THE ADMINISTRATOR OF THE ENVIRONMENTAL PROTECTION AGENCY

The Honorable John E. Skvarla III Secretary North Carolina Department of**Environm~nt**

and Natural Resources 1601 Mail Service Center Raleigh,North Carolina 27699

Dear Mr. Secretary: WASHINGTON , D.C. 20460



## AUG 2 8 

## 2014

I am responding to your August 22, 2013, letter in which you requested the U.S

. Environmental Protection Agency's position concerning the major source baseline date associated with the PM2

.s increments finalized in the EPA's final rule, "Prevention ofSignificant Deterioration for Particulate Matter Less Than 2.5 Micrometers Increments, Significant Impact Levels and Significant Monitoring Concentration". 75 FR 64,864 (October 20, 2010)

. The EPA appreciates your concerns about North Carolina potentially facing an economic disadvantage after making early reductions in PM2

.s emissions under the Clean Smokestacks Act.
Issues similar to those raised in your letter were included in a petition for reconsideration and amended rulemaking submitted by the Attorney General on behalfofthe state ofNorth Carolina in a December 23 , 2013 , letter. The EPA has carefully evaluated the issues and information and, as explained in the enclosure, does not believe that the North Carolina petition provides compelling policy or legal reasons for the EPA to change the existing major source baseline date

. Therefore, the agency is denying the petition for reconsideration. The EPA also plans to publish a notice ofthis denial in the Federal Register

. I appreciate North Carolina's interest in reducing PM2

.s levels under your air-pollution-control program, including the Clean Smokestacks Act, to provide cleaner, healthier air for North Carolinaresidents. Please know that we look forward to working with you to ensure continued air-quality improvement throughout North Carolina.

Enclosure

This paper is printed with vegetable-oil-based inks and is 100-percent postconsumer recycled material, chlorine-free

-processed and recyclable

.Enclosure Response to the Petition for Reconsideration and Amended Rulemaking from the State ofNorth Carolina By letter dated December 23, 2013, the state ofNorth Carolinapetitioned the U.S. Environmental Protection Agency to reconsider and revise the major source baseline date included inthe final rule, "Prevention ofSignificant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.s)-Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)" (2010 PM2.s PSD Rule). 75 FR 64,864 (October 20, 2010). Specifically, North Carolinapetitionedthe EPA to reconsider the major source baseline date for PM2.s under section 307(d)(7)(B) ofthe Clean Air Act (CAA or Act). 40 USC 7607(d)(7)(B). The petition also asks the EPA to undertake a rulemaking procedure to amend the major source baseline date for PM2.s by changing it from 2010 to 1975 pursuant to the Administrative Procedures Act (APA), 5 USC 551 et seq. The EPAhas carefully considered the requested rulemaking and, for the policy and legal reasons explained below, declines to undertake a reconsideration ofthe PM2.s major source baseline date established in the 2010 PM2.s PSD rule or a rulemaking to amend the EPA'sregulations.
The EPA had sound reasons, as discussed below, for establishing October 2010 as the major source baseline date for PM2.s reflected in existing regulations, as laid out in the 2010 PM2.s PSD rule, and North Carolina's petition does notprovide compelling policy orlegal reasons for the EPA to change that date. Most states are already applying the October 2010 date by incorporating it into current state regulations and state implementationplans (SIPs). Revising the date atthis time would cause significant disruption to the consistent implementation ofthe PSD program. Moreover, North Carolina's petition does not address the air-quality implications ofestablishing a major source baseline date of 1975 for the PM2.s increments. Based onthe EPA's understanding ofnational trends in PM2.s emissions, revising the major source baseline date to 1975 would reduce the level ofair-quality protectionprovided by the PM2.s increments. As discussed in detail below, the EPA is not persuaded thatthe court decision that is the foundation ofNorth Carolina's petition compels a change in the baseline date or any other aspect of the 2010 PM2.s PSD rule.
In an effortto understand North Carolina'spolicyjustificationfor asking that the EPA change the baseline date, the EPAhas considered the legal and policy reasons provided in the North Carolina petition as well as the August 22, 2013, letter from the Secretary ofthe North CarolinaDepartment of Environment and Natural Resources to the EPA Administrator requesting the EPA's positionregarding the application ofthe court decision inNRDC v. EPA, 706 F.3d 428 (D.C. Cir. 2013), to the major
source baseline date finalized in the 2010 PM2.s PSD rule. After careful consideration, the EPAhas concludedthat the concerns raised bythe Secretary are outweighed at this time by other grounds discussed belowthat favor retaining the baseline date and other elements ofthe 2010 PM2.s PSD rule. Similarto the state's petition for rulemaking, the Secretary's letter also does not address the air-quality implications ofenabling states to apply a 1975 major source baseline date for the PM2.s increments.Background
Section 165(a)(3) ofthe Actrequires a PSD permit applicant to demonstrate that emissions from the proposed construction and operation ofa facility "will not cause, or contribute to, air pollution in excess ofany
... maximum allowable increase or maximum allowable concentration for any pollutant

...." 42 USC 7475(a)(3). The maximum allowable increase ofan airpollutant that is allowed to occur above the applicable baseline concentration for thatpollutant is referred to as the PSD increment.
On October 20, 2010, the EPApublished the 2010 PM2.s PSD rule. Among other things, the final rule established increments for PM2.s inthe PSD permitting regulations

.. As explained below, to implement the PM2.s increments, the 2010 PM2.s PSD rule established several important dates usedto determine whether emissions from a given source may be considered to "consume" or "expand"the increment.


### Baseline Dates
Whether an emissions increase or decrease from a particular source will be counted as part ofthe baseline concentration (or instead affect the PSD increment) depends upon three dates: (1) the minor
source baseline date, (2) the trigger date, and (3) the major source baseline date. The North Carolina petition raises concerns aboutthe "major source baseline date."
The "major source baseline date" is a fixed date for eachpollutant defined by federal regulation at 40 CFR 51.166(b)(14)(i) and 52.21(b)(14)(i). The major source baseline date serves as the milestone for accounting for emissions changes that occur atmajor stationary sources. In other words, by statutory provision, emissions from major sources before the major source baseline date are counted as part ofthe baseline concentration. Onthe other hand, changes in emissions from major sources that commenced construction (i.e., underwent a physical change or a change in method ofoperation) afterthe major
source baseline date are not included inthe baseline concentration and will affect the amount ofPSD increment consumed. 40 CFR 51.166(b)(13) and 52.21(b)(13). 

### ProposedPM2.5 PSD Rule (2007)

In the September 21, 2007, proposal for the 2010 PM2.s PSD rule, the EPA solicited comments regarding which statutory provision should apply to establish the increments for PM2.s. 72 FR 54,112. Section 166(a) ofthe Act provides authority for the EPA to promulgate additional pollutant-specific PSD regulations, which may include increments, for the pollutants identified inthat provision and for additional pollutants for whichthe EPA may promulgate a NAAQS after August 7, 1977. 42 USC 7476(a). Section 166(f) ofthe Actpermits the agency to substitute 

### PMw increments for the statutory particulate matter increments that apply whenthe indicator for particulate matter is total suspended particulate matter (TSP). 42 USC 7476(f). Section 166(f) requires thatthe substituted increments be "of equal stringency in effect as those specified in the provisions for which they are substituted." Id The EPA promulgated 

### PMw increments to replace the statutory TSP increments on June 3, 1993. 58 FR 31,622. Acknowledging that PM2.s is a subset of

### PMw and both are indicators for the same pollutant, particulate matter, the EPA proposed two main options for establishing increments. One optionproposed, for purposes ofincrement, treating PM2.s as a newpollutant for which a NAAQS was promulgated after 1977 pursuantto section 166(a) ofthe CAA and establishing new increments for both the annual and 24- hour PM2.s standards separate from and in addition to the existing 

### PMw increments. 72 FRat 54,123. 1The second option proposedrelying on section 166(t) to establishthe annual PM2.s increment, recognizing that PM2.s is a new indicator for particulate matter. 

### /d. at 54,136. Thus, the EPAproposed establishing annual PM2.s increments to replace the existing annual 

### PMw increments because the primary and secondary annual 

### PMw NAAQS had beenpreviouslyrevoked. 

### Id Evenunderthis second option, as the primary and secondary 24-hour

### PMw standard hadbeenretained, the EPAproposed retaining the 24-hour increments for 

### PMw and developing separate 24-hour PM2.s increments under the authority ofsection 166(a). 

### Id at 54,136-37. However, the EPA requested comment as to whetherthe agency should instead rely on section 166(t) to also propose 24-hour PM2.s increments. 

### Id at 54,137.
The EPA similarly proposed two options for setting the baseline dates that aligned withthe two options described above for setting the value ofthe newPM2.s increments. The first optionproposed setting a newmajor source baseline date and trigger date for the PM2.s increments defined as the effective date of the final rule for the PM2.s increments, consistent withtreating PM2.s as a "new"pollutantfor purposes ofPSD and section 166(a). 

### Id at 54,136. The second optionproposed retaining the existing 

### PMw baseline dates for the annual PM2.s increments, which would serve to replace the existing annual 

### PMw increments, including the 1975 major source baseline date, consistent withpastpractice under section 166(t). 

### Id at 54,138. However, the EPA also requested comment onwhetherthe EPA could instead establish new, more protective baseline dates under section 166(t) for the annual PM2.s increments. 

### Id The EPA stated that section 166(t) did not address howthe EPA should handle baseline dates for substitute increments and suggested that baseline dates set afterthe effective date ofthe final rule for the PM2.s increments would be more effective at preventing significant deterioration. 

### Id With respect to the 24-hour increments, which would supplementthe existing 24-hour

### PMw increments, the EPA again proposedto set newbaseline dates consistent withthe first option. 

### Id
Comments Received

The EPAreceived 35 sets ofcomments onthe 2007 proposal from state/local regulatory agencies and regulatory agency associations, industry and industry associations, environmental groups, one federal agency, tribes and private citizens. The agency received and responded to a number ofcomments regarding the EPA's legal authority to rely on section 166(a) or section 166(t) to setthe value ofthe PM2.s increments. 

### Id at 64871-72; EPA-HQ-OAR-2006-0605-0059, Response to Comments (RTC) at 7-12. Several commenters supported the application ofsection 166(a) to establishthe PM2.s increments
as the EPA proposed in the first option described above. RTC at 8-9. The agency also received comments regarding howto set the baseline dates for the PM2.s increments under either approach. 72 FR at 64,886-88; RTC at 47-51. Even among those commenters who advocated that the EPAuse section 166(t)to setthe value ofthe PM2.s increments ratherthan section 166(a), most commenters supported the establishment ofnewbaseline dates ratherthan the application ofthe existing TSP/PMw baseline dates to the newPM2.s increments. 72 FRat 64,887; RTC at 47-51. Only one commenter, the American Petroleum Institute (API), supported the use ofthe existing 

### TSPIPMw baseline dates for the PM2.s increments because state SIPs would ensure attainment and maintenance oftheNAAQS, which will, inturn, ensure that overconsumption ofan increment does not occur. 72 FRat 64,887; RTC at 49; EPA-HQ-OAR-2006-0605-0008, API Comment at 7. The National Association ofClean Air Agencies (NACAA) submitted a commentin support ofusing section 166(t) to set the values ofthe PM2.s increments. EPA-HQ-OAR-2006-0605-0021, NACAA Comment at 3-5. However, NACAA also supported the establishment ofnewbaseline dates for PM2.s for both the 24- hour and annual averaging periods ratherthanretaining the existing baseline dates previously 2established for TSP/PM10, citing the practical difficulties ofusing the historical baseline date. /d. at 5. The state ofNorth Carolinadid not separately comment onthe proposed rule and, in particular, did not provide any information regarding the implications ofthe Clean Smokestacks Act.


### FinalPM2.5 PSD Rule (2010)

In the final 2010 PM2.s PSD rule, for purposes ofincrement, the EPA treated PM2.s as a newpollutant for whichNAAQS were promulgated after 1977 pursuant to CAA section 166(a). 

### See 75 FRat 64,871- 72. The EPA did not establishthe PM2.s increments under section 166(f). The EPA determined that it would be more appropriate to promulgate the PM2.s increments pursuantto section 166(a) because the EPA was retaining the existing PM10 increments previously established pursuant to the authority in 166(f). /d. Thus, the PM2.s increments were developed as additional increments under section 166(a) rather than substitute increments under section 166(f). A complete discussion ofourrationale for relying upon section 166(a) is contained inthe preamble to the 2010 PM2.s PSD rule. /d.
Consistent with this determination, the EPA also establishedthe major source baseline date for the PM2.s increments as October 20, 2010, and the trigger date as October 20, 2011. The EPA concluded that establishing a newbaseline date on or after the effective date ofthe final rule would make the PSD increments for PM2.s more protective. /d. at 64,886-87. The final rule also explained thatusing the existing TSP/PM10 baseline dates would be administratively cumbersome and difficult because historic emission inventories going as far back as 1976 in many areas did not include PM2.s emissions that would allow sources and reviewing authorities to determine the baseline concentration in a given area. /d. at 64,887. The commenters, except API, concurred withthese conclusions. /d.
The timely legal challenges to the 2010 PM2.s PSD rule did not raise concerns withthe 2010 baseline date orthe EPA's application ofsection 166(a) ofthe CAA, instead ofsection 166(f), to establishthe PM2.s increments and the associated major source baseline date.
Overview ofPetition for Reconsideration and Amended Rulemaking North Carolina's petition raises questions regarding the appropriate major source baseline date for implementing the PM2.s increments. In particular, the petition contends thatthe recent court decision in NRDC

### v. EPA, 706 F.3d 428, precludes the EPA from applying the 2010 baseline date established inthe 2010 PM2.s PSD rule. Petition at 5-6. In particular, the state maintains that, because ofthe decision in NRDC v. EPA, the PM2.s increments inthe PSD program should be implemented in a manner similarto the PM10 increments since the court remanded the 2007 and 2008 PM2.s implementationrules based on the premise that PM2.s is a subset ofPM10. North Carolinacontends that, because the court held that the statutory definition ofPM10 includes PM2.s, the EPA must apply section 166(f) ofthe Act to establish PM2.s increments of"equal stringency" to the PM10 increments, instead ofsection 166(a) to treat PM2.s
as a newpollutant for purposes ofincrement. Thus, the petition asserts that the EPA should apply the major source baseline date ofJanuary 6, 1975, to the PM2.s increments inthe same mannerthat it applies to the PM10 increments. North Carolinatherefore requests thatthe EPA reconsider the PM2.s major
source baseline date established inthat rulemaking and initiate a newrulemaking to change the major
source baseline date for PM2.s to 1975. Petition at 7.
Forthe reasons explained below, the EPA denies the Petition for Reconsideration and Amended Rulemaking.

3Evaluation of Petition for Reconsideration
The EPA has evaluated the administrative petition submitted byNorth Carolina according to the criteria provided in CAA section 307(d)(7)(B). The Act establishes a process bywhichparties maypetitionthe EPA to reconsider aspects ofa rule under certain circumstances. This process and the relevant criteria
are laid out in section 307(d)(7)(B), which calls onthe Administrator to convene a proceeding for reconsideration [i]fthe person raising an objection can demonstrate to the Administratorthat it was impracticable to raise such objection within [the period for public comment (including any public hearing)] or ifthe grounds for such objection arose after the period for public comment (but withinthe time specified forjudicial review) and ifsuch objection is of central relevance to the outcome ofthe rule.
42 USC§ 7607(d)(7)(B). That section essentially lays out two possible bases for reconsideration ofa rulemaking. The first requires a showing that it was impracticable to raise an objection within the period for public comment (including any public hearing). The second requires showing that the grounds for such objection arose after the period for public comment (but within the time specified forjudicialreview). The petition does not demonstrate that eitherbasis applies in this case. First, the petition does not demonstrate that it was impracticable to raise an objectionto the PM2.s major
source baseline date during the period for public comment onthe 2010 PM2.s PSD rule. As discussed above and as the petition acknowledges, Petition at 3-4, the EPA took comment in the 2007 proposed rule onthe appropriate section ofthe Actto apply inthe development ofthe PM2.s increments, and the EPA considered a number ofcomments onthe agency's legal authority to rely on sections 166(a) and 166(f) ofthe Act. The EPA also took comment onthe major source baseline date to apply to the PM2.s increments, including the optionto apply the existing 

### PMw baseline date of 1975. Afterreviewing comments received for and againstthe application ofsections 166(a) and 166(f) to the development of the increments, the EPA determined inthe final rule to apply section 166(a) to develop new increments for PM2.s and to set a new major source baseline date for implementation ofthose increments. Nothing intheNRDC v. EPA decision cited inthe petition presented for the first time the argument that the EPA must apply section 166(f) to develop the PM2.s increments because PM2.s is a subset ofPMw. Rather, the EPA proposed to apply section 166(f) to PM2.s specifically because PM2.s is anindicator for particulate matter, as is 

### PMw. 72 FRat 54,120-21. Numerous commenters pointed to the fact that PM2.s is a subset ofparticulate matter in support oftheir contentionthat section 166(f) should apply to the development ofthe PM2.s increments. See RTC at 9-11. The definition ofPMwin section 302(t) ofthe CAA, 42 USC 7602(t), that was considered bythe court inNRDC v. EPA was the same in 2007, when the rule was proposed, as it was when the court issued its decision in 2013. Commenters were not precluded in 2007 from asserting that this definition included PM2.s andthatthe definitionhad relevance to the EPA's decision as to whether to apply 166(a) or 166(f) to PM2.s (an issue not evenraised in NRDC v. EPA). Accordingly, the EPA does not agree that the NRDC v. EPA decisionraises a ground for objectionthat could nothave beenraised within the period for public comment. SeeAm. Road& Transp. BuildersAss'nv. EPA, 588 F.3d 1109, 1113 (D.C. Cir. 2009) (ARTBA I) (petition for review of agency's denial ofpetition for rulemaking time-barred "insofar as the petitionraises points that could have been broughtto our attention" whenthe challenged rule was first adopted). Thus, it was not

4impracticable for North Carolinato raise an objection to the EPA's reliance on section 166(a), as did several commenters, within the period for public comment. Second, the petition also does not demonstrate thatthe grounds for objection arose afterthe period for public comment onthe 2010 PM2.s PSD rule and withinthe period forjudicialreview. The court decision inNRDC v. EPA cited in the petition did not address the 2010 PM2.s PSD rule orthe major
source baseline date. Rather, the court decision addressed whetherthe EPA acted appropriately in establishing SIP requirements for nonattainment areas inthe 2007 and 2008 PM2.s NAAQS implementationrules that were based solely on subpart 1 ofpartD, title I, ofthe CAA. This subpart of the Act establishes planrequirements for nonattainment areas in general, while subpart 4 establishes additional provisions for particulate matternonattainment areas. The court concluded that because the Act defines the term PM10 at section 302(t) to include PM2.s, the requirements ofsubpart 4 that pertain to PM10 nonattainment areas also applyto PM2.s nonattainment areas. NRDC v. EPA, 706 F.3d at436. Additionally, the court's decisionthat PM2.s should be addressedthrough subpart 4, because PM2.s is included within PM10, does not compelNorth Carolina's interpretation ofhowPSD shouldbe applied. As subpart4 pertains exclusively to particulate matter requirements for nonattainment areas, the EPA does not interpretthe court's decision to affectthe PSD programrequirements for PM2.s, which apply to attainment and unclassifiable areas.
More specifically, the 2008 PM2.s NAAQS implementationrule 1 at issue inNRDC

### v. EPA addressed both nonattainment new source review and some PSD requirements for PM2.s, but it did not contain any provisions addressing PM2.s increments. See 73 FR 28,321. Rather, the EPA adopted the PM2.s increments and the associated major source baseline date inthe 2010 rule discussed above, which was not before the court. The petitioners inNRDC v. EPA did not argue, and the court did not evaluate, whether any statutory requirements otherthanthe part D requirements for attainmentplans must also be applied to PM2.s. The D.C. Circuit issued a separate decision onJanuary 22, 2013, inSierra Club v. EPA, 705 F.3d 458, that vacated the significant impact levels and significant monitoring concentration for PM2.s that were promulgatedbythe EPA inthe 2010 PM2.s PSD rule; however, that decision did not address any ofthe PM2.s incrementprovisions, including the baseline date, adopted inthat rule.

As discussed above, the fact that PM2.s is a subset ofPM10, and thatthe statute defines it as such at section 302(t), could have beenraised during the public commentperiod onthe 2010 PM2.s PSD rule to support application ofsection 166(t) to the development ofthe PM2.s incrementregulations. Therefore, the EPA does not agree that theNRDC

### v. EPA decisionprovides a new ground for objectionthat arose only after the close ofthe public-commentperiod. See Nat'!MiningAss 'n v. DOl, 70 F.3d 1345, 1350 (D.C. Cir. 1995) (petition for review ofagency's denial ofpetitionfor rulemaking untimely when filed outside the period forjudicialreviewwhere the agency highlighted petitioners' concerns in the challenged rulemaking, and "Appellants cite cases decided inthe meantime only to bolstertheir argument thatthe statute does not authorize the rule").

Even ifthe NRDC v. EPA decision arguably did create a new ground for objection to the 2010 PM2.s PSD Rule, the ground did not arise withinthe time specified forjudicialreview ofthe rule; and, therefore, the petition for reconsideration is likewise nottimely. The period forjudicialreview is defined by section 307(b)(1) ofthe Act:

1 The 2007 PMz.s implementation rule also at issue inNRDC v. EPA did not address any PSD requirements for PM2
.5, and, thus, also does not implicate eitherthe PMz.s increments orthe baseline dates. Rather, that rule addressed state implementation plan requirements for areas designated nonattainment for the 1997 PMz.s NAAQS. See 72 FR20,586. 5Any petition for review underthis subsection shall be filed within sixty days from the date notice ofsuch promulgation, approval, or action appears in the Federal Register, except that ifsuch petition is based solely on grounds arising after the sixtieth day, then any petition for review underthis subsection shall be filed within sixty days after such grounds arise.
40 USC 7607(b)(1). The final rule in this case was published inthe 

### FederalRegister on October 20, 2010, and the period forjudicial review expired 60 days thereafter pursuant to section 307(b)(l). The petition seeking reconsideration under section 307(d)(7)(B) ofthe Act was submitted more thanthree years later, in a letter dated December 23, 2013.
The petition suggests thatNorth Carolina believes that section 307(b)(1) ofthe Actreopens the period forjudicial review inthis case, therefore also reopening the period within whichto file a petition for reconsideration under section 307(d)(7)(B), because the

### NRDC v. EPA decision is a "ground[] arising after" the period forjudicialreview. Inparticular, North Carolina cites the "EPA'srefusal to fully comply withthe 

### NRDC decision" as the ground for objection. Petition at 7. This seems to be referring to the EPA's approval ofa Utah SIP submission applying the 2010 PM2.s PSD rule. Petition at 4 (citing 78 FR 63,883 (October 25, 2013)). Inthat rulemaking, the EPA responded to comments from North Carolina questioning the proposed approval ofthe Utah SIP in light ofthe 

### NRDC v. EPA decision. 

### See 78 FRat 63,884-85. First, even ifthe

### NRDC v. EPA decision could be characterized as a ground for objection arising after the rulemaking, North Carolina still failed to submit a reconsiderationpetition within 60 days ofthe court decision, which was issued onJanuary 4, 2013. IfNorth Carolinabelieved thatthe court decision in

### NRDC v. EPA compelled the EPA to reconsider the 2010 PM2.s PSD rule, the appropriate course of action would have beento submit a timely petition within 60 days ofthe court decision. 

### SeeARTBA I, 588 F.3d at 1113 (petitions brought outside the original 60-day window forjudicial review "mustbe filed within 60 days ofthe new event, rather than any time after it"); 

### cfHoneywell Int'l, Inc. v. EPA, 705 F.3d 470, 473 (D.C. Cir. 2013) (holding petitioners timely sought review when petition filed within 60 days ofcourt decision constituting after-arising grounds under section 307(b)(1)).
Moreover, the EPA'sresponse to North Carolina's comments inthe Utah SIP action does not constitute the EPA's refusal to comply with a court decision. As noted above, the 

### NRDC v. EPA decision did not address the provisions ofthe 2010 PM2.s PSD rule at all. North Carolina's comment onthe Utah SIP proposal contended thatthe

### NRDC v. EPA decision required that the EPA treat PM2.s inthe same manner as 

### PMw for the purposes ofthePM2.s baseline date and questioned the EPA's proposed approval ofthe Utah SIP, which incorporated the 2010 PM2.s PSD rule's baseline date. 

### See 78 FRat 63,884. As the EPA explained, the agency was bound to apply the existing regulations to review ofthe Utah SIP and could not revise the federal regulations inthe context ofa rulemaking on a SIP submission. 

### !d. at 63,885; 

### see also UnitedStates v. Nixon, 418 U.S. 683, 694-96 (1974);

### AFL-C/0v. Fed LaborRelations Auth., 777 F.2d 751, 759 (D.C. Cir. 1985) ("Unless and until it amends orrepeals a valid legislative rule
or regulation, an agency is bound by such a rule orregulation."). The EPA'sresponse to comment onthe Utah SIP action, thus, cannot be viewed as a "refusal to comply" withthe 

### NRDC v. EPA court decision
nor can such an action be viewed as triggeringjudicial review ofthe 2010 PM2.s PSD Rule. 

### SeeAm. Rd & 

### Transp. BuildersAss'n v. EPA, 705 F.3d 453,458 (D.C. Cir. 2013) (ARTBA II) (the consequences of failing to bring a challenge within 60 days ofa regulation's promulgation would be meaningless "ifthe
mere application ofa regulation in a SIP approval were sufficientto constitute an after-arising ground and trigger a new 60-day statute oflimitations period"). Itis well-established that a would-be petitioner 6cannot goad the agency into a reply as a means oftriggering an opportunity forjudicialreview. SeeAm. Iron & Steel !nsf. v. EPA, 886 F.2d 390, 398 (D.C. Cir 1989). North Carolina's petitionwas, therefore, not timely submitted withinthe period forjudicial review ofthe alleged after-arising grounds, and the requirements ofsection 307(d)(7)(B) ofthe Acthave not been satisfied. Accordingly, the EPA denies the petition for reconsideration.
Evaluation of theAP A Petition for Rulemaking
The EPA has also evaluatedNorth Carolina'srequest for a rulemaking pursuant to the APA, 5 USC 553(e). The petition for rulemaking does not present any policyjustificationfor amending the PM2.s baseline date or demonstrate thatthe EPA is legally required to do so. Accordingly, and for the reasons explained below, the EPA denies the request.
The regulations establishing the PM2.s increments and the major source baseline date were finalized nearly four years ago. Since then, most states with SIP-approved PSD programs have adopted state regulations and submitted SIP revisions to reflect those regulatory changes, including the 2010 major
source baseline date. To revise these provisions at this time to reflect a different, earlier baseline date would be disruptive to the states' permitting processes and would be administratively difficult. Inthe final rule, the EPA explained that it was rejecting the option to apply the 1975 TSP/PMw baseline date to the PM2.s increments, determining that it would leadto administrative difficulties and the potential for inaccuracies because historic emissions inventories inmany areas did not include PM2.s emissions. See 75 FRat 64,886-88. These complications would be compounded in states that have already permitted
sources using the current PM2.s increments and the 2010 baseline date, potentially requiring reevaluation ofincrement consumptionthat has occurredto date.
Moreover, although the petition does not explicitly request such relief, were the EPA to determine that CAA section 166(t) applies, we would also needto reevaluate the values ofthe PM2.s increments. Section 166(t) authorizes the EPA to substitute 

### PMw increments for the statutory particulate matter increments so long as they are "ofequal stringency." The EPA explicitly declined to finalize this approach in the 2010 PM2.s PSD rule. Therefore, application ofsection 166(t) would necessarily require reevaluation ofthe increments themselves. Thus, the anticipated disruption from revision ofthe 2010 rule to apply section 166(t) in lieu ofsection 166(a) would be magnified.
North Carolina's petition does notraise anypreviously unforeseeable considerations thatmerit imposing this level ofadministrative difficulty at this point inthe implementation process. As previously explained and discussed further below, the state's concerns could have beenraised during the period for public comment when the EPA explicitly solicited feedback regarding the appropriate statutory authority to govern development ofthe PM2.s increments and the associated major source baseline date inthe 2010 PM2.s PSD rule. The petition does not raise any new issues thatjustify or compel the EPA to reconsider the regulations finalized inthat rule.
The EPA understands from the Secretary's August 2013 letterthatNorth Carolina is concerned that the 2010 major source baseline date for PM2.s may place the state at a competitive disadvantage after displaying leadership in reducing emissions under the Clean Smokestacks Act and pursuing litigation against the Tennessee Valley Authority (TVA). However, the appropriate time to raise those concerns with setting the PM2.s major source baseline date at 2010 would have been in the course ofthe rulemaking for the 2010 PM2.s PSD rule that established the PM2.s increments and major source baseline 

### 7date. The August 2013 letter indicates thatthe Clean Smokestacks Act was enacted in 2002 and that litigation against TVA was initiated in 2006, but neitherthe August 2013 letter nor the petition explains why North Carolina did not communicate withthe EPA during the public-commentperiod aboutthe potential implications ofthe 2010 major source baseline date for North Carolinain light ofits earlier actions to reduce emissions. Furthermore, it does not appearthatthe recent court decision in

### NRDC v. EPA impacts the requirements ofthe Clean Smokestacks Act orthe state's settlement with TV A. The EPA is sensitive to these concerns expressed bythe Secretary, butthis information has been presented to the EPA at a time whenthere are several overriding grounds as discussed above that favor retaining the baseline date and other elements in the rule based on section 166(a) the Act. Perhaps most importantly, neitherthe petition for rulemaking northe Secretary's letter speaks to the airquality implications ofestablishing a major source baseline date of 1975 for the PM2.s increments. North Carolinadoes not offer a compelling environmentaljustification for the EPA to revise its existing regulations. Based onthe EPA's assessment ofPM2.s emission trends, a revision ofthe major source baseline date from 2010 to 1975 would result in less air-quality protection than the approach established in the 2010 PM2.s rule. As the EPA concluded inthat rule, ifa retroactive baseline date of 1975 were used, "emissions reductions occurring priorto the effective date ofthis rule would serve to expandthe available increments, enabling more newpollutionthan would otherwise be allowed to occur."

### Id at 64887. Thus, the EPA acknowledgedthat the use ofthe PM1o baseline date would be less stringentthan ifthe EPA established a newbaseline date for PM2.s.
With respect to legal considerations, nothing in the

### NRDC v. EPA decision compels application of section 166(f) to the development ofthePM2.s increments. Byits terms, section 166(f) permits the agency to substitute for the statutory particulate matter increments new

### PMw increments of"equal stringency." Section 166(f) does not address howthe EPA should proceed when itis developing new increments for a particulate matter indicator, as it did here, rather than creating substitute increments. North Carolina has not expressed the viewthat the EPA was unable to develop PM2.s increments different from and in additionto the 

### PMw increments, and, as explained inthe 2010 PM2.s PSD rule, the EPA continues to believe thatthe appropriate authority for such action is section 166(a). See 75 FRat 64,871-72. The EPArecognizes, as the court in

### NRDC v. EPA acknowledged, thatthe definition of

### PMw in CAA section 302(t) includes PM2.s, butthis does not mean section 166(f) is the exclusive authority available for the EPA to establish PM2.s increments and the associated implementing regulations. As noted above, the PM2.s increments were not developed to replace either the prior statutory TSP increments orthe existing 

### PMw increments, which is the only situation governed by section 166(f).
Since the EPA had the authority to develop independent PM2.s increments pursuant to section 166(a), the EPA also necessarily had the authority to establish appropriate implementing regulations, including the appropriate major source baseline date. However, even iftheEPA's only option were to apply section 166(f) to establish PM2.s increments, nothing inthat provision explicitlyprovides howthe EPA should address the major source baseline date for either the PM2.s orPM1o increments. Thus, the EPAhas the discretion to retain the baseline date inthe 2010 PM2.s PSD rule.

For the reasons discussed above, the EPAbelieves that it would be inappropriate to change the PM2.s major source baseline date and thatthe decision in

### NRDC v. EPA does not compel a revision. Accordingly, the EPA denies North Carolina's petition for amended rulemaking.



### 8Conclusion
The EPA concludes that reconsideration ofthe PM2.s major source baseline date inthe 2010 PM2.s PSD rule is not warranted and, for the reasons explained above, also declines to initiate a rulemaking to amend the 2010 PM2.sPSD rule. 

# tfzr/1(
Date:

i McCarthy**~** ministrator U.S. Environmental Protection Agency



### 9