Good evening. My name is Sheila Holman and I am the Director of the Division of Air Quality in 

Department of Environment and Natural Resources, or NCDENR. I am here to provide comments 

regarding the proposed guidelines for greenhouse gases (GHGs) from existing power plants on behalf 

ofNCDENR. NCDENR believes EPA's proposed rules under §11l(d) to reduce GHGs from both 

power plants and beyond power plants is legally and technically flawed. EPA appears to recognize 

the legal vulnerabilities by proposing to make each of the "building blocks" independently severable 

-as if realizing they will be vacated by the Court during judicial review. 

While there are a number of technical and legal issues in the proposed rule, the issue that I wanted to 

begin with is limited State resources. If this rule is finalized in its current fonn, states will be 

immediately required to amend not only their state air programs, but will be required to 

fundamentally restructure the State's entire energy generation and delivery system. This significant 

undertaking will run parallel with judicial review of this rulemaking. States have been through 

several exercises where EPA's shaky legal interpretations have resulted in States taking actions to 

satisfy a federal rule that is later detennined by the Courts to be illegal. Look no further than the 

interstate transport rulemakings from the Clean Air Interstate Rule, or CAIR to the Cross State Air 

Pollution Rule, or CSAPR. A more recent example is the PSD Tailoring Rule. 

The final rule, whatever form it ultimately takes, should not require states to begin taking action until 

the completion of judicial review. This is to preserve the state's limited resources and ensure that 

actions taken in response to the EPA rule will not be for naught. NCDENR is calling this approach a 

"legal trigger" deadline and we urge the EPA to respect their state partners and include this provision 

in any final rule. 

With respect to the significant legal issues associated with the currently proposed rule; 

1) EPA's current proposal to regulate new fossil fuel-fired electric utility units under section 

111(b) of the Act is based on their finding that carbon capture and sequestration (CCS) has 

been adequately demonstrated. CCS has not been adequately demonstrated. Far from having 

been demonstrated, there is uncertainty with respect to even the feasibility of the separation 

technology on this scale as well as continued concerns about the availability of geologic 

fonnations for subsequent sequestration. The legal implication is critical since EPA is barred 

from implementing an existing source rule under 111 (d) without having successfully 

promulgated a new source standard under 111 (b). 

2) Next, section 111 (d) prohibits the overlap of 111 (d) with two other programs in the Act. 

Section 111 (d) prohibits EPA from regulating pollutants from source categories regulated 

under sections 112 as well as pollutants regulated under that program. In 2011 EPA issued 

regulations under section 112 applicable to fossil fuel-fired electric generating units thereby 

foreclosing regulation under section Ill (d). In the past EPA has suggested that the provision 

which was the culmination of both Senate and House amendments represents a conflict in the 

statutory language of section 111 (d) with regard to whether the 112 prohibition was pollutant 

specific or source category specific. NCDENR disagrees with this assertion, as there is no 

internal conflict in section 111(d). Prior to 1990, section 112 was a pollutant-specific 

program. In 1990 the structure of section 112 was changed from a program that regulated 
pollutants to one that regulates source categories. To prevent overlap with the newly 

structured 112 program, Section 11l(d) was augmented to exclude not only section 112 

pollutants, but also section 112 regulated source categories. The two exclusions are entirely 

self-consistent and should not be used to invoke Chevron deference. This question has been 

considered in the recent past in litigation ofEPA's Clean Air Mercury Rule in 2007. 

NCDENR agrees with NRDC who also argued in that case that the text of Section 

111 ( d)(l )(A) prohibits EPA from regulating-e a pollutant that is "emitted from a source 

category which is regulated under section 112." Regarding Chevron deference, NCDENR 

also agrees with NRDC when they argued the perceived ambiguity was "manufactured" by 

EPA in an "attempt to exploit a non-substantive difference between the two amendments to 

111." 

3) Additionally,, NCDENR cautions EPA from reading the Supreme Court's decision inAEP v. 

Connecticut to grant EPA the authority to regulate GHGs under lll(d). Dicta in that case 

regarding the suitability of§ Ill (d) in regulating GHGs was based on an erroneous 

paraphrase of the relevant statute. In addition, that decision was issued prior to EPA's 

regulation of electric generating units under § 112. 

4) While NCDENR takes no position on whether EPA should establish a NAAQS for 

greenhouse gas emissions, the agency is concerned that a CAA § 111 (d) action is prohibited 

because GHGs have constructively been listed under CAA § 108. As a result of the EPA's 

Title II rulemaking, all of the conditions precedent to list greenhouse gases under CAA § 108 

appear to have already been met. NCDENR agrees with arguments made by the Sierra Club 

in NRDC v. Train (1976) when the Sierra Club succeeded in forcing EPA to define a 

NAAQS for lead under substantially similar facts. 

In that case, as is the case now, EPA has already made an endangerment finding under Title 

II of the CAA. Second, EPA found then for lead, and found now for GHGs that both are 

emitted from numerous or diverse mobile or stationary sources. EPA has already made this 

finding. Finally, the court in NRDC v. Train (1976) found that once the first two provisions 

under § 1 08(a)(l) are met, the third provision is constructively satisfied. Because all three 

criteria under §108 are satisfied, EPA is prohibited from regulating GHGs under §lll(d). 

5) In cases where EPA does have the authority to establish emission guidelines under section 

Ill( d), that authority is limited. EPA can only establish a unit-specific guideline that 

describes what control technologies have been demonstrated. NCDENR agrees with the 

Sierra Club when it argued in Asarco v. EPA ( 1978) that §Ill of the CAA cannot be applied 

to a combination of facilities within a plant site or the plant site as a whole. It certainly 

cannot be expanded to include facilities outside the plant site, or to source categories outside 

the proposed §1ll(d) source category. The plain language of the Act as well as legal 

precedent precludes EPA and States from implementing building blocks 2, 3, and 4- all 

designed to require emission reductions outside of the affected emissions unit. 
6) EPA's economic justification for the proposed rule relies heavily on the reductions in a§ 108 

pollutant (PM) that EPA believes will result as a corollary of forcing America's electric 

generation to convert substantially to natural gas. In other words, EPA is relying on the 

regulation of a § 108 pollutant to justify a rule under § 111 (d)- a provision that explicitly 

prohibits regulation of a § 108 pollutant. EPA must defend the regulation of GHGs based on 

the benefit of reducing GHGs. 

Finally, on an equitable issue, EPA has defined reductions on a State by State basis. The basis was 

the existing power generation technologies, and policies unique to each State. For example, some 

States relied more on nuclear generation, while others relied more on coal combustion for their 

generation. EPA then based each State's GHG reduction requirement on each State's natural gas 

electricity generation, nuclear generation, solar generation, wind generation, policies that 

incentivized energy efficiency, and policies that reduce consumption of electricity through demand 

side management. Since EPA based the potential improvements on the current energy portfolio, the 

resultant rule has the outcome of requiring the smallest GHG reductions from States with the highest 

coal usage. This outcome is a direct result of EPA's use of source categories for compliance other 

than that regulated by the proposed standard, i.e., coal-fired power plants. 

NCDENR believes the Clean Air Act's § 111(d) for coal-fired power plants should simply apply to 

each coal-fired power plant taking into account the statutory factors such as the remaining useful life 

of the unit to determine what the emission standard should be. 

Thank you for the opportunity to give comment to this very important rule.