator will allocate CSAPR NOX Ozone Season allowances to 

the CSAPR NOX Ozone Season units as follows:

* * * * *

40. Section 97.521 is amended by:

a. In paragraph (b) introductory text, by removing 

“§ 52.38(b)(3)(i) through (iv)” and adding in its place 

“§ 52.38(b)(3)(i)(A) through (D)”;

b. Redesignating paragraph (c) as paragraph (c)(1), and by 

revising the redesignated paragraphit;

c. Adding a new paragraph (c)(2);

d. Revising paragraphs (d) and (e); and

e. In paragraph (j), by removing “the date” and adding in 

its place “the date 15 days after the date”;”.

ToThe revisions read as follows:

§ 97.521 Recordation of CSAPR NOX Ozone Season allowance 

allocations and auction results.

* * * * *
318

(c)(1) By December 1, 2016, the Administrator will record 

in each CSAPR NOX Ozone Season source's compliance account the 

CSAPR NOX Ozone Season allowances allocated to the CSAPR NOX

Ozone Season units at the source, or in each appropriate 

Allowance Management System account the CSAPR NOX Ozone Season 

allowances auctioned to CSAPR NOX Ozone Season units, in 

accordance with § 97.511(a), or with a SIP revision approved 

under § 52.38(b)(4) or (5) of this chapter, for the control 

period in 2017 or, for such sources in Georgia, the control 

periods in 2017 and 2018.

(2) For the CSAPR NOX Ozone Season sources not in Georgia, 

by December 1, 2016, the Administrator will record in each such 

source’s compliance account the CSAPR NOX Ozone Season allowances 

allocated to the CSAPR NOX Ozone Season units at the source in 

accordance with § 97.511(a) for the control period in 2018, 

unless the State in which the source is located notifies the 

Administrator in writing by November 15, 2016 of the State's 

intent to submit to the Administrator a complete SIP revision by 

April 1, 2017 meeting the requirements of § 52.38(b)(3)(ii)(A) 

through (D) of this chapter.

(A) If the State does not submit to the Administrator by 

April 1, 2017 such complete SIP revision, the Administrator will 

record by April 15, 2017 in each CSAPR NOX Ozone Season source's 

compliance account the CSAPR NOX Ozone Season allowances 
319

allocated to the CSAPR NOX Ozone Season units at the source in 

accordance with § 97.511(a) for the control period in 2018.

(B) If the State submits to the Administrator by April 1, 

2017 and the Administrator approves by October 1, 2017 such 

complete SIP revision, the Administrator will record by October 

1, 2017 in each CSAPR NOX Ozone Season source's compliance 

account the CSAPR NOX Ozone Season allowances allocated to the 

CSAPR NOX Ozone Season units at the source as provided in such 

approved, complete SIP revision for the control period in 2018.

(C) If the State submits to the Administrator by April 1, 

2017 and the Administrator does not approve by October 1, 2017 

such complete SIP revision, the Administrator will record by 

October 1, 2017 in each CSAPR NOX Ozone Season source's 

compliance account the CSAPR NOX Ozone Season allowances 

allocated to the CSAPR NOX Ozone Season units at the source in 

accordance with § 97.511(a) for the control period in 2018.

(d) By July 1, 2018, the Administrator will record in each 

CSAPR NOX Ozone Season source's compliance account the CSAPR NOX

Ozone Season allowances allocated to the CSAPR NOX Ozone Season 

units at the source, or in each appropriate Allowance Management 

System account the CSAPR NOX Ozone Season allowances auctioned to 

CSAPR NOX Ozone Season units, in accordance with § 97.511(a), or 

with a SIP revision approved under § 52.38(b)(4) or (5) of this 

chapter, for the control periods in 2019 and 2020.
320

(e) By July 1, 2019, the Administrator will record in each 

CSAPR NOX Ozone Season source's compliance account the CSAPR NOX

Ozone Season allowances allocated to the CSAPR NOX Ozone Season 

units at the source, or in each appropriate Allowance Management 

System account the CSAPR NOX Ozone Season allowances auctioned to 

CSAPR NOX Ozone Season units, in accordance with § 97.511(a), or 

with a SIP revision approved under § 52.38(b)(4) or (5) of this 

chapter, for the control periods in 2021 and 2022.

* * * * *

41. Section 97.524 is amended by:

a. Revising paragraphs (b) introductory text, (b)(1), 

(c)(2) introductory text, and (c)(2)(i) and (ii);

b. Adding new paragraphs (c)(2)(iii) through (v);

c. Revising paragraph (d); and

d. Adding a new paragraph (f);).

ToThe revisions and additions read as follows:

§ 97.524 Compliance with CSAPR NOX Ozone Season emissions 

limitation.

* * * * *

(b) Deductions for compliance. After the recordation, in 

accordance with § 97.523, of CSAPR NOX Ozone Season allowance 

transfers submitted by the allowance transfer deadline for a 

control period in a given year, the Administrator will deduct 

from each source's compliance account CSAPR NOX Ozone Season 
321

allowances available under paragraph (a) of this section in 

order to determine whether the source meets the CSAPR NOX Ozone 

Season emissions limitation for such control period, making all 

such deductions in whole CSAPR NOX Ozone Season allowances, as 

follows:

(1) Until the tonnage equivalent of the CSAPR NOX Ozone 

Season allowances deducted equals or exceeds the number of tons 

of total NOX emissions from all CSAPR NOX Ozone Season units at 

the source for such control period; or

* * * * *

(c) * * *

(2) Default order of deductions. The Administrator will 

deduct CSAPR NOX Ozone Season allowances under paragraph (b) or 

(d) of this section from the source's compliance account in 

accordance with a complete request under paragraph (c)(1) of 

this section or, in the absence of such request or in the case 

of identification of an insufficient amount of CSAPR NOX Ozone 

Season allowances in such request, in the following order:

(i) Any CSAPR NOX Ozone Season allowances determined under 

paragraph (f)(1) of this section to have a tonnage equivalent of 

one ton per allowance that were allocated or auctioned from the 

NOX Ozone Season trading budget for the State within whose 

borders the source is located to the units at the source and 
322

were not transferred out of the compliance account, in the order 

of recordation; 

(ii) Any CSAPR NOX Ozone Season allowances determined under 

paragraph (f)(1) of this section to have a tonnage equivalent of 

one ton per allowance that were not allocated or auctioned from 

the NOX Ozone Season trading budget for the State within whose 

borders the source is located to any unit at the source and were 

transferred to and recorded in the compliance account pursuant 

to this subpart, in the order of recordation;

(iii) Any CSAPR NOX Ozone Season allowances determined under 

paragraph (f)(2) of this section to have a tonnage equivalent of 

four tenths of one ton per allowance, in the order of 

recordation;

(iv) Any CSAPR NOX Ozone Season allowances determined under 

paragraph (f)(3) of this section to have a tonnage equivalent of 

one fourth of one ton per allowance that were allocated or 

auctioned from the NOX Ozone Season trading budget for the State 

within whose borders the source is located to the units at the 

source and were not transferred out of the compliance account, 

in the order of recordation; and

(v) Any CSAPR NOX Ozone Season allowances determined under 

paragraph (f)(3) of this section to have a tonnage equivalent of 

one fourth of one ton per allowance that were not allocated or 

auctioned from the NOX Ozone Season trading budget for the State 
323

within whose borders the source is located to any unit at the 

source and were transferred to and recorded in the compliance 

account pursuant to this subpart, in the order of recordation.

(d) Deductions for excess emissions. After making the 

deductions for compliance under paragraph (b) of this section 

for a control period in a year in which the CSAPR NOX Ozone 

Season source has excess emissions, the Administrator will 

deduct from the source's compliance account CSAPR NOX Ozone 

Season allowances allocated for a control period in a prior year 

or the control period in the year of the excess emissions or in 

the immediately following year, making all such deductions in 

whole CSAPR NOX Ozone Season allowances, until the tonnage 

equivalent of the CSAPR NOX Ozone Season allowances deducted 

under this paragraph equals or exceeds two times the number of 

tons of the source's excess emissions.

* * * * *

(f) Tonnage equivalents of CSAPR NOX Ozone Season 

allowances. Where a determination is needed of the tonnage 

equivalent of a CSAPR NOX Ozone Season allowance held or deducted 

under any provision of § 97.506(c), § 97.511(c), § 97.524, 

§ 97.525, § 97.527, or § 97.528 relating to the holding or 

deduction of CSAPR NOX Ozone Season allowances, the Administrator 

will make the determination as follows, provided that 
324

notwithstanding any such determination the CSAPR NOX Ozone Season 

allowance remains subject to the limitations in § 97.506(c)(6):

(1) Except as provided under paragraph (f)(2) or (f)(3) of 

this section, the tonnage equivalent of each CSAPR NOX Ozone 

Season allowance shall be one ton per allowance.

(2) Where a CSAPR NOX Ozone Season allowance has been 

allocated or auctioned for a control period in 2017 or a 

subsequent year from the NOX Ozone Season trading budget for 

Georgia, and where the CSAPR NOX Ozone Season allowance is held 

or deducted for any purpose related to emissions from a CSAPR NOX

Ozone Season unit in another State (or Indian country within the 

borders of another State) or for the purpose of correcting an 

allocation or recordation error affecting a CSAPR NOX Ozone 

Season unit in another State (or Indian country within the 

borders of another State), the tonnage equivalent of the CSAPR 

NOX Ozone Season allowance shall be four tenths of one ton per 

allowance.

(3) Where a CSAPR NOX Ozone Season allowance has been 

allocated or auctioned for a control period in 2015 or 2016, and 

where the CSAPR NOX Ozone Season allowance is held or deducted 

for any purpose related to emissions from a CSAPR NOX Ozone 

Season unit in any State except Georgia (or Indian country 

within the borders of such a State) in a control period in 2017 

or a subsequent year or for the purpose of correcting an 
325

allocation or recordation error affecting a CSAPR NOX Ozone 

Season unit in any State except Georgia (or Indian country 

within the borders of such a State) for a control period in 2017 

or a subsequent year, the tonnage equivalent of the CSAPR NOX

Ozone Season allowance shall be one fourth of one ton per 

allowance.

(4) The Administrator will determine the year of the 

compliance period for which a CSAPR NOX Ozone Season allowance 

was allocated or auctioned and the State from whose NOX Ozone 

Season trading budget the CSAPR NOX Ozone Season allowance was 

allocated or auctioned based on the records maintained in the 

Allowance Management System.

42. Section 97.525 is amended by:

a. Revising paragraphs (b) introductory text and 

(b)(2)(ii);

b. In paragraph (b)(2)(iii) introductory text, by removing 

“paragraph (b)(1)(i)” and adding in its place “paragraph 

(b)(1)(ii)”;

c. In paragraph (b)(2)(iii)(B), by adding “the calculations 

incorporating” before “any adjustments”; and

d. Revising paragraphs (b)(4)(i), (b)(5), (b)(6) 

introductory text, (b)(6)(i) and (ii), (b)(6)(iii) introductory 

text, and (b)(6)(iii)(A) and (B);).

ToThe revisions read as follows:
326

§ 97.525 Compliance with CSAPR NOX Ozone Season assurance 

provisions.

* * * * *

(b) Deductions for compliance. The Administrator will 

deduct CSAPR NOX Ozone Season allowances available under 

paragraph (a) of this section for compliance with the CSAPR NOX

Ozone Season assurance provisions for a State for a control 

period in a given year in accordance with the following 

procedures, making all such deductions in whole CSAPR NOX Ozone 

Season allowances:

* * * * *

(2) * * *

(ii) By August 1 immediately after the promulgation of such 

notice, the Administrator will calculate, for each such State 

(and Indian country within the borders of such State) and such 

control period and each common designated representative for 

such control period for a group of one or more CSAPR NOX Ozone 

Season sources and units in the State (and Indian country within 

the borders of such State), the common designated 

representative's share of the total NOX emissions from all CSAPR 

NOX Ozone Season units at CSAPR NOX Ozone Season sources in the 

State (and Indian country within the borders of such State), the 

common designated representative's assurance level, and the 

tonnage equivalent (if any) of CSAPR NOX Ozone Season allowances 
327

that the owners and operators of such group of sources and units 

must hold in accordance with the calculation formula in 

§ 97.506(c)(2)(i) and will promulgate a notice of data 

availability of the results of these calculations.

* * * * *

(4) * * *

(i) As of midnight of November 1 immediately after the 

promulgation of each notice of data availability required in 

paragraph (b)(2)(iii)(B) of this section, the owners and 

operators described in paragraph (b)(3) of this section shall 

hold in the assurance account established for them and for the 

appropriate CSAPR NOX Ozone Season sources, CSAPR NOX Ozone 

Season units, and State (and Indian country within the borders 

of such State) under paragraph (b)(3) of this section CSAPR NOX

Ozone Season allowances, available for deduction under paragraph 

(a) of this section, with a total tonnage equivalent not less 

than the tonnage equivalent such owners and operators are 

required to hold with regard to such sources, units and State 

(and Indian country within the borders of such State) as 

calculated by the Administrator and referenced in such notice.

* * * * *

(5) After November 1 (or the date described in paragraph 

(b)(4)(ii) of this section) immediately after the promulgation 

of each notice of data availability required in paragraph 
328

(b)(2)(iii)(B) of this section and after the recordation, in 

accordance with § 97.523, of CSAPR NOX Ozone Season allowance 

transfers submitted by midnight of such date, the Administrator 

will determine whether the owners and operators described in 

paragraph (b)(3) of this section hold, in the assurance account 

for the appropriate CSAPR NOX Ozone Season sources, CSAPR NOX

Ozone Season units, and State (and Indian country within the 

borders of such State) established under paragraph (b)(3) of 

this section, CSAPR NOX Ozone Season allowances available under 

paragraph (a) of this section with the tonnage equivalent that 

the owners and operators are required to hold with regard to 

such sources, units, and State (and Indian country within the 

borders of such State) as calculated by the Administrator and 

referenced in the notice required in paragraph (b)(2)(iii)(B) of 

this section.

(6) Notwithstanding any other provision of this subpart and 

any revision, made by or submitted to the Administrator after 

the promulgation of the notice of data availability required in 

paragraph (b)(2)(iii)(B) of this section for a control period in 

a given year, of any data used in making the calculations 

referenced in such notice, the tonnage equivalents of CSAPR NOX

Ozone Season allowances that the owners and operators are 

required to hold in accordance with § 97.506(c)(2)(i) for such 

control period shall continue to be such tonnage equivalents as 
329

calculated by the Administrator and referenced in such notice 

required in paragraph (b)(2)(iii)(B) of this section, except as 

follows:

(i) If any such data are revised by the Administrator as a 

result of a decision in or settlement of litigation concerning 

such data on appeal under part 78 of this chapter of such 

notice, or on appeal under section 307 of the Clean Air Act of a 

decision rendered under part 78 of this chapter on appeal of 

such notice, then the Administrator will use the data as so 

revised to recalculate the tonnage equivalents of CSAPR NOX Ozone 

Season allowances that owners and operators are required to hold 

in accordance with the calculation formula in § 97.506(c)(2)(i) 

for such control period with regard to the CSAPR NOX Ozone Season 

sources, CSAPR NOX Ozone Season units, and State (and Indian 

country within the borders of such State) involved, provided 

that such litigation under part 78 of this chapter, or the 

proceeding under part 78 of this chapter that resulted in the 

decision appealed in such litigation under section 307 of the 

Clean Air Act, was initiated no later than 30 days after 

promulgation of such notice required in paragraph (b)(2)(iii)(B) 

of this section.

(ii) If any such data are revised by the owners and 

operators of a CSAPR NOX Ozone Season source and CSAPR NOX Ozone 

Season unit whose designated representative submitted such data 
330

under paragraph (b)(2)(i) of this section, as a result of a 

decision in or settlement of litigation concerning such 

submission, then the Administrator will use the data as so 

revised to recalculate the tonnage equivalents of CSAPR NOX Ozone 

Season allowances that owners and operators are required to hold 

in accordance with the calculation formula in § 97.506(c)(2)(i) 

for such control period with regard to the CSAPR NOX Ozone Season 

sources, CSAPR NOX Ozone Season units, and State (and Indian 

country within the borders of such State) involved, provided 

that such litigation was initiated no later than 30 days after 

promulgation of such notice required in paragraph (b)(2)(iii)(B) 

of this section.

(iii) If the revised data are used to recalculate, in 

accordance with paragraphs (b)(6)(i) and (ii) of this section, 

the tonnage equivalent of CSAPR NOX Ozone Season allowances that 

the owners and operators are required to hold for such control 

period with regard to the CSAPR NOX Ozone Season sources, CSAPR 

NOX Ozone Season units, and State (and Indian country within the 

borders of such State) involved—

(A) Where the tonnage equivalent of CSAPR NOX Ozone Season 

allowances that the owners and operators are required to hold 

increases as a result of the use of all such revised data, the 

Administrator will establish a new, reasonable deadline on which 

the owners and operators shall hold CSAPR NOX Ozone Season 
331

allowances with the additional tonnage equivalent in the 

assurance account established by the Administrator for the 

appropriate CSAPR NOX Ozone Season sources, CSAPR NOX Ozone 

Season units, and State (and Indian country within the borders 

of such State) under paragraph (b)(3) of this section. The 

owners' and operators' failure to hold such additional tonnage 

equivalent, as required, before the new deadline shall not be a 

violation of the Clean Air Act. The owners' and operators' 

failure to hold such additional tonnage equivalent, as required, 

as of the new deadline shall be a violation of the Clean Air 

Act. Each ton of the tonnage equivalent of CSAPR NOX Ozone Season 

allowances that the owners and operators fail to hold as 

required as of the new deadline, and each day in such control 

period, shall be a separate violation of the Clean Air Act.

(B) For the owners and operators for which the tonnage 

equivalent of CSAPR NOX Ozone Season allowances required to be 

held decreases as a result of the use of all such revised data, 

the Administrator will record, in all accounts from which CSAPR 

NOX Ozone Season allowances were transferred by such owners and 

operators for such control period to the assurance account 

established by the Administrator for the appropriate CSAPR NOX

Ozone Season sources, CSAPR NOX Ozone Season units, and State 

(and Indian country within the borders of such State) under 

paragraph (b)(3) of this section, a total amount of the CSAPR NOX
332

Ozone Season allowances held in such assurance account that the 

Administrator determines may be transferred from such assurance 

account without causing the tonnage equivalent of the CSAPR NOX

Ozone Season allowances held by such owners and operators in 

such assurance account to fall below the tonnage equivalent 

required to be held by such owners and operators in such 

assurance account, making any transfers in whole CSAPR NOX Ozone 

Season allowances. If CSAPR NOX Ozone Season allowances were 

transferred to such assurance account from more than one 

account, the tonnage equivalent of CSAPR NOX Ozone Season 

allowances recorded in each such transferor account will be in 

proportion to the percentage of the total tonnage equivalent of 

CSAPR NOX Ozone Season allowances transferred to such assurance 

account for such control period from such transferor account.

* * * * *

§ 97.528 [Amended]

43. Section 97.528 is amended in paragraph (b) by removing 

“paragraph (a)(1)” and adding in its place “paragraph (a)”.

44. Section 97.530 is amended by:

a. Revising paragraphs (b) introductory text and (b)(1) 

through (3); 

b. In paragraph (b)(4) introductory text, by removing “§§” 

and adding in its place “§”; and
333

c. In paragraph (b)(4)(iii), by adding after “§ 75.66” the 

words “of this chapter”;”.

ToThe revisions read as follows:

§ 97.530 General monitoring, recordkeeping, and reporting 

requirements.

* * * * *

(b) Compliance deadlines. Except as provided in paragraph 

(e) of this section, the owner or operator of a CSAPR NOX Ozone 

Season unit shall meet the monitoring system certification and 

other requirements of paragraphs (a)(1) and (2) of this section 

on or before the latest of the following dates and shall record, 

report, and quality-assure the data from the monitoring systems 

under paragraph (a)(1) of this section on and after the latest 

of the following dates:

(1)(i) For a unit other than a unit described in paragraph 

(b)(1)(ii) of this section, May 1, 2015; or 

(ii) For a unit in the State of Kansas (or Indian country 

within the borders of the State) that is not a CSAPR NOX Ozone 

Season unit in another State (or Indian country within the 

borders of another State) during any portion of a control period 

in 2015 or 2016, May 1, 2017; 

(2) 180 calendar days after the date on which the unit 

commences commercial operation; or
334

(3) Where data for the unit is reported on a control period 

basis under § 97.534(d)(2)(ii)(B), and where the compliance date 

under paragraph (b)(2) of this section is not in a month from 

May through September, May 1 immediately after the compliance 

date under paragraph (b)(2) of this section.

* * * * *

§ 97.531 [Amended]

45. Section 97.531 is amended by:

aa. Italicizing the headings of paragraphs (d)(1) through 

(3), (d)(3)(i) through (iv), (d)(3)(iv)(A) through (D), and 

(d)(3)(v);

b. In paragraph (d)(3) introductory text, by removing “§§” 

and adding in its place “§”; and

bc. Redesignating paragraphs (d)(3)(v)(A)(1) through (5) as 

paragraphs (d)(3)(v)(A)(1) through (5).

46. Section 97.534 is amended by:

a. In paragraph (b), by adding “the” before “requirements”; 

b. Revising paragraphs (d)(1) and (2);

c. Redesignating paragraph (d)(6) as paragraph (d)(5)(ii); 

and

d. In paragraph (e)(3), by removing “paragraph (d)(2)(ii)” 

and adding in its place “paragraph (d)(2)(ii)(B)”;)”.

ToThe revisions read as follows:

§ 97.534 Recordkeeping and reporting.
335

* * * * *

(d) * * *

(1) The designated representative shall report the NOX mass 

emissions data and heat input data for a CSAPR NOX Ozone Season 

unit, in an electronic quarterly report in a format prescribed 

by the Administrator, for each calendar quarter indicated under 

paragraph (d)(2) of this section beginning with the latest of:

(i)(A) For a unit other than a unit described in paragraph 

(d)(1)(i)(B) of this section, the calendar quarter covering May 

1, 2015 through June 30, 2015; or 

(B) For a unit in the State of Kansas (or Indian country 

within the borders of the State) that is not a CSAPR NOX Ozone 

Season unit in another State (or Indian country within the 

borders of another State) during any portion of a control period 

in 2015 or 2016, the calendar quarter covering May 1, 2017 

through June 30, 2017;

(ii) The calendar quarter corresponding to the earlier of 

the date of provisional certification or the applicable deadline 

for initial certification under § 97.530(b); or

(iii) For a unit that reports on a control period basis 

under paragraph (d)(2)(ii)(B) of this section, if the calendar 

quarter under paragraph (d)(1)(ii) of this section does not 

include a month from May through September, the calendar quarter 
336

covering May 1 through June 30 immediately after the calendar 

quarter under paragraph (d)(1)(ii) of this section.

(2)(i) If a CSAPR NOX Ozone Season unit is subject to the 

Acid Rain Program or a CSAPR NOX Annual emissions limitation or 

if the owner or operator of such unit chooses to report on an 

annual basis under this subpart, then the designated 

representative shall meet the requirements of subpart H of part 

75 of this chapter (concerning monitoring of NOX mass emissions) 

for such unit for the entire year and report the NOX mass 

emissions data and heat input data for such unit for the entire 

year. 

(ii) If a CSAPR NOX Ozone Season unit is not subject to the 

Acid Rain Program or a CSAPR NOX Annual emissions limitation, 

then the designated representative shall either:

(A) Meet the requirements of subpart H of part 75 of this 

chapter for such unit for the entire year and report the NOX mass 

emissions data and heat input data for such unit for the entire 

year in accordance with paragraph (d)(2)(i) of this section; or

(B) Meet the requirements of subpart H of part 75 of this 

chapter (including the requirements in § 75.74(c) of this 

chapter) for such unit for the control period and report the NOX

mass emissions data and heat input data (including the data 

described in § 75.74(c)(6) of this chapter) for such unit only 

for the control period of each year.
337

* * * * *

Subpart CCCCC—CSAPR SO2 Group 1 Trading Program

47. The heading of subpart CCCCC of part 97 is revised to 

read as set forth above.

§ 97.602 [Amended]

48. Section 97.602 is amended by:

a. Relocating all definitions beginning with “CSAPR” to 

their alphabetical locations in the list of definitions;

b. In the definition of “Cogeneration system”, by removing 

“steam turbine generator” and adding in its place “generator”;

c. In the definition of “Commence commercial operation”, in 

paragraph (2) introductory text, by adding after “defined in” 

the word “the”;

d. In the definition of “Fossil fuel”, by removing “§§” and 

adding in its place §”; and

e. In the definition of “Sequential use of energy”, in 

paragraph (2), by adding after “from” the word “a”.

§ 97.604 [Amended]

49. Section 97.604 is amended inby:

a. In paragraph (b)(2)(ii)), by removing “paragraph 

(b)(1)(i)” and adding in its place “paragraph (b)(2)(i)”.)”; and

§b. Italicizing the headings of paragraphs (c)(1) and (2).

§ 97.606 [Amended]

50. Section 97.606 is amended by:
338

a. a. Italicizing the headings of paragraphs (c)(1) and 

(2) and (c)(4) through (7);

b. In the heading of paragraph (c)(4), by adding “CSAPR SO2

Group 1” before “allowances”; and

bc. In paragraph (d)(2), by removing “subpart H” and adding 

in its place “subpart B”.

§ 97.610 State SO2 Group 1 trading budgets, new unit setasides, Indian country new unit set-asides, and variability 

limits.

51. Section 97.610 is amended by:

a. Revising the heading as set forth above;

b. Removing “SO2 trading budget” wherever it appears and 

adding in its place “SO2 Group 1 trading budget”;

c. Removing “SO2 new unit set-aside” wherever it appears and 

adding in its place “new unit set-aside”;

d. Removing “SO2 Indian country new unit set-aside” wherever 

it appears and adding in its place “Indian country new unit setaside”;

e. Removing “SO2 variability limit” wherever it appears and 

adding in its place “variability limit”;

f. In paragraph (a) introductory text, by adding “Group 1” 

before “trading budgets”, and by removing “new unit-set aside” 

and adding in its place “new unit set-aside”;
339

g. Adding and reserving paragraphs (a)(2)(vi) and 

(a)(11)(vi); and

h. In paragraph (c), by adding after “Each” the word 

“State”, and by removing “set aside” wherever it appears and 

adding in its place “set-aside”.

§ 97.611 [Amended]

52. Section 97.611 is amended by:

a. a. Italicizing the headings of paragraphs (b)(1) and 

(2);

b. In paragraphs (b)(1)(iii) and (b)(2)(iii), by adding 

after “November 30 of” the word “the”;

bc. In paragraph (c)(1)(ii), by removing “§ 52.39(d), (e), 

or (f)” and adding in its place “§ 52.39(e) or (f)”;

cd. In paragraph (c)(5)(i)(B), by adding after “§ 52.39(e) 

or (f)” the words “of this chapter”; 

de. In paragraph (c)(5)(ii) introductory text, by removing 

“of this paragraph” and adding in its place “of this section”;

ef. In paragraph (c)(5)(ii)(B), by adding after “§ 52.39(e) 

or (f)” the words “of this chapter”; and

fg. In paragraph (c)(5)(iii), by removing “of this 

paragraph” and adding in its place “of this section”.

§ 97.612 [Amended]

53. Section 97.612 is amended by:
340

a. In paragraph (a)(2), by removing “§§” and adding in its 

place “§”;

b. In paragraph (a)(4)(i), by removing “paragraph (a)(1)(i) 

through (iii)” and adding in its place “paragraphs (a)(1)(i) 

through (iii)”;

c. In paragraph (a)(4)(ii), by adding after “paragraph 

(a)(4)(i)” the words “of this section”;

d. In paragraph (a)(9)(i), by adding after “November 30 of” 

the word “the”;

e. In paragraph (b)(4)(ii), by adding after “paragraph 

(b)(4)(i)” the words “of this section”;

f. In paragraph (b)(9)(i), by adding after “November 30 of” 

the word “the”;

g. In paragraph (b)(10)(ii), by removing “§ 52.39(d), (e), 

or (f)” and by adding in its place “§ 52.39(e) or (f)”; and

h. In paragraph (b)(11), by adding after “paragraphs 

(b)(9), (10) and (12)” the words “of this section”.

§ 97.621 [Amended]

54. Section 97.621 is amended by:

a. In paragraphs (c), (d), and (e), by removing “period” 

and adding in its place “periods”’;”;

b. In paragraphs (f) and (g), by removing “§ 52.39(e) and 

(f)” and adding in its place “§ 52.39(e) or (f)”; and
341

c. In paragraph (j), by removing “the date” and adding in 

its place “the date 15 days after the date”.

§ 97.625 [Amended]

55. Section 97.625 is amended by:

a. In paragraph (b)(2)(iii) introductory text, by removing 

“paragraph (b)(1)(i)” and adding in its place “paragraph 

(b)(1)(ii)”; and

b. In paragraph (b)(2)(iii)(B), by adding “the calculations 

incorporating” before “any adjustments”.

§ 97.628 [Amended]

56. Section 97.628 is amended in paragraph (b) by removing 

“paragraph (a)(1)” and adding in its place “paragraph (a)”.

§ 97.630 [Amended]

57. Section 97.630 is amended by:

a. In paragraph (b) introductory text, by adding after 

“operator” the words “of a CSAPR SO2 Group 1 unit”, by adding 

“the later of” before “the following dates” each time it 

appears, and by removing the final period and adding in its 

place a colon;

b. Removing paragraphs (b)(1) and (b)(2) introductory text;

c. Redesignating paragraphs (b)(2)(i) and (ii) as 

paragraphs (b)(1) and (2);

d. In newly redesignated paragraph (b)(2), by removing the 

final semicolon and adding in its place a period;
342

e. In paragraph (b)(3) introductory text, by removing “§§” 

and adding in its place “§”; and

f. In paragraph (b)(3)(iii), by adding after “§ 75.66” the 

words “of this chapter”.

§ 97.631 [Amended]

58. Section 97.631 is amended by:

aa. Italicizing the headings of paragraphs (d)(1) through 

(3), (d)(3)(i) through (iv), (d)(3)(iv)(A) through (D), and 

(d)(3)(v);

b. In paragraph (d)(3) introductory text, by removing “§§” 

and adding in its place “§”; and

bc. Redesignating paragraphs (d)(3)(v)(A)(1) through (3) as 

paragraphs (d)(3)(v)(A)(1) through (3).

§ 97.634 [Amended]

59. Section 97.634 is amended by:

a. In paragraph (b) by adding “the” before “requirements”;

b. In paragraph (d)(1) introductory text, by removing “the 

CSAPR” and adding in its place “a CSAPR”, and by adding “the 

later of” before the final colon;

c. In paragraph (d)(1)(i), by removing “For a unit that 

commences commercial operation before July 1, 2014, the” and 

adding in its place “The”; and

d. In paragraph (d)(1)(ii), by removing “For a unit that 

commences commercial operation on or after July 1, 2014, the” 
343

and adding in its place “The”, and by removing “, unless that 

quarter is the third or fourth quarter of 2014, in which case 

reporting shall commence in the quarter covering January 1, 2015 

through March 31, 2015”.

Subpart DDDDD—CSAPR SO2 Group 2 Trading Program

60. The heading of subpart DDDDD of part 97 is revised to 

read as set forth above.

§ 97.702 [Amended]

61. Section 97.702 is amended by:

a. Relocating all definitions beginning with “CSAPR” to 

their alphabetical locations in the list of definitions;

b. In the definition of “Cogeneration system”, by removing

“steam turbine generator” and adding in its place “generator”;

c. In the definition of “Commence commercial operation”, in 

paragraph (2) introductory text, by adding after “defined in” 

the word “the”;

d. In the definition of “Fossil fuel”, by removing “§§” and 

adding in its place §”;"§”; and

e. In the definition of “Sequential use of energy”, in 

paragraph (2), by adding after “from” the word “a”.

§ 97.704 [Amended]

62. Section 97.704 is amended inby:

a. In paragraph (b)(2)(ii)), by removing “paragraph 

(b)(1)(i)” and adding in its place “paragraph (b)(2)(i)”.)”; and
344

§b. Italicizing the headings of paragraphs (c)(1) and (2).

§ 97.706 [Amended]

63. Section 97.706 is amended by:

a. a. Italicizing the headings of paragraphs (c)(1) and 

(2) and (c)(4) through (7);

b. In the heading of paragraph (c)(4), by adding “CSAPR SO2

Group 2” before “allowances”; and

bc. In paragraph (d)(2), by removing “subpart H” and adding 

in its place “subpart B”.

§ 97.710 State SO2 Group 2 trading budgets, new unit setasides, Indian country new unit set-asides, and variability 

limits.

64. Section 97.710 is amended by:

a. Revising the heading as set forth above;

b. Removing “SO2 trading budget” wherever it appears and 

adding in its place “SO2 Group 2 trading budget”;

c. Removing “SO2 new unit set-aside” wherever it appears and 

adding in its place “new unit set-aside”;

d. Removing “SO2 Indian country new unit set-aside” wherever 

it appears and adding in its place “Indian country new unit setaside”;

e. Removing “SO2 variability limit” wherever it appears and 

adding in its place “variability limit”;
345

f. In paragraph (a) introductory text, by adding “Group 2” 

before “trading budgets”, and by removing “new unit-set aside” 

and adding in its place “new unit set-aside”; and

g. In paragraph (c), by adding after “Each” the word 

“State”, by removing “identified under” and adding in its place 

“in”, by removing “excludes” and adding in its place “does not 

include”, and by removing “set aside” wherever it appears and 

adding in its place “set-aside”.

§ 97.711 [Amended]

65. Section 97.711 is amended by:

a. a. Italicizing the headings of paragraphs (b)(1) and 

(2);

b. In paragraphs (b)(1)(iii) and (b)(2)(iii), by adding 

after “November 30 of” the word “the”;

bc. In paragraph (c)(1) introductory text, by adding after 

“approved” each time it appears the word “under”;

cd. In paragraph (c)(1)(ii), by removing “§ 52.39(g), (h), 

or (i)” and adding in its place “§ 52.39(h) or (i)”;

de. In paragraph (c)(5)(i)(B), by adding after “§ 52.39(h) 

or (i)” the words “of this chapter”;

ef. In paragraph (c)(5)(ii) introductory text, by removing 

“of this paragraph” and adding in its place “of this section”;

fg. In paragraph (c)(5)(ii)(B), by adding after “§ 52.39(h) 

or (i)” the words “of this chapter”; and
346

gh. In paragraph (c)(5)(iii), by removing “of this 

paragraph” and adding in its place “of this section”.

§ 97.712 [Amended]

66. Section 97.712 is amended by:

a. In paragraph (a)(2), by removing “§§” and adding in its 

place “§”;

b. In paragraph (a)(4)(i), by removing “paragraph (a)(1)(i) 

through (iii)” and adding in its place “paragraphs (a)(1)(i) 

through (iii)”;

c. In paragraph (a)(4)(ii), by adding after “paragraph 

(a)(4)(i)” the words “of this section”;

d. In paragraph (a)(9)(i), by adding after “November 30 of” 

the word “the”;

e. In paragraph (b)(4)(ii), by adding after “paragraph 

(b)(4)(i)” the words “of this section”;

f. In paragraph (b)(9)(i), by adding after “November 30 of” 

the word “the”; and

g. In paragraph (b)(10)(ii), by removing “§ 52.39(g), (h), 

or (i)” and by adding in its place “§ 52.39(h) or (i)”.

§ 97.721 [Amended]

67. Section 97.721 is amended by:

a. In paragraphs (c), (d), and (e), by removing “period” 

and adding in its place “periods”’;
347

b. In paragraphs (f) and (g), by removing “§ 52.39(h) and 

(i)” and adding in its place “§ 52.39(h) or (i)”; and

c. In paragraph (j), by removing “the date” and adding in 

its place “the date 15 days after the date”, and by removing the 

comma before “described”.

§ 97.725 [Amended]

68. Section 97.725 is amended by:

a. In paragraph (b)(2)(iii) introductory text, by removing 

“paragraph (b)(1)(i)” and adding in its place “paragraph 

(b)(1)(ii)”;

b. In paragraph (b)(2)(iii)(B), by adding “the calculations 

incorporating” before “any adjustments”; and

c. In paragraph (b)(6)(iii)(B), by removing after 

“appropriate” the word “at”.

§ 97.728 [Amended]

69. Section 97.728 is amended in paragraph (b) by removing 

“paragraph (a)(1)” and adding in its place “paragraph (a)”.

§ 97.730 [Amended]

70. Section 97.730 is amended by:

aa. Italicizing the heading of paragraph (a);

b. In paragraph (b) introductory text, by adding after 

“operator” the words “of a CSAPR SO2 Group 2 unit”, by adding 

“the later of” before “the following dates” each time it 
348

appears, and by removing the final period and adding in its 

place a colon;

bc. Removing paragraphs (b)(1) and (b)(2) introductory 

text;

cd. Redesignating paragraphs (b)(2)(i) and (ii) as 

paragraphs (b)(1) and (2);

de. In newly redesignated paragraph (b)(2), by removing the 

final semicolon and adding in its place a period;

ef. In paragraph (b)(3) introductory text, by removing “§§” 

and adding in its place “§”; and

fg. In paragraph (b)(3)(iii), by adding after “§ 75.66” the 

words “of this chapter”.

§ 97.731 [Amended]

71. Section 97.731 is amended by:

aa. Italicizing the headings of paragraphs (d)(1) through 

(3), (d)(3)(i) through (iv), (d)(3)(iv)(A) through (D), and 

(d)(3)(v);

b. In paragraph (d)(3) introductory text, by removing “§§” 

and adding in its place “§”; and

bc. Redesignating paragraphs (d)(3)(v)(A)(1) through (3) as 

paragraphs (d)(3)(v)(A)(1) through (3).

§ 97.734 [Amended]

72. Section 97.734 is amended by:

a. In paragraph (b) by adding “the” before “requirements”;
349

b. In paragraph (d)(1) introductory text, by removing “the 

CSAPR” and adding in its place “a CSAPR”, and by adding “the 

later of” before the final colon;

c. In paragraph (d)(1)(i), by removing “For a unit that 

commences commercial operation before July 1, 2014, the” and 

adding in its place “The”; and

d. In paragraph (d)(1)(ii), by removing “For a unit that 

commences commercial operation on or after July 1, 2014, the” 

and adding in its place “The”, and by removing “, unless that 

quarter is the third or fourth quarter of 2014, in which case 

reporting shall commence in the quarter covering January 1, 2015 

through March 31, 2015”.